Starting up a new business is a whirlwind experience: finding clients, building up a reputation and growing your company requires a lot of hard work, and any potential advantage needs to be seized immediately. For many new businesses, funding is a constant struggle – keeping up loan repayments whilst balancing the books is a tightrope act that requires constant attention.
Contra dealing allows your business to secure assets and services that it wouldn’t otherwise be able to, without needing to dip into an already strained bank account. By bartering goods and skills that you already possess for ones that you don’t, you’re able to leverage your existing assets to create new opportunities.
Increase profit margin by exchanging services
For example, an electrician may offer to carry out electrical checks on his landlord’s properties in return for a discount on his workshop’s rent. The electrician hasn’t lost any money by carrying out the checks, as they’ve not cost anything to complete except his spare time, but by reducing the rent he’s increased his profit margin. The landlord, in return, has lost some rental income but has saved the greater cost of carrying out electrical checks on all their properties. Contra dealing like this works because no physical goods have changed hands; both parties have provided a service to the other of equal value.
Save money by trading goods
For businesses that deal in physical goods, contra dealing is also a very useful tool. If a small business desperately needs to upgrade their office computer but has no available cash to do so, they might be able to arrange a deal with another company that requires some of their stock, and has a surplus computer available. By negotiating a trade, each company is able to use items they already own to acquire something they need, without having to convert their goods into cash by selling them first.
Because contra dealing relies on both parties having something the other is interested in, your potential trading partners are limited to the ones you are already in contact with. By using an online trading platform, though, you’ll gain access to a much larger number of potential partners, increasing your opportunities to find deals that satisfy both parties and help your business to grow.