Through professional barter exchanges, where members pay a commission for goods or services traded, more complicated trades are possible. Here’s how it works: A business lists a good or service for trade through the exchange. In return, the business receives a trade credit based on the dollar value of the good or service offered. The business can then use its trade credits to “purchase” goods or services offered by other members. The result is that the business is hooked up with a network of actively bartering businesses.

Bartering enables businesses to trade excess time or inventory for the products and services they need. Trading excess inventory can be a great way for companies to supplement their advertising budgets. For example, if a company has merchandise in excess inventory, it can liquidate those products. Or, it can trade the products through an exchange where it often will receive trade credits for the full wholesale value of those products. The company can then use those trade credits to purchase advertising. So, by bartering, the company is gaining on two fronts: it’s receiving top dollar for excess inventory and it’s able to do more advertising that it would otherwise be able to do.

Take a radio station that wants an economical way to entertain its top advertising clients. The station may offer advertising time and trade its barter credits in for meals at a local restaurant. The restaurant might trade its credits in for computer equipment. And the computer company might trade its credits in for radio ads. Three separate businesses have taken part in a buy and sell transaction without ever exchanging a dime.

The network of goods and services available through barter is growing. Today’s barter exchange may have as many as a few thousand members nationwide. As bartering becomes more popular, some barter exchanges are starting to trade with each other, further expanding the bartering opportunities available to their members.

By bartering, businesses can acquire the goods or services they need without tapping into their cash flow. Bartering also bolsters the bottom line by enabling businesses to trade away excess inventory or resources. A hotel, for example, can fill empty rooms during its off season, a print shop can run jobs during what would normally be a slow time or a newspaper can fill up its advertising space.

Bartering also provides another way of advertising your business. By bringing together buyers and sellers who may not have used each other’s services before, bartering can introduce your company to new customers. These may be one-time customers or people who come back to purchase goods or services once they’ve become acquainted with the business.

Companies that actively barter may do as much as 5 to 10 percent of their business annually through trades. That adds up. The National Trade Association, based in Niles, Illinois, is one of the nation’s largest barter exchanges. And the ability to barter is not limited by size. The corporate giant all the way down to the one-person, at-home business–and everyone in between–all can use barter as part of their business transactions.

Barter exchanges typically charge a one-time membership fee. Some exchanges also may extend a line of credit to new members. That way, they can start using credits before they’ve sold anything through a successful trade. Barter exchanges also offer the advantage that they don’t require an even trade. You can use credits accumulated for one item to trade for several different items that together add up to your total credits. So you can use the credits you earn by trading carpeting to one company to secure, say, a rental car, a hotel room and a meal at a restaurant.

Business people who want to get involved in trading should remember that there is no tax advantage to bartering. Barter and cash transactions are the same in the eyes of the Internal Revenue Service–both are taxed equally. In fact, bartering exchanges must report goods and services sold through barter to the IRS.

Bartering also offers no guarantees. Some trades may happen quickly, others may take some time. An item a lot of people want, such as airline tickets, may be snapped up right away, while carpeting may take a few months to trade.

And you can’t always count on getting what you want when you want it through barter. The amount of certain goods and services available for trade may fluctuate during the year. For example, a computer technician trading his services may not be available to fix your computer on a moment’s notice. He’s going to be offering his services during his downtime, which might not coincide with your computer breakdown. Likewise, a carpet store may offer enough carpeting in trade to cover your office floors, but the carpet selection may be limited. And you’ll probably be hard-pressed to find a Florida hotel room over the Easter holiday.

But you have to weigh the disadvantages against the advantages. Bartering turns your downtime or excess inventory into valuable commodities. It increases your sales while enabling you to purchase goods or services you need without dipping into your cash.

So while bartering may impose some limits, it can still provide advantages to the business traveler. You may not be able to trade for a hotel room or car rental during peak travel seasons, but you’ll probably be able to pay for at least some of your travel expenses during the year through trade. Bartering may also provide an added bonus: You may discover a great restaurant or comfortable hotel you might have otherwise overlooked if it weren’t for bartering.

Remember, to make bartering work, you have to be patient, you have to persevere and you have to pick and choose what you want to purchase through barter.

And don’t think that you have to limit bartering to business. Bartering may be a great way for a busy business owner to take a vacation. There’s no rule that says that the trade credits you rack up for selling excess inventory has to go toward carpet for your office or dinner out with a client. You can trade those credits in for an out-of-town hotel stay–just for the fun of it!

