Okay Obama fans, first the good news:
GOOD NEWS: you more than proved you can act as a united force to unify your support and get out and spread the word and vote. Look what happened, you helped make history. But the bad news...
BAD NEWS: that was the easy part!
I'm not really sure (and certainly if I were Obama, I'd not be relishing January 20th) he's still partying it up about the victory you led him to. Take a peek at the facts of what he's walking into:
THE FACTS:
1. We are faced with the biggest global economic catastrophe in history
2. The Feds don't seem to have any real solutions. "Let's cut the rate - again!" just won't cut it any more.
3. Bankruptcies are up 28% and still rising
4. Unemployment is at an all-time high - and I predict will definately hit 10%
5. Consumer confidence is down 40%
6. I'm not even going to mention the housing market!
Trust me, I'm an extremely optimistic person and always try to look on the bright side, but this is like standing on the high board of a pool without knowing how to swim looking down at a bunch of very hungry sharks! What really worries me is that most people don't seem to be as scared as me, or even scared at all. Am I hallucinating this impending depression, or is everybody else drinking some LSD-loaded KoolAid?
My business is barter, via my company Merchants Barter Exchange, and as such I deal with sales people and business owners all day long. Almost everybody is putting a 'brave face' on things. Believe me, Obama is not going to wave a magic wand on January 20th and make all these bad dreams go away! But there is some good news:
GOOD NEWS: if Obama and his supporters are prepared to put in the same (or more) effort it took to get him elected, we may be able to speed the recovery process. This isn't intended as a sales pitch, however I cannot help but be a little biased due to all the great work Merchants Barter Exchange has been doing for over eight years preparing and supporting businesses for just this situation.
YOU can help the problem by becoming part of the solution. Just getting out and voting was a good start, but that is all it was. If that is all your participation is going to be and you are going to flop back down on your 'welfare' or 'entitlement' couch and watch as everybody else does the work, then you really didn't do justice to the campaign you voted for.
OBAMA needed your help then and he needs it now and will continue to need it on a daily basis until we are out of this economic catastrophe. So, what can you do...? Well, for starters you can badger your politicians and get them to see that the stimulous package actual stimulates something useful. You can also spread the word (twitter, email, blog, call, whatever - do everything you can) to everybody and anybody that will listen - just like you did during the campaign - that we all need to work as a team. Tell your local business owners to call Merchants Barter Exchange to help them save cash on things they need. Tell local entrepreneurs about MBE and get them involved. Now more than ever before we need a strong, serious back-up economy.
2009 needs to see the power of the people stand behind Obama-nomics, and Obama-nomics has to include MBE-barter as part of his success strategy otherwise we are on a very slippery slope to a bottomless pit. As he says, "It's gonna get worse before it gets better." Be prepared for a tough battle, but the end result can be very positive.
Let's pull together as a nation and show the rest of the world where our true strength lies, in the UNITED States of the American People.
Thanks for reading, now get twittering... texting... emailing... and lay the foundations for Obama to make some serious progress in January 2009.
Sunday, January 4, 2009
Thursday, January 1, 2009
Happy New Year????
Hopefully everyone out there is working out the cobwebs and defining their goals and purpose after an abysmal economic relapse. Before I stand on my soapbox and preach, I'd like to preface things with this... My motives and intents are pure. That being said, here we go. January 20th is quickly approaching and that takes on a historic, global magnitude. Anyone with a pulse clearly understands that their own personal and business security is being threatened. My company, Merchants Barter Exchange is the only company that is actively seeking out business owners and entrepreneurs to help weather the impending global economic collapse. Businesses that are SERIOUS about staying in business will have to incorporate MBE barter into their business plans or they will be history. My company has been supporting and preparing businesses nationally for the last eight years for this exact economic meltdown. We incubate businesses from what's unfolding in the economy around them by: helping them stop spending cash to get things they need and want, move surplus inventory, maximize capacity and acquire new business clients that normally they wouldn't have the reach to obtain.
