Podcast: Play in new window | Download (Duration: 40:46 — 56.0MB)
Subscribe: Apple Podcasts | Google Podcasts | Spotify | Amazon Music | Stitcher | Email | RSS | More
With this podcast you will learn how Nate quit the grind of cubicle life and jumped on the beer and food train. Nate started Rockhound Brewpub a couple years ago and has been navigating success, beer in hand, ever since. You’ll also learn some of the challenges of starting a restaurant, brewing beer and making a go with both. Nate Warnke is the owner of Rockhound Brewing Company. Nate and his crew make beer, food and smiles on Park Street in Madison.
Visit Nate at: http://rockhoundbrewing.com/
Want to hear more? Hit it: [themo_button text=”More Business Podcast Episodes” url=”https://drawincustomers.com/category/podcast/” type=”standard”]
You have found Authentic Business Adventures. The business program that brings you the struggle
stories and triumphant successes
of business owners across the land. Coming
to you in the sweet, sweet, sweet Draw
In Customers makeshift studio here.
So we are welcoming today Nate Warnke,
owner of Rockhound Brewing Company.
Nate, how are you doing today?
Thanks for having me again, James.
And I’ll tell you why, because, one,
you’re the first person that I’ve ever
had on the show for the second time. Woah.
So that’s cool, right?
It’s already a big deal.
And then second thing,
you’re the first person I’ve had
on the show that’s in the process
of closing their business.
So this is I’m excited because
the authentic part of Authentic Business
Adventures business is
close, man, arguably.
Well, eventually all of them
do right, nothing lasts forever.
Eventually, everyone closes.
It’s just like the covid
thing with death, right?
Somebody died like, everybody does.
Nobody gets out alive.
At any rate, we’re talking to you.
You’re closing in a month.
Just a little less than a month.
so for the people that don’t know who you
are and what you do,
let’s just start with the beginning.
So when did you start your business?
Why did you start it?
Just let’s just give
the Cliff’s Notes version.
Yeah, I’ll give the the two
minute version of that.
So basically six a little over six years
ago, I left the corporate job and I
wanted to start a business and
and I decided that business was going
to be a brewpub because I
really like the vibe of brewpubs.
And it was a growing business segment.
So I came up
with Rockhound Brewing Company, which I’m
wearing all the logos today. Nice.
I go to wear them while I can.
So, I started Rockhound Brewing Company
and it was kind of my my brainchild,
my desire to, to make good beer and make
a community around, around a brewpub.
And then here we are four and a half years
later and we’re working on shut down.
But yeah, we have a small brewpub,
it’s about a hundred seats.
So there’s one hundred seats.
We, we have one hundred eight capacity
and I’ll segway into the covid thing
like right now our capacity’s twenty seven.
Yeah that’s crazy to me.
That’s a quarter.
And you know it’s one hundred
seats at a small restaurant.
And we have a full kitchen,
so we have a full restaurant, full food menu
and a full brewing operation on site.
Every one of our beers is brewed onsite
unless otherwise stated
as a collaboration.
So I want to make it its
own little community.
And it was owner operated.
So that’s basically me.
And I’ve got a couple of very,
very dedicated staff and they’ve
been there for my house manager
she’s been there since day one.
Yeah, I still got the same,
she wasn’t house manager day one,
but she promoted two years later because
that was the future
of the of the pub.
My chef has been involved
since before day one.
She’s a friend of mine and he was kind
of a fill in for a while
and eventually became a chef.
This is this is family, right?
So we are family.
Yeah. And we built up a community,
we built up a family.
We had a lot of good time for for the five
years that I’ve been in operation.
I live six blocks away.
So it’s in my neighborhood.
And that’s that’s where we
are today now in covid land.
And I’m sure we’ll talk
about playing that later.
Yeah, it’s been a lot of fun for five
years, but now it’s time
to time to let it go.
All right. So did you see when you first
started your business,
what was the goal? What was the end game
or did you have an end game?
Actually did it.
When I started the business,
I had I saw the cash flow in beer.
I saw the cash flow in restaurants.
And I said, well, you know,
I’m a pretty smart guy.
I’ve never had restaurant experience,
but I had homebrewed experience, hired
people who knew more than I did
from a restaurant perspective
because you hire what you don’t know.
And I was hoping to bring in some good
cash flow to pay down some loans and then
turn that cash flow
into real estate property.
my goal was actually to get that thing
self-sufficient, take the cash flow out
of that and put it into
OK, just small ones.
That was the actual goal when I started
talking about it six years ago
and then eventually sell the brewpub.
My assumption was in ten
years to employees.
You know, and employees that were
potentially interested in I did at some
point have employees who were interested
in buying the thing out.
And I figured it would be a ten year
plan where I would sell it to them.
You had employees
that showed interest already?
Yeah, showed interest.
You know, three or four years in.
I had employees are interested
in potentially looking at buying it.
So they loved what I was building.
At the time.
Is there any reason not
to sell it to them now?
The economics are totally upside down
for that. Even at that bargain basement price.
I would I would entertain that.
But I don’t think any
of my employees have the
potential for loans or cash on hand to do it.
And I don’t think they’re going to be able
to get that loan under
the current circumstances.
That’s even at bargain basement prices.
Sure would entertain that.
But so, like I looked at your.
I looked at your.
Facebook page, your website,
you have a following that any
restaurant would be proud of.
When you got over 700 reviews,
the majority of positive of your four
point whatever, close to five, four
point four, four point three on Google.
Which is six on Facebook,
a super awesome super look, because
there’s always anybody that actually.
That’s really hard.
So that’s what I mean.
There’s value to that.
Right, because I guess it’s not
necessarily tangible real estate,
but in the Internet world,
that’s valuable real estate.
you know, that’s something that I guess is
a good lesson for any business that’s open
or closed or starting up is that
I paid a lot of attention to social
media at the very beginning.
The negative reviews,
I took every one of them seriously.
And, you know, restaurant
reviews can be completely.
Oh, my gosh.
I don’t want to get into the Yelp
discussion because I had
that the other day with Sony.
But it’s like you can go anywhere with.
I was just joking with someone who looked
at the reviews for the Grand Canyon.
The National Park reviews.
Like someone like you that was blogging.
Couldn’t see it.
You know, you go to you go to like Sequoia
National Park, go to many big trees.
You know, and that’s true for restaurants.
Five point are like, yeah.
You know, you go to any restaurants
at the higher end restaurants and the ones
that are very, very well known
and even they get to star one star.
Because one, everybody makes
a mistake and we get that too.
It’s about fixing that mistake.
Three, you can make no mistakes
and someone still will like you.
I just be kind of a jerk.
Haters going to hate,
you know, it’s like, well,
I didn’t like it because I don’t like
burgers and like, well, I’m a brewpub.
What do you you know, we, you know,
we had salads, we had sandwiches,
we had burgers, we had the right we have
a full menu had slimmed
down a little bit now.
But, you know,
there’s something for everyone or
something for vegetarians and vegans.
And he’s like, I don’t like the place
because it’s like
the vegan options is like.
Twenty five percent on my menu
was vegan at one point.
They didn’t like the vegan options.
That’s not it doesn’t taste like meat.
That’s not a Dagan’s vegan.
I’ll look at the camera that was
shot today against vegans.
It was just like there’s always going
to be people that, you know, oh, yeah,
burgers too big, your burgers too small.
Your steak is whatever you I never
understood the people that they complained
about getting too much food, correct?
Like what kind of sheltered life to live.
Well were that is your complaint.
You fed me too much food.
It more often it’s the other way
like oh I left, I left hungry.
Oh your burgers.
It’s an eighth of upon your
burgers are certified black Angus.
One third pound.
Sure they’re five point three ounces.
So someone says smaller
than McDonald’s burger.
And one of my reviews somewhere they’re
like, you got to be kidding me.
You know, even our kids burger is
bigger than McDonald’s burger.
So that’s all right.
So I paid attention.
The reviews are very important.
And and we built up that that reputation
of taking it seriously, OK, you know,
and making sure we address it.
Even the people that were completely and I
will say this flat out actually wrong.
OK, you I arrested and tried to help
massage the conversation and apologized.
And it’s not crazy when you
a tap dancer, the people at it.
And, you know, it was like the burgers
situation is a real situation where she
said the burger was absolutely boring,
there was nothing on it
and it was too small.
And I said, well, you ordered
a classic burger, right?
The classic burger says right on the menu,
it’s just a burger and a bun.
And then you add you can add cheese
and lettuce and tomato all for you a
couple of pennies or a dollar for cheese.
You know, it’s a build your own
burger for reasons to be looking.
