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Effective Crowdfunding Techniques: Part Two

July 9, 2018

Source:When it comes to raising money for your business online, there are several platforms available depending on your business’s value proposition, but getting an audience to review and take action in becoming a donor is the more difficult goal. Here are a few of the most effective techniques that will assist your business with its crowdfunding goals.

Kickstarter, Indiegogo, and GoFundMe are three of the most popular fundraising platforms for pre-launching a unique value proposition online. The most popular campaigns consist of book projects, market disruption technologies, and other products designed to satisfy a need or solve a problem. Hundreds of entrepreneurs have utilized online crowdfunding platforms to get their offering to market. Not every campaign launched is a success. Some of the latest and greatest well-thought out ideas fizzle out due to the lack of integration of methods in promoting the campaign itself and/or lack of audience engagement. Here are a few of the most effective crowdfunding practices that can enable your campaign to be a bigger success:

1). Set reasonable goals. Not every crowdfunding campaign will be able to sell out every perk and end up with millions of dollars at the end. It is better to set reasonable and obtainable financial goals based on your current business audience and following. It is always better to set a lower financial goal, offer many perk packages, and overshoot the expectations. When a goal is considered unrealistic, most campaign contributors will skip over and move onto the next campaign in fear that in the event your campaign does not reach its goals, it will not be in a position to deliver on the perks it offers.

2). Maximize the term of the campaign. Crowdfunding campaigns need plenty of time to be marketed, showcased, and shared with an audience of potential contributors. Setting the length of the term of the campaign to at least 60 days will allow for your campaign to be seen by more people. The longer a campaign is open, the more opportunities you have to update the campaign and adjust posts and project progress with your following audience. As the number of contributors climbs, more people will be open and willing to contribute to the campaign. A campaign that has attracted traffic has more reach and draws even more attention. Allow yourself enough time to work out the formula for success.

3). Don’t be afraid to tell your story. Crowdfunding is an opportunity to share your “why” behind the project and the “what” the value proposition is.  It is wise to share how you came to the idea you did (your motive and intention); and a clear description of the deliverable (the what). Contributors like to feel like they are helping someone out that has lent their struggle to solving a problem with their value proposition. Contributors want to believe in the people behind the perk as much as they desire to believe in the value of the perk itself. It is fine to be passionate – this is where you also get to pitch you.

4). Be clear in describing what is in it for the contributor. Any time a potential consumer contemplates to part with their money, they analyze a series of self-discovery questions. “How will this change my life?” “Do I really need the perk?” “Will this product/book/technology really help people?” “Will they (the campaigner) be able to deliver?” And most of all, “What’s in it for me?”  Ask yourself, if you were the potential contributor, do you really need this in your life? And then ask yourself, if you do purchase the perk, what will the perk really do for you? Your perk packages should be something everyone wants or can appreciate. A true and clear representation of the value of your perk will often determine how much risk a contributor is willing to take. Is it something anyone can get in a local store, or is it unique and limited?

5). Engage the crowd. Crowdfunding was designed to have two functions:

  • To raise money for a cause
  • To collect feedback from potential consumers

The more engaging a campaign with a group of followers is, the higher the probability is that your campaign will have more contributors. Crowdfunding allows for both the inventor/entrepreneur and for the market to have an early conversation about the product offering. This should also give the campaigner valuable data to improve the make and model of their concept when necessary. Don’t be afraid to answer questions, provide test results, and make changes according to the positive feedback you receive. The more information you can share in an open dialog the more willing a contributor will be in supporting your cause.

6). A great marketing strategy drives every well-funded campaign goal. Effective marketing and advertising methods can assure that a larger audience views your campaign. Your marketing strategy should employ a mix of marketing tools, many of which have little or no cost. Make sure the marketing of your crowdfunding campaign includes a mix of social media, blog content, press releases, video content, photo content, search engine optimization, articles, testimonials, endorsements, product/book reviews, back link integration, and some use of traditional advertising. You will need to monitor and update marketing metrics, so you can adjust your marketing mix according to how potential contributors respond to your message.