The oldest form of commerce known to man will outlive any economic infrastructure for milennia. Folks, contrary to what some think, this alternative payment dynamic is far from a paradigm shift. Any business that is accepting credit cards or cash is bartering. This world more than ever needs a back up economy because what's in place clearly isn't. Mr. Obama MBE-Barter can help you make your term a success and you will go down in history as the most powerful and intelligent man ever. Help the world by incorporating MBE-barter into its economy.
The oldest form of commerce known to man will outlive any economic infrastructure for milennia. Folks, contrary to what some think, this alternative payment dynamic is far from a paradigm shift. Any business that is accepting credit cards or cash is bartering. This world more than ever needs a back up economy because what's in place clearly isn't. Mr. Obama MBE-Barter can help you make your term a success and you will go down in history as the most powerful and intelligent man ever. Help the world by incorporating MBE-barter into its economy.
Sunday, December 14, 2008
What Happens when Countries Go Bankrupt?
First it was mortgage lenders. Then large banks began to wobble. Now, entire countries, including Ukraine and Pakistan, are facing financial ruin. The International Monetary Fund is there to help, but its pockets are only so deep.
No, Alexander Lukyanchenko told reporters at a hastily convened press conference last Tuesday, there is "no reason whatsoever to spread panic." Anyone who was caught trying to throw people out into the street, he warned, would have the authorities to deal with.
Lukyanchenko is the mayor of Donetsk, a city in eastern Ukraine with a population of a little more than one million. For generations, the residents of Donetsk have earned a living in the surrounding coalmines and steel mills, a rather profitable industry in the recent past. Donetsksta, a local steel producer, earned €1.3 billion ($1.65 billion) in revenues last year.
But last Tuesday the mayor, returning from a meeting with business leaders, had bad news: two-thousand metalworkers would have to be furloughed. Lukyanchenko doesn't use the word furlough, instead noting that the workers will be doing "other, similar work." But every other blast furnace has already been shut down, and one of the city's largest holding companies is apparently gearing up for mass layoffs.
Under these conditions, how could panic not be rampant in Donetsk, the capital of Ukraine's industrial heartland? In Mariupol, a steelworking city, a third of the workers have already been let go. The chemical industry, Ukraine's second-largest source of export revenue, is also ailing. In the capital Kiev, booming until recently, construction cranes are at a standstill while crowds jostle in front of currency exchange offices, eager to convert their assets into US dollars.
Donetsk is in eastern Ukraine, 8,100 kilometers (5,030 miles) from New York's Wall Street and 2,700 kilometers (1,677 miles) from Canary Wharf, London's financial center. But such distances are now relative. The world financial crisis has reached a new level. No longer limited to banks and companies, it is now spreading like wildfire and engulfing entire economies. It has reached Asia and Latin America, Eastern Europe, Iceland the Seychelles, the Balkan nation of Serbia and Africa's southernmost country, South Africa.
It is a development that has investors and speculators alike holding their breath. Some are pulling their money out of troubled countries, while others are betting on a continued decline -- and in doing so are only accelerating the downturn. Central banks are desperately trying to halt the downward trend, but in many cases the plunge seems unstoppable.
At first, it seemed as if the crash could be limited to Iceland. But now countries like Ukraine, Pakistan and Argentina are proving to be almost as vulnerable as the small island nation in the North Atlantic. It seems as though another country is added to the growing list of nations on the verge of collapse almost daily.
FROM THE MAGAZINE
Find out how you can reprint this DER SPIEGEL article in your publication. A national bankruptcy isn't just some theoretical construct. Argentina experienced it in 2001 and Russia three years earlier. Germany has gone bankrupt twice in its more recent history, once in 1923 and the second time after 1945. A country has reached this final stage if, as a result of war or blatant mismanagement, it has gambled away all trust, can no longer service its debt or convince anyone to lend it any money, no matter how high an interest rate it promises to pay.
This is what is currently happening to Iceland. The central bank in the capital Reykjavik increased its prime rate by six points to 18 percent last week. Venezuela, where inflation is also high, is now offering 20 percent to stimulate interest in its government bonds. At the moment, however, investors are shying away from all risk.
