Who Else Wants To Learn The Secret To Using Bartering To Help When Selling A Business?

Bartering or trading creatively can help you make it easier for a prospective buyer to finance the purchase of your business. And in challenging times, when access to capital is severely limited, that can make all the difference. That is the underlying premise behind the information on Bartering that can be found in another part of this website.

However, it is a layman’s view and I wanted you to benefit from the advice of a skilled practitioner of barter. So I contacted David Wagenvoord, a man with decades of experience using this creative technique for his own business, and for others. Notably Carnival Cruise Lines in their earlier days where he traded surplus room nights for advertising and other working goods and services.

In response to my question about whether it is reasonable to consider barter as a tool to be used in a business his response was enthusiastically positive. However, while agreeing that my original approach to be found at Bartering would work, his main approach was different.

His basic approach reflects his vast experience in barter. And it is more direct than what I suggested elsewhere. Essentially he recommends that you as a seller take part payment in kind or trade. Whatever product or service your business sells, agree to accept a specific amount of it as part of the price.

He used a hotel as one example. You as the seller can agree to accept a specified number of room nights per year for a specific number of years as part payment. Combining that with the capital that the prospective buyer will already have, will reduce the amount of capital he needs to secure from third parties.

He used a law firm as another example. You as the seller can agree to accept a specified number of hours of legal work each year for an agreed number of years. Again, the result will be a reduction in the amount of additional capital a prospective buyer need to secure.

When access to capital is difficult, and the amount available limited, this technique could make the difference between a transaction closing and not closing. And you want to be the one closing.

When asked whether there were any business where this couldn’t work, David was unable to think of any. He did elaborate a bit on how this will work. He acknowledged that a seller really doesn’t need an inventory of room nights, or a number of years worth of legal advice. And so on. However, as a seller has experience in his industry, he will know how and where to convert the barter accepted, to cash.

Remember that cash is your ultimate objective. And when you are agreeing on the amount of product or service that you will accept in this way, remember to consider the profit margins in the business. Where significant margins apply a buyer can afford to give more product or service without impacting overall business performance, than if margins are modest.

When you utilize this technique, be sure that everything is in writing. Get certificates representing ownership of the product or service that you accept as part payment. And have it broken down into reasonable increments, so it is easier for you to sell. Make sure that the claim that the certificates represent is legal and enforceable. And that it is transferable to third parties.

This discussion of barter has barely scratched the surface. It was not intended to do more than get you thinking about another alternative way to help a buyer acquire your business.

You may wish to learn more about it. It could also prove very profitable for your business while you still own it. David Wagenvoord has an audio program on the topic. It is available in CD form, and comes with a money-back guarantee. To get more information about it email David Wagenvoord . Tell him you are interested in the audio program on barter, and give him your phone number. He won’t do business by email.

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