Club Entrepreneur's Solution to Unemployment

Unemployment in Phoenix is around 10%, probably higher. Commerce is down, in part by the inability to expand and re-invest in materials and employees. This results in diminished sales taxes, which negatively impacts the City and State. Banks have no money to lend and even if they do have the money, they aren't lending to businesses. Angel investors and venture capitalists are almost non-existent in our state. Business has stagnated, people are out of work and there's no money. People without jobs don't spend and people with jobs are afraid to. In short, something radical needs to be done.

I believe that I have that solution....

Barter has been with us forever. Trading goods and services were the first commercial transactions on the planet. Barter flourished well before money was invented. Trade organizations whose members trade on a retail for retail basis with each other, using that exchange's barter currency represent the tool that makes my plan work. These microcosms of the economy maintain a perfectly balanced budget, with a rock solid currency...if run with integrity and proper controls. My organization of 4500 local businesses, Club Entrepreneur, has chosen a well established and properly controlled Phoenix-based trade exchange as its barter partner of choice and it is through this alliance that we're going to change the face of unemployment and cause a resurgence of commercial activity.

Specifically, we are going to create the program of "Hire Yourself." We're going to take some of the unemployed labor force and have them barter their skill sets to companies that need that labor but believe they cannot afford it. Both the laborer and the business will become members of the barter company, filling out all the necessary paperwork that allows them to legally trade bartered services of the former employee and now independent contractor, for equitable compensation in the form of barter dollars. (Through Club E Exchange, there is no cost to either party to enroll in the barter company, an automatic savings of over $500.)

The business gains a skilled workforce on a contract basis, paying for those services through barter dollars generated from the sale of that company's excess goods and services to the ever growing membership of the barter exchange. The formerly unemployed worker now trades their time and skills to the company that contracts for them and earns barter dollars, which are used to offset former cash expenses like renting an apartment, paying for childcare and even buying an automobile...all services offered in the barter exchange. There is even a "cash conversion" of accumulated barter dollars that can be used for a discount of around 30% of the retail value of the barter that can be offered to the "Bartered Worker."

All this makes great sense and given the infrastructure that already exists; a pool of Club Entrepreneur businesses in need of skilled labor, an established barter exchange and a plethora of skilled yet unemployed workers...there is a workable model here.

Club Entrepreneur itself can become the test case of this potentially sweeping solution to America's unemployment problem. We have already hired two "Bartered Workers" to do much needed administrative work for our company. Starting part time on an agreed upon wage, paid in barter dollars, these two individuals have specific independent contractor agreements with the company, specifying the required duties in exchange for barter dollar payment for the work completed. At the end of the year, 1099s are issued to the "Bartered Workers" for the amount paid to them by the company in the barter dollars. The IRS recognizes barter income the same as cash income for the purposes of paying taxes and the barter exchange maintains careful records to be in full compliance with the law.

In order to comply with all regulations as well as to mitigate the costs and provide the greatest benefits to the "Barter Worker," each will form an entity (LLC, corporation, etc.), complete with a Federal EIN number, in which the Independent Contractor contract will be executed. Each entity will establish it's own barter exchange account, so that Club Entrepreneur can pass it's payments from their own barter account directly to the entities of each of the "Barter Workers."

As part of it's service, Club Entrepreneur will provide incorporation services at cost to the "Bartered Worker," as well as guide them to bookkeeping, credit restoration, business plan writing, equipment leasing and even capital raising services for the "Bartered Worker" and their new entity.

Since health care coverage is such an issue with all of us, especially the unemployed, who often seek employment with a company for the sole benefit of being eligible for health insurance, Club Entrepreneur will be offering an affordable solution to that issue. Through one of it's own Club E members, a health care provider who offers solid health plans to business owners and their employees, these affordable plans will become an option for each "Bartered Worker." Often, these rates are 1/3 less of any other provider.

Although many cash expenses of the "Bartered Worker" can be offset by purchasing barter services within the exchange, there will always be the need for some cash. To provide that cash through the "Barter Worker" program, a "cash conversion" option to turn earned barter dollars into cash is being created. Through an arrangement with both residential and commercial rental providers and an automobile dealership, Club Entrepreneur has arranged to "purchase" a significant volume of residential/commmercial rental space as well as good used vehicles...in exchange for barter dollars, which can then be liquidated at discounted rates for cash on the open market. The "cash conversion" process will be a service offered to the "Bartered Worker" by Club Entrepreneur.

When this model has proven to be an effective solution to the unemployment issue through it's introduction to our first two "Bartered Workers" at Club Entrepreneur, we will then be offering this to our 4500 Club Entrepreneur membership and reaching out to the unemployed to take positions in those companies that want to enter the program.

In the barter business, there is a 12% cash component whenever the barter dollars are spent. This fee remains with the barter company that facilitates the trades and acts as the "bank." By prior arrangement, Club Entrepreneur will receive half of every transaction fee, or 6%, which will support Club Entrepreneur's underwriting this new program.

In short, everyone wins. The company that needs skilled help but doesn't have the money to hire, wins. The formerly unemployed worker who now incorporates himself and farms out his skill sets at an equitable wage paid in barter, wins. Finally, Club Entrepreneur, which pioneered this "game changing" strategy, wins by creating a significant passive cash flow from completing the transactions ...proving the point that the proper execution of the Free Enterprise system really does benefit us all.

Best regards,

Peter J. Burns, III