Jack Schacht is president of the National Trade Association, one of the country’s leading barter exchanges headquartered in Niles, Illinois, http://www.ntatrade.com. He can be reached by contacting JoannePR@aol.com.

Article Source: http://EzineArticles.com/?expert=Joanne_Levine

In a world where ideas drive economies, it is no wonder that innovation and entrepreneurship are often seen as inseparable bedfellows. The governments around the world are starting to realize that in order to sustain progress and improve a country’s economy, the people have to be encouraged and trained to think out-of-the-box and be constantly developing innovative products and services. The once feasible ways of doing business are no longer guarantees for future economic success!

In response to this inevitable change, some governments are rethinking the way the young are educated by infusing creative thinking and innovation in their nation’s educational curriculum. In the same vein, they are putting much emphasis on the need to train future entrepreneurs through infusing entrepreneurship components within the educational system, especially at the tertiary level.

Some countries have taken this initiative to a higher level by introducing entrepreneurship education at elementary schools and encouraging them to be future entrepreneurs when they are of age. In a series of survey funded by Kauffman Center for Entrepreneurial Leadership, it was found that nearly seven out of 10 youths (aged 14-19) were interested in becoming entrepreneurs.

Being an entrepreneur is now the choice of the new generation as compared to the preferred career choices of yesteryears such as being a doctor, lawyer or a fighter pilot. In a recent visit to the bustling city of Shanghai in China, an informal survey was carried out among Chinese youths by the author. The results of the survey showed that being an entrepreneur, especially in the field of computer and e-commerce, is perceived as a ‘cool’ career and is an aspiration for many Chinese youths Prior to the ‘opening up’ of modern China, being an entrepreneur was perceived as the outcome of one’s inability to hold a good government job and those who dared to venture, were often scorned at by their peers. Times have indeed changed.

With this change in mindset and the relative knowledge that entrepreneurs bring forth increased job creations, the awareness and academic studies of entrepreneurship have also heightened. In many tertiary institutes, many courses of entrepreneurship and innovation are being developed and offered to cater to the increasing demand. The term “entrepreneurship” has also evolved with numerous variations. The proliferation of jargons such as netpreneur, biotechpreneur, technopreneur and multipreneur are coined to keep up with the ever-changing times and business conditions that surround us.

In view of these changes, it is important that the definition of entrepreneurship be refined or redefined to enable its application in this 21st century. To put it succinctly, “Good science has to begin with good definitions (Bygrave & Hofer, 1991, p13).” Without the proper definition, it will be laborious for policymakers to develop successful programs to inculcate entrepreneurial qualities in their people and organizations within their country.

The paper will provide a summary of the definitions of entrepreneurship provided by scholars in this subject area. The author will also expand on one of the definitions by Joseph Schumpeter to create a better understanding of the definition of the term “entrepreneurship” as applied in today’s business world.

Entrepreneurship through the Years:

It was discovered that the term ‘entrepreneurship’ could be found from the French verb ‘entreprende’ in the twelfth century though the meaning may not be that applicable today. This meaning of the word then was to do something without any link to economic profits, which is the antithesis of what entrepreneurship is all about today. It was only in the early 1700’s, when French economist, Richard Cantillon, described an entrepreneur as one who bears risks by buying at certain prices and selling at uncertain prices (Barreto, 1989, Casson 1982) which is probably closer to the term as applied today.

In the 1776 thought-provoking book ‘The Wealth of Nations’, Adam Smith explained clearly that it was not the benevolence of the baker but self-interest that motivated him to provide bread. From Smith’s standpoint, entrepreneurs were the economic agents who transformed demand into supply for profits.

In 1848, the famous economist John Stuart Mill described entrepreneurship as the founding of a private enterprise. This encompassed the risk takers, the decision makers, and the individuals who desire wealth by managing limited resources to create new business ventures.

One of the definitions that the author feels best exemplifies entrepreneurship was coined by Joseph Schumpeter (1934). He stated that the entrepreneur is one who applies “innovation” within the context of the business to satisfy unfulfilled market demand (Liebenstein, 1995). In elaboration, he saw an entrepreneur as an innovator who implements change within markets through the carrying out of new combinations. The carrying out of new combinations can take several forms:

The introduction of a new good or standard of quality;

* The introduction of a novel method of production;
* The opening of a new market;
* The acquisition of a new source of new materials supply; and
* The carrying out of the new organization in any industry.

Though the term ‘innovation’ has different meanings to different people, several writers tended to see “innovation” in the form of entrepreneurship as one not of incremental change but quantum change in the new business start-ups and the goods/services that they provide (egs, Bygrave, 1995; Bygrave & Hofer, 1991).