7). Perform your due diligence. There is nothing new under the sun, and the same goes for crowdfunding. Even if your product is the first of its kind, there may be a similar market solution or competitor in your industry space. Research the “problem” and review the “solutions” other entrepreneurs have offered to the market. Then research how many of those entrepreneurs employed crowdfunding to upstart their enterprise. Chances are that there will be a number of campaigns that were very successful and some campaigns that were utter failures. Make a list of the techniques that were most effective and the mistakes made that caused a campaign to flop. Compare these techniques against the list of practices you desire to employ in sharing your campaign.

8). Have a complete understanding of your potential audience. You must have a clear understanding of the audience you desire to enroll in your campaign. The demographics of the audience and the geographic location of potential campaign contributors can have an effect on whether your campaign is a success or failure. For instance, most digital or complicated electronic devices are more popular with younger generation donors. In contrast, if you have a very traditional product offering, then you need to identify, and target your campaign to, the audience that will have the most interest in your value proposition.

9). Be transparent with how you plan to spend your campaign funds. Campaign contributors want to know if you have a financial plan in place for spending or saving the money in which they have pledged. Most campaigns have best succeeded by using the campaign contributions to fulfill actual product orders. Most campaign contributors want to pre-pay for the unreleased product or book before everyone else in the neighborhood has it. Be prepared to plan to give back all of your campaign contributions in the event you do not meet your goals.

10). Set a reasonable timetable of delivery. Truth is your value proposition should be almost market ready. Crowdfunding should not be the only source for funding your project, nor should your campaign’s success or failure determine if your product is going to ever be manufactured. Set a reasonable delivery date that campaign contributors can expect their perk. In the event your project takes longer than expected, it is important to share with your contributors about the delay and updates of progress until the project orders are fulfilled.

11). Show that you are willing to invest into yourself. Most campaign contributors want to see that the entrepreneur has some of their own risk involved. There are two basic types of investment you are going to be required to make in your own project. The first is monetary. You must have some of your own capital at work. Having the ability to share with potential donors the actual amount of hard cash investment you have at stake before asking for outside financial resources always strikes a positive cord. The other investment you will have to make is sweat equity. Provide detail with contributors how much time you have invested and how much work you have put behind the project. You can share with the audience the functions and tasks you are personally responsible for. It is also good to provide some back story of your experiences and regarding your abilities to deliver upon those said tasks.

Each crowdfunding campaign has its own unique value proposition, and brings with it each entrepreneur’s story. The more thought you invest into each of these areas of your campaign, the greater the probability that a larger audience will take notice and interest in your campaign.

Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Burlum is also a career entrepreneur who currently lends his expertise as a consultant firm to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is the author of The Race to Protect Our Most Important Natural Resource-Water, and Main Street Survival Guide for Small Businesses.

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Why is Fashion So Important?

June 21, 2018

Source: Throughout history, society has turned to the latest fashion statement as a mark of social status. Why is fashion so important? Why do so many people pay attention to it, and why does it even matter?

Fashion in clothing has always stood as a social economic symbol for individuals that were in tune with the times. For some, clothing is just fabric that serves the purpose of covering and protecting the body. For others, fashion is a form of living art in motion.

It is believed by many in the fashion industry that fashion is a way for individuals to express themselves. Each color and type of fabric has a meaning, and matches a personality type. When colors and fabrics are mixed, each combination tells a story about the person wearing it, much the same as it does of the person or company that designed it. Each fashion trend has a “look” or style that best reflects individual personality and demeanor. Every person contributes a personal touch to each day’s outfit.

For instance, navy blue and a mixture of gray colors for business suits and outfits are considered the professional in the office environment; however, if you are at a trade show trying to attract attention, you might wear white or bright colors to get noticed by people. Such “rules” for fashion usually come from corporate dress codes, with the intent of being neutral and objective to the audience you are trying to communicate with.

Fashion itself has always been a reflection of the sign of the times. Whether it is for a social economic reason, political statement, or within a culture’s tradition, fashion has always played a role in communicating the “message” of a people or a message of the times. Each culture has its own unique traditional dress that reflects its community’s belief system, whether it be philosophical or religious. As technology has improved manufacturing capabilities, fashion has gone from being “homemade” to more mass-produced, thus more audiences may wear similar clothing than in the past.

