Last week, Colin Hirdman and his partners at northeast Minneapolis digital-marketing firm Augurian prepaid $3,000 toward future bar-and-meal tabs at the Stray Dog, their neighbor in the building and a favorite spot that also offers them free use of a backroom for big meetings.
“My partners and I thought we would support the Stray Dog in their time of need,” Hirdman said. “It was our way of supporting a fellow small business in our community.”
Hirdman’s small business really hasn’t been affected by the coronavirus so far. The Stray Dog, which could gross $3,000 on a slow weekday to $10,000 on a red-hot weekend day and night, is getting crushed.
Gov. Tim Walz and public health authorities ordered restaurants and other public places where people gather shut down last week, other than takeout.
The Augurian team is worried about Stray Dog’s survival and appreciates the good food and friendly atmosphere that this small business provides them and other neighbors. There’s reason to worry.
“Business is down at least 80 percent,” said Stray Dog owner Kevin Kraus Jr. “We’re lucky to do $1,000 a day in takeout business.”
Kraus has laid off 31 of his 35 employees.
Last year was his best since he bought the assets of the business for more than $100,000 from the former owners of what was called Bulldog in the same location. Kraus was a longtime chef.
Unless he can get forbearance from the building owners and Sunrise Banks, his lender, Kraus doubts that he can survive the weeks-to-months that some experts say it could take for the coronavirus to work its way through Minnesota.
“The sooner we can reopen, the better, but I hear this could last through August,” Kraus said. ‘’We just have to go month to month. Our landlord, John Kremer and Jennifer Young, and Sunrise Banks have been very gracious so far. We’ve talked about going to interest-only payments.”
The public health threat has plunged the nation toward recession, with unemployment surging toward 20% by some estimates.
Restaurants started getting killed last week with the ban on gatherings of more than 10 people. Even earlier, companies started sending workers home to work remotely.
That led to dwindling crowds.
Now, it’s lights-out for many in the hospitality trade, particularly operator-owned eateries.
Six-year-old Hen House in downtown Minneapolis packs in workers, conventioneers and sports fans seven days a week for breakfast, lunch and a lighter-crowd happy hour and dinner.
It shut down early last Monday night.
“The best case is that we reopen in two weeks and everything is back to normal and the employees are all back,” said Barb Gardiner, who opened the restaurant in 2014 with two other women who had worked at other restaurants. “My worst fear is that this goes on for months.”
A heartsick Gardiner on Tuesday notified her 65 employees, who make base wages of $13 to $20 an hour before tips, that the restaurant was closing and sent them information on applying for unemployment compensation.
“I would say our employees are 95 percent of our success,” Gardiner said. “We had the vision and concept. But the employees make it work every day. Many have been with us five or six years. The customers know them.”
Gardiner is hoping she can tap into a no-to-low interest U.S. Small Business Administration loan to help weather a weekslong shutdown in order make rent, utilities and other bills that don’t go away with the customers.
The partners put in about $50,000 in equity, on top of a $250,000 SBA-backed loan to fix up the space once occupied by Peter’s Grill. The business generated positive cash flow the first year and has grown every year.
Gardiner has a modest reserve from which she intends to provide hardship loans or other help to at least some employees.
Penny Masuku, a five-year bartender-server at Hen House, also works at Aria, the downtown event center, and is a choreographer-dancer at the Urban Spectrum Theatre Co. A lifelong dancer, she also mentors young people who aspire to theater careers.
She walks to Hen House from her Southside neighborhood and says she loves the lunch and dinner regulars.
She’s up on the coronavirus. Her mom and sister are both nurses, essentially locked in at the nursing home where they work in Grinnell, Iowa, to protect their patients.
Masuku is trying to remain upbeat. But she’s not rich. And she needs to make rent and other bills.
“We left the restaurant Monday night with some cash,” Masuku said appreciatively of Gardiner. “I’ve got enough savings to get through next month and then it gets a lot tougher. I’m an optimist. I don’t think this will last forever.
“I hope nobody gets sick and we take care of each other and stay healthy.”