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E.Factor
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Use your Cash wisely - Social Cash
Social Cash – an old way to save money today...
This past Friday I was extremely honored to have been invited to open the Trading day in Europe by hitting the gong on the NYSE/Euronext Exchange. As I was standing on the podium, counting down to the final second, I was thinking about trading and trade in general and how today is so very different to last year with the Exchanges around the world in turmoil.
It struck me that we have almost come full circle in our trading habits. It started out with people using barter to exchange goods for other goods, thus acquiring what they needed and getting rid of what they had in surplus. Then banks started to trade goods for money, and eventually money itself became the symbol of trade. After that, various instruments based on money were created to lower risk or at least to share risk among many people. Which leads us right back to where we are today – because of these instruments – we are now in a situation of crisis as the risk did not really go away of course, it merely changed shape and ended back on the banks’ balance sheet in a different format undermining their portfolios and biting them right back in the rear-end.
With the banks tightening their procedures for lending (a bit too late, and as always in an exaggerated manner as a reaction to the over-extending they did for years), entrepreneurs globally are now looking for new ways to trade their goods, products and services. This might be a great time for us to revisit the idea of bartering. A better term these days is “Social Cash”. Instead of charging money for something you do, you ask your counter party to give you a few hours of their time performing a task that you need done, or exchange your service for products that you need. I am not an advocate of using this for everything, as I think barter has its downsides too, but as one of the many tools you should consider – it could be really helpful in today’s world and saves you having to use cash that you might need for more traditional items. For instance, why not exchange whatever you are selling for a few hours of accountant’s service, or have someone good in sales sell your product in return for helping them with something you are great at? Entrepreneurs are creative people – and flexible. This is one area where you can use your creativity and save yourself a lot of money. You simply find other ways to pay for the things you need for your business. I would love the larger companies to also start seeing the benefit of Social Cash – but believe that it will be a while before they will. What would be cooler then buying a night in a hotel by offering that hotel a link for a week on your website, or help them with a marketing campaign that otherwise would have cost them big bucks? And why not, after all, the limitation of these exchange are only formed by the limits of your own imagination. Added advantage is that the risk is far less then hedging your bets on the Stock Exchange…
Now I only need a gong to sound and we can open a brand new type of trading day!
I would love to hear of ways you have used Social Cash to your advantage, or if you have found other creative methods to overcome the credit crunch!
Marion
3 Comments
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Peter Thomson | Mar 13, 2009 11:54 AM
Great article and idea. Having used 'social cash' for many years - I've found the key is in the value one places on one's 'time' and therefore the value we have to trade. Too many people seem to undervalue their time as they do not include their years of experience in the calculation
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Great article and idea. Having used 'social cash' for many years - I've found the key is in the value one places on one's 'time' and therefore the value we have to trade. Too many people seem to undervalue their time as they do not include their years of experience in the calculation
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Karin Abarbanel | Mar 18, 2009 12:41 PM
Hi Marion, I love this post! In my book, Birthing the Elephant, we interviewed a wide range of women entrepreneurs and many of them used the social cash approach to stretch their start-up dollars. In return for professional product photos for her Web site, Sarah Levy of Sarah's pastries & candies created gift baskets that a professional photographer could send out to his clients. When launching Stroller Strides, which is now a fast-growing franchise, Lisa Druxman traded fitness workouts for legal advice. The opportunities are endless and the contacts you make can be as valuable as the dollars you save. In fact, "creativity not cash" is a great mantra for entrepreneurs! All the best, Karin www.birthingtheelephant.com
