Bartering is back

If you have recently started a small business, you might want to consider a modern version of the oldest form of payment - bartering.

Forget the idea of paying in groats, bartering is now a hi-tech, platinum card affair and if you are serious about it, you'll want to consider the organisation that claims to be the world's largest bartering exchange, Bartercard.

The company was started in Australia in 1991 and arrived at these shores in 1996. Although it has been trading here for nine years, it has 3,500 active members dotted across the UK, who currently trade the equivalent of £4m a month. It operates as a franchise and costs those wanting to exchange their services around £1,000 to join.

Put simply, it allows firms to buy or supply products or services to other companies in the network, and to be paid or pay, using its Trade Pounds - which have the same value as a standard pound.

Bartercard says it is particularly suitable for small to medium businesses looking to grow as they are able to trade in wholesale prices - before any profit margin is added. It can also significantly improve cash flow at what can be a crucial time.

Transactions are all recorded and users run an account, holding their Trade Pounds in the same way as a conventional bank account.

Lou Lommano, commercial director of Actis Group in Chester, has been a Bartercard member for a year.

"I was originally rather sceptical, but thought I would give it a chance. We have one of the only digital printing machines that is able to print images on to wood and joining has been good for us. We make sure we only do a proportion of our business on Bartercard as you still need to keep the real money coming in.

"When asked to quote, we do so in the same way as we would for any other job and simply convert the price to Trade Pounds. Some jobs we ask to be paid for half using the Bartercard, and the other half will be involved in the normal way."

He says the company now buys all its stationery and a range of other services from other members and is about to use an accountant in the scheme.

"It's very good for networking and we have undoubtedly gained lots of new business as a result of being a member, although I think it really helps that we are offering a product that isn't run of the mill," he says.

Membership starts at £597 and users pay 6.5% of each invoice in administration charges.

Call 0870 920 1000 or go to bartercard.com/uk