In the end, the rating agencies will have no choice but to downgrade the problem countries to their lowest level of creditworthiness. When that happens, lenders will have no choice but to write off much of their money. For citizens, national bankruptcy would probably lead to massive inflation.
The threshold countries, described until recently as "emerging" economies, are in for an especially rough ride. "The dream that they would be spared seems to have come to an end," says Rolf Langhammer, vice-president of the Kiel Institute for the World Economy.
Countries like Russia and Brazil owe their recent success in large part to the boom in commodities the world has experienced in recent years. But now prices for oil, copper, wheat and corn have plunged and a giant spiral of debt has begun to turn. The companies and banks that borrowed vast amounts of money abroad for their investments can no longer service their debt, and investors are pulling out their capital. As foreign currency becomes scarce and imports unaffordable, the currencies of these countries are losing value, which only increases the mountain of debt.
According to Stephen Jen, a currency specialist with the US bank Morgan Stanley, the flow of capital to threshold countries could drop by more than half -- from the current level of €575 billion ($730 billion) to €230-270 billion ($292-343 billion) -- if world economic growth drops to only 1 percent in 2009. The demise of these countries, says Jen, represents the new "epicenter of the global crisis."
The looming crisis has the countries in most dire need lining up for emergency loans from the International Monetary Fund (IMF). But all they are doing is buying time -- a few weeks, or perhaps even months -- and hoping that the general situation will soon improve.
The Ghost of Buenos Aires
The signs of looming national bankruptcy are plentiful, and bankers in the Uruguayan capital of Montevideo know them well. In late 2001, they were the first to see the coming crash in Argentina. Men traveled across the Rio de la Plata, from Buenos Aires to Montevideo, carrying suitcases filled with US dollars. They stood in long lines at the city's banks, depositing the contents of their suitcases into accounts and safe deposit boxes there. Uruguay is South America's Switzerland, a safe haven for money in times of crisis. No one asks about where the millions come from.
DER SPIEGEL
Argentina in crisis.
Once the Argentine businessmen had transferred their dollars abroad, the second phase of the collapse began. The Argentine government froze all bank accounts, capping the maximum amount an accountholder could withdraw at only $250 (€198) a week. Small investors, those who had left their money in the banks, were the hardest hit. Tens of thousands of desperate citizens stormed the banks, and many spent nights sleeping in front of the automated teller machines.
The last phase of the downturn began in the Buenos Aires suburbs. After consumption had dropped by 60 percent, young men began looting supermarkets. In December 2001, 40,000 people gathered on Plaza de Mayo in front of the Casa Rosada, the presidential palace. There, they banged pots and pans together day and night, until an unnerved President Fernando de la Rúa fled by helicopter.
The image of the fleeing president has burned itself into the collective memory of Argentineans. It marks the worst financial crisis of the last 100 years. De la Rúa's successor allowed the peso to float free on the world currency-exchange markets after it had been pegged to the US dollar at a ratio of 1:1. Tens of thousands of small business owners, who had incurred debt when the peso was still pegged to the dollar, filed for bankruptcy.that Argentina would not be able to repay its $145 billion (€115 billion) in foreign debt.
Is history repeating itself today?
Economic experts have been warning for months that Argentina is again heading toward national bankruptcy. Men are traveling to Uruguay once again with suitcases filled with cash. In the space of only three weeks, more than $700 million (€553 million) was withdrawn from Argentine bank accounts. Government bonds have lost more than half of their value. ATMs are no longer giving out more than 300 pesos, and inflation is running rampant
No, Alexander Lukyanchenko told reporters at a hastily convened press conference last Tuesday, there is "no reason whatsoever to spread panic." Anyone who was caught trying to throw people out into the street, he warned, would have the authorities to deal with.
Lukyanchenko is the mayor of Donetsk, a city in eastern Ukraine with a population of a little more than one million. For generations, the residents of Donetsk have earned a living in the surrounding coalmines and steel mills, a rather profitable industry in the recent past. Donetsksta, a local steel producer, earned €1.3 billion ($1.65 billion) in revenues last year.