A newer trend in clothing fashion goes beyond purpose, function and the traditional forms of influence to include becoming mobile billboards for the fashion brands themselves. If you take a look at fashion brands such as Tommy Hilfiger, GUESS and Juicy Couture, their signature brands have become the focus, not the people wearing them. Their ad campaigns can make people feel that if they do not own a Hilfiger or GUESS article of clothing, they are not part of the cool crowd. Other clothing brands focus on becoming high energy, luxury life style brands, thus owning their clothing becomes a status symbol.

For others, fashion, style and choice of brands are determined primarily by an individual’s personal passion, hobby or cause, making their clothing into their own personal billboard. Some examples of this are seen in sports apparel, racing, motorcycle apparel and brands committed to environmental sustainability and human rights.

Fashion has become a living art form, and though most average working class individuals may never spend thousands of dollars on one single article of clothing, individuals have come to appreciate the many artistic designs presented on the runway or showcased on models in department stores. This work of art says something to each person that views it. Some of these designs may be ridiculous to wear in any daily situation, however, the design itself may spur off other creative ideas because of the shapes, colors, or materials used to create the living art.

It has also been said that we feel the way we look. As human beings, we are very visual people. How we see ourselves in the mirror before leaving our homes for the day may be a reflection of how we feel about ourselves. Have you ever put on an article of clothing such as a suit and tie or a dress and instantly felt better about yourself? Showing that we are willing to invest into ourselves before we leave home for an important meeting, or for a family or social event, usually will reflect the response that we demand from others on how they view us. Though we are taught not to judge a person by their appearance, we do; and it’s the first impression that lasts the longest in our mind.

Fashion is not just clothing. It is a representation of an industry that employs millions of people. From designers to production line manufacturing, from marketing and advertising to retail workers, many jobs and economic foundations are based on the fashion industry. The next time you choose a piece of clothing from the rack, ask yourself how many people were involved with the final product you can touch and see in the store. Even the raw materials had to be grown or harvested by a farmer or field hand.

Ultimately, fashion is a personal choice, whether you chose your style to serve a specific purpose or it’s to impress others around you, fashion is meant to be the personalized message you dare to share with others. For some, fashion trends are not that important, but rather a matter of form and functionality. Whatever your view, it is reflected in how you present yourself.

Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns.  Burlum is also a career entrepreneur who currently lends his expertise as a consultant to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is also author of The Race to Protect Our Most Important Natural Resource-Water, and Main Street Survival Guide for Small Businesses.

 

Bug Off, Mosquitoes!

June 19, 2018

While walking through one of our serene Milwaukee County Parks over the weekend, it wasn’t long before I became a feast for the mosquitoes that seemed to arrive from out of nowhere—and during mid-afternoon! As a lifelong Wisconsinite, I shouldn’t have been surprised (locals often joke that Wisconsin’s unofficial state bird is the mosquito) but I was upset with myself that as of mid-June, I had yet to whip up a batch of my all-natural mosquito repellant. Early summer rains, combined with the region’s signature humidity, created the perfect breeding grounds for the little bloodsuckers, and they apparently took full advantage of it.

As itchy welts surfaced on my legs, I left the park, headed home and immediately grabbed my trusted essential oils to make my natural insect repellant. Like many people, I used to use the chemical-laden commercial bug repellents, until I began researching what was in them (which likely explained the mild headaches I occasionally suffered from after using some of those products).  So for the past decade-plus, I’ve turned to natural remedies such as this easy-to-make mosquito repellent:

4 oz. with hazel or distilled water

2 drops peppermint essential oil

2 drops rosemary essential oil

2 drops lavender essential oil

2 drops tea tree essential oil

2 drops eucalyptus essential oil

Pour all ingredients into a spray bottle and shake to blend. Spray on the body before heading outdoors, avoiding the eyes, nose and mouth. Reapply as needed.

Tip: be sure to use good quality essential oils; many cheaper oils sold at discount stores contain synthetic fragrances and fillers.

