As Governor Cuomo begins the process of reopening New York State, we’re having a lot of discussion about what it all means for us at The 443.
When we closed our doors on March 15 I thought we might be able to open by June 1. At this point, I think July is probably more likely. We’re looking forward to it, obviously, but the part that concerns me most is the fact that we will almost certainly have restrictions on our capacity.
Don’t get me wrong – I 100% agree it’s the right thing to do. We want to keep our staff and guests safe and we want everyone to feel comfortable visiting us.
The problem is, we’re in the business of gathering people together. It’s literally why we exist.
It isn’t about the booze. You can pick up a bottle at the liquor store and drink at home much cheaper than you can at your favorite bar…and you don’t even need to put real pants on. It isn’t about the food either.
We are a live music venue, but you can see a live performance by any artist, anywhere in the world, anytime you want by opening YouTube up on your phone.
It’s about the bartender who knows your favorite drink and makes it just the way you like it. It’s about catching up with old friends and making new ones. It’s about seeing your favorite musicians in real-time, up close and personal, and the unique magic of an intimate live performance. It’s about hanging out with your tribe. The buzzy energy of a room full of laughter and conversation. And being well taken care of by staff who are always happy to see you.
It’s about the experience.
It’s why not every restaurant has been able to make the transition from dine-in to carry out. A lot of restaurants have spectacular food, but that’s only part of it. You go to your favorite place for the top-notch service, the way it feels like a warm hug when you walk in the door, or because the owner always stops by your table to chat.
A lot of restaurants have opted to close rather than switch to a take out only model during the pandemic because it just doesn’t translate.
And like any business, we have numbers we have to hit in order to survive. It’s not a coincidence that most restaurants have as many tables as possible crammed into their dining rooms. Or that most bars don’t have a lot of seats, because standing room gives you the highest capacity. Getting bodies in the door is the name of the game and we all push the limits on a regular basis because it’s the only way to survive in this business.
Now we are pondering a future that will almost certainly include reducing that capacity by half…or maybe even more. How is that going to work, exactly? Is it possible to break even under those circumstances?
Spoiler: It probably isn’t.
We would be better off staying closed until we’re able to safely open at full capacity, assuming we are able to get more aid from the government in the meantime.
Reopening at half capacity does not cut our expenses in half. Quite the opposite…they will increase significantly. We’ll have to have someone at the door at all times with a clicker keeping track of how many people we have in the building and possibly checking temperatures of guests when they arrive. We’ll need an extra set of hands to sanitize tables, chairs and restrooms throughout the night. We’ll have to use more disposable products.
Our landlord is waiving our rent while we’re closed. When we open, rent starts up again and so does trash removal and linen service. Our National Grid bill is low right now, but once we turn our coolers back on it will double. Because of disruptions in the supply chain, many food prices are skyrocketing – and that’s if you can find them at all. What does that mean for our menu?
Live music performances are the main focus of our business. Our ability to book touring artists depends in large part on the artist being routed through our area with other shows. They might be in Boston or Philly, then head to Albany, Syracuse, Rochester, Buffalo and maybe onto Ohio. It doesn’t make sense to send an artist up to Central New York for a one-off show, but different states and cities are going to have different open times and rules. Right now booking agents are trying to figure out how to reschedule entire tours.
And what about the financial side of booking touring acts? A typical arrangement for musicians who play small rooms like ours is a minimum guarantee vs an 80/20 split of ticket sales. The artist gets whichever amount is greater. If our capacity is cut in half, even a modest guarantee will be hard to cover and the potential to make more with an 80% split goes out the window. A musician traveling from show to show still has to pay for hotel rooms, gas, food, etc. The limited earning potential might mean it’s not financially feasible for them to tour at all.
Will we become ineligible for aid once we’re “allowed” to open?
Not to mention the million-dollar question –
Will anyone even show up?
What if They Reopened the Country and Nobody Came?
I have a wide circle of friends and acquaintances and I would be hard-pressed to name anyone who would be comfortable in a room full of people right now. While our numbers look okay here in Central New York due to a pretty rigid lockdown, we’re all reading about ever more terrifying developments of the disease – strokes and blood clots, silent hypoxia, risk of miscarriage, children getting sick and nobody is totally sure you’re immune once you’ve had it. We don’t have a solid, proven treatment. Testing is still not readily available in a lot of places. And, as people start moving around we will almost certainly experience a second wave.