But last Tuesday the mayor, returning from a meeting with business leaders, had bad news: two-thousand metalworkers would have to be furloughed. Lukyanchenko doesn't use the word furlough, instead noting that the workers will be doing "other, similar work." But every other blast furnace has already been shut down, and one of the city's largest holding companies is apparently gearing up for mass layoffs.
Under these conditions, how could panic not be rampant in Donetsk, the capital of Ukraine's industrial heartland? In Mariupol, a steelworking city, a third of the workers have already been let go. The chemical industry, Ukraine's second-largest source of export revenue, is also ailing. In the capital Kiev, booming until recently, construction cranes are at a standstill while crowds jostle in front of currency exchange offices, eager to convert their assets into US dollars.
Donetsk is in eastern Ukraine, 8,100 kilometers (5,030 miles) from New York's Wall Street and 2,700 kilometers (1,677 miles) from Canary Wharf, London's financial center. But such distances are now relative. The world financial crisis has reached a new level. No longer limited to banks and companies, it is now spreading like wildfire and engulfing entire economies. It has reached Asia and Latin America, Eastern Europe, Iceland the Seychelles, the Balkan nation of Serbia and Africa's southernmost country, South Africa.
It is a development that has investors and speculators alike holding their breath. Some are pulling their money out of troubled countries, while others are betting on a continued decline -- and in doing so are only accelerating the downturn. Central banks are desperately trying to halt the downward trend, but in many cases the plunge seems unstoppable.
At first, it seemed as if the crash could be limited to Iceland. But now countries like Ukraine, Pakistan and Argentina are proving to be almost as vulnerable as the small island nation in the North Atlantic. It seems as though another country is added to the growing list of nations on the verge of collapse almost daily.
FROM THE MAGAZINE
Find out how you can reprint this DER SPIEGEL article in your publication. A national bankruptcy isn't just some theoretical construct. Argentina experienced it in 2001 and Russia three years earlier. Germany has gone bankrupt twice in its more recent history, once in 1923 and the second time after 1945. A country has reached this final stage if, as a result of war or blatant mismanagement, it has gambled away all trust, can no longer service its debt or convince anyone to lend it any money, no matter how high an interest rate it promises to pay.
This is what is currently happening to Iceland. The central bank in the capital Reykjavik increased its prime rate by six points to 18 percent last week. Venezuela, where inflation is also high, is now offering 20 percent to stimulate interest in its government bonds. At the moment, however, investors are shying away from all risk.
In the end, the rating agencies will have no choice but to downgrade the problem countries to their lowest level of creditworthiness. When that happens, lenders will have no choice but to write off much of their money. For citizens, national bankruptcy would probably lead to massive inflation.
The threshold countries, described until recently as "emerging" economies, are in for an especially rough ride. "The dream that they would be spared seems to have come to an end," says Rolf Langhammer, vice-president of the Kiel Institute for the World Economy.
Countries like Russia and Brazil owe their recent success in large part to the boom in commodities the world has experienced in recent years. But now prices for oil, copper, wheat and corn have plunged and a giant spiral of debt has begun to turn. The companies and banks that borrowed vast amounts of money abroad for their investments can no longer service their debt, and investors are pulling out their capital. As foreign currency becomes scarce and imports unaffordable, the currencies of these countries are losing value, which only increases the mountain of debt.
According to Stephen Jen, a currency specialist with the US bank Morgan Stanley, the flow of capital to threshold countries could drop by more than half -- from the current level of €575 billion ($730 billion) to €230-270 billion ($292-343 billion) -- if world economic growth drops to only 1 percent in 2009. The demise of these countries, says Jen, represents the new "epicenter of the global crisis."
The looming crisis has the countries in most dire need lining up for emergency loans from the International Monetary Fund (IMF). But all they are doing is buying time -- a few weeks, or perhaps even months -- and hoping that the general situation will soon improve.