How are they all to she complain.
There is nothing on.
There was no cheese.
The local cheeses,
a dollar a dollar fifty extra.
You could have cheese.
So you know, you had
the massage that conversation.
Would you like to come
back in and try it again.
It was just small amounts, third pound.
We patty them ourselves.
We know there are thirty.
So but you have to take this seriously
because most people have power
and Internet is very strong
on the customer side.
Especially in its anonymous
power to a point.
In some ways, yeah.
That’s why I like Facebook, especially
because it’s not very anonymous.
OK, you have to be yourself
on Facebook, right?
So you’re James Katamon to a point.
Weren’t you on Facebook?
You can fake it, but not
very easily on Facebook.
It takes time to it takes
a lot of work anyways.
But building up like the Facebook
at one point was four point six.
I think Google’s four point
three or four point four.
OK, that’s very high for four,
but it’s over 700 review.
Yeah, it’s very high for restaurants
overall as far as, say,
five years and seven hundred reviews.
That’s incredible to me.
So to me, I’m like, there’s value there,
there is value there.
So I think it would be worth,
I don’t know at least
I mean just because I’m closing and talk
about whatever you want to there,
just because I’m closing doesn’t mean
there isn’t value to the restaurant.
And, you know, talking to my my primary
lender, my credit union is the primary
lender that they are SBA secured
in the SBA looks for deals to get their
money off the books for sure.
So they’ll take a sweetheart deal
for the SBA to get to get it.
If someone wants to buy the whole thing
right as a turnkey restaurant, it’s right
there ready to go even if they want to.
Take the name off the wall and change
the name, it’s still pretty turnkeys,
but a couple of grand and you got a name.
So I was going to ask you about that.
Because, one, I want to talk about
lending just to get a restaurant alone.
Your restaurant, any restaurant,
when you look at the volume of restaurants
that that come up and then go away.
It’s a ton.
I don’t know what the percentage is or
what the stats are,
but it’s got to be a lot.
First five years when I when I opened
my market research,
when I opened first five years,
I think it’s 60 some percent
within the first five years.
Make it or don’t make it.
Don’t make it 60 percent failure.
Now, that said, so it’s
lending to a losing bet.
But I have a brewpub and brewpub has
an inherent competitive advantage.
Again, we’re talking five years ago.
A group of has
an inherent competitive advantage
because beer is such a big thing.
People will go just for the beer, just
for the experience of going that route.
So it was only in around
40 percent failure.
Winning is better than 50 percent.
So it’s not black or red, right?
You’re you’re you’re better then.
It’s better than betting in black and red.
But that said,
in Madison area and Wisconsin,
overall beer it was was on such
the upswing that it was
there was no calculated percentage that I
could find, but it was a lower
and they just weren’t closing overall.
Got it brewpubs.
They weren’t closing in Wisconsin.
OK, so let’s go.
We like our alcohol look.
And that’s what I sold to the
banks and private investors.
So do they.
Was it tough to get money
to open up a brewpub?
It is OK.
my my situation was quite the I
don’t want to call it House of Cards
or in some waysvery creative.
And fabulous to clarify something like
this is creative financing
as a term of illegal?
No, no, no, no.
Not that I’m not laundering money is very
creative in the way that I talk to
a lawyer about how to work
on creative financing.
OK, so I can get a primary lender through
the SBA, Small Business Administration.
They had loans.
This is just a bank.
It’s just a bank credit union,
which is a great.
So I applied and I talked to
almost two dozen banks in the area.
I had to make my sales pitch sometimes.
It was a five minute over the phone like,
yeah, we’re definitely not interested
because this restaurant base.
So you get to know right away
from some boom easy circle.
Some said let’s sit down in person.
So I had this kind of sales pitch.
I’ll figure it out.
I’ll I’ll I’ll describe
the puzzle house of cards.
Simple to make the puzzle whole.
I need a bank to give me a good chunk
of the money,
60 to 80 percent of that money potentially
coming from bank, OK, or lender.
So Turnell being a credit union.
And on top of that, I need
some operational financing.
So I went through Webcke for some
operational financing and I also went
through Medicin Development Corporation,
first of all,
OK, and I was able to secure those loans
with some private investors who helped
cosign them as well and cosign that.
Then I was an honest guy, basically.
So cosign being like a like a dad would
co-sign for a kid on a car
or something like that.
So these are either friends or family or
relatives who are cosigning
on that loan too.
So they weren’t fronting the money.
They’re just essentially
keeping your promise correct.
And if I fail in my promise,
then they have to step in.
Does that mean that they
have to step in now?
Yes, they do.
Oh so one hundred percent or.
Well, the loans are dramatically,
dramatically reduced from what they
started out, but some of them
a good chunk of money.
Oh all right.
I’m going to table that one.
OK, I just say the other thing I did was
get a bunch of private investors
to to give me between ten
and fifteen thousand dollars.
So that wasn’t cosign.
That was that was just cash.
They wrote me a check and I and I,
we agreed upon an interest rate and it was
basically just like any type of look where
you loan me ten thousand dollars and I
give you X percent interest
and pay it back monthly.
I feel like I’m a Democrat.
Do I have to feel like I have
to wait for this a little bit?
Yeah, you do.
Because you got you got the credit union,
then you get
Medicine Development Corporation,
then you got WebEx in there as well.
Weetbix And there’s one
case, there’s a third.
Then you have the cosigners
for the Willock one or for all three
times were for Lebec and MDC.
OK, so those those two guys.
OK and then on top of that you have
the individual investor, five, 10 or 15.
And how much money are you talking
total to start this thing up.
I won’t say the exact amount,
but I’ll say there was it was
more than my house cost,
but less than a million dollars.
OK, it’s my ballpark.
Half million ish, over half a million.
I mean, there’s a lot
of stainless steel there.
The hoods, the stoves, the staff,
the glasses, the knives, the forks.
Yeah, all that stuff.
I look at business plans
for restaurants and it’s not cheap.
There’s no there’s a lot and a lot
of that went into the stainless steel
equipment for the brewing
and then finishing up.
Oh just the brewing equipment alone.
Forget about the restaurant portion.
I’ve looked at plans for stuff like
this financial suicide.
You better hope that.
Well, I got a good deal
on the brewing equipment.
I was actually in the last good deals
before the market took one of these.
You know, it does before it right
before the next inflection point in.
So I got a really good sweetheart deal.
They raise the price 40 percent after I
signed 40 because people
were willing to pay.
And I got one of the last good deals
like Nate, you got really lucky.
And I did.
That saved me a bundle right there.
Just just in being able to sign and they.
They said your offer was on the table.
It was good for X days,
but we just raised the prices.
So they didn’t tell me that until after I
sign because they didn’t want me,
didn’t want you it as a sales tactic.
OK, there was a rule that the companies
in Nebraska, I’m sure, fantastic company.
So they did it.
OK, so you got a bunch of cash in then.
Did you have to front any money?
I put in originally I put in 60 grand.
OK, and that had to cover a that had
to be 10 percent of the SBA loan.
So this was six hundred.
I had to put in 60 grand.
And then on top of that,
we did have a couple of infusions of cash
that I pulled in myself, OK,
for operational purposes
about six months and it put a touch in.
And then this this past winter
I rearranged operations and restructured
some loans and a bunch of my own cash
again, of course,
right before the pandemic.
Did you get any financial help through
the PRP stuff or
whatever the case we’re all in?
Yeah, I mean, it’s funny
that we’re all in.
I was like twenty five hundred
bucks and you get 20 staff.
Well like anything’s
better than something.
I got two grants and I’ve got the loan.
OK, I have to file all the paperwork
but I got the max allowable
by my business, OK, which is good.
That’s that’s what kept me alive.
So let’s talk about the decision to close.
You well, actually, this back
up a step in March, April, when
people are starting to be like,
wait, what is this?
And it’s kind of coming around that this
is the actual thing and we’re going have
to deal with this for more
than just a couple of weeks.
Tell me what the reaction was.
Staff with your people, with your
customers, just maybe even vendors.
I don’t know if you had some of them
that just closed up shop or.
Yeah, well, there was the other some
vendor issues that was interesting.
That didn’t happen until a month or two.
restaurants typically don’t
do very well in winter.
But that said, you know,
we lost a little money in January
as expected from this typical.
So in February, we made a profit.
OK, I made a bookable profit in February
because we changed a whole bunch
operations around last fall and I got
rid of things that didn’t work right.
So this is just kind of setting the stage
for disappointment in my the systems.
Are you improved right over the
in my house manager.
We sat down, we said, well,
branches are working.
We have to get rid of branch.
