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ONLINE DOCUMENT: BARTER AND EXCHANGE FOR SMALL BUSINESSES

Do you sometimes wonder whether your business will be able to survive until some economic sanity comes to the country?

Federal, state and municipal governments continue to formulate safety and social regulations, all of which, while protecting customers and workers, increase the costs of doing business.And we entrepreneurs are hit the hardest when it comes to finding new customers. With escalating advertising costs, the price we have to pay for a new customer threatens our very existence. But don't despair, help is available, and it comes in the form of bartering. Here's how it works, and where you can obtain additional information to make it work for you:

- The bartering concept: You have something to sell, say marketing consulting. You offer a package worth $500 to the Barter Exchange. You receive a `chit' worth $500 which you can spend for any other product on the exchange, say radio advertising. In some cases you spend your chit on the advertising without having previously sold your consulting package! When someone else in the exchange needs consulting, they will spend their chit for your services.

- The continuing concept: You don't have to "sell" your product over and over again. Just leaving it on the Exchange means you offer it for sale to anyone who needs it. For example, say you offer carpet cleaning for $50 a room. You might have 10, 50 or 100 people accept your deal. You expend your time and materials on the cleanings, and you build a chit balance of thousands of dollars, maybe more. It is entirely possible you can trade-in your chits for a new truck!

Why would the truck dealer go for this? He or she would then have a chit worth several thousands of dollars to use for a variety of products and services ranging from remodeling to advertising to consulting to, yes, carpet cleaning.

- The chit concept: Chits can be thought of as credits redeemable as products and services. They are not money, but they represent what money can buy. As long as you remain in the exchange, you can redeem your chits for goods and services offered by anyone else in the network. You do not have to stick to products or services exactly equal to your chit balance, but can use any combination of services worth any amount of money.

- Your benefits: You get to trade goods and services at your retail for other goods and services at their retail price. The larger the exchange, the more opportunities you have to sell your goods and services, and the exchange managers will regularly advertise you to the other participants. This amounts to almost-free advertising! In addition, you can spend your chits on vacations, travel and a myriad of other benefits.

- Your costs: Most barter exchanges charge an entry fee to join, have a small monthly service fee and take a 10 percent to 12 percent cash bite out of the exchange price to help pay for the bookkeeping and advertising they do to support the network. You will have to weigh the costs involved against the benefits that could accrue, then make your own decision.

- More information: Would you like to know how business exchanges work? If you live in the Phoenix-Tucson-Albuquerque area, talk with Mary Bolton, 505-298-2929; in the Chicago area, call Joan Varner at 847-390-6000, extension.

If you are interested in starting a barter organization in your area, call Saul Yarmack in Burbank, Calif., 818-563-4966.

(Paul Tulenko is a business marketing consultant based in Albuquerque, N.M.)