The Ghost of Buenos Aires
The signs of looming national bankruptcy are plentiful, and bankers in the Uruguayan capital of Montevideo know them well. In late 2001, they were the first to see the coming crash in Argentina. Men traveled across the Rio de la Plata, from Buenos Aires to Montevideo, carrying suitcases filled with US dollars. They stood in long lines at the city's banks, depositing the contents of their suitcases into accounts and safe deposit boxes there. Uruguay is South America's Switzerland, a safe haven for money in times of crisis. No one asks about where the millions come from.
DER SPIEGEL
Argentina in crisis.
Once the Argentine businessmen had transferred their dollars abroad, the second phase of the collapse began. The Argentine government froze all bank accounts, capping the maximum amount an accountholder could withdraw at only $250 (€198) a week. Small investors, those who had left their money in the banks, were the hardest hit. Tens of thousands of desperate citizens stormed the banks, and many spent nights sleeping in front of the automated teller machines.
The last phase of the downturn began in the Buenos Aires suburbs. After consumption had dropped by 60 percent, young men began looting supermarkets. In December 2001, 40,000 people gathered on Plaza de Mayo in front of the Casa Rosada, the presidential palace. There, they banged pots and pans together day and night, until an unnerved President Fernando de la Rúa fled by helicopter.
The image of the fleeing president has burned itself into the collective memory of Argentineans. It marks the worst financial crisis of the last 100 years. De la Rúa's successor allowed the peso to float free on the world currency-exchange markets after it had been pegged to the US dollar at a ratio of 1:1. Tens of thousands of small business owners, who had incurred debt when the peso was still pegged to the dollar, filed for bankruptcy.that Argentina would not be able to repay its $145 billion (€115 billion) in foreign debt.
Is history repeating itself today?
Economic experts have been warning for months that Argentina is again heading toward national bankruptcy. Men are traveling to Uruguay once again with suitcases filled with cash. In the space of only three weeks, more than $700 million (€553 million) was withdrawn from Argentine bank accounts. Government bonds have lost more than half of their value. ATMs are no longer giving out more than 300 pesos, and inflation is running rampant
Negotiating your way around a tough economy
Anybody that’s a fan of bartering is a fan of mine.
Barter is the bedrock of ALL economics… it’s the “bedrock trampoline” a crashing economy smashes into before it eventually bounces back.
If you’re in business and you don’t barter directly with other business owners, or use an ethical, regulated barter company such as Merchants Barter Exchange (MBE), you’re seriously missing out on multiple benefits. That goes for the good economic time AND the bad economic times.
Just imagine how much business you’d lose if you didn’t accept credit cards…? How much business are you losing by not using the MBE barter system…?
Let’s hope people don’t let this country go the way Argentina did back in 2002 and HAD TO use barter because the country went BANKRUPT.
Barter is the bedrock of ALL economics… it’s the “bedrock trampoline” a crashing economy smashes into before it eventually bounces back.
If you’re in business and you don’t barter directly with other business owners, or use an ethical, regulated barter company such as Merchants Barter Exchange (MBE), you’re seriously missing out on multiple benefits. That goes for the good economic time AND the bad economic times.
Just imagine how much business you’d lose if you didn’t accept credit cards…? How much business are you losing by not using the MBE barter system…?
Let’s hope people don’t let this country go the way Argentina did back in 2002 and HAD TO use barter because the country went BANKRUPT.
New Economic Revolution Needed...?
Quoting Einstein, "Insanity: doing the same thing over and over again and expecting different results."
That said, $700 BILLION... the lunacy (I can't think of another word for proposing such a ridiculous short term solution to a problem that was allowed to happen for so many years) that is happening in the economy right now, really is insane.
I am feeling rather smug, with that "I told you so" look on my face, though. Why?
For three years people have been telling me I was crazy for working so diligently for Merchants Barter Exchange - a new (launched eight years ago) company to help businesses trade for things at the same price as cash using the barter system - it even cost me my marriage, but I knew the economy was headed for a fall like this.
We are now being lauded as "futurists". Call us futurists if you want to, but for us the writing has been on the wall for many years: our economy is down the toilet and is not going to be solved by "bubble-gum politics". The only way to save the US economy is Merchants Barter Exchange.
