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Bar Management News

Back to the Old Days with Bartering

July 30, 2013 By: Mary-Kate Dunphy


If you’re hungry for new ways to generate business for your nightclub or bar you might want to consider the oldest form of business itself: barter. Bartering can help clubs and bars attract new customers, maximize underutilized resources, and even reduce your cash expenses.

It has been said that barter works particularly well in the food and beverage industry, because it’s an effective way to utilize the “disappearing assets” that are our stock in trade.

“If you don’t sell perishables while they’re fresh, or fill an empty table any given night, you lose that opportunity to earn income,” says small business expert Ray Silverstein, author of The Small Business Survival Guide: How to Survive and Thrive During Tough Times.

John Strabley, president of International Monetary Systems, explains that as long as the hospitality industry remains under capacity, the need to create additional revenue streams will facilitate an upward trend to barter through organized trade.

“There has been an awakening to barter because of the economic constraints these past few years and we have seen good growth in the food and beverage sector. These operators are facing more pressure on costing and labor and barter programs such as health benefits through eye care and dental services and such offer supplemental options to their staff at a minimal cost through trade. It gives them a competitive edge over their completion.”

Strabley tells us that barter is evolving into mainstream America out of necessity especially with the independent operators.

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NCB: In what ways is bartering more effective than tradition spending for nightclubs/bars?

Strabley: The primary reason any business to participate in organized barter is to increase sales. In the case of bars and nightclubs, get more butts on barstools. It is all about increasing sales and by engaging in a barter program, doors open to B2B employees that haven’t traditionally been loyal patrons. In many instances they are first-time visitors. Because this trade income is a new revenue stream it allows that establishments to offset routine expenses by paying invoices using barter. This literally allows these hospitality venues to pay bills at their cost of goods.

Club owners can earn trade by honoring specific gifts certificates, they then deposit these into their trade bank account and spend anywhere within the system. Many utilize Health Benefit Solutions programs for dentistry, optical or pharmaceuticals; some take a trip to a warm destination resort but most use this new financial resource to offset routine restaurant and club expenses such as fire extinguisher recharging, hood cleaning, advertising, printing and such.         

NCB: Can a business rely solely on bartering to succeed?

Absolutely not, cash is always king and barter is a complement to the almighty US monetary unit the dollar. We typically suggest a business should not exceed 5% to 10% of the gross annual sales.  

NCB: It has been said that “Bartering eliminates waste and translates into greater profits,” how so?

Strabley: “Bartering eliminates waste and translates into greater profits,” because it puts excess inventory to work. In the hospitality sector excess translates to idle time due to lack of traffic and not enough covers or beer served to capacity. This then eliminates the perishable element of time and undersold capacity and when these dollars are spent it leaves more cash in the till. And that relates to profit and more take-home for the owner.

NCB: How many nightclubs/bars have adopted this idea? Where?

Strabley: IMS currently has 16,000 businesses trading using our currency of which 12% are restaurants/bars and nightclubs. We are in 52 US markets and heavily concentrated in N. California, Chicago, Denver, OH, NY, WI, MO, KS, and the eastern seaboard, CT.  

NCB: Explain barter dollars and how they are earned.

Strabley: A barter dollar is a monetary unit recognized and reported much like a US dollar, a medium of exchange for credit with value. Participating businesses routinely purchase trade gift certificates and spend them at establishments within the exchange. These clubs and bars then deposit the certificates they honor into their trade bank account, getting 100% return. And then comes the fun part, spending these dollars.   


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