How Restaurants Leverage Barter as a Strategy to Thrive and Grow

By Bob Bagga

Aside from the incalculable toll it has taken on families, high-risk populations, and frontline workers, it's also clear how much COVID-19 upended the restaurant industry in 2020 with the Puget Sound area being no exception.

Restaurants shuttered or empty, workers furloughed, and bottom lines and markets reaching new lows are all in plain view while the emotional impact will be felt for years, or even decades. Some business leaders have re-evaluated how they approach their business, as well as each other.

Rather than competing with each other, we're now seeing business owners and managers coming together in a variety of ways, building networks and supporting each other in identifying creative solutions to weather this extended crisis.

After the pandemic began having a serious impact in early 2020, two peers and I began wondering how we could help those here in Seattle. From those conversations emerged a Facebook group for small business owners - heavily weighted towards restaurants and other businesses in the hospitality industry - that grew to have thousands of members who gathered to share inspiration, resources, and advice each day.

It's been inspiring and heartening to watch these entrepreneurs and managers come together to solve problems, share ideas and even forge new business relationships. The communal nature of this Facebook group brought to mind flashes of the "all-hands-on-deck" business landscape we saw in the wake of 9/11, with businesses joining together to help each other stay afloat. It was at this time that I created a new community called BizX, with a goal of connecting businesses through barter to preserve their cash flow amid economic uncertainty.

So how does barter, a concept that's been here for centuries, relate to your local pizzeria, winery, or café?

Before COVID-19, roughly one-third of the global economy was non-cash. Now, barter, which ruled the day in the Middle Ages, has returned with a 21 ^st century, digital twist. Barter is now not just Facebook posts from friends and neighbors looking to swap toilet paper, eggs, and hand sanitizer, but also major organizations like iHeartRadio and the San Francisco 49ers using modern-day, digital bartering communities like BizX.

BizX and similar exchanges allow businesses to free up their cashflow - particularly during times of great economic uncertainty - by trading what they have to get what they need. With excess capacity being a reality for countless bars, restaurants and coffee shops in the COVID-19 landscape, it couldn't be timelier.

In most barter transactions, there is a double coincidence of wants. Both parties have to have exactly what the other party needs or wants, proving to be ineffective in the long run. In using a digital barter network however, one party can sell excess products for a unique digital currency that can be used to purchase other budgeted products or services from other members. For example, restaurants can drive new customers through their doors, fill empty tables, and use this credit to complete necessary renovations; or wineries can find creative ways to fill empty rooms and use it to pay for advertising.

The Heavy Restaurant Group, for instance, is a collection of diverse local establishments that had to conjure up new ways to stay competitive amid COVID-19. With indoor dining limited, cash flow was of real concern, and management examined ways to trade rather than spending cash on items like meats, wine, printing, and website work. They leaned into BizX to leverage their community.

But barter wasn't a tool the Heavy Restaurant Group began using just because of COVID-19; the restaurant group said that they've gotten thousands of new visitors in the years since they began using BizX.

Trading within a digital community can also come in handy for much-needed repairs and renovation in addition to getting customers in the door. Tim Short, the owner of Redmond's Bar & Grill, said his establishment been able to use BizX for painting and flooring, and has even been able to hire contractors to do the work. Short says that the restaurant has boosted cashflow by upwards of $350,000 using barter and says that by saving cash spent on monthly cleanings, repairs, and various recurring expenses, Redmond's has been able to preserve cash for other expenses. This led to the restaurant being able to sustain a portion of its staff working during the pandemic and keep the restaurant afloat.

"When there is a shift or change in your market, you start focusing on new ways to save cash that you previously haven't looked at," Short said. "BizX is a great addition to your arsenal during a time like this."

Utilizing a barter network can also help you give back to your team, and extra capacity in a restaurant - even if it's simply gift cards or credit - can end up back with your employees through bonuses, which can be used on vacations, meals in restaurants, or a variety of other services available.

For so many businesses, cash remains tight and capacity remains abundant, so I urge you to think creatively-not just with your team but with your fellow business owners as well-so you can join together to leverage your collective capacity. In the toughest of times, these concepts have helped keep businesses afloat that went on to do truly special things. I'm confident that by leveraging barter, you can do the same.

Photos courtesy of BizX

March 2021

Bob Bagga is CEO of BizX , a digital barter exchange. www.bizx.com