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Showing posts with label currency. Show all posts
Showing posts with label currency. Show all posts

Tuesday, July 27, 2010

LIVING OUTSIDE THE BOX: Business to Business - Bartering Business Survival in a Cashless Recession

Living Outside The Box with Joe Wallace


When the going gets tough and the banks slam the vaults shut, the innovative business owners among us look for ways to sell their goods and services to other business owners that do not necessarily involve the exchange of money. In the absence of available cash and credit more and more entrepreneurial business owners are resorting to the age old custom of bartering to get what they need for what they provide.

Barter is not a new idea. It has been around forever and actually predates currency. There is a good reason for that. The act of bartering or exchanging goods and services for goods and/or services is generally beneficial to both parties. Why go out of business when bartering can provide access to inventory, travel, services, and many other things that are required to operate a business. About the only thing that can’t be bartered for in some way are utilities, government services, big company offerings, and of course...taxes.

Will Work for Stock:

In my own business of providing practical business advice to all stages of SME’s (small and medium enterprises), the recession has provided me with a fantastic opportunity to trade my business planning and advice for equity stakes in promising businesses. These are businesses that need my services that do not have the cash resources to pay, yet are willing to grant stock, stock options, or future profits in their business in exchange for my services right now. I like to think of this segment of my practice as Equity Based Venture Capital.

During the course of the past year my portfolio includes equity positions in Smart Grid, Battery Electric Vehicles, Recycled Plastics, Internet Publishing, and College Textbook Rental businesses. What is the value of this portfolio? If one were to have a fire sale today on any of these holdings the value is probably near zero. Several of these entities have however gotten through the prototype stage, gained national attention and are poised to attract real outside capital investment. The long term gains from such efforts are sure to be worth way more that my hourly rate if they culminate in an IPO (initial public offering) or are acquired. Of course they may not succeed, in which case I get zero for my work, but I have made some good friends, kept my skills razor sharp, and created a potential for Silicon Valley type returns during the worst recession of my life.

Will Work for Stuff:

In addition to providing services for stock, I am aware and have at times been involved in barter transactions where trips, lodging, books, home improvements, automobiles, stained glass, furnishings, collectables, gold, landscaping, art, and even partial interests in income properties have been exchanged. Many years ago I repaired a porch in exchange for a non running BMW then turned around and sold the BMW for cash. If I would have been unwilling to do this, the porch would have not been repaired. I made a good friend in the process.

Will Work for Promissory Notes: Be the Bank When the Bank Won’t

Just because a bank will not make a loan to a business that desires to purchase goods and services from your business, it is not necessary to forego that opportunity. See the bank, be the bank. You may create a trade note with whatever payment terms that you and your customer are agreeable to. I have on three occasions financed automobiles that I wanted to sell for new college graduates that a bank would not make a loan too. These kids got transportation at a fair price and terms and I got an income stream and a much better price than a used car dealer or a trade would have offered me. These kids all paid their notes too. Promissory notes can be win-win scenarios and are easy to write and manage with a simple program that is available commercially.

In times when the economy is not supportive of available cash, SME’s are well advised to consider barter to keep the business churning along through these rough waters. After all is it just as effective to barter for what you need as it is to write a check for it. Open minded business people skilled in the arts of negotiation and barter will be surprised just how little cash is needed when you can get what you want without it. After all, what would you rather have for dinner tonight, a steak and a fine wine or a pile of dollar bills. Money is simply a medium of convenience. The things we really need are tangible.


For more information, please visit Joe's TNNWC Bio.



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Sunday, March 29, 2009

HEADLINE: In Paper We Trust(ed)




There are many “socially-accepted norms” when it comes to conversation that all effective networkers should keep in mind – subjects that one might deem appropriate when making conversation, of which religion and politics are classically considered “taboo”…


…so it is with fair warning that I’m going to be talking about BOTH RELIGION AND POLITICS in this article.


