Bartering, For The Old Biz And The New...

Ever thought about trading your way to business success? Tune in as I, Trader Stu, share my journey into the world of bartering and the creation of the Trading Post podcast. This episode sheds light on the essence of bartering in business and unravels why some entrepreneurs embrace or resist this ancient practice. Bartering isn't just trading goods; it's about building a community, supporting local businesses, and engaging the younger generation to keep this vibrant economy alive.

Learn how to leverage the power of barter networks for business growth, especially if you're navigating tight cash flow. These networks offer a unique opportunity where marketing costs are aligned with sales success, making it a win-win for everyone involved. I share real-world examples from the lawn care and tree trimming industries, illustrating how established trust and proximity can unlock new business opportunities. Additionally, discover how trading excess inventory or services can transform potential business liabilities into valuable assets. Whether you're a new entrepreneur or an established business looking to optimize resources, this episode is packed with insights that could revolutionize your approach to growth and sustainability.

“Whistles In The West” was written, recorded, and produced by Durracell, exclusively for use with Trader Stu’s platform, always rocking the cowboy hat. The track is protected under U.S. Copyright rights to use have been granted specifically to Trader Stu for content and promotional use related to his brand and media presence.

contact:
 📧 durracellmusic@gmail.com
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The thoughts and views expressed in this podcast are solely those of the host and do not reflect the official policy or position of Metro Trading Association. Although the host is an employee of Metro Trading, this podcast is intended to educate entrepreneurs on the benefits of professional trading, regardless of their location. Additionally, the host reviews various pieces of camping gear due to the association of trade, barter, and prepping.

Chapters

• 0:00 Bartering and Business Success Insights
• 16:59 Business Growth Through Barter Networks

Transcript

Speaker 1: 0:24

Hello, welcome back to the fourth episode of the Trading Post podcast. I am Trader Stu, back in the old sauna studio today. I wanted to make a quick little observation about something I said two weeks ago, because it's been two weeks since I recorded a podcast and I made a little joke about how there's no way that I'm going to not make it or not fail about the three podcast episode failure stat that I mentioned. Basically, it says that podcast 95, or 99% of all podcasts, fail. That hasn't that. Haven't made three podcasts I think it was or not didn't make it to four, essentially right. So three and under fail.

Speaker 1: 1:10

And then here I am uh, struggled to get my fourth episode up because of things that happened at work and with the family and whatever like that, right? So, uh, now I'm going to try and record out a little bit, uh, further than just day by day. My goal was to do a podcast every Monday. My goal was to do a podcast every Monday, edit it and then upload it by Tuesday. And I'm finding out that in the business world, when you have a business not that I have the business, but I am the sales and marketing manager things come up and you know, monday comes up fast because by the time you edit it and post it and you know that's not but another few more days and then you got to do it all over again. So now I want to uh pre-record out, as most people probably do, and uh have it 30 to 90 days out. I was talking to another podcaster who said that they've heard it's not uncommon for them the people that she was talking to uh to record 30 days to even 90 days out. So I guess you could do an entire season, which would be nice, and just record all season, like they do it, you know, for sitcoms, and then be done. And uh, I guess what does that? Probably what's the season? Three months or something like that. I guess it depends on your podcast, but I would say probably 10 episodes or so would be a good season. That's what one per week for eight. Now the 10 is only two and a half months, so I don't know. I would probably do 12. That'd be three months, 12 episodes out. That'd be nice At any rate.

Speaker 1: 2:40

Uh, season one of this podcast is all to explain the different avenues of bartering. Uh, the remaining seasons after this I want to go around and do the mobile interviewing and to all the barter members on how they utilize a barter and how it's helped them and why they're still members. As I said, I'm back in the sauna studio today because it's just really hard to get in the office early and record these before anyone gets there, before the phones ring. I noticed that was kind of a struggle. Plus, there's this crazy air system that is pretty loud and I had to edit that white noise essentially out. So still dreaming about having my mobile studio. That'd be sweet, like a Class C or a trailer or something like that. That'd be nice.

