lifeline image

How barter trading can become a lifeline for small businesses


Times of economic hardship is a tough place for any business to be in, particularly if you are a small company where a firm grip on cash flow could make the difference between your business flourishing or going into administration.

Contra Dealer exists to try and connect businesses and encourage trade and commerce, even when cash flow is tight. As well as being a good way keep active during downturns, barter trading can act as a lifeline for small businesses on the brink. Here we break down the different ways barter trading can work for your business.


What is a barter trade?

We understand your apprehension, as when one mentions bartering it draws up ideas of market trading and activity from the pre-monetary system. It is easy to understand why many view it as outdated; however barter trading involves more than just the exchange of low-cost items.

A barter trade is essentially any form of cashless trade where goods and services are exchanged for other goods and services. It can be between two sole-traders, or two multinational companies. The idea of this kind of trading is frequently used as the model for trades between nations too. So with the definitions out of the way, how exactly can barter trading help me if my business is struggling?


  1. You can save on the cost of processing invoices and delayed payments

Accounting is a big cost in any business but is central to the way many companies operate. Whilst adopting a bartering mindset wont completely cut down on the costs, it will help to ease the pain of dealing with unprocessed invoices and late payments.

In a barter trade it is very clear whether you have received the service or not, and you will find business are far more willing to fulfil their end of the trade agreement if it does not involve cash. This better process coupled with the reduced stress on you and your team of late or withhold payments is a great reason to take up bartering in and of itself.


  1. Barter trading helps you network, with potentially lucrative clients

In addition to the benefit you get through the good or product you receive, there are a series of augmented benefits that you can get from bartering. Firstly, you get to work with a company that you otherwise may not have had the chance to; and the good faith that you operate in with the barter deal should leave a good impression.


If you do leave a good impression, what’s to say when business does start picking up you won’t receive recommendations from your new bartering partner? They may even start working with you in a more traditional money-based trade. All these are benefits that would not have come about if you did not take the chance on a barter trade.


  1. You gain better value out of leftover stock rather than loss selling

It may be tempting to sell your stock at a loss to try and free up some cash, and while it may be a necessity in the short term you should approach it with caution.

Say for instance, you are an industrial cleaner, short on cash and looking to offload stock. The situation is not made any easier by the fact that you have a lot of accounting work to backdate in time for the tax return deadline.

Instead of unloading stock at a loss then dealing with the finance issue, why not ask for a contra deal with a local accountancy firm, who just happens to be wanting their office professionally cleaned? This in the long run, will save you a lot more money.


  1. It helps you reduce costs without reducing your activity

Linking on from our third point, a good barter system will help you reduce costs without reducing the activity for your business. In a time when many are looking to furlough and lay off valuable staff, bucking the trend through cutting costs whilst also offering more barter work for them to do is much more sustainable in the long run.

It will lead to direct cost savings and a whole hosts of intangible benefits such as higher staff morale and engagement in their work.