The people "pulling the strings" now have their dirty little fingers on the flusher handle.
Barter, as an economic system, has outlived Kings and Queens, Empires, World Wars, Governments, recessions... It is the bedrock trampoline every economy hits when it crashes.
Thankfully Merchants Barter Exchange had the foresight to create their highly effective method of bartering 100%, same as cash, 100% of the time.
If there's anybody out there that really thinks $700 billion is really going to fix this problem, you probably also believed that the Titanic could have been saved with a large enough piece of bubble gum. Folks, please stop drinking the Kool Aid... and I tell you what, you can buy a lot of Kool Aid with $700 billion dollars.
Rant over, just had to get that little thing off my chest. Phew!
That said, $700 BILLION... the lunacy (I can't think of another word for proposing such a ridiculous short term solution to a problem that was allowed to happen for so many years) that is happening in the economy right now, really is insane.
I am feeling rather smug, with that "I told you so" look on my face, though. Why?
For three years people have been telling me I was crazy for working so diligently for Merchants Barter Exchange - a new (launched eight years ago) company to help businesses trade for things at the same price as cash using the barter system - it even cost me my marriage, but I knew the economy was headed for a fall like this.
We are now being lauded as "futurists". Call us futurists if you want to, but for us the writing has been on the wall for many years: our economy is down the toilet and is not going to be solved by "bubble-gum politics". The only way to save the US economy is Merchants Barter Exchange.
The people "pulling the strings" now have their dirty little fingers on the flusher handle.
Barter, as an economic system, has outlived Kings and Queens, Empires, World Wars, Governments, recessions... It is the bedrock trampoline every economy hits when it crashes.
Thankfully Merchants Barter Exchange had the foresight to create their highly effective method of bartering 100%, same as cash, 100% of the time.
If there's anybody out there that really thinks $700 billion is really going to fix this problem, you probably also believed that the Titanic could have been saved with a large enough piece of bubble gum. Folks, please stop drinking the Kool Aid... and I tell you what, you can buy a lot of Kool Aid with $700 billion dollars.
Rant over, just had to get that little thing off my chest. Phew!
Barter: An Old Concept That Continues To Help Business
The earliest documented records of civilizations bartering dates back over 9000 years to the Egyptians, but it is certain that Man bartered long before that. Barter is the oldest form of commerce and is still going strong, in fact with the recession strengthening more and more business owners are turning to organized barter to bolster their businesses.
It is a very simple concept - quite likely the major reason for its longevity and continued success. Barter is the exchange of goods and services for other goods and services. In essence a cashless transaction. An example is a restaurant that needs landscaping. The landscaping company does some work for the restaurant in exchange for some gift certificates. But what happens when the job is quite large and the landscape company does not want that many restaurant gift certificates, or none at all? Enter the barter exchange.
Barter companies have been around since the mid-50s in America and it is estimated that there are probably over 1400 exchanges of differing sizes and scope now in the US. Just type “barter exchange” into any Internet search engine and you will be inundated with a myriad of companies to chose from. A barter exchange steps into the one-on-one relationship that exists with traditional bartering, basically allowing businesses to trade with other businesses they have nothing in common with (or where no duality of needs exists). Take the earlier example of the landscape company. If they belonged to a reputable barter exchange they would get barter credits (usually known as barter dollars) for doing the work for the restaurant, but they could then spend that barter revenue on renting a backhoe, or getting tires for their trucks, or something equally useful to their business.
There are multiple reasons to belong to a good barter exchange, below are a few key benefits:
*Increased revenue
*More clients
*Better cash flow
*Improved efficiency
*Greater marketing opportunities
*Increased purchasing power
Unless a business has more work than it can handle, barter is a ‘no-brainer’ for any company. A business has all its fixed costs (rent, salaries, insurance, vehicles, machinery, etc.) whether it has one hundred customers or three hundred, if a business can take dead time or inventory that in effect is costing money and turn it into new revenue, it’s a home run. The major benefit to companies is that they get to leverage their cost of goods. Back to the landscape company, what does it really cost them to do $1000 worth of work for the restaurant? Obviously less that $1000 or they wouldn’t be in business long (usually a company’s cost of goods is 50% or less). Since barter work is absorbing their surplus time, inventory or capacity, when they barter their services they are only incurring their actual cost of goods, this means they can make purchases via the exchange for pennies on the dollar - another home run.