Speaker 1: 3:24

Anyway, bartering for the old business and the new. So a lot of our members have been with MTA since the 80s. It's still going strong. Actually they would give a testimonial any day about how much joining a trade association has benefited their business and in fact many of our members are also members of one or more I guess you could say of two other barter groups so that they can diversify their portfolio as much as possible.

Speaker 1: 3:55

It's hard to say competitors in the area because a lot of us don't have the same businesses, although some of our barter groups in the area do have the same business. Like I just mentioned times two or three the same business, you know, like I just mentioned, times two or three, and so I guess that would be a competitor. But, um, you know, in the end, uh, business, businesses, they do what they can to get as much money as they can in the system, in their uh, in their checkbook, so a lot we'll just do, uh, sign up for two or three different barter groups, which is great, and um, it's about that, you know, that I wanted to get into today, because why is it that some businesses, like I mentioned, they have two or three different barter groups that they're members of. They get it right, they get traded, they get barter, and then some others don't. They just don't see the whole, I guess, the concept it's hard to talk to them about. They just want cash only and then they don't, I guess don't understand about, you know, converting. You know, like, convert trade into cash, but trade creates cash, and I would kind of want to talk a little bit more about that today.

Speaker 1: 5:01

So the whole reason behind me creating this podcast is to educate as many people out there I guess entrepreneurs, business owners, you know same thing about what seems to be our underground society, because when I talk to people. Most of my job is explaining what trade and barter is first, and then I can kind of get into it on how it would work out for them. But the whole point of the podcast is just I'm trying to get the word out there about trade because it seems like a lot of our members are, uh, mostly author I say mostly older, but they're all you know, the old school and so I'm trying to bring in some young blood because we're going back to the ways of you know, old school business. It seems like we've been burned out with the thing and people want to go back to that local business feel and that's what we do, that's what trade does. It makes everyone kind of know each other.

Speaker 1: 5:57

So a couple of statistics that I found here. I'm a bit of a numbers guy, so I couldn't help but look for some of the stats on new businesses and on the fail versus success rate. I guess you could say so. I'm just reading this from a Google search that I, you know, typed in about the US Census Bureau, and this is actually just an AI feedback that I'm kind of citing here. There's a record-breaking in 2023, a record-breaking 5 point. I'm going to round up here to 5.5 million, but it's 5,041,000,. You know blah, blah, blah, but 5.5 million new businesses were started in 23. That's a record breaking hit, I guess. Maybe it's because people can't find jobs and so they're like I have to start my own job here If I wanted to get many money. Maybe that's what it is. I don't know, because I was out there for a little bit and it's hard to find a job and I've seen that on the Nextdoor app that I'm on and Facebook and LinkedIn. It's for some reason it's tough racket out there, although there's a record number of job openings At any rate, record breaking new businesses 2023.

Speaker 1: 7:05

The onset of the pandemic in 2020 has driven a surge in new business creation. So I think that my assumption is right in that they can't find jobs, so they're going to start their own job. So the number of new businesses is trending up. On average, it starts at 4.7 million businesses are started every year, so this is actually quite a bit more. It's almost a million. So 800,000 more businesses were created in 23, as opposed to the average of 4.7 versus 5.5 million. So, yeah, I guess that's a that.

Speaker 1: 7:39

I can see the record breaking a number there and, according to the U S bureau of labor statistics, or the BLS, about 20% of new businesses fail in the first year and the failure rate increases over time. So I think we all knew that. You know it's, starting a small business is a high risk endeavor and very interesting stats here as well. The first year, 20% of new businesses fail, and then the second year, 30% of new businesses fail. The fifth year, half. So 50% of all businesses fail. By the 10th year the stats change a little bit. The 10th year, 30% of new businesses remain, so remain, not fail. 30% remain, and then the fifth year, 25% of new businesses remain.

Speaker 1: 8:25

So I did the math on this one. It was like you know, minus 20, minus 30, minus 50. I don't want to say plus 30, but kind of it's 30 remain and then 25% remain, right? So I did the math and if you do, starting just from a hundred, minus 20%, minus 30%, minus 50%, and then take the remainder of 30 and 25, I came up with a 14.7 businesses remain out of 100. Yeah, I mean, when you do all the numbers like that, I can see. I see it now, you know, but it's kind of confusing. So here's why some of the businesses do fail and they're including the lack of market need. You know most.