If you feel that you are easily offended by such talk, feel free to peruse the other TNNW articles this month. Actually, I would never have broached such “formidable” topics, but was lured (perhaps “tempted” might be more appropriate a term) into such dark waters, if not for one individual…


Along Came Mr. Rowland

It all started when I published last month’s article, A World Without Money in this very publication. In this article I suggested that our current monetary system is broken, perhaps beyond repair and posed a hypothetical world where money didn’t exist yet run on effective valuation of Relationship Capital (RC) and Intellectual Capital (IC). Okay…I may have had some political undertones to my discussion, but never once did I mention religion or the G-word: “G-d” (yes…many of us Bar/Bat Mitzvahed types spell it this way).


My friend, (and TNNW member) Jay Rowland, Founder of The Referral Marketing Association (a.k.a., ChapterTracker.com), made the following comments on my post:


As with your State of the Industry address, I feel you’re really talking about the issue of morality, not economic systems.


And

…you can’t love both God and money.


As well as


God’s economy is one of relationship.


I was shocked, in a sense, by Mr. Rowland’s comments. Aside from sharing a few political beliefs in my column and publication about networking, had I inadvertently breeched the religion/spiritual barrier with a few offhand remarks or was I making a stronger underlying statement by design? Either way, I was called out, albeit in a friendly manner and felt it a good idea to do one of the things I do best…write about it!


Morality and Economic Systems/G-d and Money

Mr. Rowland suggests that morality/G-d and economic systems/money are mutually exclusive, and unfortunately, he is right…to a degree. It is because of this that I feel we are experiencing our current global economic crisis.

Our current economic system is one of paradox. On one hand, the Founding Fathers of the United States, many of whom were members of one of the oldest running networking organizations in the world, the Freemasons, built the U.S.’s political and financial systems believing and imbuing into them the symbolism of Freemasonry. To be a member of the Freemasons, one must have a belief in that of a higher power – G-d. Therefore, all U.S. currency shares the common quote, “In God we Trust”.


To Mr. Rowland’s point, unfortunately, there is the saying that “money is the root of all evil”, and we’ve recently seen the classic “seven deadly sins” rear their ugly head to a head, resulting in economic meltdown. What took coinage and script imbued with the power and trust of G-d inscribed upon them and reduced them to almost meaningless hunks of metal and paper upon which now our trust is questionable?


Diverging Economies

From my perspective, here’s what has happened – we have abdicated our own personal power and externalized our trust into a situation where we have given power to an economic and political system that has diverged from G-d’s economic and political system of Karma and morality.


Some may argue that it is difficult to base such a tangible system of our current economy on such an intangible concept. To this I respond, our tangible economic system, once backed by such tangible “assets” as salt, gold, oil and even chocolate has "evolved" into something much more intangible.


For a while basing our economic system on tangibles worked quite effectively…it even curtailed our needs for more spending because we could not spend beyond our means. The downside to this was that the profit one could make in business was relatively flat.


But human needs, desires and ambitions work on abundance…our success is never an endpoint, just a milestone on one’s journey through life. Tangible assets, on the other hand, are limited. When we, as a human race, had the opportunity to graduate ourselves to the next level, we kept the same classroom, same teacher and the same curriculum. We just created new rules as we began to head into the new school year.


Those in the class who were ahead of the learning curve decided to make rules to make things more “interesting”. Unfortunately, they were weighted in their favor and refused to notice that by favoring themselves, they would be hurting others while ignoring the classic golden rule “do unto others as they would have done unto you”. They made the rule of credit, whereby we could spend beyond our means in return for speculating that we could pay back the difference in time. Thus began the downward spiral.


In time, words like “extortion”, “blackmail” and “highway robbery” would lose their significance as they were minimized or “spun” positively by those in power who networked and then eventually hijacked the political/economic system. At times, under the guise of being “G-dly” or “religious” they made their points known and got their agendas passed as more of the “regular people” (some called them “middle class”) got too busy playing by the new rules which didn’t at first effect them. The middle class became complacent and trusting into a system that was being perverted and compromised.