In the view of Drucker (1985), he perceived entrepreneurship as the creation of a new organization, regardless of its ability to sustain itself, let alone make a profit. The notion of an individual who starts a new business venture would be sufficient for him/her to be labeled as an entrepreneur. It is this characteristic that distinguishes entrepreneurship from the routine management tasks of allocating resources in an already established business organization. Though the definition tends to be somewhat simplistic in nature, it firmly attaches the nature of entrepreneurial action with risk-taking and the bearing of uncertainty by the individual (Swoboda, 1983)

In a Delphi study, Gartner (1990) found eight themes expressed by the participants that constitute the nature of entrepreneurship. They were the entrepreneur, innovation, organization creation, creating value, profit or non-profit, growth, uniqueness, and the owner-manager. The themes could be seen as a derivative and expansion of Schumpter’s earlier concept.

Expanding on Schumpeter’s Definition:

After digesting the numerous definitions of entrepreneurship, one would tend to see a strong link between these two terms: entrepreneurship and innovation. In retrospect, most of the definitions tended to be, to some extent, a re-work and expansion of Schumpeter’s definition of entrepreneurship (which is that of innovation being applied in a business context).

As defining the term of ‘innovation’ is highly debatable and would merit a paper on its own, the author has thus, for convenience, summarised the definition of innovation. Innovation can be perceived simply as the transformation of creative ideas into useful applications by combining resources in new or unusual ways to provide value to society for or improved products, technology, or services.

In the author’s opinion, the difficulties of defining “innovation” could be the reason for the quandary one finds in attempting to arrive at a clear-cut definition of the term “ Entrepreneurship”.

Take for example, if someone starts another run-of-the-mill hot dog stand in the streets of New York, will he termed as an entrepreneur? According to Drucker’s definition, he will be seen as one. However, if the above definition by Schumpeter was used as a guideline, the answer is probably ‘NO’.

Why? The core of the matter lies in what is so innovative about setting up another hot-dog stand which are in abundance in New York. On the contrary, if he is the first one to start a stand selling hot-dogs with Oriental Sweet and Sour sauce topping; he could be termed as an entrepreneur (even based on Schumpeter’s requirement) as he has done what others have not done before. In the context of entrepreneurship, creativity and innovation are key points in the whole scheme of things.

In this manner, by adding “innovative” features to a product or services and setting up a business based on these additional features to compete in the existing market, new entrants may be able to gain this competitive advantage over existing market players.

In the case of the hot-dog seller, it may be argued that his addition of Oriental Sweet and Sour sauce toppings may be seen as nondescript. This runs in contrary to some scholars’ definition of entrepreneurship as requiring quantum changes in the products/ services to be justified as being entrepreneurial (Bygrave, 1985; Bygrave & Hofer, 1991).

Consistent with creating new products for sale, someone who starts a business by providing a totally new way of serving his customers/ clients is considered to be entrepreneurial too. Though, it is often argued that there are no real new products or services in a case where one does not look to the past products and services for ideas for improvements. Thus, the notion of incremental improvements should be accepted as being innovative too.

Innovation in the business sense may not necessarily involve, in the physical sense, the introduction of a new product or service. It can be in the form of what is commonly known as creative imitations. For example, if an individual starts selling a product that is already common in his area or country, he will not be seen as being entrepreneurial. However, if he is the first to sell the same product in a virgin locale or to an untouched market segment, he will be seen as an entrepreneur in his own rights.

Take Muhammad Yunus, for example. Yunus became an entrepreneur when he started a micro-loan program for the poor villagers in a rural part of Bangladesh named Grameen, with only US$26. The loan was divided among 42 villagers to assist them to buy small items such as combs, scissors, needles and other necessities to start their own home businesses. In the past 22 years, Grameen Bank has grown with over $2 billion loans granted. It has now become a model for several micro-loan facilities.

>From the following example, Yunus created banking and lending facilities in Grameen specifically for the poor villagers. Banking and lending money activities are not new but Yunus was the first to provide such facilities in a rural part of Bangladesh and that is definitely innovation and risk-bearing on his part as a social entrepreneur. In short, innovation need not arise mainly from a new product or service but it could be an old product or service finding a new market for penetration.

An individual could be termed as an entrepreneur if he or she sells a product or service using new systems and/ or mediums of marketing, distribution or production methods as a basis for a new business venture. A good example will be Jeff Bezos, the founder of Amazon, the successful Web-based bookstore. He was one of the first to sell books on a large scale using an online store and also patented the one-click system for online buying. Though selling books is not an innovation in itself, Jeff Bezos was innovative in the use of the Internet then as a viable marketing and sales channel for selling books.

