By Bari Faye Siegel
You know what they say about “one man’s trash being another man’s treasure?” Nowhere in business is this more valuable than the practice of bartering – exchanging goods or services, in lieu of cash.
Bartering is the ultimate cost-saving win-win in the construction business because jobs – whether small or multi-billion-dollar projects – often require extremely costly equipment to complete. It’s understandably cost-prohibitive for a company to buy a piece of heavy equipment they will use sparingly. On the other hand, if the company obtains the equipment without having to dip into cash reserves, it can also look for ways to use it more to increase value to GCs.
Besides, there is usually some contractor or supplier somewhere who has what you need and may be willing to trade it for something they want. Cold hard cash doesn’t exchange hands in most cases, but everyone gets what they need to get their work completed.
There are many great things about bartering, the main one being that businesses that engage in trading wares are able to maintain the status quo when it comes to revenue. In other words, if your company is doing well, you can get the job done without risking going over budget when you barter for equipment, supplies or services. Conversely, trading what you have for something you need also maintains your bottom line; you don’t have to cough up cash to get your job moving forward.
CIS’ online information directory currently includes a robust classified section where GCs, subs and material suppliers can buy and sell goods. In the near future, look for a dedicated bartering section on the newly designed CISLeads.com. Many online bartering services charge hefty fees to handle the administrative aspects of bartering. CIS clients will be able to save money by making great use of CIS’ do-it-yourself bartering section – coming soon!
Consider these other ways bartering can boost your business:
Generate New Customers: Cash is king, of course. However, if a company trades you something you need for something they need and the values are equal, you both get what you need and you’ve extended considerable goodwill to your new customer.
Conserve Cash: Look at the opposite side of that same example. You need something and don’t have the funds to buy it. If you can work a trade deal in which you barter something you’ve already paid for you will get the equipment or supplies needed to complete your project without putting out cash.
Empty Your Warehouse: Sometimes, what’s old will never be new again. That doesn’t mean it isn’t valuable and useful to someone else. But for now, it’s taking up space on your shelves. You can trade your reserves or overstock to another company that needs it now. You deplete excess inventory in favor of getting something else of value that you need.
Make the Most of Downtime: In the construction business, which is often weather dependent, there are periods of downtime throughout the year. Every day your crew or equipment sits idle is a day without profits. Through bartering, savvy general contractors, subcontractors, material suppliers, equipment dealers and professional service companies can trade goods and services to make better use of those extra resources.
One Additional Thought
In order to be successful in the bartering game, you need to connect with others who need what you have. Remember trading baseball cards? You had to make deals and negotiate trades. You talked with others who wanted something from you and, in return, were willing to give you something you wanted back.
In the business world, that’s called networking. Networking always expands a company’s potential customer base. So, at the end of the day, bartering is a win-win-win because today’s efforts get both companies what they need and potentially solidifies the possibility of doing future business together.
CIS is here to help. If we can help you reach more customers, please let us know. Visit cisleads.com or email customer service at Sue@cisleads.com.