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07/13/2010

From our BarterNews files of 1999:

Staggering Barter Agreement Jump-Starts New Business

Talk about an agreement that helped both parties ... Union Bank of Switzerland (UBS) decided to give their business to new computer services start-up Perot Systems in 1996. They did so because, in addition to a good price and a promise of extra-special service, they were given an option to buy 7 million shares of Perot Systems stock at $3.65 a share, when the company went public.

Perot Systems made such an agreement because they needed a substantial contract, and had to �outbid� their bigger rivals IBM and EDS.

The UBS contract accounted for 25% of Perot�s revenue. On the second day of trading after going public in February 1999, less than three years after the contract and barter agreement was signed, Perot Systems� stock was selling at about $61 a share. And UBS was holding a $400 million windfall!

How did founder Ross Perot fare on this barter deal with UBS, an agreement that admittedly jump-started his new company? His 38% stake in the company was valued at $1.4 billion. (Additionally, it was the substantial UBS contract that enabled Perot Systems to go public as quickly as it did.)

The barter technique (and perspective) used by Ross Perot isn�t limited to super huge deals. You can, and should, use the concept � regardless of your company�s size. What�s required is an awareness by you that a barter component can be the determining factor in a new business contract.

What should you offer? That depends on the situation, which a little research will reveal. However, an exceptionally versatile commodity you�ll always want to consider is trade credits. They�re valuable and can be used in a variety of different ways by the other party.



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