Interview with Mike Grantis, Sr. Director Business Development at Barterpay.ca
In Episode 13 of the Mad Profit Podcast, we interview Mike Grantis who is the Senior Director of Business Development at Barterpay.ca. He explains the opportunity of leveraging the oldest form of trade to help businesses improve profitability in today’s marketplace.
Mike provides some great examples of businesses that have succeeded in offloading their stock or using excess capacity. Businesses of all sizes can leverage this community to help improve their bottom line
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|Laurent : Hey everybody Laurent Truc here from the mad profit podcast welcome back today we have a special guest Mike Grantis from barterpay.ca this is a bit of a different interview than what I’ve done in the past barter payday ca is a very interesting new community that’s being created and it’s been around now for a couple of years that allows members to barter with other members and I see a very unique opportunity for even internet businesses to be able to put excess product or even use up excess capacity if they have a service business and I think it’s a really interesting way to continue to sell and even diversify your sales. Mike is a terrific guy and it was a great interview so dive in and hopefully you’ll find value in it thank you.|
Intro : welcome to the mad profit podcast where we interview active investors entrepreneurs and experts who left corporate jobs to buy or start successful ventures and live life on their own terms listen to their stories learn from their experiences and heed their advice so you too can create mad profits and the life you’ve always wanted and now here’s your host Laurent Truc.
Laurent: welcome back everyone today we got a special guest with us his name is Mike Grantis from barterpay.ca mike welcome to the show how are you.
Mike: thanks so much appreciate you having me yeah, I’m great
Laurent: I’m glad you’re on you’re a bit of a different guest than I’ve had in the past focused on more of the online business type entrepreneurs and you’re obviously your business is that but I think you provide services for many types of business so it’ll be really interesting to kind of dive in and get the lowdown of how you help everybody so of course can you give a little bit of background about yourself.
Mike : sure so my name is Mike Grantis I’m the senior director for business development with Barterpay Toronto community and essentially what barter pay is we’re Canada’s largest and fastest growing organized barter exchange so what that means is we help business owners to pay for things that they need or accumulate the things that they need using their own idle time capacity and services as payment instead of cash right so it’s a way for business owners to conserve some of their cash get the things that they need increase their profit margins and grow their business.
And the reason I say organized barter is because it’s very different than traditional barter right traditional barter is the oldest form of commerce and it’s how business was invented but it’s got some big flaws and one of those is what we call the coincidence of wants and so what that is when you need to find somebody that has what you need needs what you have at the same time and at the same value and you know that doesn’t happen very often in business especially with the complexities of kind of modern markets and so what we did with Barterpay is we created this ecosystem where you no longer have to be tied into one-to-one transactions all you have to do is provide your idle time or your idle capacity or goods and services to the network anybody within the Barterpay community can pay for those services using barter credits and each barter credit is equal in value to Canadian dollars one to one for kind of accounting tax and valuation purposes .
Then you accumulate those barter credits and you can spend those barter credits on whatever you need so instead of having to be locked into these transactions now it’s a one-to-many barter system where you can actually procure the things that will help you grow your business and reduce crop and reduce costs so that’s what we’re doing uh here yeah here in Toronto and it’s great super exciting very interesting.
Laurent: when did you guys launch?
Mike : We launched as Barterpay just about two and a half years ago and in that time we’ve amassed a network of about 4,000 businesses across Canada and yeah seen some really lightning fast growths had some great um signings with national partners like restaurants Canada retail council of Canada um Ontario chamber of commerce and many others to come but we’ve really seen some great traction and I think it’s because we’re providing this kind of alternative mechanism for business owners to really get the most out of their business for them to increase their capacity and work at closer to the kind of full throttle excellent.
Laurent: So, can you give us kind of an understanding of the types of businesses that are in the ecosystem today
Mike: you know what it’s funny that you ask that because they’re so wide-ranging we don’t necessarily focus on a certain niche of business what we what we more focus on is the mindset of the business owner right and so what we usually say is barter can work for any business but not every business owner makes it work and so you need to have a mindset that’s you know open to making deals open to trying new things love loves to network we love givers we love people that are you know socially conscious and thinking about their community so I mean what I would say is we have services we have physical goods we have businesses from solopreneurs all the way up to Gordon Foods who’s a 17 billion dollar company and provides us their idle food inventory for restaurants and retail consumers so the kind of wide-ranging different types of businesses is pretty remarkable but as we focus on these different industries and get these big industry leaders as our partners they’re starting to kind of you know trickle down the word and it really starts to grow organically from the ground up so I can literally buy my groceries yeah I mean and the great thing is it’s that wholesale cost of cost of goods right so Gordon food service is a is a you know major food distributor in Canada but they sell to restaurants and so when they have you know when they’ve over produced some inventory they’ll sell you know kilograms of mashed potatoes or you know I think they would sell to restaurants I mean there’s everything from you know kitchen equipment to food service product but you know it’s a great way to supplement that grocery order for sure that’s great.