You can also adjust the ratio of essential oils to suit your preference, but I’ve found the above combination to be effective.

Other mosquito prevention tips:

Remove any standing water from your yard. Empty your pet’s water dish into the garden whenever the pet is not outdoors, and check the saucers under potted plants for water accumulation. Clogged rain gutters or buckets left outdoors can also collect standing rain and provide a breeding ground for mosquitoes. Change water in birdbaths regularly. If you have a rain barrel, be sure it has a screen.

Incorporate mosquito-repellent plants into the garden. Rose geranium, lemon balm, catnip and basil are good choices.

Burn citronella candles.

If you have room on your property, install a bat house. Although these winged creatures are usually associated with creepy Halloween images, bats are our most useful, natural allies in controlling pests such as mosquitoes.

Notice how mosquitoes are never present on breezy nights? The small, light-bodied mosquitoes cannot fly against even lighter winds, so create your own breeze. You’ll have to use a small amount if electricity, but this method is chemical-free and works well, especially for larger backyard get-togethers: bring a box fan or an oscillating fan outdoors, and plug it into an outdoor outlet or run an extension cord outdoors. Turn on the fan, and just blow the mosquitos away.

Sheila Julson is a freelance writer and contributor to Natural Awakenings magazine.

 

 

Crowdfunding Options for Entrepreneurs and Small Businesses

June 6, 2018

Source: Many small start-up businesses and tech ventures in search of capital turn to popular online platforms for crowd fundraising of financial resources to get their concept off the ground and launched into market. Indiegogo, Kickstarter, and GoFundMe, to name a few, offer solutions in generating cash to fund new ideas. How do you get people to contribute to your cause? We take a look at some of the most effective crowdfunding techniques.

In the last decade, there have been a number of crowdfunding platforms that offer a menu of fundraising options, including the launch and growth of Indiegogo, Kickstarter, and GoFundMe. A potential campaign contributor can find a variety of crowd fundraising campaigns that range from an inventor who is in search of a few thousand dollars, to a large, corporate-backed venture that is accepting pre-market orders for their new value creation. Each platform specializes in their own niche offering and provides a formatted recipe for what works in getting campaign contributions.

For instance, Indiegogo mandates that campaigners build and maintain a very aggressive plan that engages with multiple audiences from the campaign’s inception. As a part of the Indiegogo playbook, campaigners must make weekly posts and provide monthly updates for campaigns that have transitioned from either a 30- or 60-day campaign to their long-term product, called InDemand.  Indiegogo shares that campaigns must include video and photo content as part of their message in sharing their offering with potential contributors.

Kickstarter is also a leader in assisting with the introduction of innovative products and new books, music and other forms of art to market. What makes Kickstarter so successful for some entrepreneurs are the tools available that Kickstarter offers to promote their campaigns. Crowdfunding campaigns that have the highest rate of success with Kickstarter are those that offer something that is new, solve a problem, and offer something practical that people are willing to buy. Most products presented on Kickstarter are beyond concept and are ready for manufacturing and delivery. Kickstarter has helped products get more traction online, and has served as an interim online e-commerce site for product sales while entrepreneurs are setting up a permanent place to market their value proposition.

Most people use GoFundMe as a social cause donation site. For many individuals and groups needing only a few thousand dollars of funding for a personal project, GoFundMe has become the crowdfunding platform of choice. From setting up and taking donations for a funeral, to sponsoring a local sports team which is trying to obtain funding so they can travel to an event, GoFundMe has provided millions of individuals and nonprofits the ability to quickly gather up a few extra dollars in a time of need.

So what are some of the most effective practices for marketing your crowdfund project? When marketing to potential funders, social media has become the mainstay platform to inform your audience of close friends and connections about your cause or value proposition. Facebook gives you an opportunity to spread the word to your friends, family and extended connections. To get a better reach of your program, you can ask and encourage your network to share your post and provide feedback about the reason why they chose to help your campaign. If you desire to connect with professionals in a specific industry, LinkedIn provides the ability to syndicate and share your post with people from several related market segments. You can also promote your campaign through Twitter and Instagram, redirecting raving fans to your campaign page.