We love Branch.
We hate the fact that we
have to get rid of branch.
But Branch wasn’t working.
So on the table.
Seven days a week.
Wasn’t working too hard to staff.
So we go to brunch to get rid of Mondays
and let us all sit down
and breathe for a minute.
And it turned around our
operations to make it more.
And we adjusted the menu
to make it more readily sustainable
and and easier to produce with just fewer
items and keep it higher
quality at the same time.
Keep the customers happy,
keep some of our favorites on there.
So fewer menu options, your menu option,
OK, but keep them higher quality and then
we’re able to be more
consistent that way too.
And that’s a you can go back
to the reviews consistency.
The burger was good to stay,
but not so good the other day is the
burger should always be cooked the same.
The policy should always
be cooked the same.
So we did that and then we adjusted
the hours a little bit to to make it
easier on our staff
because it’s just hard.
We were open over one
hundred hours a week.
So we said that’s not going to work.
So that then at that point
we’re open like 75 to 80.
So it’s you at what point did you become
what you would consider to be profitable?
Well, we’ve had months here and there
that have been profitable
for all five years, I guess,
OK, say four and half years.
But February we looked at and said
we did it.
We made it the February this year.
Oh, February twenty twenty.
And then that left.
And then and then
I went on vacation and I came back
and then I was in Malaysia and covid
was just touching Malaysia right.
When my wife and I were in Malaysia
on vacation, OK, started reading about it
and that gave me the same thing is like
seiners, saryan murres and or maybe it’ll
be like killer bees was H1N1 swine.
I got that one.
I got swine flu.
That was not fun but OK, you know.
Bla bla bla bla.
Maybe we’ll just be like that.
It’s no big deal.
Like I’m not going to worry
about it until we have to.
And then so came home and then it started
getting the United States and,
and March came around and we saw a notable
drop in business in early March before
any of the lockdown discussions this day.
Yeah, we saw we kind of we start
scratching our heads because, you know,
usually March, March, April, May are
my three biggest months historically.
basketball and sports and all that kind
of stuff, people come off like
plus people or, you know, waking up,
you know, sharing their
from their winter hibernation.
Like, I need to go out.
I need to see people.
I need to see people, you know,
comfort food, we pot pies and burgers.
It’s comfort food.
People love that in March.
And then April and May are
just filled with beer events.
And those beer events bring us
a lot of a lot of business.
So beginning in March, I saw I said,
man, we’re 20 percent below last year.
That was but that’s before before the
official covid, you know, lockdown thing.
So this is not good news.
No, I said some of that can be attributed
to losing money and losing branches, but
that was like 10 percent of our business.
then the lockdown happened.
boy, we had to do a lot of quick
thinking on her feet real fast.
Did you guys ever close for.
We never closed.
OK, so, you know, ever since March 13th,
Friday the 13th was the last regular
day in the world for Wisconsinites.
And then we had the Seyfert home order and
the order of restaurants had to close.
And that was the 16th,
I guess that would be the Monday.
And we had a I had a manager meeting
on that Monday because we were trying
to try to figure out how
to operate during the pandemic.
And then that order comes through
and we’re like, well,
that just made us change our.
Sorry about your profit.
Well, the first thing to happen is I had
I had twenty three employees.
And by the end of that day I had two two.
We laid off twenty one employees in one
day because we looked at it and said well
we can only be open for carry on
and that only requires one person
at the bar and one person in the kitchen
to just make some stuff
available for carry all day.
So all I had was my salaried
managers running the place and me.
And I was the guy running the food
and packaging it up
and taking it out to people.
Did you have another Brewer guy
or were you the brewer guy?
So I was like, we just shut down brewing
operations because we didn’t, you know,
we had enough beer on hand to just kind of
carry through right it through.
And then we knew it was it was going
to be, you know, weeks, couple of months.
And I was like, I don’t I’ll be two months
that we’ll get this thing under control.
We’ll figure it out.
So I’m like, well.
And so we quickly hired back part
time just a couple of people.
So, look, I own a little
help in the kitchen.
So same previous employees or employees,
employees, we’re like we’re like,
well, we need to go first thing we do.
We said we’ll give you jobs and we can,
you know, current employees,
you get first dibs on any jobs, obviously,
because we love you guys.
You know your family here.
But, you know, my manager,
she she sent the email and she just felt
sick to her stomach because she
had about twenty one employees.
The email via email.
OK, like that.
Just saying we’re sorry.
This is what we have to make phone calls
and that one time we just got it right.
It was just after he broke up over email.
We broke up with twenty one employees over
email, doing some more
part time with someone.
We’re full time and this was,
this was their gig.
They’re full time bartenders, you know,
students that were paying their way
through grad school or whatnot.
So who’s the guy that I would always see
when I’d go in or the gentleman
beard from the bar.
Yeah, that’s Chuck.
So he was on that list.
He was on that list, too,
But he’s there right now, literally.
OK, we’re recording this.
He’s our cleaning guy right now.
So we we are to hire him back when we had
to we’re able to open for full service
operation, able to hire him back as a
full service at twenty five percent.
But so what’s your profit?
So we had to lay off everybody.
We had to revamp the menu so that we
could actually cook it quickly.
And my chef is,
is he can spin in the kitchen and do
amazing things with just one guy because
Carrizo people expect
to order it, pick it up.
Well, they give us a time, you know,
so I was in charge, Jamie, my manager, and
she and I were in charge of the phones.
We’d answer the phones
and put together the orders.
You know, she’d punch them back.
They’d come up, you know,
carry out, carry out, carry on.
And that worked
quite efficiently for a while.
It wasn’t sustainable long term,
but it was efficient.
It could pay their salaries.
It could pay for the food product.
So on a pause, a little bit there.
Because you have rent on this place
that you’re having to hustle
and you’re at,
I don’t know, ten percent capacity or
something, maybe whatever
you want to call.
Less than normal.
We’re doing maybe twenty
percent of the business.
So you have in business
you have your static cost.
Your rent, your insurance,
all that jazz and then you have your,
your dynamic costs that go with
the food and all that jazz.
So those static costs are
still a lot of money.
It’s a ton of money.
So I especially rent in a place
like that, decent size.
You get your loans and all that jazz.
Did any of those people come to you
and say, hey, let’s knock
this down until this passes?
Or did you go to them and ask them?
Yeah, that was on.
The initial conversations we had was how
to look at the loans and look at the rent
and see what works and what doesn’t.
Was where people.
Do you think school was the landlord cool,
or are they just like poets and
he said Gopalan said, luckily,
my private investors immediately,
all of them said, nah, just just don’t
worry about the payments for now.
Just OK, you will worry about
it after this is all over.
So I said private investors,
those think five of them, OK?
They also just just don’t worry about it.
We’ll come up with a deal later because
they’re all friends and family and.
Which is unfortunate.
That’s going to make Thanksgiving awkward.
Well, they’re supposed to do Thanksgiving
this year and you know that I did not.
That’s the best holiday
supposed to do Thanksgiving this year.
Spread covid anyways.
So, yeah, private investors are fine.
did a very instantaneous like deferral.
OK, so he deferred the rent
for three months right off the bat
themselves with 50 percent deferral.
But we’re just going to kick
the can down the road, OK?
Right now he said this is
what what we’re going to do.
And I said, OK, right.
So I paid 50 percent for for three months.
OK, so good.
But not great.
Yeah, not great.
But when you realize that that 50 percent
was more than twenty five percent of what
I was bringing in, you can’t be twenty
five percent of your revenue on rent.
No that’s so interesting.
It just doesn’t work.
When March hit and I remember them,
the shutdown order thing come in,
I was like there’s no way that they can
hit the brakes on the economy like this.
There’s no way.
Yeah, it’s hard because the fallout like
people losing their jobs and look
at landlord rate,
landlords get to pay for the building, pay
for insurance, all this kind of stuff.
If if you can’t pay rent,
that person can’t pay their stuff.
Well, they got mortgages
on their buildings, right.
I mean, this is a huge domino game
that we’re just like kick.
Let’s just see what happens.
And you hope there’s a gap in those.
Yeah, there is just no way
that they would do this.
And they this is me being totally wrong.
I totally did it.
Well, it’s also worldwide, so it’s not
like we’re the only ones who did it.
Doesn’t make it right.
But it was worldwide and we don’t have
to get into the politics positive,
negative of right.
Decisions made in different countries.
it was a worldwide thing where every every
country in the industrialized world
especially and even some of the money,
they all decided, OK, well,
we got to shut down for a little while
and then figure out what
the heck to do later.
So we’re still in that phase, right?
That’s the lottery.
