Barter Group helps small businesses get creative with financing - East Valley Tribune: Business

Barter Group helps small businesses get creative with financing

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Posted: Tuesday, January 1, 2013 1:45 pm | Updated: 4:41 pm, Mon Jan 7, 2013.

The Barter Group, looking to help one of its members, has made barter available to pay a debt.

“Talk about great creative financing,” said Lori Baker, director of the Barter Group, an East Valley business that promotes barter between member businesses.

Barter has always been a part of business, Baker said. Lately, even as the economy slowly returns, cash-flow remains low. Many businesses have turned to barter to help business expenses.

“I know from the business perspective, we’re working twice as hard for less profit,” Baker said. “Essentially, we’re running to stand still.”

Many businesses are working harder for less profit, especially around the holidays as larger businesses mark-down prices to entice shoppers, she said. Smaller businesses have to follow suit to stay competitive.

“It’s not what you’re selling; it’s what you keep,” Baker said, meaning that regardless of what businesses sell, what really matters is the profit margin.

Barter, however, allows businesses to exchange services to help keep up cash flow, said Casey Stechnij, who joined the group about a year ago.

“It won’t pay my electric bill or rent, but in the middle of the summer one of my air conditioning units went out at the ice cream shop,” said Casey Stechnij, owner of Mesa’s Superstition Farm and Gilbert’s Udder Delights.

Stechnij used barter to solve the cooling issue nearly immediately, he said.

“A year ago, I probably would be still trying to figure out it out,” he said.

He added, “With the holiday season, I was looking to settle some things: How am I going to do this? How can I do the thing right?”

One specific bill from a lighting company had been sitting on the backburner as other bills took priority in a squeaky-wheel sense of things, he said.

“He wanted it all at once,” Stechnij said. “I thought, ‘I don’t have the money today, but how could I pay it today?’”

Stechnij contacted Baker and the Barter Group created an account for the amount of the bill. Instead of paying cash, Stechnij worked out of his barter account.

Barter dollars can be used among about 400 small businesses in the Valley for a multitude of services, from marketing to employee t-shirts to electricians.

Barter dollars from the Barter Group are an alternative currency used by member businesses. Rather than using direct barter — eggs for electrical work — it allows businesses to trade the currency for things they actually need from any of the other companies in the group.

Using barter to pay a debt is new experience, Baker said.

“My goal is always to help an existing member,” she said.

But if other businesses run into similar problems and other non-member businesses are willing to take barter dollars, it might not be the last time this sort of financing happens, Baker said.

In an extreme example, Baker said, barter would be better than if the bill went to collections or bankruptcy.

“The silver lining is barter,” she said. “If a business were to file bankruptcy, a person often gets nothing. If it goes to collections, you might get half.”

With barter dollars, small businesses could pay off debts and creditors get their money, Baker said.

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