Bartering helps small businesses survive recession

The Miami HeraldApril 5, 2010 

James Taylor doesn't need to pay full price for marketing materials.

When his basketball training service needs event T-shirts, he'll get them half price by making the printer a sponsor.

When he needs fliers, he'll get a discount by throwing in free advertising space on his website.

Taylor, the chief of Taylored Athletes in Boynton Beach, finds that bartering is widespread in South Florida -- and small business owners like himself find it a useful tool in a rocky economy.

"It played such a major role," Taylor said of bartering, which he began when he started his company in 2007. "Capital was hard to come by and it was how I had to start. . . . It gave you a sense of network and security. You never felt alone with bartering because you know other entrepreneurs are in the same place and want to work."

As small businesses see their lines of credit shrink and struggle to get loans, exchanging goods ends up being a way to afford extra services and make sure time and products don't go to waste.

There are two types of bartering -- the kind Taylor does by making business deals on a case-by-case basis -- and "modern" bartering through organized networks, which is what the International Reciprocal Trade Association measures to be a $10 billion to $12 billion industry globally.

In a slow economy, bartering typically isn't always the best business option, according to Peter Thompson, chairman of the Economics Department at Florida International University.

"It tells me what they're having is cash flow problems," Thompson said. "Some companies have their lines of credit drastically reduced."

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