So I don’t know that
seriously, for six months, we still don’t.
But, you know,
it’s a whole worldwide thing.
And I think what was most important
to to note is that what we all did,
as business owners will always
meet in a restaurant, a landlord.
I’m trying to think of a good
and a good business example.
You might have been to game like Target,
I’m sure the grocery stores
You know, your vendors, right?
You get the truck that delivers your food,
all of a sudden they’re right.
So let’s look at, say,
what works best for us.
So we go back into our own little
box and say, what do I say?
Instead of saying we
said, what do I need to do to survive
this thing and what do I need to happen?
And that’s where the unfortunate decision
comes in, where we say, I have twenty
three employees, I only need two.
That sucks for the twenty one
that just got that email.
Yeah, so what do I need to do?
Well, to survive this right now,
I need to pay my loans,
I need to pay my rent,
I need to pay those bills,
and I need to see if I can stay open.
And I hate to do this, but I have
to we have to let go of 21 employees.
Vendors do the same thing.
They one of our main food
vendors cut down their drivers.
But just like that, like immediately,
they don’t need to drive trucks all over
the state anymore or as many trucks,
I should say, all over the state.
So they they cut their driver rolls
and hassle all truck drivers
who had a very simple, easy gig.
You get in your truck at, whatever,
2:00 in the morning or early
in the morning, drive to restaurants,
drop off a bunch of food product
and go home and you can sleep it off.
So they had a nice gig
from that perspective.
And they just got laid off, too.
Yeah, it was a delivery driver for a while
for not exactly a glamorous thing, but.
No, not at all.
But it was I was I was delivering
beer for I think six months.
But it’s consistent.
And you were you were a god to right
the beer man.
But I don’t know how their gigs went.
But I also delivered milk with my dad
for a while,
and I like schools and delivering
a half pint of milk to school.
That school shut down.
So we don’t talk about
the press conference.
I can’t talk about that.
But the other thing we had,
it’s a mess, right?
From a business perspective.
The thing it’s I was like,
how do we make this a to go menu
and how do we make this working?
For a while it was, you know,
people calling in and we put
our menu on the website.
It was always been on there and we made
sure we updated it through a specials.
We just have to update the website,
literally every song to ask you about
that as well, every day,
because could people order on the website
or did you come up with that or you
just like, well, that’s a great call.
That’s that was a great
serendipitous thing we had gotten.
So I have a point of sale system that’s
through some a company called Heartland.
And it’s it’s kind of older system.
It’s it’s like it’s
the phone line and all.
Yeah, well, not quite, but it’s based off
of Microsoft that gets a little older.
It’s not is it’s a little clumsy.
And we’d gotten a couple of months earlier
we’d gotten a spiel from their new system
which is iPad based and allowed
for online ordering.
And then in the pandemic.
And I said, well, I’m not going to change
it from my point of sale and it cost
me five grand to change it over.
Oh, it was supposed to be
a long term investment.
Make sure this is beautiful and you can
have a handheld and all that and stuff.
And they said, we’re
giving you a free trial.
All you got to do is buy the iPads.
A hundred bucks.
Yeah, I got two iPads off
a credit card points there.
There’s a credit card,
but I get two iPads with my credit
on the verge of disposable.
So I got two iPads for the kitchen
and my credit card points and then they
went forward and set up our
online ordering system for free.
Oh, well, the company did,
which is fantastic.
So now suddenly we’ve got a link for our
website says you want to order
online and pay online.
Same credit card processor,
all integrated beautifully
when you look at pay.
And then we just get a slip that just
printed off a little printer and it
would say pick up at five thirty.
We’d cook it ready for five thirty.
So that was a saving grace.
Yeah, that was huge.
there were a lot of restaurants that
weren’t as lucky to have that point
of sale where they could get that online
ordering system set up for free.
And look at most restaurants where you’re
banking on people coming to you, right?
Yeah, we’re in the house.
We don’t do we didn’t we did a couple
to go orders a week before this,
and now it’s all to go.
Yeah, every single last order is a bag
that you have to hand
someone to go like it.
See, it’s just interesting,
interesting dynamic because you
look at pizza places, right?
Pizza places where people are ordering
delivery or takeout or whatever.
They were made for this.
They’re automatically online.
So it ain’t no thing with them.
But other places where you’re expecting
the atmosphere to be the reason
that people come to you
is a place where there’s no atmosphere
anymore because you’ve got a strong
community and creating to go pizza.
Yeah, I’m creating a community.
So we had a few orders a week and now we
went to every order is carry out and we
had a few delivery orders for each street.
OK, we partnered with E Street
well over a year ago.
To just do a little bit of delivery here.
It was never more than a few a week.
We take a healthy night.
So yeah, if they do delivery,
it depends upon what your contract is.
But some places they take 20,
30, 40 percent off.
That’s a big number.
And when you’re when your profit margin
rate, your gross margin on food
is typically thirty percent.
Labor costs plus ingredient costs
costs over sixty percent for food.
So then you look at what
you got left to get.
Thirty, thirty five percent.
Well, you three just took 30 percent
of that’s the only reason was
there is a to move product.
To to allow people
to have that experience.
If they couldn’t findit.
Street orders never really picked up.
And if people don’t want delivery,
Rockhound, they just
didn’t get that right.
They’ll pick it up.
They don’t want it delivered
because it takes too long.
It’s like a pizza told in a box.
Great burgers just work.
It’s all soggy and just
don’t work as well.
So someone ask you about
like there was just mass confusion.
With everyone, right?
My wife and I.
Well, I guess my wife, kid and I, we used
to go for breakfast every Sunday morning
and all of a sudden we
don’t know what’s open.
We don’t know what the rules are for.
When you go to this place,
we don’t know, like every restaurant
kind of had its own thing.
And I totally get it from a business owner
standpoint, just like they were
throwing a crazy curve ball.
And they’re all reacting
in semi different ways.
And you don’t know what the rules
of the game are for ordering food,
picking up food, all this jazz.
Yeah, well, just just to make sure we
people still don’t know what’s going
on half the time when they
come into their home.
People still come.
It’s like, I don’t know
how this works really.
Well, we’ll guide you through the process.
You’re absolutely right.
So, you know, first of all, there was no
in-house at all for a couple of months.
OK, so March 16th through I think it was
June something or and it was after
Memorial Day so that the quote unquote
lockdown ended after Memorial Day.
And then there was the judicial
things where it wasn’t, it wasn’t.
And then Dane County put
their own order down.
On top of their confusion.
It adds to the confusion.
There was no consistent message.
And that’s one of my biggest
Arguments like the problem is that they
couldn’t get together to make
a consistent message.
Still isn’t right,
at least in other countries,
whether it’s positive or negative,
whether you agree or disagree,
there’s a consistent message from their
president or prime minister.
And whether you talk a state level or
national level, there’s
no consistent message.
No, not at all.
Now, let’s just forget about that here.
That’s not what we’re talking about.
That does hurt business.
Still incredibly so public.
It hurts people don’t know
what to do or they should go or not go.
So I would say you could come back
to that in just a small way
in just a couple of minutes.
But it’s when we were finally able to open
back up again
and we were able to open back up and we’re
able to look at the way things worked.
We did it our way, OK?
We took the Dane County order,
followed all the rules that we had
to there, and then added a few of our own
processes and procedures to make sure
the cleanliness was just as what
were the Dane County rules.
It was they were pretty simple.
for a while it was questionable
whether masks were not required.
OK, we required masks, OK?
There was no ifs, ands or buts about it.
We gave away for free.
So let me pause right there.
So if I order food from you
or any place, right.
Yeah, I would never know.
Can I go inside?
What are the rules for me to go inside.
How do you know who I am versus any other
person that walks in there right
now like I’m here for my food.
Well that was that wasn’t that was a lot
easier than we thought it would be.
OK, someone didn’t have a mask.
I was just picking up food.
They can wait outside and if they need
to run their credit card,
we just grabbed their credit card.
OK, it’s spring summer.
So isn’t too bad.
OK, we’ll wait in the
vestibule real quick.
They just wait there.
So we accommodated any of that.
When we got the dining and people didn’t
have a mask when they were
able to dine in in June
and moving forward,
if they didn’t have a mask for a while,
we just gave them one for free.
OK, they cost us a few pennies apiece.
We just asked any time they got it
from their table, they put their
mask on if they needed to.
If they want to go look at the merchandise
or go the restroom, it was
put your mask on, please.
OK, and we just so at the table,
no mask because you’re good,
you’re eating and drinking.
And we had something that would leave it
on the whole time unless they
were actively eating or drinking.
