Sunday, August 14, 2011

Saving Money as a Small Business -- Trade, Trade, Trade


Saving money when in business or starting a business is crucial to its success. I try my best--here are the two things that I do well:

1. Buy in bulk.

With a small crafting business, you may be tempted to buy small to begin with, and then reinvest that money again and again, until you can afford to "buy bigger."

I recommend against this. I think you should learn the value of buying in bulk to start. I know many of you are loathe to use your credit card for business purchases, but this is the reality of business: if I can buy my materials for less money overall, then I will make more money in the end. Those bottles of organic jojoba oil up there? I snatched those up when I learned about their price. I took all she had left. It will last me a year.

Buying in bulk means you can price your wares for profit, as well. If you only buy supplies in small amounts, you are paying a premium, and your profit is smaller.

2. Barter whenever possible.

There are lots of benefits to bartering. The most important one is that both parties are getting full retail value for the trade. You can barter items or services--whatever you have that is of value, you should consider trading, as you can.

I am not suggesting that you offer a sack of potatoes to an online supplier as payment. I am suggesting that certain expenses in your life can be handled by bartering, in order to reduce your monthly cash expenditures.

For example, I regularly trade editing services for haircuts. My hair goddess has been cutting my hair for 16 years now. We recently came to an agreement: I edit the monthly newsletter for her business, and she cuts my hair when I need it. We both get full retail value for our services. She hates editing her writing, as it takes too long and is too laborious for her. Since it is not much effort for me, I'm happy to do it for her. She is the master of cutting my hair so that it curls just right and I don't have to "do" it every day. If I took scissors to my own hair? Girl, please.

We both benefit from this arrangement by getting the full retail value of the services. (How much do you pay for hair services? She's expensive!) Sometimes I do data entry work for her, as well. Again, she LOATHES that kind of work, and for me, it's just second nature. A bartering situation works best when both people involved think they are getting the better end of the bargain. Both folks win.

Some people come up to me when I'm vending at the farmer's market (usually other vendors) asking me if I want to trade. Sometimes I do, and sometimes I don't. If their wares are something that I want, then yes, I always trade for it. I have traded for: hot sauce, salsa, vegetables, fruit, a massage, lemonade, lunch, herbs, flowers, spices, cookies and pie. All were even retail value trades.

Heck, sometimes a trade just falls into my lap. I have several longtime customers who interact with me more like a friend. Last week, Russ came up to my booth and said, "Look, I picked a little squash and some cucumbers for you this morning." Fresh, organic produce, right out of his garden. Of course, I picked up his favorite soap and gave it to him. It was a treat.

I'm going on and on about bartering, aren't I? In these economic times, I think it's wise for everyone to consider what we have of value already. What skills or products do you have that are worth trading?


4 comments:

  1. Bartering is a great concept that we should take advantage of more often!

    Buying in bulk is often a great idea, but one needs to be realistic about their future needs and the interest they pay on their credit cards. jojoba is a great example of a product where it can pay to buy ahead. A really great price, not to mention the lack of availability and eternal shelf life make it a no-brainer.

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  3. Wow..!! Such a nice post. I like the way you write. Keep posted...

    Regards,
    Ray Grimm

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  4. Thanks, Ray. I appreciate the feedback.

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