Organized barter companies (usually those with national scope) also have many more benefits over conventional advertising methods since they are much more proactive. Barter members call into the exchange brokerage with things they need and the brokers match those needs with other members that can fill them. There are usually fees to join, but compared to a print advertisement for example, you only pay to join once and then most exchanges are ‘pay per use’. If at all possible, when choosing a good barter company, go with one that does not encourage cash-barter blends (i.e., a portion of the transaction is cash - not strictly all barter) and join a company that insists on ‘100% trade, 100% of the time’. Any barter company that allows blends to happen usually has inflation in their economy and not too many hard goods as a consequence.
One final tip when choosing a good barter exchange, make sure they allow you to spend first - this ensures you that their barter dollars actually have tangible worth and you’ll be able to continue spending them on a long term basis. Extra revenue is fine, but if you cannot spend it, it’s as good as worthless - unfortunately some businesses have been badly hurt by less reputable barter companies this way. Most quality barter companies will actually offer a guarantee to new members that they will let you spend a barter credit balance first and get you new business. Barter is a lot of fun and with the right company can be one of the most useful business tools you ever employ.
As far as tax goes, the IRS considers all barter transactions whether directly or via an exchange exactly the same as cash revenue. Consult your tax adviser for more detailed information on how to report barter income.
Tram Holloway owns the Minneapolis/St.Paul, MN division of Merchants Barter Exchange, a national barter company, and is available for any questions you may have concerning bartering: barterguy@yahoo.com.
It is a very simple concept - quite likely the major reason for its longevity and continued success. Barter is the exchange of goods and services for other goods and services. In essence a cashless transaction. An example is a restaurant that needs landscaping. The landscaping company does some work for the restaurant in exchange for some gift certificates. But what happens when the job is quite large and the landscape company does not want that many restaurant gift certificates, or none at all? Enter the barter exchange.
Barter companies have been around since the mid-50s in America and it is estimated that there are probably over 1400 exchanges of differing sizes and scope now in the US. Just type “barter exchange” into any Internet search engine and you will be inundated with a myriad of companies to chose from. A barter exchange steps into the one-on-one relationship that exists with traditional bartering, basically allowing businesses to trade with other businesses they have nothing in common with (or where no duality of needs exists). Take the earlier example of the landscape company. If they belonged to a reputable barter exchange they would get barter credits (usually known as barter dollars) for doing the work for the restaurant, but they could then spend that barter revenue on renting a backhoe, or getting tires for their trucks, or something equally useful to their business.
There are multiple reasons to belong to a good barter exchange, below are a few key benefits:
*Increased revenue
*More clients
*Better cash flow
*Improved efficiency
*Greater marketing opportunities
*Increased purchasing power
Unless a business has more work than it can handle, barter is a ‘no-brainer’ for any company. A business has all its fixed costs (rent, salaries, insurance, vehicles, machinery, etc.) whether it has one hundred customers or three hundred, if a business can take dead time or inventory that in effect is costing money and turn it into new revenue, it’s a home run. The major benefit to companies is that they get to leverage their cost of goods. Back to the landscape company, what does it really cost them to do $1000 worth of work for the restaurant? Obviously less that $1000 or they wouldn’t be in business long (usually a company’s cost of goods is 50% or less). Since barter work is absorbing their surplus time, inventory or capacity, when they barter their services they are only incurring their actual cost of goods, this means they can make purchases via the exchange for pennies on the dollar - another home run.