Laurent: do you do most businesses that are on the platform take the wholesale approach or does it really depend on what they’re offering?
Mike: well what we say is fairly price your product so as you’re priced in the marketplace price is the same way in barter credits and that’s because you know with fair value of barter credit to dollar it makes everything simple from accounting to valuation to doing your taxes and you don’t want to have a different price point in the marketplace as opposed to barter that being said what we always say is we will never we will never discount your product to sell it on barter pay so one of our you know largest value propositions is that we can sell product at full cost in barter credits as opposed to discounting it in the cash world and having to you know maybe take fifty percent for a you know close out sale so we’ll price everything at full price we’ll get your full your full retail value for it and make sure that you continue to hold all that buying power
Laurent: Can you give us an example or two of you know successes that have happened on the platform?
Mike : yeah I mean they’re so good they happen every day and they’re so wide-ranging but you know just actually literally yesterday one of the one of the great examples we had is one of our moving companies had 200 sorry 20 000 bottles of hand sanitizer that they wanted to sell on barter pay and they wanted to liquidate it quickly and get some storage space out of their warehouse so what we did was we put out a blast to our barter pay members one of our members golf north ended up purchasing 7 200 bottles within the first five minutes and then another one of our members one of our charity members purchased six thousand bottles within the within the next 40 minutes and then we as barter pay are purchasing the rest and we’re going to sell those to the barter pit community so within the span of a day or even less than a day we sold through 20 bottles of hand sanitizer roughly that they can now that was essentially just taking up space in their warehouse that they can now spend on things that they need to grow their business be it advertising be it SEO or printing or you know moving equipment renovations whatever have you there’s so many different options within the barter pay community that they can spend it really the way that they want
Laurent : and the alternative would have been for them to market that they’re selling this put a huge discount on it you know get their whole team involved in trying to sell it now they were able to do it to a very focused group with your help as a marketing avenue to sell it quickly
Mike : absolutely and you know maybe hand sanitizer isn’t the best example because there’s probably a cash market for that as well let’s just say they had all this inventory in their warehouse that just wasn’t selling in the cash world I’ll give you another example we had Willowbrook Nurseries in last summer or sorry going into last winter they had about four hundred thousand dollars’ worth of flowers on their dump list that they just couldn’t sell in the cash world so they couldn’t keep it through the winter they were going to dump it now what we did through barter pay is we created some barter promos we blasted it out to our network we got we sold almost a hundred thousand dollars’ worth of flowers to our community that would have been thrown in the garbage right now this is a hundred thousand dollar barter credits and buying power for this business owner but what he chose to do was actually donate it to charity our charity called barter pay it forward foundation that works with about 100 charities across the country so now this is a hundred thousand dollars’ worth of purchasing power that goes to charities they so they can now drive their mission forward that would have been thrown in the garbage and he gets a tax receipt he gets a full tax receipt in return so he does good he you know puts his product to good use and also you know shares the wealth with the community so it’s really a win-win-win for business owners everywhere across Canada
Laurent : that’s huge that’s very cool I love the marketing aspect that you guys bring to the table right there is probably you know first there in terms of what’s available for them to buy with cash that they’ve accrued through barter trade and you know service or products being able to go to you and say hey I’ve got some open capacity really want you guys to push it like how does that work how much marketing do you do on behalf of a business owner
Mike : yeah great question what I would say first of all is every business owner that signs up gets assigned a barter coach so your barter coach is kind of like your personal sales concierge or your sales cons they’ll help you not only promote and advertise your business but they’ll also help you to procure the things that you need so they’re really your first point of contact with respect to barter now when businesses sign up we really try and inculcate the fact that you want to think barter first if you have if there’s something that you know you want to buy instead of spending cash in the cash world you might as well look at look in the barter network look call your barter coach and see if there’s anything available that we can find for you because it’s always better if you can spend your barter credits as opposed to cash with respect to marketing what we do is we have a we have a barter blast that goes out twice a week once nationally and then once to the local community and it’s totally free for business owners within the barter pay membership um you let us know when you have capacity or when you want to be promoted we then our graphics design team will build an advertisement for you we’ll put you up on our barter blasts they get great open rates with respect to our barter pay community because they’re always looking for things that they can barter with and it’s just a great way to get some extra eyeballs on your on your product or your service and create some new cash business essentially down the road because you’re now building up this network of like-minded business owners that can promote your product as well we do that if you have a specific deal or a specific promotion that you want to do we’ll even we’ll even build out a separate email entirely for you called the barter promo and we’ll sell was for example when Gordon foods came on board and they were starting their inventory sales we built a barter promo for them sent it out to the entire network let them know and we’ll even build out full shopify stores for businesses if they have extra inventory that they want to sell and barter pay so the extent of our marketing it continues to grow but the value you know the value that we’re adding to the marketplace continues to grow as well with it
