I thought I’d share some thoughts / insight from the perspective of a small business owner during this incredibly difficult time. My thoughts of course are just my own opinion and outlook.
First off, the epidemic has hit at perhaps the worst possible time from a business perspective. Early Q1 is typically our slowest period of the year, although rivaled by July / August due to the intensity of the Texas summer. Early March through Memorial Day is typically our busiest season when our business roars to life with the beautiful spring weather. At this point, we’d be thrilled to reemerge and get back to full operations by the summer. But even by then, we will have missed our busiest season of the year.
Most critically, the mechanism of controlling the virus (isolation / social distancing) unfortunately takes dead aim at the heart of our business model at Jester King. Rather than trying to grow our business by increasing our beer production volume year over year, we’ve chosen to grow the onsite experience by purchasing land and adding a restaurant, farm, inn, and private event hall. What was designed to diversify our business and make it more immune from the intense competition of offsite retail and distribution, is for now at least, making us highly susceptible. Onsite sales account for 77% of our revenue -- ordinarily a good thing, but for now, a severe detriment. It’s unclear what we will be able to recoup through “to go only” sales in the near future, but we anticipate it only being a small fraction of what we’ve lost. On top of that, the remaining 23% of our sales are in limbo, given the evidence we’ve seen of distributors and retailers being hyper-cautious in these uncertain times. All in all, but for the yet to be determined impact of to go only sales, we’re in a position where 100% of our revenue is in jeopardy.
As an aside, I wholeheartedly support and am proud to have Jester King play a small part in helping stem the spread of the virus. Technically, we don’t have to close right now, as we’re not in Travis County. But given the large crowds we routinely see on the weekends, it’s the right thing to do in order to support our healthcare system in this time of crisis.
What further compounds the situation is that there is no immediate end in sight from my perspective. While acknowledging that no one knows how this will play out, it seems to me we are faced with adjusting to a new normal – a new normal where social distancing and isolation are the way of life until a vaccine can be developed, hopefully by 2021. Thus, whatever emerges (if anything) as a route to business survival, must keep us afloat for possibly over a year. Again, I have no special knowledge or insight, but I am operating under the assumption that we must try to make a go of it in this reduced state for the long haul, not just two weeks or two months.
Then there is of course what may be waiting for us once we do return to full operations, i.e. an economy in all likelihood facing a severe recession or depression. I have no expertise to predict what the impact will be, but it seems severely bad at this juncture as the ripple effects spread.
As far as direct help, there is none in sight at this time. At the time of this writing, there is news of a potential $850M stimulus package, but it’s impossible to say how much, if any, will reach us or other small breweries and restaurants in the United States. Our insurance company has denied coverage citing that our buildings are still intact. Our bank has not indicated whether they will attempt to foreclose on us or grant us relief. Finally, Texas beer law (while improved) does not allow for direct to consumer shipping, thus putting us at a disadvantage relative to some other states.
Furthermore, going back to our efforts to diversify our income, 2020 was supposed to be the first full year operating Jester King Hall – our new 200-person private events venue. As expected, and understood, we have seen our spring weddings and events postponed or cancelled, compounding our revenue loss.
Finally, the emotional toll of having to part ways with long time staff (several of which feel like family) in the wake of losing 77% of our sales practically overnight is extremely difficult to say the least. I understand the toll is far worse for the people we lost, who are now unemployed.
Again, this is just a sharing of my perspective as a small business owner. I know I’m not the one hurting the worst out there. Nearly 10,000 people have lost their lives and nearly 200,000 have gotten sick. And this is apparently just the beginning. Then there are the healthcare workers like my wife Amber who selflessly risk exposure while showing up to help others. My sincere appreciation goes out to them.