So what will donors get for their money? A donor should have the ability to choose perks in return for their donation, especially if the campaign is not solely philanthropic. “Perks” are the benefits that an individual can expect in return for the donation. The more creativeness and value you can squeeze into each perk package, the more you can request per perk level. By adding in a free copy of a book or promotional materials, you can provide additional added value for your donors. Perks are generally pre-orders for the specific market product you desire to launch. You can, however, provide add-ons for each level of donation.

Two methods you can employ for increasing how many people see your perks are:  1) holding a contest for most shares of your post with friends on social media, and 2) asking people who are not in a position to contribute to your campaign to help by spreading the message about your campaign story with people they feel would be interested in your project.

Having a few endorsements either by written or video testimonial will provide additional credibility to your offering. You can ask satisfied customers to give testimonials, or, if you know a celebrity, sports figure, or public figure, you can ask them to share a few words about your project, edifying the project and the product.

Lastly, you must monitor your results on a daily basis and make campaign adjustments accordingly. Having the ability to tweak your project’s campaign as you obtain feedback from donors will help you make changes to your campaign and provide updates that may increase traffic to your campaign’s page. Most crowdfunding campaigns can extend as long as 60 days, thus giving you time every few weeks to add to your campaign content and promote it online.

Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy and public policy concerns. Burlum is also a career entrepreneur who currently lends his expertise as a consultant firm to start-up companies, small businesses and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management and systems integration. He is also author of The Race to Protect Our Most Important Natural Resource-Water, and Main Street Survival Guide for Small Businesses.

Giving Up Social Media: Five Surprising Discoveries

May 30, 2018

Summer is around the corner and people will no doubt be sharing pictures of vacations, at the beach and with family and friends. But what would your summer look like if you gave up social media?

I gave up social media because, like so many people, I was spending too much time on it. I wasn’t necessarily posting a lot, but I would mindlessly scroll throughout the day: while pumping gas, in line at the grocery store, at my desk and while walking my dog. I started to wonder what my life would be like without the constant attachment to my smartphone. I decided to find out.

After giving up social media (Facebook, Twitter, and Instagram), I not only broke my smartphone addiction, but I also made five surprising discoveries:

  • I didn’t feel as stressed: Social media is supposed to be fun, so why did it stress me out? Well, I didn’t realize it, but routinely checking my social media accounts ended up feeling like another “task” on my daily to-do list; if I hadn’t checked my social media accounts in a few hours I could feel my anxiety level go up ever-so-slightly. Now I don’t worry about checking my accounts—it’s simply not an option anymore.
  • I lost weight:Yes, I actually lost a few pounds! Believe it or not, all those chunks of minutes that you spend looking at social media actually add up to a solid amount of time each day. Now that I had more free time, I found myself going for a walk during my lunch breaks instead of looking at my smartphone at my desk. Getting in the fresh air and walking amongst nature encouraged me to eat healthier, and I found myself cooking new recipes and craving fresh greens.
  • I woke up earlier (and enjoyed it!):I used to hit my snooze button several times each morning and finally drag myself out of bed. Now, I wake up around 5:00 a.m. naturally. The reason? I don’t look at social media before bed. Before, I would go to bed but then be looking at my smartphone for anywhere up to an hour. Now I have more energy to wake up earlier and have a peaceful morning to myself.
  • I cleaned out my house: Giving up social media inspired me to clear out the other unnecessary aspects of my life. I started with my closet and donated clothes I no longer wore and then I ended up moving to the rest of my house. Before I knew it, I had a carload of items that I’d accumulated over the years that no longer served a purpose in my life. It’s nice to know that someone out there is getting use out of those pieces rather than just collecting dust in my closet or basement.
  • I honored my own values:This is perhaps the biggest shift I noticed. You may feel like you know your values already, and maybe you do, but I challenge you to step away from social media for a week and see if you notice any changes in yourself. When we scroll through social media every day, we internalize the images that we see and start to believe—subconsciously or not—that they align with how we want to live. Without social media, I feel no social pressure, I don’t crave validation in the form of “likes” and “retweets” and I feel at peace with the choices that I’ve made.