Laurent : that’s very cool that’s very cool you and I had a conversation before around you know the varied types of services that are on the platform some of them are b2b some of them are b2c I think you said chiropractors massage therapists different things like that right so you know from a tax perspective how does a business that maybe has accrued quite a bit of barter credits use the barter credits for personal consumption right so let’s say they do want to get food or they do want to get a massage you know you had recommended a way to kind of move those bar credits from the business world to the personal world to the financial world can you kind of cover it
Mike: sure I mean there’s a lot of creative financing ways that you can use your barter credits as a business owner in the same way that you know if you’re incorporated you can pull money out of your business you’d have to repay it back in some form or fashion um but absolutely there’s nothing that says you only have to spend your credits on um business expenses they can also be used for cottages and vacations and rentals and timeshares um so what I would recommend and what we actually had somebody too was we’ve had somebody build almost an entire house personally with barter credits and I’ll kind of explain the story and how that worked he was a mattress manufacturer and the house costed I think three hundred thousand dollars or four hundred thousand dollars and he was able to um he was able to provide almost three hundred thousand dollars’ worth of those services in barter credits and what he did was he as he ran a mattress manufacturer he put 300 000 worth of mattresses on barter pay and over time not just to flood the network but um generally he started to accrue these credits and build up this net worth in his in his company of roughly 300 000 barter credits now he used those mind you the cost of those mattresses to him was only a hundred thousand dollars so cost of goods sold was about a hundred thousand now what he did was he spent those three hundred thousand barter credits on things to build the house carpentry plumbing electrical and you know physical goods like with wood and all that stuff and then I mean I’m not a carpenter but and then what he did was he cut himself a check for a hundred thousand for the cost of goods sold back into his business so now all the cash that was outlaid to build up those barter credits is back in his business and he’s built a 300 000 or a 400 000 home for really the price of a hundred thousand dollars so moving yeah moving credits in and out of your you know personal account versus business account there’s a lot of creative ways to do it but just in the same way that there’s a lot of creative accounting methods and financing methods for businesses as well
Laurent: and you guys have kept it easy a dollar per credit so and from a tax perspective CRA looks at it as you know you made a dollar it’s a dollar of revenue and so you’re paying um like it’s just another account is that how it works
Mike : absolutely so we actually have an agreement with the candidate with cra that says each of each dollar is equal in value to a barter credit and so that actually makes it really easy our barter pay bank account you can call it can be added into QuickBooks can be added into your general ledger just like any other bank account can be and you know for accounting purposes whenever you make a sale it should go under revenue and whenever you make a purchase it should go under expenses and that just keeps everything really tied together what I would say as well is us as barter coaches what we’re trying to do is act more like um consultants for your business so we’re not going to let you accrue 300 there’s something that you’re going to use those for so we want to figure out okay what is the amount of barter credits that you’re going to need to do a certain project let’s hypothetically turn on the sales faucet get you some sales we’ll promote your business we’ll market you we’ll get you some sales then we’ll turn off that sales faucet when you have enough to purchase what you need and then you can go out and spend those credits so it’s kind of like credits in credits out and then there’s no tax liability because with respect to you know HST you’re paying HST in barter credits and you’re receiving HST and barter credits and when you actualize for the year it ends up being close to close to a wash
Laurent: that’s great yeah so, I think most of my listeners you know obviously we talk about buying and selling internet businesses so is there a heavy concentration of services like I’m thinking SEO AdWords like are those kinds of businesses readily available on the platform today
Mike: so definitely they are there’s lead generation services there’s SEO web development you know those type of things what I would say is well we don’t work directly with google or Facebook so you can’t pay for your ad spend through barter credits unfortunately not yet yeah but there definitely are those b2b services that can help you grow your business with and I know you work directly with e-commerce sites as well and what I would say is e-comm sites tend to be the kind of best in class sellers on barter pay because they have physical good products you know exactly what you’re getting they’re easy to market we can put you in our Shopify multi-vendor marketplace and that’s a great place for business owners to kind of see what’s available and you know pick out what’s available so ecommerce sites do tend to do really well but there is such a broad mix of services professional services and um you know b2b or b2c that can really help you grow your business or whatever you’d like to do in your personal life
Laurent: perfect and you talk that you know even if your services are commission-based you guys have a way of making that work I think you said you had some real estate agents as examples
