It’s a Miracle Your Favorite Local Bar Still Exists
Rent, product, payroll...sand? Restaurant margins are infamously tight. The pandemic era has made them tighter.
12:45 AM EST on November 20, 2022
Nowhere feels more empty than a suddenly vacant restaurant. When you work in the hospitality business, there's a precious moment that occurs at the end of a shift: You turn the lock on the door, the room plummets into shocking silence, and you can hear yourself breathe again. A good part of that feeling comes from knowing that you'll return to do it again tomorrow.
But the night we closed our restaurant at the beginning of the mandated COVID shutdown, the sound of the lock clicking into place transformed that relief into ominous uncertainty.
Sometimes, the emptiness of our restaurant felt like a balm. During the height of the pandemic, whenever I would deliver meals to Elmhurst Hospital to help feed its staff, I was always relieved to return to my empty restaurant. All I had to do was tackle problems that were financial or bureaucratic, almost immaterial. People were dying. We were just going broke. Then the weeks turned into months, and the months turned into years.
It wasn’t that long ago that those of us in the restaurant industry were minor heroes for showing up to work every day—not like the doctors and nurses who dealt with death, but more like maintenance workers charged with preserving some sense of normalcy. Now, people just want us to get back to work.
I've worked in bars most of my life and I never went to college. Having a restaurant felt like a way to put some mark on the city, so in 2013, my business partner and I borrowed money—from friends, family members, banks, wherever—to open a cozy corner restaurant in the Lower East Side. We sell beer and some wines that I think are cool. We aren’t allowed to sell liquor because we are within 200 feet of a church, so in 2017, we opened a second place a few doors down, a cocktail bar named after a woman who used to live around the corner. People love the sense of community that our places have fostered. But that doesn't always matter. Or, I should say, it isn't enough.
My partner and I didn't pay ourselves for a long time. I still tend bar two days a week, and she works as a server. What little is left after paying expenses goes back into the business.
Every restaurant has a set of mostly fixed, predictable expenses each month, rent being the biggest. Other costs are not fixed but tied to mercurial sets of circumstances. And then there’s a series of smaller fees that will swarm you like army ants and strip you to the bone.
This summer, an average month netted us $56,000. There's a three percent fee for every credit card transaction that the restaurant has to pay, which adds up to $1,773 for the month. There's sales tax: $4,236. Payroll taxes: $1,306. Payroll company fee: $56. Spectrum: $135. Con Edison: $1,868. Linen service: $312. Insurance: $542. New dishes for the ones that get lost, thrown away, broken, or stolen: $216. The exterminator: $60. Then there's payroll: $22,564. Then throw in the cost of all the product you have to buy in order to have something to sell. (This number ranges widely these days due to, or at least blamed on, inflation or supply chain issues. Just as a quick example, the cases of potatoes that we buy to make french fries went from $35 to $80 in the span of a month.) The average cost of goods to sell for one month that quarter was $18,717. Then other things happen. In my experience, under regular use, every piece of equipment in a restaurant has about a year's worth of life in it. The toilet breaks: $350. Beer lines need cleaning: $112. A/C needs repair: $750. There's a plumbing issue in the kitchen: $250. The gas for the beer needs changing: $65. That's a swift $1,500 that you didn't know was coming.
If you’ve followed along with the math, we've got $2,688 in our bank account and we haven't paid rent yet. (Or property taxes, which you might be surprised to learn that tenants in commercial buildings, like restaurants, help pay for.) You might be wondering how we pay the rent if this is the case—the answer is that we skip some bills and pay the rent late, with the next month’s earnings.
During the height of the pandemic, when restaurants like ours were shut down, food deliveries brought in about $16,000 a month. This might sound like a lot, but we were nowhere near able to pay our rent or our portion of the property taxes. Unlike many others, our landlord was understanding of our situation.
The delivery money made it possible for us to take care of some bills and to pay our kitchen staff who were unable to collect the federal unemployment checks that kept the rest of us afloat. One employee who had been with us for six years returned to Mexico early on in the pandemic because the work we were able to scrounge together for him wasn't enough to pay him what he needed to survive.