And that’s, you know,
when you’re chatting with friends because
there are people that were there not with
or necessarily in their household, OK?
And they’re just trying to, you know.
Follow the rules as best possible.
And then the mask rule came down.
And in Dane County, it’s an absolute mask.
You’ll get the signs
on doors and everything.
And then when that came down, we decided
to start charging a dollar for masks.
It was it was a a legal requirement
that we legally require masks, OK?
there’s fines up to a thousand
dollars per violation for things.
But they only are enforcing capacity
violations, not really enforcing them.
But so, you know, we had to change to take
out then we had to change
to how we’re going to enforce.
We had we had to revamp the way
the whole restaurant operated.
We got plexiglass for around our bar,
you know, Plexiglas for a host.
And in case someone came in and there’s
people that don’t want to have
a conversation with you.
So it was a little bit
of extra protection.
So our host Dan has a plexiglass.
Looks like you’re at a bank
or something that
we remove the whole stand
right up against the door.
So, yeah, we moved the whole stand right
up against the door to make
sure people wouldn’t come in.
And without our authorization, we
monitor the number of people in there,
whether or not they’re wearing
masks and all that kind of stuff.
So it was basically we took a very strong
stance that we’re going to do all
the safety procedures possible.
And then on top of that,
my much of my staff and I go get covid
tested every two weeks
and kind of a rotating basis.
I had twelve,
twelve total negative covid tests.
OK, OK, up the nose.
So and that’s just a little bit of just
a checkbox to say that,
you know, we’re all tested this week,
my chef gets tested next week, whatever,
you know, and we’re all kind of in a pod
where we’re so exposed to each other that
if we keep a rotating negative set
of tests, we feel pretty
safe with each other.
It sure makes sense.
So, yeah, there’s a lot of
the buzzword right now.
It’s called pivoting and I
hate using it, but you had to.
Oh, yeah, new normal,
yeah, you get to change what
you’re doing every five minutes.
But, you know, every couple of weeks we
have to think about changelings and every
time a new order came down from either
the state or the locals,
I was so proud that I could go
on my Facebook page and say we didn’t have
to change anything because we
were already doing is fair.
OK, we were already
taking these precautions.
You know, we’re sanitizing
things every couple of hours.
We’re doing this.
We’re doing that.
We’re wearing masks.
Every time a new order came up,
we didn’t have to change
anything because I took that
called a high road.
I guess you want the high road of saying
I’m going to do things as
carefully as possible.
You’re on the side of caution as well.
To try to make it more
comfortable for my guests.
I suppose you never know from a customer
standpoint where they stand.
Is there just like a thing or if they’re
I don’t want to breathe anybody else’s air
within 12 feet of me,
so you have to appease them, whatever.
Well, that’s why we had a patio,
too, so that helped to write.
So in summary, we had a patio.
Oh, that’s right.
You just got it.
Just the fall of last year.
A year ago.
So the patio was was there and we got
that’s got lucky that it got approved.
How many people can fit in patio.
Well with Coalwood we can live at twelve.
OK is at two tables.
There’s a three to four tables,
there’s two on the corner that are
two tops are shoved in the corner.
OK then two four tops that are
kind of in the middle.
You know, so there’s but we would
otherwise would have been
off at twenty, twenty five.
You know, you put them together like
you want to maximize that space.
You can’t know.
So we can live at twelve.
But we have people I don’t
ever want to go inside.
I’m like, that’s fine.
If you want to go and say you have to wear
masks to go the restroom or whatever,
like, can we just use the patio?
That’s fine in our house to see
what the shirt stuff takes care of.
The never have to come inside.
I worked great also from August
was quote unquote really good.
OK, just really good for an August.
Are really good for a comedy.
Good for Coleman.
OK, I was half last year.
We nailed it actually knows
forty percent last year.
That’s not bad.
No it’s actually really good for going.
Forty percent is really
good at that point.
Did you have to be at twenty
five percent capacity.
OK so that’s twenty five,
twenty five percent inside and then.
Plus the patio.
So twenty seven plus twelve.
That wasn’t too bad.
Well yeah it’s that,
that consistent message though
the government was the big,
big kicker that was really kind
of there’s just confusion.
And that’s what also made me
proud that I took my own Sure.
My rule is that confused
customers don’t buy it.
And I remember I went to pick up Chinese
once and I almost got in a fight with this
dude because, like, not he got
mad at me for something because
we don’t have to go crazy on the story.
But I ordered the food
and then I pull up in the parking
lot and I can see people are around.
Some people are in the cars.
And I’m like, OK, there’s a system here,
but it’s not clear what it is.
So I just called and I’m like,
hey, order my food.
I don’t know what the game is
because it’s a very small up place.
So I’m like, we shouldn’t go in there.
So I assume they’re just bringing it out
and they’re like, no, your stuff is ready.
Come on in.
Oh my gosh.
So I walk in and apparently some guy
wasn’t happy that I was picking up
my Chinese food and he’s like,
we’re waiting out here.
And I’m like, all right,
you’re getting awfully upset
about Chinese food and whatever.
It was just one of those things like,
I don’t need to do this again.
I just want to get Chinese food.
Like, it’s not
I’m not trying to get some cancer curing
drug for my mom or something like that.
I’m getting food.
I get food anywhere.
I don’t need to get food.
A place that has no system
to the Chinese food.
What I want to say, like they’re they had
no way to know that this is
going to happen, correct?
That it’s just mass chaos.
Come up with all this plexiglass,
invent all these ways and then try
to communicate this new system
to your customers.
It’s never going to happen.
So it’s rough.
We did pretty well in making sure our
customers knew what was expected.
We only had a couple of
points of confusion or points
of contention with our customer base
or people that just wanted to come in.
Yeah, you know, and it frankly
was most often from out of town.
OK, people in Madison, in Dane County
understood what the rules were.
Even if they didn’t like it.
They understood it.
They dealt with it.
I don’t I don’t care if you
like it or don’t like it.
It’s the rule and I
don’t want to get fined.
we can use the game here.
Here’s the rules.
You know, here’s what we expect.
You know, you got to sit six feet apart.
People would try to come in with groups
of eight and the maximum
allowed at a table six.
So we’d have to split them
into two tables of four.
And if they didn’t like that,
they would leave.
And that was we’ve seen
it with a group of twelve
and we said we can’t stitch all together.
We’re going to find a place
that we don’t like.
Go find someone who will break
the rules because I won’t write.
And I said.
To them directly that way, and they left.
we’ve had other groups that come
in that actually have
like it was a husband,
wife and five kids, their own five kids.
And I can’t seat seven at a table.
So the kids all sat at one table.
The husband wife set another table
and they were fine with that.
I bet they were fine with it.
It’s so quiet.
So there was that kind of thing.
But, you know, we stuck to our
guns and we follow the rules.
And we lost probably a few
customers because of that.
Groups of 12.
We had a group of 15 call and say,
can we preserve the space?
We don’t do any reservations
at all right now.
And how many times can a group of 15
go to a restaurant just universally?
This is a really big place and it’s
the middle of an afternoon when I’m just
sitting at the Batman table or something.
And we’ve had reservations in Rickover
times of groups of 15, 20, OK,
we’ll accommodate them during slow times.
We love that because, you know,
it’s middle of a Sunday afternoon.
Twenty group of twenty made a reservation.
We’re ready for a walk in fifteen people
when we can only have
twenty seven to begin with.
And there’s already fifteen
people in the restaurant.
Twenty seven in the whole
rest of the hall restaurant.
He’s like, well what are
we going to do with you.
We can’t, we can’t accommodate you.
We can’t actually get you here.
We’ve had Cherkin all right.
And my, my manager had to turn them away
and they’re like, well I don’t get it.
Like what about, you know,
it was almost we want to see them.
Do you not know how to do math?
You know, it’s like simple math.
So, yeah, I don’t want to bash customers
because again, they’re the bread
and butter of the whole industry.
But it’s like you have to understand
that we have rules to follow.
And if you don’t want to follow them,
we can’t help you.
No, it’s tough.
It was tough to see from a restaurant
owners standpoint and then
from a customer standpoint,
I had a manager when I worked
at the theater, told me,
never get in the restaurant business
because people are hungry and cranky.
And they just he’s like they’re always
in a pissy mood until they get fed.
And so right away.
And the whole covid thing,
people are locked up.
So there’s just this tension
in the air everywhere.
Especially I think it was April to
There’s just it’s like I’m cooped up
and there’s confusion and there’s
just like you see suicides are up.
Depression is crazy up drinking is up.
So it’s just drinking more.
There’s a tension in the air.
And so you add that on to like I just want
food and I don’t know how to get
food and they want social time.
