HOW TO START AND OPERATE YOUR OWN BARTERING CLUB
Bartering is not negotiating! Bartering is
"trading" for a service, or for the goods you
want. In essence, bartering is simply buying or
paying for goods or services using something
other than money.
Thus defined, bartering has been around much
longer than money as we know it today. Many
companies use the principles of bartering as
standard business practice.
The reason bartering enjoys renewed popularity in
times of tight money is simply that it is the
"bottom line" method of survival with little or
no cash. In times of high interest rates, cash in
anyone's pocket is indeed a very precious
commodity and bartering is even more popular.
Bartering affords both the individual and
established business a way to hold onto cash
while continuing to get needed goods and
services.
In addition to saving a business borrowing costs,
bartering can improve its cash flow and
liquidity. For anyone trying to operate a
successful business, this is vitally important,
and for individual families in these times, it
makes possible the saving of cash funds for those
purchases where cash is necessary.
To start and successfully operating a bartering
club, you must think in terms of a banker. After
all, that's precisely the reason for your
business - to receive and keep track of people's
deposits while lending and bringing together
other people wanting or needing these deposits.
So your first task is to round up depositors.As a
one-man operation, you can start from your home
with nothing more than your telephone and kitchen
table, but until you get helpers you'll either be
very small or very busy (probably both).
You can run a small display ad in your local
newspaper. A good ad would include the following
ideas:
NEW BARTERING CLUB!
Trade your expertise and/or time for the
merchandise or services you need. We have the
traders ready - merchandise, specialised skills,
buyers too! Call now and register
ABC BARTERING (1234) 5678
When respondents to this ad call, you handle them
just as a banker handles someone opening a new
account. You explain how your club works:
everyone pays a membership fee, could be between
$100 - $200. The depositor tells you what he
wants to deposit, perhaps $300 worth of printing
services, and what he's looking for in return -
storage space for his boat for a three month
period. If you have a depositor with garage space
for rent, who might need printing services, you
have a transaction.
But let's say you have no "perfect match" for
this deposit. On your list of depositors you
have a dentist who's offering $600 worth of
dental work for someone to paint his house. A
woman with a garage to rent in exchange for
dental work for her children. An unemployed
painter willing to paint houses in exchange for a
side of beef, and a butcher who wants to trade a
side of beef for advertising circulars.
Remember, when a new member joins your club, he
makes a deposit and states his wants or needs.
In the above example, you have a typical
bartering club situation. Your service is to
spend or line up those deposits to match the
wants or needs of the club members.
An affinity for people and a good memory are
vital to this kind of business, especially if
you're running a one man business. Generally,
when you have a buyer for one of your depositors,
you notify him or her right away with a phone
call. You simply tell her that Club Member A
wants to rent your garage. She tells you fine,
but she doesn't want any printing services. You
simply tell her to hang on because you are
currently in the process of contacting the
dentist who'll do the work on her kid's teeth.And
so it goes in the operation of a bartering club.
Some of the larger bartering clubs (with several
thousand members) simply list the deposits and
wants or needs on a computer, and then invite
their members to come in and check out the
availabilities for themselves. Others maintain
merchandise stores where the members come in to
first look at the computer listing, and then to
shop, using credit against their deposits. The
smaller clubs usually publish a weekly "traders
wanted" sheet and let is go at that.
These methods all work, but we've found that
instead of leaving your members to fend for
themselves or make their own trades, the most
profitable system is to hire commission sales
people to recruit new members, specifically with
deposits to match the wants and needs of your
present members. These sales people should get
20% of the membership fee from each new member
they sign, plus 3 to 5% of the total value of
each trade they arrange and close. This
percentage, of course, to be paid in club
credits, spendable on merchandise or services
offered by the club.
You'll need a membership booklet, explaining the
rules, and possibly a contract for each member to
sign. Also a membership card would be a good
idea, with identification numbers.
Two things are important to the make up of the
membership package you exchange for membership
fees:
- It must be as impressive as you can make it
- It must be legal, while serving your needs
almost exclusively.
Basically, you should have at least 100 members
before you start concentrating on arranging
trades. As stated earlier in this report, the
easiest way to recruit new members is to run an
ad in your newspapers, and perhaps even on your
local radio stations as well.
Follow up these enquiries with a direct mail
package, which would typically consist of a
brochure explaining the beauty and benefits of
being a member of your bartering club, a sales
letter, and a return reply order form.
A bit more expensive, but just as certain of
success are free seminars. Rent a large meeting
room, advertise in your local papers, and then
put on a hard-sell recruiting show. Such a plan
is very similar to the party plan idea, but on a
larger scale. An inside tip: Whenever you stage
a recruiting seminar, always "pad the audience"
with your own people, who will of course lead the
way for those you're trying to recruit.
As stated earlier, you can start operations out
of your home, but working at home has a number of
growth inhibiting factors. After a certain period
of time, the growth of almost any kind of
business is retarded when it's operated out of a
home. So just as soon as you possibly can afford
to, move into an office of some sort. Keep your
eyes open and consider the feasibility of sharing
an office with an insurance broker, or estate
agent. Read the newspaper classifieds for
businesses willing to share office space or to
rent desks or other office amenities. This is the
kind of business that demands an image of success
You just can't keep people from "dropping in"when
you're operating strictly on a local basis. And
when you attempt to hire sales people, a place of
business to work out of is just as important to
them as how much commission they're going to
receive. Image is super important, so don't
neglect it.
Should you or should you not accept instalment
payments from new members? Yes, by all means.
But only when you've got their signature on a
contract drawn up for your benefit and deemed
legally binding by your solicitor. What about
credit cards? Yes, if you can get accepted onto
Visa or Access, you'll find that your ability to
accept these cards will double or even triple
your sales.
Precisely how much are you going to need in
actual start-up costs? We would estimate at least
$600 for printing and legal fees, unless you can
trade charter memberships in your club for these
services. Reputation and success in matching
offers to wants will be just as important as your
image, so give it your all. Don't give up; stand
behind the implied as well as the real promises
you make to your members.
A couple of final notes: Should you offer a
guarantee of satisfaction? Only so long as it
makes money for you, and you can back it up.
There's not a person in business anywhere who
enjoys refunding a customer's money. But don't
forget that the existence of your business
depends on service. The more you project an
image of a "people pleaser", the greater success
you're going to achieve. This is definitely not
a business for someone who doesn't enjoy "waiting
on" people. You've got to like people, and want
the inner satisfaction that comes from selling
new ideas. Actually, no experience or special
training is required. The operation of a
Bartering Club is equally suited to women or men.
Both do equally well as salespeople. It's a
business that fills a need, and a kind of
membership program people will stand in line to
be a part of, once they've been introduced to the
benefits.
This is the plan. It's going to take your time
and effort to get organised, but after your
initial work to establish this business, you can
become quite wealthy in a relatively short time.
Read over this plan again; determine if this is
"the one" for you, and then go all out. It's up
to you, and all it takes now is action on your
part.
