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More Than a Recession Buster, Bartering For Better Business

Historical and Current Contexts of Bartering

Depending upon your cultural experience and history the term “barter” can elicit a number of scenes in your mind:

o a 19th century American frontier doctor accepting a chicken in trade for an office visit

o an Italian cobbler trading a shoe repair for a fabulous meal

o or maybe a Basque sheep herder trading a swatch of wool for a bottle of aged Tempranillo

Within our economic structure it has seemed, at least generally speaking, that bartering has been a thing of the past. Yet, the truth is that bartering never totally vanished from our socio-economic landscape. It just became less common and with our current global economic situation, bartering seems to be making a huge come back!

However, while the financial benefits of bartering may seem obvious, there are many socio-cultural benefits that translate into improved community relations and new emerging business practices that spell success and growth in a whole new world.

Exactly What Is Bartering?

The type of products and services exchange that we usually term “bartering” is referred to in sociological circles as a form of reciprocity. In order to better understand bartering let’s take a look at the 3 levels of reciprocity.

1. Generalized Reciprocity

Generalized reciprocity is the kind of uninhibited sharing or giving that we generally extend to individuals, family members, and people in our clan or kin groups (or perhaps today we’d say our close friends, our crew, or our peeps, and of course our family).

This type of reciprocity requires a level of maximum trust and minimum social distance. You need to be able to really trust these people and feel close to them. In these relationships you don’t give with the intention to receive, but there is an expectation of similar trusting and close behavior from those in your circle.

For the sake of our discussion I will refer to this kind of bartering as Inner Circle Bartering.

This kind of giving creates social closeness.

2. Balanced Reciprocity

Balanced reciprocity is when we give and we expect to receive some time in the future. We give in this way to relatives, friends, neighbors, and coworkers-or maybe in your network.

Maybe you pick up lunch one day, knowing that your coworker will grab it the next day or you have an extra ticket to a show and treat a friend, knowing she or he will probably pick up the check for dinner. This type of reciprocal giving requires a level of moderate trust and social distance.

Your neighbor may not reciprocate your BBQ invitation and your coworker may never pick up lunch. Those things won’t crush you. However, you may stop giving in those particular ways with those people.

The flip side is that the people who reciprocate your hospitality and generosity are people that you will grow closer to, give more frequently to, and even perhaps do business with.

For the sake of our discussion I will refer to this kind of bartering as Community/Network Bartering.

This kind of giving creates community.

3. Negative Reciprocity

Negative reciprocity is when we give labor or goods with the expectation of immediate reciprocation of a similar kind. This type of giving can even occur between strangers and requires minimum trust and maximum social distance.

You may see a vendor on the streets of SoHo selling scarves with a sign that reads, “in need of cell phone.” Though you don’t even know this person, you know it’s getting a bit chilly and you were thinking about buying a scarf for the upcoming fall season. You also know that you have an extra cell phone you have no use for. You suggest a trade, goods are exchanged, and the deal is done. This relationship may end there. However, if you happen to connect with this person in someway, you may find other ways that you can help one another and the relationship could, over time, develop into more of a friendship or acquaintanceship that builds community and future business interactions.

For the sake of our discussion I will refer to this kind of bartering as Immediate Exchange Bartering.

This kind of giving creates opportunity.

The “So What” About Bartering

Now that we have a sense of the different kinds of bartering that people engage in, it’s important to think about the real benefits of such relationships and business practices.

At it’s very core bartering is about relationships. These relationships vary in their levels of trust and social distance, but ALL of them have the ability to inspire new creative business relationships, build community, and create opportunity. True, not all of them will, but many of them will. That’s just a basic numbers game. If the majority of corporate employees and small business owners are choosing to ensconce themselves in their offices and cubicles conducting business as usual…little can change, little can evolve, the status quo remains entrenched, and if the ship goes down, we all go down with it.

However, our current economic situation has brought with its challenges great opportunity to think outside the box, to step outside of our offices and our comfort zones. It has brought with it a realization that the status quo was tragically lacking, and it is time for a new world of business – and many of us have responded with a resounding – YES.

The Human Voice of Commerce and Our Growing Need

In 2000 Thomas Petzinger Jr. (Wall Street Journal) stated in his forward to the Cluetrain Manifesto, “In this book(italics mine) I read a startlingly concise summary of everything I’d seen in twenty-one years as a reporter, editor, bureau chief, and columnist for my newspaper. The idea that business, at bottom, is fundamentally human…That natural, human conversation is the true language of commerce. That corporations work best when the people on the inside have the fullest contact possible with the people on the outside.”

That was 2000, now in 2009 many feel as though the corporations, in fact the system at it’s very core, has failed us and many of us feel that we know what the answer to that failure is-people.

The very act of bartering, Inner Circle Bartering, Community/Network Bartering, or Immediate Exchange Bartering, creates social closeness, community, and opportunity. It is one facet of our ever changing landscape and it is a very good one.

The reality of the great recession is that it’s happening, it’s here, it’s financial, but it’s a whole lot more. It’s opportunity to forge new business relationships, new organizational structures, new professional communities, and a new world.

Making Better Business Decisions in 2012

2011 was a big year for small businesses, but that’s all behind us now as we move into the New Year. We’ve learned a lot from last year’s economy because of its ups and downs, and thanks to these lessons we may move forward to build stronger businesses in 2012. What can you do to make better decisions for your small businesses to make this year a strong one?

Keep Up With Trends

As always, it’s important that you keep up with the latest trends when it comes to small business news, issues and legislation. Being well-informed will inevitably lead you to make sounder business decisions. For example, did you know that Health Care, Information Technology and Business Services represent three industries that saw the most growth last year and are looking to perform strongly in 2012? Staying on top of the news may seem like unnecessary work or wasted time, but this is only the case if you let it become a distraction. Use the information you learn through trusted business websites and journals to better understand your industry and drive your business this year.

Spend Smarter

It’s no secret that the recession and increased unemployment are both hitting small businesses where it hurts. Because so many consumers are spending smarter, your business should follow suit. Examine what you’re paying for in regards to your business, line by line. Is the new coffee machine for the office really necessary? The dawn of the New Year provides an opportune time for you to really decide what your business truly needs versus luxuries that you’ve come to depend on.

How can you cut down on your marketing budget? Take advantage of free marketing tools such as Social Media and Blogging to help drive traffic to your business. Facebook and Twitter have revamped the online marketing landscape, meanwhile Google+ is just now gaining traction for business owners. Blogging platforms such as WordPress and Blogger allow you to share your business’ content and keep your customers up to date and what’s happening with your company. Use such sites to your advantage; the only cost involved is the time that you’re willing to spend.

Take Care When Hiring

Be especially careful when it comes to hiring in 2012. Can you afford new employees? One of the most common and deadly small business mistakes is to hire in advance of revenue. Don’t fall victim to this trap. Hire only when necessary. You may also want to opt to rely on independent contractors rather the full-time employees to help keep costs down.

By making sounder decisions in 2012, your business will make this year a strong one.