Speaker 1: 9:05

There's an app I can I found in the library. It's called A to Z databases and I took their online course because I had some questions about it and they had a free program where you can ask them questions and do a online training seminar, which was fantastic because I was the only one on this training module that they had training module that they had and so I got the one-on-one training, basically, and I got to ask all my questions and not interrupt anybody, so to speak. So one of the modules in this A to Z databases is to look for business failures and I was like, why would you ever want to know that? Like what's the point of finding out what businesses are failed or gone or went out of business? I think it's how many went out of business. Let me just find this real quick. I'm going to go online here because I want to make sure I say it right A to Z databases. Let me just log in, all right, all right. And then what we see here? What does it say? Oh, here we are.

Speaker 1: 10:02

So search it's closed businesses. There's a tab for closed businesses. Search by type of business employee size, sales, geography and more. So I was like, why would you want to look for closed businesses? And they said, well, because if you're trying to open up a pizza joint, you want to know what other or I guess how many other pizza joints in that area have failed from. In this case you can define a date range of last two months, six months, last year. Then it goes by years two years, three years, four years, five years, six, seven and eight years. Ok, so you can say how many pizza places have failed in the last five years, which is really cool. And you can do it by metro area, zip code, state, city. Then you got the geography. You can exclude certain areas that you don't care about. You can search by a keyword your SIC code or NAICS code If it was a home-based business, major industry or group keyword business group, business name, headquarters and branch.

Speaker 1: 11:05

I don't really care about if it was a headquarter, but I don't know, maybe some would if it's, I guess, a very large, small business, I don't know. And then you can go by employee size, annual revenue, which is kind of cool If it was women-owned, public or private, you can check box small business indicator on here. Annual expenditures the year established. If it was a Fortune 1000 company, a non-profit County population oh, that's cool. You can say how many people are in that county Very neat, okay. And then manufacturing indicators you can find out if they are a manufacturer or something Like. I used to work for a place that built salt spreaders, for example. Website name, square footage and number of PCs Very cool.

Speaker 1: 11:52

I like this, but anyway I would never use it because I'm not in that. That doesn't help me at all. Anyway, it's called A to Z databases. Your library probably has a subscription to it and if you have a library card, hey, now is the time to use your library card that you've been that you forgot about or wiping the dust off of. You're like I don't read books anymore. But you know, libraries provide a lot of great resources that people don't know about and for a lot of programs that people are probably paying for but don't need to because your tax dollars are already doing it for you. So look into your local library for cool things like that.

Speaker 1: 12:29

When I used to work at the company for metro trading association uh, 10 years ago, I actually used reference usa. That was free through the library back when I lived in Genesee County the Genesee I forgot what, it doesn't matter the library name, I guess a subscription that they paid Reference USA for, and I found out that it's a quite expensive program. Their Reference USA is no longer anymore and then they've been bought out by a different company and, anyway, a to Z databases is basically Reference USA. All right, that's enough of that. So what's the other reason why they fail? Uh, 35% of startups fail because there's no demand for their product or service. So obviously you want to do some backgrounds, home homework, and see what's, uh, the need is for that area. And then, uh, this is a redundant thing that it's been out for me. Uh, setting up shop before identifying a target audience. So, again, same thing. If there's no demand, there's no target audience. Same thing, right.

Speaker 1: 15:22

One way to prevent failure Set up a portion of your marketing budget to bartering, depending on what you can handle for the fee. It's suggested to stick between 10% to 30% of your business income for barter. It suggested a stick between 10 to 30% of your business income for barter. So, whatever your income is, try and have 10 to 30% of that as your barter income. This varies, of course, due to the fact that some companies are solopreneurs and they have more flexibility than when you have a bunch of employees. When you have employees it changes because of the variables, that some employees are bonus with trade dollars, prepaid barter cards be prepaid barter cards and if the owner is savvy with spending their trade. So we do have a couple of uh, big clients, big members, in our association that do tip out kind of or give christmas bonuses or end of year bonus or whatever you want to call it, and they have prepaid barter cards for their employees that they'll either give them right before our trade show and then they'll rent a limo and they'll come up and we serve food and drink and then they can have some spending money at the trade show to buy whatever they want, whatever their bonus, right, so really nice perk. Some others I know will just use their trade dollars and go to out to restaurants, take their family to restaurants or you know, splurge on something like that. So it's kind of nice when you have the employees and then you teach them about barter and just tell them, like here's your you know card with whatever 500 bucks on it and you know, here's your list of places you can go to and, uh, have fun. So it's, it's nice, uh, nice little perk.

