Cutting Expenses, Bringing in More Business, and Getting All Sorts of "Free Stuff" With this Ancient Trading Technique

...So yesterday we showed you how "people power," or the magic of modern-day bartering, can help you cut your costs and preserve your lifestyle in hard times.

Today, we're going to take a look at how you can "supercharge" the barter system to cut business expenses and rope in all sorts of free goodies...no matter what's going on in the economy at large.

So let's get right to it.

Cutting Expenses with Joint Ventures

If you're a small business owner, then chances are you're already familiar with the idea of a joint venture.

Now sure, there are fancy, billion-dollar joint ventures like Sony Ericsson. But a joint venture doesn't have to be a major "go get the lawyers" sort of ordeal. It doesn't have to involve equity stakes and shares of revenues and expenses.

Instead, a joint venture can be as simple as an arrangement to share advertising costs between neighbors in a shopping center Or, a food trade between the local sub shop and pizza joint.

A joint venture is just a mutually beneficial arrangement between two businesses. And as such, you can almost think of a joint venture as a bartering transaction between businesses instead of individuals. So instead of trading my old couch for your used television, we would be exchanging the goods or services that our businesses produce.

For example, take a printer and a web designer. As we already mentioned, they could share costs on advertising to stretch their marketing dollars. But they could also enter into a trade; perhaps the web designer makes a website for the printer, and the printer runs off some business cards and brochures for the web designer's services.

But you can take a joint venture further than that.

Our Staff Writer Joe - the one who owned a few grocery stores in a former life - gave us a great example, "Let's say you're a new dentist in town...and you're setting up shop down the street from a chiropractor whose been there for decades...a guy that's well-known and well-liked, with a client list packed full of people who've been seeing him for years."

"You could write a letter of introduction - or better still, get him to write it - and take it over to his office. Something simple that will let the chiropractor share his credibility with you. Ask him to sign it and send it to his client list, and for every client he refers,you share a bit of the profits...you know, a few percent. Maybe even add a special discount into the letter for his clients, just to draw in more business."

So beyond simply trading your goods or services with other business owners, remember that you can also trade on the less tangible things your business generates. You can trade on your reputation with your clients...your "brand." Just remember to be careful about the who, the what and the how, because your reputation is easily the most important part of your business.

So sit back for a second and ask yourself this question; what does my business produce that I can trade? What do my neighbors and associates produce that could be useful to me? Are there any creative advertising arrangements I could make to bring more traffic to my business?

Sit back and think about that for ten or twenty minutes, and you just might come up with a few ideas that could lower your expenses, increase your traffic, or bring in some free goodies...all of which can increase the efficiency of your daily efforts.

But - of course - the Tax Man Wants a Bite

But a word of warning before you go out to set up a new joint venture with neighboring businesses;

Neither you nor I are likely to be selected for President Obama's cabinet. As such, tax laws still apply to us...even in the case of bartering and joint ventures. That's right, the IRS still wants to "get its beak wet."

When we mentioned the "drag of government taxation" in yesterday's A-Letter, we were referring to the superstructure of tax enforcement that casts its shadow on most American businesses...not to the idea of tax-free bartering. Even in the case of personal trading, you're obligated to report the fair market value of the goods or services you receive as income on your tax filings.

And in the case of joint ventures - take for example the web designer and the printer mentioned above - it's the same scenario. Our web designer would have to report the fair market value on the printed materials he or she received as income.

Wealth Preservation and Tax Consultant Mark Nestmann chimes in with the details, "I believe barter exchanges (and indeed anyone involved in barter) are supposed to issue a 1099 to the person receiving something in a barter transaction." Laws will vary by state, so do some research to make sure you're on the up-and-up with the taxman.

While bartering may get you around some of the disadvantages now facing government-mandated bits of green paper ("dollars"), it won't get you out of the specter of taxation.

But bartering and joint ventures are truly the beating heart of our economy; exactly what "paper money" tries to simulate. And when paper money fails to closely simulate the levels of efficiency and satisfaction you get from barter trades...well, don't be afraid to go back to what works.

So get out there and start thinking outside of the box!