Right now you know,
I talked about it before the show
started with social type people.
We’re social creatures.
Totally social creatures.
And it drove me nuts for a couple months
to like my my life was going to the pub,
going, oh, look,
I have a wife and we could sit and chat,
we could watch movies.
We love each other, but only going home.
And I was able to socialize
with by a couple of staff members.
I did have.
Some people, they just want to come
out and they want to socialize.
And, you know, my my one
of the people that we did her,
she came to the pub and she said, oh,
my sister drove down here from Appleton.
There’s no way we’re
sitting at separate tables.
So we’re going somewhere else.
We’re like, OK, all right.
She wanted to be social.
I understand the perspective.
She didn’t need to get snippy with us.
But I understand the perspective.
But else she had
to understand my perspective.
I can’t play.
So customer behavior is challenging.
Did you ever have any employees,
I guess when you had to cut them all,
maybe not so much, but
there weren’t any employees that said I
don’t want to work here anymore because
I don’t want to deal with people.
We had some employees that were skittish
of skittish OK of coming back because they
were worried about exposure and coming
back and that kind of thing.
So when we put our employee procedures
in place for reopening,
we had an employee meeting and, you know,
so we had an employee meeting
with an eight or ten employees.
And we went over the procedures with them
and told them how things
were going to work, OK?
And it actually set a lot of them at ease.
Because they weren’t sure how exposed or
whatnot they were going to be
or how much they had to do.
And we instead of having sort
of team work environment.
But it’s tough having a team
work where we cross jobs a lot.
We tried to keep people isolated within
their specific job so we wouldn’t have to
go near each other as much of a choice.
We won’t go near each other as much.
And then we put in the Plexiglas
to help protect the employees as well.
The Mask policy helped to protect
the employees as well,
and then made sure we were careful about
distancing of tables for rules and to help
protect the employees as well.
and we put procedures in place
that minimize their contact at tables
and told the customers about that and
said, we’re not going to have tables off.
If you need anything,
don’t hesitate to ask.
You know, we’re not going to be at your
table every five minutes going how are
things that you need more ketchup?
But if you need something,
just let us know.
So we had to change customer
expectations of the toys.
Our employees were very, very good
in accommodating that they like.
I feel better about that.
So we did have the employees that were
able to come back did come back.
Some went home to their family,
some graduated college and left the city.
And we lost a number of good people.
Because it’s covered for various reasons,
I’m sure the ones that were still around
could come back and feel safe about it.
So when did the thought
come in your head like
we might have to close?
Was that March when stuff get
all weird to lay everybody off?
Well, you know, thought crosses
your mind in March, April.
But you’re like, no, no, no, no.
It was a year three.
you know, you think, hey,
we’re thinking about closing.
But I no, it’s it’s a matter of looking
at things day by day or week by week.
In March and April, I looked at and said,
we got a little money in the bank.
And then April I got approved
for the people I think was April.
I got approved for the loan and said,
OK, cool, I got this chunk of money.
It’s designed for salaries, some rent,
some utilities, which is interesting.
So for the people that don’t
know about the PvP thing.
The calculation had to do
with employee payroll the year before.
Like the year before.
And the multiplier was two point five.
So I saw that and I was like,
oh, two and a half months.
What be done?
This is this is they’re calling the shots
and it made it sound like the point five
was just like a little it was just in case
that was the extra to make sure you could
pay not only your payroll but your
rent and royalties as well.
So I’m like, OK, if we can make
it two months, we’re all good.
This is clearly people that know
what’s going on above me.
Do you think they don’t know
what’s going on above you?
Well, apparently not, because that two
months came and went a few months ago.
And they change the rules of.
So, you know, you’re supposed to use it
within, I think, a three
month time span and then.
And then eventually they
extend it out to six months and whatnot.
So, yeah, that’s a mess, too.
They change the rules.
And now it’s technically could be
forgivable to still apply
for my forgiveness.
closing discussion kind
of started happening
I look at the amount of the money
in the bank account go more fine.
And then the first
the next month we’re fine.
The first next month we’re fine.
And I’m a big analyst guy.
I worked in the corporate world for 12
years as an analyst numbers cruncher
for vice presidents
of the Fortune 500 company.
So, like, I know how to do this.
And I started crunching my own numbers
and said, all right,
PPY loan is gone, all right.
My rent is past due
and paying in 50 percent.
And he wants the whole thing.
Oh, he didn’t keep that rolling.
So I see what I can.
In good faith, I was paying and what I can
and I understood his business perspective,
my business perspective.
I paid him what I could.
Yeah, it’s not a charity.
And you know that utilities and certain
things that the place will never fully go
a gas electric insurance is
down because I don’t use much.
OK, so was that an active lowering
or did you have to ask for that.
They actually lower it.
They asked me what changes I’d made
and they changed my insurance
and sent me a refund.
So I got a couple of grants from state
government and county government.
All that stuff was just legal.
It’s all gone.
And then the Kahrizak was paying
my SBA loans, OK, for six months.
They were paying the loan payment for six.
OK, so I know.
Is there something that you have to pay
or would have to pay back later.
They’re just covering that,
not covering it.
So they are covering the with the loan
and the loan to the credit.
Through some credit union.
So they’re covering two
of my biggest loans.
So that was, you know,
ended that last month.
So here I in October,
I have to pay those loans again.
I won’t have any money left.
I’ve got about twenty five
percent revenue coming in.
I got more bills.
I know what to do with.
I don’t need to produce
any more beer for months.
You know, the rent is well overdue.
And then the less I’m thinking about
looking at going, the market is changing,
the customer base is changing.
And my lease is up in March
of this coming year.
So much to be first about five,
six months from now.
OK, my lease is up.
Either I just kind of stumble
along until I run out of cash.
And I’ve seen that happen
with Russian state.
They close up one day like texted
and plays like we’re done by game over.
And that’s that’s a jerk move incredibly.
And that I, I have gained
employees from those moves.
By the way, good employees
from restaurants are closed
or I can say or I can do
this gracefully and my way.
On my terms.
And that’s you know what.
It’s inevitable it’s going to happen.
I can’t make the numbers work
and recitals for five more years or even
one more year and said, this makes sense.
Let’s close on my terms.
Did the were you guys busy
with Badger football?
That didn’t affect you guys.
Well, in the past.
In the past.
Yeah, yeah, yeah, yeah.
So now that that’s weird or no,
I don’t know what’s right.
So we would do as much money
and a single badger football game day
as we would do in a week.
OK, during lockdown.
So, so, so our, our, our weeks.
So those badger Saturdays.
We’re the same as what we were doing
for an entire week in like
June, July, August.
OK, we do that in one day.
Sometimes more so then flip
flopping on the decision with.
Football thing doesn’t help.
I mean, again, I don’t want I can’t put
one hundred and eight
people in there right now.
I know, right?
So what’s the point?
Oh, they’re OK.
So what’s the point?
Unless unless we go to full capacity
and my staff will will would leave.
If we went to full capacity.
They’re not interested in full capacity.
Oh, I get we all want to stay safe.
They want to stay safe
and they don’t want that.
All right, so we’re looking
at all the factors.
We don’t have football.
We don’t have basketball coming up.
You know, we thrived on football,
basketball, hockey, even some volleyball.
We want a sports bar.
We were the pre game post game bar.
And we made a lot of money in football
Saturdays and that would carry
us through the lean months.
It was all right.
And it just it just and we’re
approaching the winter, right?
The profit numbers don’t make
sense because they don’t exist.
Thirty one percent negative.
I could yeah.
I could buy a fine European sports car
with how much money we lost this year.
So, you know, it’s it it’s one of those
I’m not going to put any more my own
personal money into this
because it really doesn’t exist anymore.
It’s a sinking ship, right?
It’s a sinking ship.
So can I steer it to the shore and
hit the reef carefully as opposed
to tipping the damn thing over and it’s
right on its belly, so to speak.
So let’s let’s close our way.
Let’s close Graceville.
Let’s do it the right way.
And that’s where we came up with the you
know, how to close our procedures.
And we’re close in a month and after
that we’ll sell as much beer.
I came up with one last beer to sell that
those conversations happened started
happening about two months ago.
And then we came up with the plan
Did you know what I want to ask?
When you make your
decisions like fumbling,
closing a business got to be tough
when you make your decisions pre covid
did you like it? Was that you and your
wife was you your managers? What did you
have for your decision making team? Is me
and my managers OK? And then my my wife,
of course, was involved in that to
me. And my managers would make
the the two managers they had basically
the three of us
would make major operational decisions
and my wife and I would make kind of long
term decisions like if we were going
to sign the lease again,
had covid that happened,
that would be between me and my wife
for the most part, saying,
do we want to do this for five years?
