Connecticut’s Barter Business Unlimited has members across the country and even some abroad, but when it comes to restaurants and catering companies, the deals have a distinctly local flavor. Still, the network has signed some 75 foodservice companies, and the number is on the rise as eateries use the service to not only trade meals for services they would otherwise have to pay cash for but also as a way to fill seats, keep servers paid and market what they have to offer, says sales consultant Sandi Sweig.
We spoke Monday, as the company gears up for its annual Barter Expo, an event on Nov. 10 that’s expected to draw about 3,000 people.
Is the number of restaurants in the network growing?
Yes, absolutely, it’s growing for every kind of business right now that has empty tables or extra space. It’s a challenge right now to keep the restaurants full, for them to make money and for staff to get tips. They may still fill up on a Friday or Saturday night, but it’s not enough. They need to fill empty tables the rest of the week, and it’s a challenge because the economy has changed.
So is it just the economy that’s driving the increase?
Whether the economy is good or bad, they have always looked to barter because the restaurant gets the whole package. They get people in at their normal menu prices, and then they’re getting the dollars to use for services. But on the marketing end, when the economy is slumping, they want people in there. When their food is good, people bring more people. Also, if you want to keep good servers, you need to have people eating there so servers make tips. That motivation is higher when the economy slumps a little bit.
One thing that’s always been a big key for restaurants is that barter enables them to purchase things with new business rather than with their existing revenues. When they’re trading gift certificates, they’re getting new customers that are coming in. They might have bought them on barter, but they’re with friends and business associates. Sometimes they give the certificates to people who have never eaten there before. Restaurants also absolutely love the fact that it’s dollar for dollar, they’re not coming in with discounted coupons.
Also, right now, there are so many discount programs out there, where they’re getting sometimes 25% of the profits. All of a sudden when they realize we’re retail to retail with just a 15% commission, they’re looking at us again, during times when they never did before.
Basically, how does a barter network like Barter Business Unlimited work?
A company comes on board; let’s say they’re a restaurant. They’re excited to do some barter, a lot like to start slowly, and the better we are at finding them things they can use, the more they’ll trade. They might give us $1,000 in gift certificates. We have an office full of trade brokers here, one gets to know the restaurant really well, they spend time on the phone and get to know who does all their services. Then they begin to set things up for the restaurant owner and the more things we have that they can use, the more they’re giving gift certificates.
Some restaurants stay on gift certificates forever and others will actually take their barter card into the restaurant to use like a credit card. For the restaurant owners, it’s income and a lot of them use it for employee perks and their own personal expenses, like dental and eyeglasses, since most of them don’t have that coverage for themselves and their families. When more clients come through the door, whether it’s cash or barter, they have more money to spend.
Can members amass barter dollars until there’s something they need?
They do. If they know, for example, that next year they will be opening another restaurant and they will need a lot of services, they’ll hold onto the credits. We also give barter loans – say a restaurant is opening a brand-new facility and they don’t have a lot of dollars banked. We have given them a barter line of credit. We are careful, it’s really other members’ barter dollars we’re lending, so we ask for guarantees or other things a bank might ask for.
Restaurant owners remember that, especially if they’ve had a tough time getting a line of credit.
Have you used barter in your restaurant or catering business? Tell us how it worked out for you.