Another example from the field of e-commerce is Stuart Skorman, the founder of Reel.com. Reel.com is essentially one of the first cyber movie store with a very large inventory of over a 100 000 videos. Though setting a movie store was revolutionary then, Reel.com main distinction was being known as the first online store to expand by opening an offline store. The founder felt that by doing so, the online store could be an advertisement for the offline store and vice versa, thus strengthening this click and mortar business venture- an example of creativity and innovation applied in a profitable business context.

Conclusion:

This paper has started as an attempt to redefine the term of entrepreneurship but ended up ‘updating’ the wheel, based on the definition as proposed by Schumpeter. The paper expanded on this influential work by giving examples to illustrate what innovation in entrepreneurship was and hope that along the way, new insights were unearthed in the study of defining entrepreneurship.

In summary, the author hopes that this paper would further encourage the infusion of creative thinking and innovation within the educational system to nurture future entrepreneurs with a competitive edge. In the author’s view, the characteristics and capabilities to set up a new business venture based on doing things that have not done before should be encouraged. Innovation needs to be the cornerstone of entrepreneurship as opposed to the mere setting up of another new enterprise without implementing changes or adding features of improvements to the products and services provided and/ or its business processes.

About The Author

Dr. Alvin Chan is a Senior Research Consultant at First Quatermain Centre of Collaborative Innovation (www.firstquatermain.com).

For reprints permission, please contact bizguru88@hotmail.com

Article Source: http://EzineArticles.com/?expert=Alvin_Chan

The truth is very different. Ask any entrepreneur and they’ll gladly put you right, and assure you that nothing could be further from the truth. Many of the common assumptions people associate with independent business owners, or sole traders, are woefully inaccurate, often gleaned from the media’s obsession with personal individual success and the American Dream. Let’s look at what being an entrepreneur really means, and who these people really are.

Most entrepreneurs are ordinary people like you or me. They are very rarely the high flying successes, flung skywards through their success in the city; in fact, those who already have a successful city career, in what one might term a ‘traditional’ or ‘normal’ job are the least likely to step from behind the security of their desk, and brave the world alone. Generally those who do take the initiative are those who are either fed up with the monotony or sheer frustration which can come with many jobs these days, or who have a burning personal desire or passion, a dream they feel compelled to follow.

We all have dreams, hopes and ambitions; entrepreneurs are, in the main, simply those people who have got up from their comfortable office chair with lumbar support and arm rests and stepped outside to do something about those dreams, ambitions and desires. They are, largely speaking, passionate people, with self belief and determination.

But let’s consider the next assumption that tends to walk into such a discussion: risk. Most people, at least, most people who have never tried, will happily tell you that starting out on your own, becoming your own boss, and starting up your own business idea is incredibly risky, and that it is likely to cost you a fortune, and that you’ll see very little income for years, and even that is assuming you survive long enough to earn anything.

Most of this scaremongering is meant well, but generally comes from those who could never become entrepreneurs because they have no self belief, no courage, and have packaged away their dreams and ambition in a small cardboard box which has been locked away in a filing cabinet in the basement of the office block in which they have willingly becoming imprisoned until released back into society when they retire.

There is risk in anything, as we can readily see today, with the stock market looking gloomy, traders panicking, businesses crashing, and increasing number of people finding themselves out of work. There is no longer such a thing as job security, or a job for life – in any business. Entrepreneurialism is a way of protecting yourself, to a certain degree, by taking greater control over your finances, job and future.

You become the boss, aware of all aspects of your business, and able to make sensible decisions both within your business and your personal life, in full knowledge of the situation, and all relevant factors. Who can honestly say that, while working for a company or business, your boss keeps you fully informed of every possible risk and problem occurring which could potentially jeopardize the future of your job, income or even the company? Very few!

Entrepreneurialism is not risk free – that would be absurd to suggest, but the risks are known, and manageable. You’re in control, and that alone can make a world of difference to your peace of mind. Stress is largely down to a feeling that you are not in control; no matter how much needs doing, or whatever the pressure, stress only becomes an issue when we feel over burdened with worries and pressure, and unable to control where we are and what we are expected to do.

If you have a business idea, a hobby you’d like to turn into a home business, a work from home opportunity you’d like to pursue, or a ground breaking product or service you’d like to launch, then running your own business may well be for you, giving you the opportunity to follow your dreams, lower stress, feel in control, and be positive about your future. All you need is a plan, and a dream and, of course, belief in yourself.

About the Author

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