Why you don’t always need to spend cash to get what you want.

When Genevieve Bos, then an entrepreneur running a startup software company, needed a trade show booth, a lack of cash and credit didn't faze her. "We bartered a software upgrade for one of our clients for the booth," she recalls.

MAKING THE TRADE
The concept of bartering is simple: Instead of paying cash for items (office equipment, airline tickets) or services (consulting, cleaning), you pay with goods or services of equal value. There is no limit to what can be bartered, and commercial exchanges such as International Monetary Systems, Itex and U-Exchange.com make the process even easier.

Exchanges match buyers and sellers, and let you track trades: A "sale" to another member earns you credit, while a "purchase" debits your account, so there is no need to calculate trades individually.

Roberta Weissburg, owner of two leather-goods boutiques in Pittsburgh, has used Green Apple Barter Services for 10 years. "A store near one of mine used billboard advertising," she recalls. "When I asked the owner how he could afford it, he told me about Green Apple." Weissburg says she barters about $100,000 in sales, often with people she wouldn't otherwise have as customers. "It's not real money," she adds, "but it makes a big difference with cash flow."

To Bos, bartering is also a great sales tool. "If you're willing to barter for a sale while a competitor is not, you're giving your prospect a huge discount they don't have with your competitor."

One-on-one bartering requires effort, though. "Just as in sales, you have to understand the company you're approaching," Bos explains. "It's old-fashioned salesmanship. Use your network. Find the right person in the organization to make the deal and convince him or her of the benefits." She finds that social networks such as LinkedIn generate leads, but the best way to close the deal is a telephone call.

Whether bartering can save money while improving cash flow depends on the deal. Airlines and hotels, for example, barter at about 70 cents on the dollar, taking a loss, but still earning revenue that would otherwise be lost, such as excess inventory. In that case, Bos says, "There's really no downside."