Monthly Archives: April, 2018

Bartercard Myths: Setting the Record Straight

April 30th, 2018 Posted by Bartercard, Marketing, Smart business tips No Comment yet

It’s a simple concept of exchanging products and services, yet there are still misconceptions when it comes to Bartercard. This week’s blog sets the record straight and dispels the most common Bartercard myths, whether you are already a member, or a small or medium-sized business looking to join.

Myth: I won’t be able to spend my trade dollars

dining_restaurant.jpgThis is one of the biggest objections to joining Bartercard. When you join Bartercard’s business marketplace, a comprehensive business analysis is conducted so we can identify potential suppliers already available.

If there are insufficient suppliers available to suit your specific business requirements, we will work with you to bring on additional new suppliers to satisfy your needs. Many of Bartercard’s top trading members have successfully improved their business profitability by proactively recommending and referring new suppliers.

We don’t claim to be able to provide all members with everything they need. But we do find that when members (small businesses or medium-sized businesses) are engaged and communicate with their Bartercard Trade Broker, appropriate spends can be identified.

Bartercard is also seen as an excellent way to reward high performing staff. Some businesses even give staff their own Bartercard cards, which are credited each quarter based on performance. It’s a great approach to staff rewards and to make your staff to feel valued. They can make a range of lifestyle purchases like accommodation at destinations world-wide, dining and massage.

 

Myth: I can’t get my core spends using trade dollars

This one has some truth to it.  Certain expenses like utilities, rent and wages do require cash payment, so it’s not realistic for a business to run entirely on Bartercard without cash. We always suggest Bartercard is in addition, or a supplement, to your existing cash business (and not a replacement), and should make up approximately 10-15 percent of your business. A dedicated Trade Broker will work with you in identifying opportunities to spend, and help you source products and services on trade.

 

Myth: Trade dollars aren’t equal value to cash 

One trade dollar has the value of $1 USD and members should price their products and services accordingly. From an accounting and tax perspective, Bartercard income should be viewed as you would your cash income. You can read more about Trade Dollars and tax here.

 

Myth: The fees are too high

Bartercard charges a minimal monthly marketing and support fee. A fee is also charged on all transactions. The average Bartercard transaction fee is 6.5 percent (which is low in comparison to daily deal websites and discount sites who charge approx. 15-20 percent of the sale price and stipulate the offer must be at least 50 percent of the original sale price). The fees cover provision of a dedicated Trade Broker, full e-commerce capabilities, proactive marketing of the member business to businesses nationally, online monthly statements and an interest-free line of credit.

Top reasons why SMEs run out of cash

April 25th, 2018 Posted by Bartercard, Smart business tips No Comment yet

More than half of all new businesses close in their first year and making it that far doesn’t make you fail proof.

Small and medium-sized businesses don’t have the deep pockets or backing that large enterprises do, which is why even short-term cash flow problems can sink a business with an otherwise promising future.

Quick takeaways if you’re in a hurry

  • SMEs work on tighter budgets than large companies, and that means even small financial problems can sink an unprepared business.
  • The most common problems that can sink otherwise good SMEs are: unsustainable growth, clients who pay late and a sudden loss of credit.
  • These issues can’t be completely avoided, so every SME requires a plan or prearranged facilities which allow them to manage these kinds of cash flow hurdles when they occur.

How can a business unexpectedly run out of cash?
There are a lot of different reasons why your business could suddenly run into liquidity issues, but let’s take a look at a few of the most common.

Unsustainable growth
Surprisingly, too much success too quickly can wreak havoc on your finances. High demand for your products can overextend your ability to provide services, which means you need to build up your business’ infrastructure – more employees, tools, materials and management support.

If, for example, a long-standing client suddenly wants to scale up their service by an order of magnitude, you might end up trying to scale your operations up part-way (as your budget allows), only to lose the client entirely because the service from your lagging infrastructure no longer meets their expectations. You won’t be able to recover the investment you made in the time you had planned, and your revenue is now even lower than before you made the investment.

Clients who pay late
Every business owner is familiar with clients paying late. It’s so common that entire industries are built collecting those overdue debts. Unfortunately, most SMEs don’t have time to wait for collection agencies to do the work. Businesses need reliable revenue to cover operational costs. When a small business doesn’t get paid, things go downhill fast. Tools break and don’t get repaired, materials run out, payrolls fail and employees leave.

Sudden loss of credit
Sometimes everything will be fine, until you get a letter in the mail letting you know that your bank is closing your line of credit. This essentially pulls the safety net out from under your business. If you were counting on this facility to cover any expenses due to another issue (like a late payment from a client), find another backup quickly.

These issues pose massive risks for SMEs all over the world, and the most critical way to avoid them is by understanding and making use of the financial tools available to SMEs.

What can an SME do avoid cash flow problems?
There are a variety of different financial arrangements that SMEs can make with business finance firms to protect themselves from these common cash flow problems:

Bartercard
Bartercard is a business marketplace where members exchange products and services without the use of cash to attract new customers, boost cash flow and increase profits.

Bartercard continues to work effectively in communities where members exchange everything from a hamburger to real estate, capitalizing on spare capacity and slow-moving stock.  See what expenses you can instantly move across to Bartercard to conserve cash in these areas.  Every member who joins Bartercard receives an interest-free line of credit to start spending straight away.

Small business loan
Access to working capital is critical in every business – whether it’s continual cash flow or a vital cash injection to take your business up a notch.

Business overdraft
This is a line of credit containing flexible payment options letting you withdraw money up to a pre-set limit when required and make deposits when your business receives payments.  Many have flexible terms and competitive rates – speak to a business banker to find out more.

The threat of depleted cash flow is a concern for many business owners but having the right resources in place can keep you covered in just a few steps.  If you take out a loan always ensure you are credit smart and have a plan around spending and repayment so you can continue to access capital into the future to strategically expand.

 

Written by Bartercard Australia

5 tips to drive business growth

April 18th, 2018 Posted by Online Business No Comment yet

Whether you want to scale up in leaps and bounds or at a steady incline, metrics are a critical part of tracking progress and success.  Want to chart your progress but don’t know where to start? Read these five tips to drive business growth and stay ahead of the curve.

1. Define success

In today’s digital world, many businesses plan in three month blocks – a 10 year plan just isn’t the case anymore when the world is changing so fast.  But despite of how far out you plan, mapping out where you want to be through a strong and clear business plan is critical.

2. Set your key performance indicators

If you have firstly mapped out what success looks like, use data to then define how you will measure it.  Identify which indicators, or KPIs, are critical to achieving your goals.

3. Understand your baseline florist on computer

Every journey has a start and end. If you want to set measures that will drive your business forward then start by understanding exactly where you are today in terms of business impacts, costs and finances. Factor in seasonal changes, external impacts and key trends when planning ahead.

4. Set effective targets

Effective targets encompass both an achievement and a time frame. Break your targets down into manageable tasks so they don’t seem so unachievable – think how much more doable it is to achieve one sale per day, rather than 30 per month or 360 per year.

5. Go forth and achieve

Once your metrics are in place make them part of the everyday conversation in your business. They should be transparent across your team and everyone should be clear of what they are working to, and what success looks like. Empower your team to contribute directly towards your goals and structure rewards so that they support goal achievement.

If you can successfully place measures and performance indicators into your business it will become much easier to track your progress towards the growth you desire. But keep in mind that these measures will only be effective if they empower you and your team to make the changes needed to make them achievable. Put effective growth measures in place today then measure, adjust and repeat to achieve the results you want.