We want to figure out
a way to get rid of it.
But my managers and I would figure
out all the operational decisions.
So did you how did the conversation go
when you decided to close the door?
Did one of your managers come to you
and say, hey, well, there you go to them
and say they asked very early on,
we’re talking July.
Are we closing up tonight?
OK, not yet.
So no, that’s not inevitable.
That’s what I would tell them.
I said, here’s how much
money we got in the bank.
It’s fine, OK?
And I would tell them exactly how
much money you had in the bank.
It’s we’re doing good.
We’re doing well when it came to us.
And here’s what we got for I
was open book with my managers.
I’m like, this is my finances and this is
what I pay you and this is
what we need for operation.
They were they knew that I knew my numbers
and I was very clear with them.
I said, we’re fine.
Cash flow is good.
And then July, we looked at things.
I said, man, things are
not going to be fine.
Oh, in July, because I was looking at
the end of the the Kahrizak and the PP.
The rent, like I said.
So you could see when stuff more stuff is
coming due and less money was
coming in as far as outside help.
And I’m looking at going if if
the government doesn’t change things
and I’m not looking for yet another
handout or of covid doesn’t change or
a vaccine doesn’t miraculously appear.
Right, we’re not going to be fine.
So let’s it doesn’t say seventy degrees.
It doesn’t say seven degrees.
I think we need to be cognizant of that.
And I want to make sure that they knew
early on that I was going
to keep them well informed.
And you know, and then,
you know, August and then
very much in September,
we had the conversations of like,
all right, are we are, aren’t we?
And it finally came to a discussion.
I sat them down and we said I said,
we’re going to have to close, all right?
And I said, you’ve got to keep this
between the three of us
and my wife for now.
And then at that point,
we will figure out a plan.
And then a few weeks later,
we came up with a plan
and then we that’s we’re
executing right now.
So what made you decide on the November
fifty is November 14th fourteenth.
It’s right before the holiday season.
OK, and it basically allowed us one month
from the announcement to close,
which is a perfect time for everybody
to run ragged because we’re gonna
run ragged for the next month.
Just people excited to come one last time.
We did a lot of this past week
and we did quite a bit of business.
OK, more business than
we’ve done in entire weeks.
Actually, half a month.
OK, during covid.
So I’m trying to put as much
money in the bank as possible.
I’ve got money set aside
for salaries and taxes.
You can’t get away from those by law.
So salaries and taxes are set aside
because much money in the bank,
it’s possible to pay our vendors and start
paying off what I need to be set
And that’s all internal discussion.
you know, I’ve got a lot of loans to pay
off that I won’t be able to write.
Those things are eventually
going to default.
Right at that point, we’ll run down
to the scenario of what to do about that.
And, you know, I’ll work with an attorney,
I suppose, in that scenario.
So they’ll tell you what to do.
But we came with that plan
November 14th because it was
right before the holiday season.
My chef is a deer hunter.
That is the week before
deer hunting opens.
So I said, let’s you are welcome.
Yeah, no, he’s he’s got
a job already, so he’s good.
He works third to half time now for me.
So we got no job,
no worry about that and that we allowed us
time to do it on our own way and not try
to fumble over Thanksgiving
and fumble over Christmas.
And from my own personal perspective,
just my own even my own mental health
perspective, I can be done as much as is
going to hurt from a financial
perspective before the holidays.
And I can be like,
even if I can’t go visit my family one
hundred percent during the holidays,
I can not be open.
And not have to deal with trying to staff
a pub, try and deal with the public during
holidays and stuff because they’re going
to want to do X, Y, Z, even more
attention to the holiday tension.
And and I think that’s
it’s a good, clean break.
My perspective to do it right before
Thanksgiving and just be be done and just
try to decompress and enjoy my life.
What was the what was
your landlord’s reaction?
He is not real happy.
He wants to sit down and figure
out how we close things down.
OK, tell him I do everything I could
to get everything out
of there by March 31st.
OK, but there’s there’s agreements,
security agreements in the lease
that says, you know, you’ve
got to pay X, Y, Z, Bulba.
So we have to figure out what I can
and can’t pay what is and isn’t possible.
And then again, that’s
where lawyers come in.
Unfortunately, we’re trying to figure out.
So, yeah, I owe him back rent and I
recognize that I’m not going
to be able to pay all that to.
So I don’t I don’t have a lot
of options to rent to to go to stuff.
I don’t have I don’t have
a lot of roads to go down.
So it’s kind of a
can we come to an agreement and what I pay
and be done, you know, wash my hands
or is there going to be a legal
battle which I really don’t want.
Because I can get expensive.
Nobody wins in court.
And you know, my lender,
some credit unions lean
on everything that’s in there.
So they technically get
first dibs at everything.
So he I don’t want to fight
between my lender and summit.
Which he knows shouldn’t happen because
some it gets first dibs on everything
because they gave me the primary loan.
So I rather to say,
what do you want me to do, credit union
and everybody else and falls under that.
So I want to ask you something.
I don’t know if you have the answer
but what would you have liked to see so
that businesses, restaurants
and stuff like that could stay open?
Restaurants are closing left and right.
And some are going
to college just for winter.
Then figure out what the heck happens.
Yeah, like there’s still it’s a
arguably it’s a restaurant
closing pandemic rate.
Very much so.
What would you have liked to see or see in
the future to stop there to prevent that?
Or is there something that exists or
is this just the course of business?
It ebbs and flows.
Some come, some go, I think half and half.
So of course, of business, some are going
to fail, some it’s going to come and go.
McDonald’s and Culvers are doing great.
There’s a McDonald’s in the
country that just closed.
They just came in by high school.
I know that Culvers is just killing it.
Yeah, because it’s the comfort food.
Easy to get.
Fresh because I love the product.
I think it’s great.
It’s a great frickin business model.
I think a reputation.
I think I covered it.
It was a genius in that whole franchise.
So he’s going to do great.
really overall is doing very well.
Look at the stock right now or
any time a pandemic happens or an economic
stuff like Culvers and McDonald’s go up
and then the chain’s somewhat servi.
Applebee’s Chili’s will survive because
they’ve got corporate money
that they can put back into that,
So you Applebee’s surviving not all.
But look at this pandemic.
It’s kind of just in an economic
downturn from that perspective.
And that economic downturn
is going to kill a lot of.
Right of local restaurants.
It happens every time.
I’m sure it happened back in 2008 and then
before that, 2001
restaurants go out of business.
On the flip side of that, there’s like,
wow, this is a little bit extreme,
It’s like a year.
It’s less extreme.
It’s more like a Great Depression
from a restaurant perspective.
And and what could we
have done differently?
You know, do you do a restaurant specific
bailout kind Wisconsin restaurant
associations pushing for that?
So all of it’s been there?
Very much so because they’re
losing all our members.
Do you do a restaurant specific bailout
like they do in airline specific bailout?
Or remember the old days of the auto
bailouts or those big companies?
Well, the government is like the bailout,
little rest, little companies.
They like to bail bailout
the big Wall Street.
Sure, airlines and the airlines
are bailed out every decade.
So the car companies.
They don’t like the bailout,
the little guy, because it’s
harder to regulate their money.
And also, we don’t have the CEO power
that like the airlines and the rest
or the and the Wall Street people do.
So I was going to think to when you do,
do you do the restaurant bailout?
You could look into something like that.
But is it worth it?
Only to some extent.
If I’m lucky, if I put like an analyst
government hat on, it’s not
worth it to a larger extent.
But I also don’t think
airline bailout is right.
So I look at.
I looked at the PP loan,
and I consider that to be the government
saying, look, we have two options.
Yeah, a bunch of people can get laid off
and we can end up having to pay them
with unemployment or we can throw
money at a bunch of business owners
and they can pay unemployment sort
of whether they’re employed or not.
Those people which I did,
I gave furlough pay.
So, I mean, people can essentially eat,
they can pay the rent
and all that kind of stuff.
Whether it’s however
that money gets to them.
The government used a lot of business
owners essentially as a filter for that.
So to that point, I get it.
When you’re laying off 21 people,
Let’s 21 people that are going to have to
find a way to pay for rent
and all that kind of stuff.
And maybe some of those
people work part time.
So it’s not an issue.
They weren’t exactly
living off that money.
They had to be a fair
amount that were full time.
There was a field full time, and that was
what they’re living on for the most part.
So now they got to go chase down
a government, not for a little bit
until they find something else.
Well, the unemployment,
they get the six extra six dollars
a week through unemployment.
