Who needs cash? Get what you want without paying for it
Cash-strapped businesses can obtain the goods and services they need without any drain on cash flow. Here are two strategies to do this effectively.
Barter
Trading is as old as civilization itself. Today, however, bartering is a refined way to swap your goods or services for the things you need. More than 70% of Fortune 500 companies barter and the World Trade Organization says 15% of world trade is done on a non-cash basis.
What barter can do for you:
In addition to conserving your cash, barter allows you to:
- Dispose of excess inventory.
- Market yourself to a select group if you do so through a barter exchange. A barter exchange is a membership group that, like any other networking group, you can get to know members better and network with them.
- Obtain what you need. Whether it's marketing, web design, hotel accommodations, or other goods and services, you usually can find it through an exchange. When joining a local exchange -- something that can be useful for businesses with a local profile -- be sure that the exchange belongs to a national association such as the International Reciprocal Trade Association or the National Association of Trade Exchanges, advises Kevin Brown of Hudson Barter Exchange. This will help you obtain things that may not be available through the local exchange.
What barter cannot do:
- Save you income taxes. You are taxed on the value of the goods or services you trade. If you swap through a barter exchange, you'll receive a Form 1099-B from the exchange; this reports your transactions for the year to the IRS and you.
- Save sales taxes. If the items or services you offer are subject to sales tax under your state's rules, you must collect sales tax and remit it to your state. Typically, this is done outside of a barter exchange; sales tax collections are in cash.
Non-cash employee benefits
Don't let being short of cash stop you from rewarding your employees. Here is a list of some ways to do this without spending a dime:
- Offer flex time or a telework option. Many employees value the flexibility to arrange their work schedules. Find resources to help with this at the Telework Exchange.
- Grant stock options if your business is incorporated. Learn more about stock options from The National Center for Employee Ownership.
- Parking privileges. Prized spots can be granted month-to-month in recognition of outstanding service.
- Employee discounts on the goods and services you normally sell.
- Corporate memberships. Employees may be eligible to pay for their own memberships, but at reduced prices, if your business enrolls with a health club or other facility.
- Mentoring. The time you spend with promising staff members can be a win-win; they enjoy the benefit of your knowledge and experience to help develop their skills and you get a better-trained workforce.
- Thank you, handshake, and other small gestures. Personal communications to employees, thanking them for a job well done, can go a long way in keeping up morale when there's no cash for tangible rewards.
Note: In addition to saving the cash it would otherwise cost to reward employees, many employee fringe benefits are exempt from payroll taxes; this provides additional savings for your business.
Barbara Weltman, author of several books including her most recent, 1001 Deductions & Tax Breaks 2009
www.barbaraweltman.com
Copyright 2011 Author retains ownership. All Rights Reserved.
