With falling oil prices and the uncertainty in the Alberta economy, business owners should consider barter as a financial tool to brace their business for slower times. If business is slow, one of the challenges a company will face is keeping their staff. We all know that positive cashflow is the lifeline of any business. If there’s no money coming in, it’s hard to sustain business. Now, instead of letting your staff go – why not consider negotiating a partial cash plus partial barter pay? Let me explain.
Let’s say for example you own a coffee shop, and you normally pay your staff $15 cash per hour. You’ve been contemplating laying staff off because business has been slow. Your staff however are great with your customers, loyal and have always been there to help. One of the immediate things any business can and will do to save cash is let their staff go to alleviate the cash flow burden. Instead of letting your staff go and creating more work for yourself, why not consider paying your staff partial barter?
If your business belongs to a business trade exchange, you can pay your staff in a virtual trade currency called Trade Dollars. Trade Dollars are earned whenever you sell a product or service through the trade exchange to another business member of the network. The Trade Dollars then get deposited into your bank account through the trade exchange. The sales generated is incremental sales on top of your cash business. It’s like getting extra business you otherwise would not have gotten. In the eyes of Revenue Canada, they consider $1 Trade Dollar equivalent to $1 Canadian Cash Dollar. In other words, your barter income is treated the same just like cash. When you pay your staff with Trade Dollars, it gets deposited into their account through the trade exchange. Your staff can then immediately buy things through the trade exchange they normally would’ve paid cash for. Such things include:
- Heath services – dental, massage, eyewear, chiropractor, physiotherapy
- Renovations – general contractor, plumbing, electrical, locksmith, painting
- Home services – carpet cleaning, maid cleaning, furnace and duct cleaning, window cleaning
- Personal care – spa, salon, laser hair removal
- Entertainment – comedy, golf
- Travel – accommodation
- Other – restaurants, tutoring. window coverings, footwear
So, in the case of the coffee shop. To alleviate the cash flow burden, you can negotiate with your staff a pay of $10 cash + $5 Trade Dollars. The Trade Dollars you are paying out is a benefit to you because the actual cash outlay is in your product or service. The wage that you are paying out is at your own cost of goods, and as a result it helps you to save cash!