Small Business Cash Flow Strategy Without The Cash

For many businesses managing cash flow is elusive and difficult. But there are creative solutions for managing cash flow that don't even require cash.

For small businesses everywhere, the hobgoblin of the Great Recession is cash flow.

Buyers and businesses are on a tight budget, credit cards are available to the lucky few, and the days of refinancing properties to pull out cash are gone for most.

Yet for the small business, expenses such as salaries, benefits, taxes, rent, mortgage payments, insurance and utilities – the overhead of the business - cannot be paid with anything else but cash.

Because cash is king for these essentials, small businesses often find themselves in a cash-flow bind.  There is no choice but to accumulate a minimum level of cash each month to pay them.  And if cash from customers is insufficient, then the business must borrow.

Operating loans, lines of credit, and credit cards have gotten many a business through tight times, but these options are very expensive for the small businesses that have them.  High interest, late fees and penalties associated with paying them back, can break a business’ back.

To battle the cash flow beast, small businesses are known to get creative. Offering discounts for cash, reducing cash-based costs, tightening credit and penalizing late payers all serve to free up the needed cash when account balances run dry to pay essential expenses.  Sometimes, however, these measures are not enough.

When Cindy Landine launched her online marketing firm in late 2014, the former telephone executive knew she and team needed sales training; but had already allocated most of her cash to paying for the essential things.  Searching the web for solutions, a clever new idea that had never occurred to her before was found:  bartering her business services for other business services.

Barter, however, is hardly new.

In the 1960s, tens of thousands of Americans joined barter groups which extended credit to their participants for everything from personal goods and services to business products, car repairs, and paint jobs. Back then, of course, there was no internet, and the world was not connected by the tap of a finger.

Today, the same bartering system exists, but on a vastly superior level with literally hundreds of thousands of products, goods and services available for barter worldwide.

Ana Hawk, founder of Instant Barter, says: “Barter is as good as money or gold. Two willing businesses can exchange literally anything of value they need, want or desire – from delivery trucks and refrigeration units, to services for accounting, legal and marketing.”

The International Reciprocal Trade Association (IRTA), a nonprofit organization of commercial and corporate barter exchanges, estimates that more than $7.5 billion in sales flow through commercial barter channels each year. Last year, IRTA members employing modern technologies enabled over 400,000 companies globally to engage “Excess Business Capacities and underperforming assets, to earn an estimated $12 Billion dollars in previously lost and wasted revenues.”

In the article, “Sometimes Barter is Better for Your Business,” Forbes contributor Jim Blasingame writes: “Small business should look for barter opportunities. For example, with too much inventory and too little cash, barter can be part of a survival strategy in a bad economy. Slow-turning goods become the equivalent of cash to pay for something that in a better economy would have been covered by the cash flow and profits from customer sales.”

“Barter is as creative as the human mind wants it to be,” says Ms. Hawk. “Many business owners might initially think of barter only as something to be exchanged informally with neighbors.  In fact the opposite is true. A service like InstantBarterdotcom connects with barter companies all over the world. A small business that needs to keep a tight rein on cash might barter for accounting services from a company located 1000 miles away on the opposite coast, and a foreign web design firm located half way around the world in Russia.”

For small businesses, being creative with cash flow can be the difference in surviving or going out of business.  But ironically, sometimes the best cash flow strategy comes from alternative solutions like barter, which requires little or no cash.

Contact Info:
Name: Ana Hawk, CEO
Email: Send Email
Organization: Instant Barter

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Release ID: 72433