Like many restaurants, we started selling to-go drinks, but that came with its own headaches. We had to figure out what we could sell that was substantial enough to pass muster as “food” and not so onerous that the customer would choose to not buy anything at all, a process that required a whole slew of tasks that cost money and time, with negligible returns. Somebody just wants a beer because they've been cooped up in their house for three weeks, but I'm forced to create, package, and sell them a sandwich to keep from being fined money I don't have. That sandwich didn't cover the costs to make it. (And often, customers complained—they just wanted a drink, not a sandwich.) It felt like COVID and the State Liquor Authority were racing to see which could close us down first, and the pissing contest between Andrew Cuomo and Bill de Blasio didn’t help.
It started to settle in that we were on our own. My city wasn't going to help. Or when it tried, it was so woefully inadequate and incompetent as to be worse than doing nothing. I'd never felt that way in New York before; anonymous, definitely, but not abandoned.
Our neighbors, however, were there for us, making videos to raise money for us, buying drinks they didn't necessarily want, tipping generously and unreservedly as the staff ran their asses off trying to make all the madness work. But I was sprinting in every direction. Losing weight, losing faith, and losing ground.
When the City said we could have outdoor seating, we bought the same IKEA folding chairs, tables, and umbrellas as every other desperate business owner on the planet, poured cement into buckets to mount them, and rolled them out every day and back in every night. I spent $800 we couldn’t really spare and a couple of afternoons to build two unstable outside seating areas. The evening after a couple of friends and I finished the larger of the two, I collapsed into one of those IKEA chairs, looked down at myself, and realized my body had changed shape. I weighed myself when I got home and discovered I'd shed 15 pounds. My left eye began to twitch intermittently.
Even the outdoor seating program made our lives more complicated. When the City then announced that outdoor seating was permanent, we pulled down our rickety DIY sheds and hired a contractor and spent a few thousand dollars to do it right. Right after they were built, we were told by the officials that the walls of our sheds needed to be filled with sand. The City was good enough to set up sites in each borough with free sand, but neglected to consider that thousands of restaurants and bars would need some too. We waited in a borrowed truck for an hour before we had to leave to get back to work, and ended up just buying our own sand and paying a contractor (again) to fill the walls. Of course it was disappointing, but by then it was normal.
This past year, it felt like the world was regaining some sense of normalcy, but the standard has shifted, and we’re still reeling. We've taken out small forgivable loans to pay staff and large, 30-year term ones to pay for everything else, just to make it to this point. We've reduced our hours to focus our energy on the times that we actually make money. We're closed one day a week in order to give our amazing staff a day to rest. We're pulling in more in revenue each night now than we did before, but the grind of the pandemic years laid bare things about our business that needed changing. The restaurant industry has relied too long on a model that devalues the actual worker. We were guilty of it too, and now we pay our employees more than we used to. Even though revenue is up, and even though we're lucky enough to have a landlord who has gracefully and humanely decided to reduce our rent and eliminate our property taxes, the rest of the fee structure has only increased to the point that we're just getting by. The margins have always been tight, and they're only getting tighter.
I never expected this to be easy. But Mayor Adams isn’t helping—the City seems poised to decide that to continue to have the outdoor seating that helped us limp along through the summer and fall, restaurants will need to reapply and rebuild dining sheds a third time to comply with new rules the City Council is currently drawing up. The regulations surrounding outdoor seating haven't changed yet, but after a recent visit from the DOT, we've learned that we need to refill our outdoor space with sand—and because someone ran into the shed with their car, the entire structure has shifted a foot, and we need to figure out how to move it back.
Now, whenever elected officials refer to small businesses like mine as “the backbone of the city’s economy,” I just have to laugh. Perhaps they could consider some real commercial rent regulation. The state could remove the ridiculous rules that force small venues like mine to continue to get gouged on small orders while competing on the same field as huge restaurant groups. There could be some form of legislation that would address crippling and unnecessary credit card or third-party vendor fees.
A man at the bar one night opined that the social contract in New York City was paper thin, that we were mere inches from utter chaos and at the mercy of circumstance. That's not true in my experience. I can rely on my neighbors. That’s what we’ve been doing. But during the pandemic, who I learned can’t be relied upon are the people we've put in power, who weren’t equal to the task when the time came.
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