Small to mid-size companies combine to account for a staggering GDP shortfall of $2 trillion, resulting from untapped and underutilized business potential.
Looking to help companies crack into this massive revenue opportunity while driving transactions for businesses of all scales across industries, one entrepreneur set out to establish an innovative solution that allows businesses to offer products and barter services without spending any cash.
Founded in 2002, BizX is a membership-based network that works with companies to promote their products and services, build new business relationships and facilitate transactions between companies that might not normally conduct business together. BizX allows members to buy and sell within the network directly using an alternative form of currency equivalent to the U.S. dollar, aptly named ‘BizX Dollars’.
By implementing their own form of currency, the company also functions as a third-party record keeper, providing clients with monthly statements and real-time account balances. However, unlike a bank or other financial institutions, BizX connects clients with other members, creating a pipeline to funnel new customers to purchase products and services directly.
This model allows their clients to preserve vital cash resources, while maximizing their service offering and increasing revenue. Additionally, by allowing members to purchase products and services from each other without the use of cash or credit, BizX helps companies offset business expenses.
Agreeing to accept BizX dollars as payment from others within the network also allows members to establish additional sources of incremental revenue. This incremental money flow can be spent back within the network to fulfill other business needs.
Their expansive network has powered over $800 million in transactions, significantly increasing cash flow for companies while also saving business owners over $400 million.
I spoke with CEO Bob Bagga about the vision behind the company, disrupting a traditional industry, and his vision for helping businesses unlock a trillion-dollar gold mine.
What was the void or opportunity you discovered that inspired the idea behind BizX?
Bob Bagga: Whether it’s an empty table in a restaurant, unsold ad-space, or unbooked hours of a general contractor, lawyer — most business owners would jump at the chance to close that 20% gap. We think the best way to help maximize that capacity is by providing business owners with tools that allow them to use unutilized capacity as currency or lines of credit, without any cash requirements involved. Since cash is often limited, using unrealized business potential as capital can help improve efficiency while paying goods and services that may have been difficult to obtain due to a lack of working capital. That’s why we created not only the BizX community but also the BizX dollar, which allows our members to buy and sell their extra capacity amongst the network.
Describe your business model and what was the strategic thinking behind it?
Bob Bagga: By using the BizX dollar, they can turn extra business capacity and assets into cash flow, which in turn, can be spent at member businesses without any cash involved. The goal for us is to reduce waste, maximize member potential, and help them earn new customers through BizX members and the eventual cash based referrals that follow.
What were some of the challenges you faced early on when trying to get your business off the ground?
Bob Bagga: Initially, we had to help people understand the concept, and realize that it isn’t as complex as it may seem. So, we had to invest heavily in educational content to help our early customers adopt our model. Any business has an uphill battle when it comes to building credibility, which is why we started by investing heavily in the success of our members while maintaining a hyper-local launch model. This helped us create brand champions that have in turn helped rapidly grow our network. Today, the biggest challenge we face is scaling the business to new cities. We care deeply about the BizX community, so when we launch, we launch location-based teams that can help guide our new members and foster a thriving local business network. That makes any launch a time-intensive process, but we think the results are worth the investment.
What have been some of the biggest blind spots or pitfalls plaguing the space and how does your company aim to solve for them?
Bob Bagga: By giving users a cashless platform, on which they can transact with other members, we’ve been able to solve that problem. Additionally, other currency alternatives or bartering options become incredibly complex, costing business owners time, which second to cash, is the most vital resource they have. We not only have a seamless web platform that members can use, we also have a mobile application that allows members to transact with one another painlessly. On top of that, we’ve provided complete transparency through dashboards that allow members to track their BizX dollar spending and their increased cash flow.
What are the criteria for becoming a part of this extensive network and what are the primary benefits businesses experience?
Bob Bagga: BizX is free to join, and any high-quality business that delivers real value is welcome to join. Businesses that have underutilized capacity, time, and so forth benefit from joining, because instead of letting those services go to waste, they can turn them into a cash-free line of credit when other members pay for them with our complimentary currency. To put it another way, given the opportunity to spend cash, or BizX dollars, on expenses — which would you choose? Obviously, the answer for most of us is that we’d use BizX dollars keep our cash to spend on other things. Our members have an advantage in that they now have two currencies to spend: U.S. dollars, which are the result of all of their marketing, sales, word of mouth, and promotional efforts. Then, they can use BizX dollars. Since they all share the motive of spending BizX dollars first, they will always choose to do business with other members over non-members.
How does BizX specifically save businesses money and how does your model make business owners rethink executing deals and transactions?
Bob Bagga: Since BizX is a B2B network comprised of members in practically every industry, members can get almost anything they need with member businesses. This results in direct savings because they can obtain goods and services without expending any cash. It doesn’t just save them money, in many cases it allows them to take on expenses that would otherwise be too cumbersome with their existing cash revenue alone. It certainly isn’t a closed loop either; members consistently experience new cash referrals from other members who are happy with their services. This allows them to convert unutilized potential into new customers, increased cash flow, all for nothing more than their incremental cost of goods sold.
How does your company empower the small business economy and in what ways do you see BizX setting trends in the space?
Bob Bagga: BizX is not just a business – it’s a community. A community made up of business owners, entrepreneurs, and savvy professionals looking to get ahead in an ever-changing market. We believe that we are stronger together than we are individually, and our members think the same. That’s why we exist. Our goal is to make the lives and businesses of our members better by giving them the tools they need to grow without using potentially limited cash resources. Whether they need a cash-free line of capital, new customers, or a way to barter with others for goods and services, we can help them make the most of their business potential. Our long-term hope is that this can start to chip away at that $2 trillion in unutilized business potential, which will help grow not only individual businesses but markets as a whole.
As Bitcoin and other forms of crypto-currency increase in popularity, where do alternatives like BizX dollars fit into the equation?
Bob Bagga: BizX generates local commerce by giving business owners a way to turn their unused goods and services into capital. Cryptocurrencies are still largely based on speculation and do little to drive growth for businesses. Also, unlike other digital currency solutions, the BizX dollar isn’t theory; it’s been used and proven effective in giving companies opportunities to grow their business and invest in their teams. While cryptocurrencies are an exciting and innovative cash alternative, all of them eventually require a cash outlay from the buyer. With the BizX dollar, however, a transaction only involves using extra business capacity. In short, earning BizX dollars doesn’t cost a business anything, but it returns a cash alternative that they can easily use with countless vendors, through a simple application.
What are the keys to your company being both successful and sustainable as industries rapidly evolve?
Bob Bagga: We are growing and launching in new partner cities all the time. One thing that’s at the core of our business is building up communities of business owners that support one another and transact within the network. This is incredibly important for our members that do business in person, like general contractors, restaurants, etc. While many of our member’s services can be delivered online regardless of location, we still make sure the community is at the center of it all. Doing so helps us build sustainable member communities all around the country. That’s also why we keep BizX free to join without any monthly or annual fees. We only earn when members improve their business through new customers on the network, and when they save by spending BizX dollars for the services they need. Since our member’s success is directly related to our own, it means we can partner with them to make sure the service and the network are everything they need it to be.
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