Mike: yeah absolutely so with respect to real estate it’s a little bit more difficult because there’s lots of stringent regulations with respect to brokerages and how money gets money gets transferred but what we’ve done in the past was real estate deals where after the closing of the of the house and the commission gets paid out to the real estate agent or the real estate brokerage we’ve created contracts before the deal that say once this commission gets paid out we’ll swap it with the consumer for barter credits so this is our mechanism to say okay if you’re a real estate agent we can find you buyers or sellers within the barter pay community we’ll market your business we’ll get you those eyeballs we’ll get you that exposure but in return since you’re um since we’re getting you that new business that you might not have had otherwise we’ll do that transaction and barter credits and we’ll give you that buying power on the barter pay ecosystem as opposed to the cash bank dollars so it’s tend to work it’s worked out really well we just did a real estate closing I believe it just closed on august for the commission was roughly of that in barter so you know it works really well from that perspective but there’s a lot of creative uh creative ways that you can use it if you’re somebody that’s interested in barter we can figure out what makes the most sense for you and your business to get you on networking and get your services available
Laurent: well I think it’s a no brainer it’s businesses that are available and quite frankly at a relatively cheap marketing approach right you guys do it kind of all to help a business really push their product whether they have a spike or not there there’s an avenue there so I think it makes a tremendous amount of sense so where are you guys going what does the next two years look like for you guys
Mike: well I would like to continue that uh kind of hyperbolic parabolic road we’ve seen some great growth trajectory and um as we continue to bring on these new partners these national partners we’re really starting to create that buzz so what I would like to see us get to is roughly maybe 15 000 businesses nationwide and really start to see the name barter pay become resonant with um you know a new a new means of transacting or a better way forward where everybody can kind of work together to help each other grow I think especially in times like we’re in right now the importance of community the importance of a network and actually working together kind of takes precedent over everything else and I think in order to get us all through this we’re going to have to work together so I would love to see people start to adopt barter as this new form of commerce that’s kind of an inflation hedge and that’s also just a way a great way to connect with other business owners in your community agree is there an international scope at some point we and I don’t want to speak too much of this this is our founder john porter that’s been working on a lot of this the international expansion but we are in talks with some businesses in the in the us to expanding there as we’ve had a lot of interest from other business owners in other countries that want to start getting involved as well as of right now we’re specifically focused on Canada we want to make sure that we’re owning our sandbox here in Canada and making sure that we’re kind of the primary source for barter here in Canada before we really start to move our efforts but it’s definitely in the works yeah that’s
Mike: the world barter alliance is in the works
Laurent: excellent Mike anything else you want to cover
Mike: I mean not so much but I just wanted to say thank you so much for the for the time and for having me on the show and letting me kind of have a platform to speak about barter pay
Mike: we really appreciate it
Laurent: yeah, we love new opportunities like this I mean I think it’s a lot of businesses can benefit from having that Canada to Canada direct selling ability yeah
Mike : One thing I would add actually before you go and I know MadX Capital fantastic business model I love what you’re doing but what I would say is for businesses that are interested in selling their business I know you tend to work on a revenue or a profit multiple to sell their business now if you know you’re going to sell your business in the future wouldn’t you want your profit or wouldn’t you want your revenue numbers to be as high as possible right and so barter pay can be a way to fill up some of that sell some of that idle capacity increase that cash conversion cycle and really grow that profit margin for the short term while you’re really getting evaluated while you’re while you’re getting kind of audited for price on your on your business so if you’re looking to sell or if you’re looking to buy it’s something to look at as a means of kind of I don’t want to say inflating the value of your business but showing the true capacity of what your business can bring
Laurent : I agree I also think one of the biggest factors in driving a multiple up is how well diversified of businesses right so if they only have one avenue of selling whether it’s amazon or shopify you add another avenue like this then all of a sudden a potential buyer’s like okay there’s less risk right i’m not completely platform one platform focused so and like you said there’s always highs and lows in the business there’s going to be some capacity that’s not fully utilized so being able to always maintain that high level of sales by either going to your regular marketplace or this one I think just gives you more options so it’s a great point
Laurent: Mike how do people get in touch with you
Mike: You can find me on LinkedIn. Mike Grantis on LinkedIn or you can email me at mike.grantis@Barterpay.ca
Laurent: perfect I’ll put all that in the show notes and thanks for taking the time today this was great I really appreciate it
Mike: thank you very much appreciate the time
Laurent: all right we’ll talk soon take care
Outro: Thank you for joining us on this episode of the mad prophet podcast we hope you enjoyed the show don’t forget to subscribe on iTunes, google play, or the listening platform of your choice. also check us out at madxcapital.com for more useful information and resources to help you achieve your investing entrepreneurial and business goals see you next week on the mad profit podcast.