If The 443 becomes a hotspot of the infection I wouldn’t be able to live with myself…not to mention, would our business ever recover from being the venue where 20 people got sick?
So to anyone who is protesting to force your state to reopen – seriously, sit the fuck down. You have no understanding of what your petulant “demands” mean for small business owners. We can’t just unlock the doors and resume business as usual.
Nevertheless…we’re not willing to give up.
Good News
We received our PPP loan last Friday. If we want the loan forgiven, we have 8 weeks to use 75% of it on payroll – and the clock started last week. We are supposed to have our staff back to normal levels by June 30, but that’s going to be virtually impossible. It’s an awesome program for any business that can open right away, but it’s really tricky for a venue or anyone in hospitality. We will likely be among the last to open and it certainly won’t be at full capacity. The rules have already changed a few times, so I’m hopeful they will be adjusted again to allow us to use the loan as it was intended. It’s not an extraordinary amount of money anyway since it’s based on payroll for 2019 – which was our first year in business. Our 2020 payroll is (was) significantly higher.
I could call my staff back and give them busy work, or pay them to stay home, but it doesn’t make sense. They are all on unemployment and some of them went through a lot to get there. We have always paid our tipped employees more than tipped minimum wage, but it’s still less than regular minimum wage. If we’re not actually open, we’ll have to pay them more to make up for the lack of tips, which means we’ll run through the funds faster, and then they’ll get pushed back onto unemployment anyway.
We’re allowed to use 25% to pay rent or utilities. While our landlord was not pressuring us to pay rent while we’re closed, it’s still money we would have to make up at some point, so we paid April, May and June rent as soon as the money hit our account. It helps our landlord and at least that part of the loan will be forgiven.
If we use the remaining 75% for something else and it’s not forgiven, it is a 1% loan, which is a fantastic rate. But, it needs to be paid back within just 2 years. We simply can’t take on any more debt knowing sales likely won’t rebound until next year. So, we’re sitting on it for the time being.
We received our EIDL Emergency Advance on Monday, which is AMAZING. This allowed us to clean up all our outstanding vendor invoices, so we’ll be able to restart with a clean slate. This does not need to be paid back – HOORAY!
Still in Limbo
I have not heard anything about the larger EIDL loan through the SBA. It’s possible to get the Emergency Advance and not get the loan, but I’m still hopeful. This would be the most useful program out of everything we applied for. It’s a low-interest rate and a 30-year payback time, plus there are no restrictions on what we can use it for. This will help us buy inventory when we’re ready to reopen and give us some much-needed working capital to help us survive the next one to two years of uncertain revenue.
I personally applied for PUA as a self-employed person, but that seems to be in a holding pattern.
What We’re Working on Now
In my last couple blog posts, I talked about our plan to change our seating arrangement to be better prepared for our new reality. Unfortunately, our funky living rooms were a big part of our identity…but it is what it is.
Here’s where we’re at right now:
- All our upholstered furniture has been put into storage. We can’t sanitize it between guests and it would be difficult to keep people apart in our cozy living rooms. Also, we need to be as flexible as possible over the next several months.
- I ordered more small tables and we’ll be putting them together this weekend. It’s not the total amount we’ll need to get to regular capacity, but it’s plenty to open at 50%.
- I ordered a fancy no-contact thermometer because I think we’ll be required to check our guests at the door. I also ordered a pulse oximeter. We’ll be using that on our employees to check for hypoxia in case they are infected and asymptomatic.
- We’re also working on our outdoor patio. Normally we would be getting ready to open it for the season this month, and I truly hope we’ll have some time out there this year. Outdoor space will be more important than ever after being cooped up in the house for months.
- We’re working on splitting our ticketed shows into 2 sessions so we can keep the shows at half capacity and not lose our shirts. So far most of our artists are agreeable to the arrangement, but we haven’t heard back from everyone. It will make for a much longer night for the musician, so the shows will likely be a bit shorter than usual. We’ll have to fill the early session first so we don’t end up with 2 half-empty seatings.
- We’re also looking at doing an early happy hour show on the patio followed by a later show inside on nights we have a local artist.
- Bartender Ally B is working on fun summer cocktails.
- We joined NIVA, an organization of 1300+ independent music venues lobbying for government aid to support the unique challenges of the live music ecosystem. You can help by emailing your elected officials, there is a quick and easy link HERE.
That’s about it for now…we’ll keep you in the loop as the situation develops.
Stay healthy and safe,