That helped quite a bit.
That was for a while.
Oh, my gosh.
It was tough to find employee then.
Yeah, because when you’re supposed to hire
them back, they want nothing,
make an extra twenty four hundred a month
on top of what they were making before.
Plus, you know, I did a couple of things.
I gave furlough pay to all
my staff that was on staff.
Wasn’t a lot.
I was a little bit and I
gave everybody a raise.
When the pandemic hit.
Who was still working
for me then we reopened.
I made sure.
And when I know I was closing,
I actually announced I was closing
and told everybody there
getting a raise then, too.
So I gave everybody what they stick with,
you know, to the end.
And there’s a bonus program at the end
to see you work out all your shifts.
I got a little bonus for you at the end.
So I wanted my people
with me until the end.
So it’s like I want to take
care of my employees.
The government sort of took place,
but I want to take care of my employees
for a couple of months
working for as much as I can.
Like, you know, it’s in the day.
I can’t take care of myself anymore.
So I’m try to take care
of the employees as best I can.
So they’re making Bucho bucks in tips.
And, you know, kitchen staff got raises
and, you know, waitstaff got raises.
So everybody got a raise
as soon as I know.
So it’s closing.
And I said, if you do X, Y, Z,
there’s a bonus at the end for you.
You just got to be loyal and stick it out.
And so what’s next for you?
Maybe the next few months.
But let’s see,
over the course of the year.
well, other than closing down operations
and figuring out where you know,
where that affects me personally,
financially, where doesn’t is a plan
to get a day job or I’ll get a job.
You know, I can go back the corporate
world or government or
teaching or something.
Affect, you know, OK, consulting.
I don’t know.
Here’s what nothing like, you know.
Yeah, it’s I don’t know during
a pandemic if you can’t teach.
So but you know, other than that I don’t
have a long term plan for the first
time in like twenty years.
And I’m kind of loving that.
It’s like I am actually really happy
to have what looks like a pretty darn
blank slate and maybe
we’ll move out of town.
Maybe we’ll move out of the country.
I don’t know.
It’s kind of like we’ll figure that out
and I’m not going to worry
about that right now.
How I forgot to ask you this.
How did your wife react when you told her
we’re closing up shop?
Well, she knew before anybody else, right?
So she’s not even talking about it for,
you know, did she did she get that feeling
before you pulled the trigger on it?
I mean, she and I were very
honest with each other.
We always are, OK?
And, you know, it’s like this
might not be March 16th.
I said, or we might not survive this.
I’ll do everything I can,
but we might not survive this.
So that was on the table.
And by the time it came to saying we’re
going to close, you know, she knew that
the stress level on me was just great.
It was ridiculous.
Like, you know, I couldn’t sleep at night
of tossing and grinding my teeth.
My shoulders are tense.
The whole thing.
It just wasn’t working well for me.
And it’s kind of things like
from from my perspective,
it’s going to hurt financially,
but it might be just better in the end.
So, yeah, she knew she and I
were very open with each other.
It might just be better in the end,
as much as it wasn’t a lot
of tears over it, too.
We you have.
So I sold the business six years ago,
and when I drove past
the old shop that I used to have,
there’s still interesting
memories that go by.
So when you drive past Rockhound in three
years, what do you think you’ll feel
regardless of what it is then once there?
Well, let’s just say, for example,
it’s a brewpub, right?
Well, stop in and see
who the owners are, OK?
You know, and wish them well.
If it’s if it’s still empty,
I’ll be like, well, oh, that.
Well, that means the landlord should
of made a better deal for me.
Not to be a jerk, but.
He should have he should have put more
on the table for him
to try to keep you open.
You know, again, he’s he’s been a business
partner, has made his own businesses.
And I’m not saying he’s at fault
because he certainly isn’t
in the end.
It’s again, you know,
one of my one of my staff joked today,
he said he said if this turns
into a Starbucks, I won’t be so mad
that I cracked up.
I said at the bar,
he just he’s my bartender.
I just cracked up.
You know, maybe it’ll be a Starbucks,
maybe it’ll be a coffee shop.
You know, take care of your own Walgreens.
Maybe a day care.
I don’t know.
They care for.
Appropriately, once a year of the brewing
equipment, so it makes them softer floors,
but on the staff, right?
No, it’s like three years ago.
I don’t know.
I don’t know what’ll happen.
You know, maybe I won’t be in the city
in three years and one of my friends will
probably send me a picture,
something like that.
What it is.
So what have you learned
from all this so far?
Don’t start a restaurant.
brutal honesty right there.
So, OK, no, it’s
I learned a lot of what
to do, what not to do.
I learned I’ve done a lot of things right.
I’ve done some things wrong.
And I learned that you can you can do
things as up and up and ethically
and positively as possible and still fail
and also need to be comfortable with that.
That’s that’s a great, great point.
I was talking with a friend of mine that’s
got a retail store on State Street
and she’s been dealt a bad hand.
Of course, it’s a mess right now.
Oh, my gosh.
Yeah, we got pandemic.
You got protests, you got homeless.
You got people just out of tents.
They’re very bad.
I just dealt a bad hand
and she’s been doing that for
a decade plus.
And I’m like,
there’s no shame in walking away.
No, there is.
And that’s what I’ve kind of come to terms
with over the past couple of months.
You know what?
If I have to walk away,
there’s no shame in that.
I’m forty three.
Sure life isn’t over for me yet.
I can pick up the pieces and figure out
what to do next and use this as
a great learning experience.
Maybe I’ll write a book someday.
Yeah, chalk it up to experience
and move on, I guess is what um.
What I would say.
I’m looking for the next chapter also
that much I’m absolutely looking forward
to what’s next and getting the mental
weight of this off of my shoulders
and looking for that next chapter of life
and see where it takes me
and having that blank slate again.
That midnight or 2:00 am on November
14th will be an interesting time.
I don’t know what closing time is in pandemic.
Whenever people leave I suppose.
OK, get out we’re done.
We’re done well
by 2 a.m. so. Interesting.
I want to thank you so much
for being on the show.
Where I guess how can people order
from you online for the next
month ish, few weeks?
Rockhound brewing NOT brewery,
And there’s a link on there
for online ordering system.
And if for some reason they can’t
get that to work, give us a call.
But it should work pretty well for almost
everything, including beer vouchers.
Just come in and claim their
beer with a voucher and an ID. OK.
What’s a beer voucher?
Well, you can’t legally
sell beer online but
you can sell pieces of paper online
Play the game, the game.
That’s so interesting.
Oh, thank you so much
for being on the show.
This is cool.
Is there anything else you want
to share with your people as closing?
I mean, obviously, you know,
thanks to all of our my staff and my wife
and and of course, all of our
patrons during the whole thing.
It’s been a lot of fun and it’s it sucks.
you know, I really
appreciate what everybody did for us.
Chalk it up to experience and move on.
This has been Authentic Business
the business program that brings you
the struggles, stories and triumphant
successes or closures, whatever.
Coming to you from our makeshift
studio here during this covid time.
My name is James Kademan
and Authentic Businesses Adventures is
brought to you by Calls On Call,
offering call answering services
and receptionist services for small
businesses across the country, on the web
at CallsOnCall.com. As well as
Draw In Customers Business Coaching,
offering coaching services
for entrepreneurs in all
stages of their business.
Maybe not right at the end,
but what are you going to do?
It could be real, could be, you know,
probably something we can tell you.
On the web at DrawInCustomers.com.
And of course, The Bold Business Book,
a book for the entrepreneur in all of us
available on Amazon and wherever
fine books are sold.
We’d like to thank you our wonderful
listeners, as well as our guest,
Nate Warnke, owner
of Rockhound Brewing Company.
Nate, thank you so much for being on the show.
I’m going to include a link
to the original interview that we had, was it was a couple of years ago?
Man, time flies.
It would be interesting to just see, man,
so much has happened.
Yeah, so much has happened.
But at any rate, whatever you do,
you should go check out Nate’s
Rockhound Brewing while you still can.
November 14th is the last day? November 14th,
last day to the public other than
beer sales we’ll still have beer
after that. You will?
Well we think so.
We’ll do beer sales
a couple of days a week.
But November 14th is the last full
service day. Get the beer.
It’s good stuff.
Find this airing
on 103.5 Wednesdays
at 1:00 p.m., Sundays at two p.m., as well
as at SunPrairieMediaCenter.com
Past episodes can be found
morning, noon, and night.
at the podcast link found at
Thank you for listening.
We’ll see you next week.
I want you to stay awesome.
And if you do nothing else,
this is probably terrible advice for Nate.
Enjoy your business!