Richard called me in a panic, begging me to fill in as a guest on his local cable TV show. Seems that one of the people he’d booked had cancelled at the last minute. It sounded interesting, so I agreed.

I was surprised to find that his show was recorded in a tiny room instead of a professional sound studio. The format was similar to a talk show. He had four guests, including me, all of us local businesspeople. He interviewed us, one at a time, about what we did – giving each of us a chance to indirectly plug our product or service.

At one point, Richard whispered to me, “Can you believe I’m making three thousand dollars right now?”

I was floored. I had been producing my own little cable show, and was struggling to make a profit by selling airtime for commercials. So, when Richard’s show was over, I asked him to reveal how he was making so much money for just an hour or so of work. He explained that each of the other businesspeople on the show had paid him $750 to be there – including the one who didn’t show.

“But how are you getting these people to pay that much for such a small amount of media exposure?” I asked.

“They don’t care about the money,” he replied. “They’re paying me in barter dollars.”

That’s how I found out about a whole world I never knew existed.

I learned that there are networks made up of thousands and thousands of businesses that participate in formalized bartering. These networks, in effect, create their own currency – what they call “barter dollars.” And those barter dollars, in theory, have the same value as real dollars. Not only that, but barter club members are very receptive to buying products and services from other members, because they are always looking for ways to spend their barter credits.

I was amazed to see how many things can be acquired with bartering. That includes almost any professional service you can think of, from doctors and lawyers to copywriters and public relations experts. Also restaurant meals, furniture, travel, and too many other goods and services than I have room to list here.

As I said, I was barely breaking even with my cable show… until I discovered bartering. But as soon as I joined a large national barter network, I found a video production company that would work for me in exchange for barter credits. This greatly reduced my cash expenses.

I had been paying a videographer $500 to come out and film my show, and another $500 to do the editing. I was paying for that, as well as the airtime I bought from the cable company, with the income I was getting from advertisers. And I was usually left with about $100 in profit. Hardly worthwhile for all the time and effort I was putting in.

But because this videographer accepted payment of $500 in barter, that allowed me to retain the real dollars I was getting from my regular advertisers. I was also able to sell out my previously unsold airtime to barter advertisers. That barter income was then applied to the bulk of my expenses.

My cash profit soared from $100 to over $1,000 per show.

Now you might be wondering if the products and services you get with barter dollars are below par in some way. Absolutely not. The production services I used for my show were equal to those of any I had paid cash for. The restaurants I ate at with barter dollars were expensive and popular. The lawyer I used gave me better advice than several others who had charged me hefty hourly cash fees. The dentist I used did a perfectly good job. And I was very happy with the lamp I bought with barter dollars from a furniture retailer. I also noticed that the advertisers who bought airtime from me with their barter dollars had thriving businesses – a massage therapist, party entertainment company, chiropractor, perfume distributor, and Italian restaurant, among others.

You might also be wondering how wide-ranging barter networks are. Certainly, if you live in a relatively big city, you will have access to more local merchants who are members. But there are many kinds of barter transactions that can be done no matter where the participants live. For example, I use a Web programmer who lives in Connecticut and a pay-per-click marketing consultant who lives in Orlando. And when I ran a mail-order house for a colleague, our fulfillment house was in the Midwest and our phone center was in the Northeast.

If you decide to join a bartering organization, here are some things to keep in mind:

• Joining a well-established organization offers a lot more security.

Many national barter networks have thousands and thousands of members. While there is no guarantee that any bartering organization won’t suddenly go out of business – and, in doing so, vaporize your barter credits – if you join one that has been around for a number of years, there is a much smaller chance of that happening. If you simply put the term “barter club” into a major search engine like Google, you’ll find many options.

• Barter earnings and expenses are treated like cash by the federal government.

Barter organizations are required to report the barter earnings of their members to the IRS, so don’t think the barter dollars you get are tax-free. Yes, you’ll have to declare your barter income – but you will also be able to deduct legitimate business expenses that you pay for with barter dollars. If you are smart about it, you can actually lower your tax bill.

• Most barter organizations prohibit members from inflating their regular prices for barter transactions.

Even if there’s a willingness on the part of some barter members to pay a premium for your product or service when they’re using barter dollars, you can’t charge them more than you charge your cash customers. In fact, some barter organizations will terminate your membership if you get caught doing it.

• The cost of joining a barter organization varies.

As I said, a quick search on a major search engine will turn up many barter club options. So shop around.

Bartering offers a great way to fatten the bottom line of any business with excess capacity that can be turned into extra profits. It opens up a whole new market to sell to. Plus, you can potentially lower your cash expenditures drastically by using other barter club members as vendors.

Let’s say you operate a company that puts together travel packages. Some of the services you provide for your clients include transportation from the airport, hotel accommodations, and restaurant discounts. As a member of a barter club, you could arrange for all of that to be paid for with your barter dollars – and then the entire fee you charge your clients would be pure profit.

Or perhaps you’re a CPA, and have just opened your own office. Until you build up your business, you could fill your idle time with barter clients and use that barter income to pay your doctor, your lawyer, or maybe even treat your family to a vacation.

Bartering can’t totally replace a cash business. But it can vastly increase your cash flow and profitability – as it did mine.

[Ed. Note: By joining a bartering network, business-building expert Paul Lawrence says it’s possible to make your dollars stretch… and multiply. You can learn more about bartering with Paul’s new audio program, “Secrets to Get Rich With Bartering.”
Check out the details here.

Of course, with or without barter dollars, starting your own business is one of the very best ways to achieve financial independence. And you can do it with as little as $100. Learn how right here.]

Paul Lawrence

Paul Lawrence is an entrepreneur who has made his living starting and running a series of profitable businesses. One day while cleaning his mother's pool for a few extra bucks, it dawned on Paul that he could perhaps start his own pool cleaning business. He carefully employed all the marketing techniques that he had learned in school and designed his first flyer. Immediately the business took off and within a week, Paul had his own little business. He quickly expanded, hired employees and then eventually sold it some relatives who made well over $250,000 in the next year before they eventually sold it for a six figure profit. After finishing college, Paul did a brief stint in a management program for a national rental company, but he quickly realized that he was much happier running his own show. Paul left the rental company and launched one of the most financially successful independent ballroom dance instruction companies in the state of Florida where he received quite a bit of media attention for his revolutionary business practices that included front page features in the Life Style section of the Sun Sentinel, features in the Miami Herald, Boca News, Center Stage Entertainment and many others. With that business running profitably, Paul started several other businesses either individually or as partnerships that included a million dollar video production company, a mortgage brokerage, a home maintenance business, several mail order companies, a business consulting service among others.With a love of movies, Paul began to work at breaking into Hollywood as a screenwriter where he's beaten the odds by becoming a produced writer. He is a credited writer for the film CRUEL WORLD, starring Jaime Presley and Eddie Furlong and has signed a development deal for a national television series with one of the world's largest producers of television and films among his half a dozen sales and options of movie scripts he wrote. Paul is the creator of the Quick & Easy Microbusiness program.