In time, the economic system changed to being backed by intangible means. A central authority of “oversight” based upon so-called tangible economic models, once backed by tangible assets would now be based upon nothing more than an “IOU”. Still the middle class trusted in the system…until slowly but surely, the system that “worked” for them at one time, began sorting them into two classes: upper and lower. Due to the nature of the system that was created, the 20% of the population that controlled 80% of the wealth began shifting to 10% controlling 90% of the wealth.


90+% of the people in this world have been taking the same class for years, passing it each time, yet never graduating to the point where it is becoming seemingly harder and harder to do so each year. The problem is that through faith in G-d to save them, they STILL GO TO THE SAME CLASS, EXPECT DIFFERENT RESULTS AND WONDER WHY NOTHING’S CHANGED.


How long must the insanity continue? How soon can we come to our senses and resolve this issue seriously and peaceably before things get worse?


Getting Back to “the Garden”

The question that I pose to Mr. Rowland, TNNW readers and the rest of the world is, how might things have been different if the “winners” of the economic game that has been created, maintained their ethical/spiritual integrity and worked to make everyone a winner. What if they networked to build and earn trust in a viable sustainability model that would support generations to come?


The key lies in understanding that an economic system based upon scarcity and hampered by the self-limiting beliefs of its creators and stewards does not take into account the abundant creativity and power as well as the sovereignty and stewardship of humanity. What if there was a way of merging the two economic systems: the Karma/G-d-based relationship economy steeped in “morality” and the economic system we use to feed our families?


Since we are already basing our currency (Financial Capital, or “FC”) on the valuation of intangibles, shouldn’t we utilize the who we know (RC) and the what we know (IC) that got us all the FC we’ve ever earned and leverage it into something of true value…a currency that we can really trust?


I believe that with proper valuation of RC and IC, we can create a realistically, spiritually and morally-balanced economic system that is scalable for the human condition and optimized for sustainability. Our technical knowledge of the internet and the populism of social media would allow enough oversight by which the playing field will once again be leveled and a one class system can be created. In this way, we would determine and have full control over our own “earning potential”.


I believe that creating such an economy would cater to the majority of the people in the world, despite race, color, nationality, political leanings, religious beliefs or sexual preferences. As one of my fellow TNNW writers and friends, Terry Bean, this month writes about the concept that we are all one, let’s take G-d off of our currency, put G-d back within ourselves and fly our flag under one world nation, one balanced and morally-blessed economic system, and one fully-networked "meritocrity".


This is not capitalism, this is not communism, this is not socialism. This is not JudeoChristianity, this is not Buddhism, this is not Islam. This is not American, this is not Russian, this is not Chinese. This is humanism. In this, we are all powerful and all meek at the same time. Why don’t we all inherit the earth together? And as for Mr. Rowland’s statement, “God’s economy is one of relationship”, I say AMEN, BROTHER…AMEN.


Adam J. Kovitz is the CEO, Founder & Publisher of The National Networker (TNNW).

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The Emergence of the Relationship Economy

Relationship Capital is the cornerstone of the Relationship Economy, which RNIA defines as “a measurement assigned to individual and organizational entities based on the relationship interactions between them, and the interactions they have internally.” I am proud to have contributed discussion of the Ten Laws of Relationships Capital to the upcoming book The Emergence of the Relationship Economy, now out as an eBook and in hardcopy. With a forward written by Doc Searls (of Cluetrain Manifesto fame), it is being considered a “must read” for anyone responsible for the strategic direction of their business. If you would like to purchase your own copy of The Emergence of the Relationship Economy, please click here.


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The Emergence of The Relationship Economy

The Emergence of The Relationship Economy
The Emergence of the Relationship Economy features TNNWC Founder, Adam J. Kovitz as a contributing author and contains some of his early work on The Laws of Relationship Capital. The book is available in hardcopy and e-book formats. With a forward written by Doc Searls (of Cluetrain Manifesto fame), it is considered a "must read" for anyone responsible for the strategic direction of their business. If you would like to purchase your own copy, please click the image above.

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