How Donations Have Helped One Small Restaurant’s Pandemic Survival

The general consensus seems to be that independent restaurants will only survive the economic impact of the novel coronavirus with a government bailout, and even this threatens to be inadequate, with reports that relief packages are disproportionately benefiting large corporations. But though conscious consumerism — the act of aligning one’s money with one’s values — is often shrugged off as an insufficient way to influence change, small-scale neighborhood efforts can have an incredible impact. Supporting restaurants through things like buying gift cards and ordering wine can literally help keep the lights on for another day or week. It’s a reality that I experienced last month, when the restaurant where I’ve worked as a manager for the past year closed its dining room.

Huertas, a 75-seat Basque restaurant, opened in the East Village about six years ago, and like many of the city’s small restaurants, it stays alive through a loyal local customer base, with regulars coming for years and bringing in their own friends and family. Where larger restaurant groups can rely on national fan bases and media attention, as well as massive government intervention, small and independent restaurants must put trust in smaller revenue sources and community support.

For us, the goal was simple, but a bit daunting: bring in enough revenue to pay a full staff of 18 for as long as possible. In the short term, this meant paying out a partial week of time off across the board, a plan with a price tag of about $5,000. Beyond that, much remained unclear. When we first closed, the most cynical estimates had us back in business in one month’s time. As we pass this mark, the initial timeline is becoming increasingly less realistic. To pay the team in full for the duration of the crisis would simply not be feasible without putting the restaurant out of business permanently. The focus has now evolved into raising donations in an attempt to make the interim period a bit more bearable for everyone.

Here’s a breakdown of what we did, how it has impacted our staff, and how small-scale purchases have helped our business. While a gift card or a few bottles of wine will only be a drop in a rapidly growing bucket, a drop is better than nothing, and a few drops could be huge. Aside from the obvious morale boost that comes with the friendly and reassuring face of a regular, these small financial decisions make a big impact. For us, these actions were enough for now, while we wait with bated breath for the day we are allowed to reopen our doors — a day that we hope will come soon.

Raising money and getting short-term revenue

Gift cards and other merchandise sales: $4,000

The first logical step toward our goal of providing paid time off for our staff was to peddle gift cards and other merchandise, such as cookbooks and our signature pulpo sweatshirts. For many restaurants, this strategy is beneficial in the short term, as any form of cash flow is better than none. At Huertas, more gift cards were sold in the 48 hours prior to closing than in the last six years of business. An increase in online orders caused us to sell out of our minimal inventory of merchandise within a matter of days. There is a natural fear associated with some of these purchases, as gift cards being redeemed have the potential to put a damper on business on the flip side. However, in such dire circumstances, the value of immediate income tends to outweigh the concern of costs down the road. The end result was nearly $4,000 in total online sales, 50 percent of which has been allocated for donation directly to staff for short-term relief.

Provisions sale: $3,000

Like many others, we also resorted to a “provisions sale,” an unorthodox but necessary move that was not unlike an adult bake sale. For just one day — our last before closing completely — we offered little more than a specialty grocery store might, selling manchego, marcona almonds, baguettes, and DIY steak meals. While we expected it to be a sentimental day, no one could have anticipated the constant flow of neighborhood regulars, friends, and family who came by to say hello and show support from open to close. After selling approximately $3,000 worth of goods at a 50 percent COGS (cost of goods sold), $1,500 was added to the growing pool.

“Donations”: $25,000 and growing

Beyond that, options are limited, and many chefs were forced to face the awkwardness of asking for donations — even though it goes against every natural law of a business to solicit funds in exchange for nothing. There is always an ingrained need to “sell” something.

There is also competition between restaurants, as we collectively call to our shared clientele through mailing lists, social media, and press. Like hundreds of other restaurants, we started a GoFundMe in hopes of continuing to pay staff as the estimated timeline grew longer. But with the link to the donation page, our chef Jonah Miller advertised a “reopening” party with details as ambiguous and uncertain as the world at large. Donations of $100 would go toward a “ticket” to the celebration, whenever we are able to return to business. In under 24 hours, we raised $12,000.

By now, the “sale” has yielded more than $25,000, which puts $1,250 into the pocket of every employee. As with gift card sales, this poses a threat to business later on, as Huertas plans to foot the bill for what is shaping up to be an extremely well-attended party. But the benefits here once again outweigh the cost: As soon as the doors are open, revenue and expenses become somewhat less critical, especially when the blow is softened with a happy and well-paid staff and an outpouring of local support.

Huertas

How the money is spent

Built-in operating costs

Like the rest of our industry members, perhaps the most frightening task is paying the built-in monthly costs that have no pandemic escape clause. While our building landlord was generous in providing rent forgiveness for April, there are contracts and recurring payments with both vendors and utility companies that simply cannot be avoided. These amount to approximately $7,000 per month after rent is out of the picture, which is a sizable chunk of change for a business that’s bringing in no revenue. However, with a reasonable amount of savings, this is slightly less daunting than it sounds. Like everything else, the severity of our situation will change depending on how long we remain fully closed. We’re also still unsure about how rent will play out moving forward.

With more restaurants creatively and successfully entering the world of takeout and converting to corner shops, these options are growing. In order to sustain those base level costs, only a minimal flow of business is required. Here, once again, small purchases matter, as any revenue is better than none. We’ve entertained the thought of a wine sale or takeout model, but it will likely only come to fruition if circumstances get more dire. For now, the strategy remains to hunker down and wait for the storm to pass or the bank account to run dry.

Staff paychecks for three weeks as the unemployment system fails

On the week of April 17, we received our final “paychecks” from the restaurant. Most of this money has come from the staff fund, excluding the initial week of PTO paid out by the business. This money satisfies most, if not all, of the immediate need as we wait on unemployment and stimulus checks. However, while nearly our entire team of 18 has filed for unemployment, not all have been successful. Some have sat on occupied phone lines for hours, and up to days, only to find a recorded message telling them to call back later. Others have been locked out of the glitchy government websites, left to find odd jobs that pay in cash. For those struggling to fulfill basic living costs with no guarantee yet of unemployment money, the PTO and supplemental payments have been critical. Only a few weeks of cash flow is enough for everyone to stay afloat.

For now, we all wait. Alberto, our sous chef, is helping his mother at work in a laundromat in Queens. Kayleigh, a bartender, has turned to commissioning drawings as a sole source of income, as well as a way to stay connected with friends. Kate, a server and interior design student, has returned to Minnesota to wait out the storm with her family and finish classes remotely. Ever-charismatic Dylan, another server, focuses on his writing and hopes to gain new momentum in the fight against climate change and corporate America, all while riding his bike through the empty city streets.

The owner, Jonah, continues to send us reassuring messages, emphasizing the importance of staying in touch and staying positive. The restaurant received one of the federal small-business loans, and he’s still weighing the benefits and potential pitfalls, debating the right way to use the funds to aid the business rather than hinder it in the long term. With news of restaurants cautiously reopening across the country and the globe, it is slowly becoming easier to see a way out. Many will open in the first wave, with masked staff and reduced capacity, while others will wait until things have settled to reopen fully, a route which will likely take weeks, if not months.

Regardless of our strategy, even with the gate closed and the lights off for an indefinite amount of time, this does not feel like an ending; it is merely a pause. It is clear that our community is strong, and consists of more than friends and regulars — it starts with our team. Our intimate staff has supported one another, now more than ever. When the doors reopen, we are certain that our community will return, perhaps even more powerful than before.

Jaime Wilson is a restaurant manager and food writer in New York City.