Our modern lifestyles are so stressful and sometimes the key to addressing those stressors is through one simple change that can have a wide-range of lasting benefits. For me, it was giving up social media. Without social media, I feel that my emotional, mental and physical health are better and that helps me be a better wife, daughter, friend, colleague and neighbor. I believe that if you decide to give up social media this summer, the next few months will be more fulfilling and enriching.

Barbara Alvarez is a freelance writer in Wisconsin. Connect with her at BarbarAlvarez.com

Money Saving Tips Any Business Can Put into Practice

April 13, 2018

Source:There is an old saying, “To be profitable is to save money.” A small business needs every advantage it can get when it comes to trimming expenses and unnecessary cost. Here are a few savings tips for every business.

During tough economic times and a very competitive business climate, small business owners are doing all they can to conserve cash and increase accountability of the best use of their working capital so that they avoid watching their margins of profit from slipping away in between the floor boards. “A penny (or dollar) saved is a penny (or dollar) earned,” so here are a few tips a small business can adopt in order to save on fees, interest payments, and other bills that seem to cut into an owner’s profit margins.

1). Do away with debit/credit card use-switch to a reimbursement system. Banking institutions have switched their business model to a fee based revenue generation machine; which is different from when banks mainly profited from interest payments and fees attached to loans and loan servicing. Every time you use your debit/credit card, there is a transaction fee, either at the merchant and/or at the bank, and sometimes both. Ever use an ATM that is not affiliated with your bank? You will find in those cases multiple usage and service fees from ATM Vendor, the bank it is associated with and your own bank. Some of these fees range from mere twenty or thirty cents upwards to three or four dollars.

To avoid watching these fees and service charges cutting into your profits, stop using debit/credit cards for every little business transaction. Also, if you have multiple employees, you will want to limit their usage of these cards as well. Use a draw of petty cash that is withdrawn from the bank in-person. Use cash on smaller transactions under $100 when applicable. As it relates employees, you can set up a system in which they front the initial expenses they incur on behalf of the business, such as tolls, parking, gas, lunch or dinner meetings with clients, postage, and other purchases that make up the vast amount of small transactions. Once a week, have each employee submit their receipts to the company accountant for reimbursements and issue them a check for these expenses. Less usage of debit/credit cards means less fees you are charged.

2). Pay your vendors and/or suppliers early. Many of your vendors and/or suppliers may be on 30, 60, or even 90 day-payment terms with your business. This allows for your business to have the time it may take to sell inventory or service a client account before you have begun covering your cost of goods sold. Many distributors, vendors, and/or suppliers do offer a discount if payment is received before the 30 day window. Usually the offered amount is 2 percent discount if a bill is paid within 10 to 15 business days. If such terms are offered, pay your bills early to take advantage of these discounts.

If your business has a burn rate of say $10k per month, two percent is $200 saved per month ($2400 a year). That is $200 that is found money which can be applied to other parts of your monthly budget, such as marketing and advertising. If your vendor and/or supplier does not yet offer you early payment terms, negotiate this upfront with them. This is a small concession they will be glad to offer in keeping you as a client. It is of no risk to them. Most vendors or suppliers are accustomed to not receiving payments until 30 days after they are due.

3). Pay your credit card balances on time and/or in full. Most small business owners utilize credit cards as a form of business credit to keep their business afloat in between getting paid by clients. Most small business owners and managers often take credit card offers that provide “interest free,” or “low-interest” on credit that is borrowed. Many of these deals are contingent on payments being made on time and/or in full. When only the minimum balance is paid, a small business owner now loses the low interest deal they first had when they acquired the card. To avoid these increases in interest rates and service fees, pay the balance off in full and on time.

Another practice you can try in saving money when using credit cards is to call the credit card provider themselves and negotiate a “one time balance paid in full” when you have a high balance and are looking to close your account. Credit card companies would rather receive payment on an account that is closing than have it sent to collections. Usually if you get a manager or supervisor on the phone, you can ask to negotiate a final settlement offer. This saves you money in fees, interests, and charges, and clears the credit card company of the account.