Organized barter companies (usually those with national scope) also have many more benefits over conventional advertising methods since they are much more proactive. Barter members call into the exchange brokerage with things they need and the brokers match those needs with other members that can fill them. There are usually fees to join, but compared to a print advertisement for example, you only pay to join once and then most exchanges are ‘pay per use’. If at all possible, when choosing a good barter company, go with one that does not encourage cash-barter blends (i.e., a portion of the transaction is cash - not strictly all barter) and join a company that insists on ‘100% trade, 100% of the time’. Any barter company that allows blends to happen usually has inflation in their economy and not too many hard goods as a consequence.
One final tip when choosing a good barter exchange, make sure they allow you to spend first - this ensures you that their barter dollars actually have tangible worth and you’ll be able to continue spending them on a long term basis. Extra revenue is fine, but if you cannot spend it, it’s as good as worthless - unfortunately some businesses have been badly hurt by less reputable barter companies this way. Most quality barter companies will actually offer a guarantee to new members that they will let you spend a barter credit balance first and get you new business. Barter is a lot of fun and with the right company can be one of the most useful business tools you ever employ.
As far as tax goes, the IRS considers all barter transactions whether directly or via an exchange exactly the same as cash revenue. Consult your tax adviser for more detailed information on how to report barter income.
Tram Holloway owns the Minneapolis/St.Paul, MN division of Merchants Barter Exchange, a national barter company, and is available for any questions you may have concerning bartering: barterguy@yahoo.com.
Merchants Barter Exchange Fighting Recession
Barter is booming in the dwingling economy. MBE helping to support businesses.
Whilst presidential candidates merely talk about economic solutions that might help the current financial crisis, Merchants Barter Exchange (MBE) continues to actively help businesses around the country bolster themselves against the recession.
Since streamlining the barter system over seven years ago, MBE has helped businesses around the country benefit from the age-old concept of trading goods and services instead of tying up their cash. The MBE system allows businesses to move slow-moving or surplus inventory, increase revenues, maximize efficiency, gain more customers, and improve cash flow with a simple and effective concept that's been around for millennia.
"With our '100% trade, 100% of the time' system and efficient brokering department, we've made barter a simple and essential medium for any sized business," states Steve Bolles, president. Every Fortune 500 company has known the value and benefit of barter, but until the cost-effective simplicity of the MBE system and its safeguards against misuse (price-gouging or cash-barter blends), the effective application for small and medium sized companies has been limited.
MBE has steadily grown in size around the country, but is currently experiencing unprecedented growth due to the recession-proof nature of their business model. "Revolutionizing an industry is a challenging prospect and hasn't always been easy," says Bolles. "These are exciting times for our company and this latest growth makes the journey and struggles we've endured all the more rewarding."
For more information about their national licensing program, employment opportunities, or membership eligibility, please contact:952-334-1226
Merchants Barter Exchange
www.merchantsbarter.com
Whilst presidential candidates merely talk about economic solutions that might help the current financial crisis, Merchants Barter Exchange (MBE) continues to actively help businesses around the country bolster themselves against the recession.
Since streamlining the barter system over seven years ago, MBE has helped businesses around the country benefit from the age-old concept of trading goods and services instead of tying up their cash. The MBE system allows businesses to move slow-moving or surplus inventory, increase revenues, maximize efficiency, gain more customers, and improve cash flow with a simple and effective concept that's been around for millennia.
"With our '100% trade, 100% of the time' system and efficient brokering department, we've made barter a simple and essential medium for any sized business," states Steve Bolles, president. Every Fortune 500 company has known the value and benefit of barter, but until the cost-effective simplicity of the MBE system and its safeguards against misuse (price-gouging or cash-barter blends), the effective application for small and medium sized companies has been limited.
MBE has steadily grown in size around the country, but is currently experiencing unprecedented growth due to the recession-proof nature of their business model. "Revolutionizing an industry is a challenging prospect and hasn't always been easy," says Bolles. "These are exciting times for our company and this latest growth makes the journey and struggles we've endured all the more rewarding."
For more information about their national licensing program, employment opportunities, or membership eligibility, please contact:952-334-1226
Merchants Barter Exchange
www.merchantsbarter.com
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