Speaker 1: 16:59

And obviously word of mouth, advertising and referrals are the best for growth of a new business. So how do you get more of that Right? Uh, every bomber, every member of a barter group is a business owner of some sort, and when you join a barter group, other than the initial membership fee, you don't pay for anything. Uh, the advertising that we do for you, and we do, uh, seven different ways of marketing, and I've kind of touched on that before so I'm not going to go over it again. Uh, but you don't pay for any of that marketing until after you make a sale.

Speaker 1: 17:26

So if your new lawn care company and your trade group generates an account for you and you're able to stake a sign in the yard for you, and you're able to stake a sign in the yard, for example, if you're, you know, mowing lawn, put your sign out front. I know my neighborhood they do it and they infertilize and they'll put signs in their yard. Or even just if your trucks and trailer in front of the house and you're logoed out and they have, uh, I know when people in my neighborhood get jobs done like I had my trees trimmed at a substantial discount because a neighbor down the way had a tree cut down, but it didn't take all day and they didn't have any other jobs lined up. And here they got a crew of kind of I think it was like 10 to 15 guys that this guy had working for him doing this tree trimming and cutting. And, uh, he just door knocked me. He was like hey, we're up the road, we just finished a tree, we're early, and uh, I'll cut, you know these, I'll trim these trees down for you. And I said, actually, you know what, give me a quote for you know this one, this one in the front yard at a big maple, two sycamore trees, a crab apple tree, uh, and another, I think it was this crab apple tree. I ended up cutting the whole thing down. It was, um, drawing squirrels onto my roof, so anyway, I cut that down completely. But he trimmed it and that was included, um, and yeah, I think it was 700 bucks. You know which would have been, I think, 2500 if I would have. You know, I already got the quote before and the guy quoted me, I think, two or three grand. This is a couple years ago, but because I was a special job, you know he had to come out for. You know I already got the quote before and the guy quoted me, I think, two or three grand. This is a couple of years ago. But because I was a special job, you know he had to come out for me. But because this guy was already down the road, this had a walk down the road to me. You know he got extra money and it was great. It worked out for both of us.

Speaker 1: 19:07

So you know, and it happens a lot, people will door knock, they'll get their lawn sprayed. Or a big one in my area is pest control. There's a house, a couple of doors down. Who gets their yard sprayed I think of spiders or earwigs a couple of times a year. And sure enough, you know, every time they're in the area you got a door knocker. He's like hey, we're down the road or helping your neighbor out spraying earwigs. Do you have a problem? And you know me, my wife, we don't care that we have spiders or earwigs and they're in the yard and not in the house, you know whatever. So we never bite on that one. But the tree trimming we sure did.

Speaker 1: 19:44

At any rate, people buy from people they know, like and trust, right. And that goes for one tier further than that People who buy from those people they know, like and trust and do business with. So if they know that neighbor and you're taking care of their landscaping needs or whatever, those neighbors know that neighbor and you're taking care of their landscaping needs or whatever, those neighbors know that neighbor, so if they're doing business with you then you must be kind of like all right, so to speak. I guess you assume they've already been vetted, because that neighbor doesn't, you know, necessarily buy cheap stuff maybe, or he's meticulous with his yard, or you know he's picky with landscaping and you're out there doing it and I see that landscaping and you're out there doing it and I see that. Well, if they only get nice things, then I'm more apt to you know bite, I guess.