If you are using credit cards to make purchases for business growth needs, consider joining a barter exchange that has a multitude of businesses connected to their network in which you can engage in. Barter is interest-free.

Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Burlum is also a career entrepreneur who currently lends his expertise as a consultant firm to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is also author of The Race to Protect Our Most Important Natural Resource-Water.

The World’s Demand for Alternatives to Traditional Currency

April 4, 2018

Source: With technology ten steps ahead of the market, even more options for paying bills have become readily available for both the consumer and for the merchant. We explore the many options payment options a business may choose to accept.

Two factors have changed the way we conduct commerce and financial transactions in the world over the past fifty years. The leading factor is the faith that people now have in traditional currency. For many countries, their money supply is based on one factor—faith; the belief that the value of the piece of paper or coin is a true representative of the value of good and/or services they wish to purchase.

Prior to what is known as “fiat currency,” money supply that is backed by no hard good, commodity, or tangible asset that is widely accepted as a mark of trade, such as precious metals like gold or silver, most countries would back their value of their currency on tradable commodities which had a real market value.  In recent years, crude oil and petro chemical fuels were used to support currency, while these same currencies were used as the preferred measuring stick against oil. Such is not the case anymore, now that even tying the U.S. Dollar to fossil fuels has become volatile.

With such conditions changing, more individuals are sharing their concern, vocalizing how they have less faith in a piece of paper, which is backed by nothing.

Another trend that is leading people to explore other currency options is the development of technology. Today there are more options on how to make a financial transaction for a good or service. Beyond credit and debit cards, e-wallet and electronic paying systems such as PayPal, Apple Pay, and Android Pay are used. Crypto-currencies are also on the rise. Bitcoin and One Coin have become the top ranked electronic currencies, and merchants are racing get their business into the fold into accepting these new forms of payment.

However, one form of a financial transaction that is as old as men and trade itself is also still on the rise. Barter is growing at a faster pace due to advancements in technology, organizational set-ups, wide-spread networking, and oversight from two leading barter-industry trade organizations.

With the improvements into accountability and infrastructure, barter has never been easier. Traditionally, one business or individual would trade services or products with another party that may too have a product or service to offer in the actual exchange. This limited barter, because if one party did not need the other party’s offering, then the exchange could not take place. Today the use of a credit system has widened up the scope in the barter arena. Barter exchanges have made it easier to use barter for many business to business purchases.

Exchanges such as Badger Barter, located in Sun Prairie, Wisconsin, offers a barter exchange that includes well over 600 business ranging from auto repair to graphic design; from legal counsel and services to website creation. These types of exchanges have evolved over time to include many member benefits in which traditional barter did not offer.

As a small business, you should be exploring all payment options, in addition to traditional payments of debit, credit, cash, and check. Barter is a viable way to conduct business to business transactions and opens the door for new business relations to develop within barter exchange networks. Some retailers are now accepting Apple Pay, Android Pay, PayPal, Bitcoin, and Onecoin. However, barter is considered one of the best options since most barter exchanges offer a credit system, allowing you to use the barter on a wider selection of products and/or services.

Barter is not only a form of payment; it is also a marketing tool. There are businesses that seek out other businesses that offer barter payment options. You should notify your clients about all of the payment options you offer in multiple touch points, including but not limited to a placard at the cash register/counter; logo of the barter exchange on your website, social media, and e-mail newsletters; logo on a storefront window; print advertising; business cards; invoices; and other forms signage a client may see at your establishment.

Bloomberg Business had researched and found that in 2012, over $12 billion dollars in goods and services were traded without any currency changing hands. Research showed that not every transaction conducted was on business essentials however the barter was still utilized. Even when the most obscure product or service was offered, the bartered item eventually would find a relative home. Another part of the study revealed that small businesses mainly spent their barter in exchange for marketing and advertising; legal and professional services; facilities maintenance; office supplies; and construction/renovation services; which are many of the same expenditures a small business might use proceeds from a working capital loan for.

Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Burlum is also a career entrepreneur who currently and lends his expertise as a consultant firm to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is also author of The Race to Protect Our Most Important Natural Resource-Water.