Will work for food…New England Trade launches restaurant division With the economy in its current state, you might think eating out would be off the table for many small business owners. Conversely, you might think a restaurant’s plans to upgrade systems, replace ca
With the economy in its current state, you might think eating out would be off the table for many small business owners. Conversely, you might think a restaurant’s plans to upgrade systems, replace carpeting or embark on a billboard advertising campaign might have to be put on hold just to keep up with necessary services like pest control. To meet the needs of both the small business owner and restaurants, New England Trade, a bartering organization serving Massachusetts businesses for the past three decades, has set up a special restaurant division.
“We have a large number of restaurants as members. These members put up gift certificates to their establishments in exchange for the services they need to run their organizations, things like upkeep of their facility, pest control, new menus, advertising, etc. We also have members who like to use their barter dollars on restaurant gift certificates to use for themselves or incentive programs for their staff or customers. The new restaurant division helps pair the members from both sides of the equation,” said Ken Meharg, CEO of New England Trade.
The practice of bartering has been around since the days of the caveman (e.g. a plumber does some work for a CPA, who in turn does the plumber’s taxes). In a bartering organization, members have access to the products and services of all the members. So, the plumber can do work for the CPA on barter, but can then choose to “spend” the bartering dollars he’s accrued on another product or service offered by other members. Like use of an ocean-side condo for a week.
There is some exchange of cash involved with barter. A 7.5 percent transaction fee goes to the bartering organization and members are responsible for paying taxes on the “barter dollars they earn. Still, for the most part, a bartering organization makes a meal out possible for many small business owners without dramatically impacting their cash flow.
For the restaurant owner, barter provides a tremendous means to attracting new business for a relatively small investment. An example of this is the New England Trade member and restaurant owner who offered $20,000 in gift cards. While those cards represent $20,000 to fellow members, the actual cost to the restaurant owner is much less. After all, the restaurant owner is probably ordering the same amount of food and beverage and keeping the same amount of staff on regardless of the gift certificates.
The bottom line in this example is that the restaurant owner was able to purchase $20,000 in billboard advertising space while attracting $20,000 worth of potential new business without spending much more than usual.
“In today’s economy, the biggest problem restaurants are facing is empty seats. By trading gift certificates for barter dollars, restaurant owners can bring in new customers, who, if they enjoy their experience, could become repeat, cash-paying customers. Short of word-of-mouth referrals, there’s really no more cost-effective way to attract new business,” said Meharg.
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