Speaker 1: 20:26

If you're in my area, so if you're doing a yard across the street from me is what I'm getting at and you take that as a trade job, now you got penetration into that neighborhood. If that's what your job is. If you're, you know plumbing, landscaping, tree trimming, whatever roofing, now you got you know landscaping, tree trimming, whatever roofing, now you got. You know easier access. I don't say it's a referral, but it's more of a layup, I guess, for you to get more jobs for cash that you used trade for. You know to get in. So that works for new and old businesses too, you know. All right.

Speaker 1: 20:55

A couple other things I wanted to bring up too, about why businesses work for both new and old establishments is that the cost savings allows you to obtain the goods and services without spending cash beneficial for new businesses with limited cash flow and established businesses looking to reduce expenses. So keep that in mind as well, if you're new or old business, and you can also trade excess inventory or unused services, which would turn your resources into valuable assets. So that means managing inventory more efficiently and reducing waste, which, if you're an old business and you have a lot in storage, let's just say, hey, great way to get rid of that extra storage and make some money off of that. One of the big things that I like about trade is that there's the huge networking opportunities, which is great for new relationships between the businesses. Obviously, new businesses can build connections and gain the credibility by partnering with established ones, so, while established businesses can discover new markets and opportunities and I've been experiencing that as well.

Speaker 1: 22:04

When I go to networking events and I explain things in person about how we work, it's kind of like a wow moment goes off with some of the business owners that I talk to and they're like, wow, that's great, yeah, let me try that out, or let me talk to my partner or whatever the case may be. But there's just something with talking to somebody in person and seeing a face behind you know the business. That just really does help with expanding business and that has not changed. I don't care what anybody says. With the COVID and the Zoom and all that stuff, the online thing is just yeah, it's nice, it's convenient, maybe it's great for established relationships. But I still think one-on-one opportunities are.

Speaker 1: 22:47

You know, even though they're far and few between anymore, it seems like I still try and hit up every networking thing that I can get my hands on because, one, it gets me out of the office or the house and uh. Two, I get to meet some people. Three, I see new areas and you know new businesses, whatever, and uh and maybe go to new towns I've never been in either. There's a lot of cool things that you get a hold of if you just get out and go do some of these things, and I use Eventbrite. Of course there's BNI, lbn, chamber of Commerce, a lot of things in the one I'm in. They do a lot of different things. So, anyway, and then back to this.

Speaker 1: 23:24

Back to, uh, this list I created here real quick. Uh, you increase your sales, obviously, with trade. Um, participating in barter networks you reach new customers who might not have been accessible through traditional cash transactions and increases the lead. Uh, increased sales and customer base expansion. I am totally aware of that. I know people will go out of their way to spend trade and do business with people that are in the association just because they're part of our network, and whether or not they have trade to spend or not, it's all about people helping everybody out in our group. So you know, if you've got a new business and they're trying to get into the market, the, you know the penetration is kind of tough with some of these businesses that they're in because there's a lot of competition. Our members will go out of their way and try and help them out and spend their trade dollars with them.

Speaker 1: 24:14

One of the cool things that I didn't think about until I was making this list here is skill development. Bartering can provide opportunities for businesses to acquire services they might not have afforded otherwise, such as marketing and professional training. It helps in skill development and business growth. Now, I've seen that too. We do have some professional trainers in our group that I know that a lot of business owners might not spend the cash on, but because they have this extra trade maybe that they've earned, they'll take these courses and pay for trade dollars with it and learn something new, and I've never heard a bad thing from it. I mean, how can you go wrong really? And then, of course, like I mentioned in my last episode, economic resilience. So during economic downturns, bartering can be a lifeline and I've seen that already too. It allows businesses to continue operations and maintain relationships without relying solely on cash transactions. So overall, bartering is a flexible approach to helping a business of all sizes thrive by leveraging their assets and building strong community ties and building strong community ties.

Speaker 1: 25:24

So, yeah, just a quick list. I made up there because I was thinking of other things that I could talk about and how the new and the old kind of thing kind of popped up, and I like that. It makes all makes sense. Of course, a little help with a Google search with the statistics and math. But all in all, yeah, that's a. That's pretty much it. That wraps up this episode and thanks for listening, and I'll see.