One of the toughest constraints faced by small business owners is cash flow. When premises have to be rented, stock has to be bought and salaries have to be paid, it can place a huge strain on your business to keep the customers coming in, and a stilted cash flow turn your promising start up into a struggling flop. When the margins are as tight, any breathing room at all is a blessing, and a few smart contra deals can make all the difference between success and failure for a small company.
Take this example: you’re the owner of a small car repair shop, and you need some new welding kit. Without it, you won’t be able to take on the jobs which are your bread and butter, but it’s expensive, and it’ll put you into the red. You have to bite the bullet and pray that nothing comes along to put you further in debt, or else you’ll struggle to make ends meet.
There is an alternative, though – there’s a set of brand new off-road tyres which have been left in the stockroom for months. There’s no time to list them online, and anyway you’ve no interest in losing 20% of their value in fees and shipping. However, you’re able to find a trader who’ll take them off your hands in exchange for their old motorbike – it’s a bit of a fixer, but one of your regulars is into this sort of thing, and it turns out they know someone who’d be interested. You strike a deal, and you make enough from the deal to cover the cost of your new welding gear. Though you’ve had to take a few twists and turns to get there, you’ve essentially exchanged the tyres you didn’t need for the tools that you did, with no need for a cash exchange.