When Streetcar520 closed for indoor dining in March of 2020 due to statewide COVID-19 restrictions, owner Ari Knaup faced an intense battle for the restaurant’s survival. Streetcar was her invention, as much a work of art as it was a dining establishment. Three large, colorful murals of women adorned the walls, each one portraying a different archetype. An elegant arc of lights hung directly over the bar. A brick wall and high ceilings with vents and piping recalled the industrial history of Downtown Colorado Springs. The restaurant was open and airy with clean lines, perfect color coordination, and a lovely little patio out front. Now, Ari’s dream was in jeopardy.
Keeping the restaurant moving forward had been enough of a challenge in better times. Ari will be the first to admit that she’s a people pleaser, which isn’t always a good thing. People were constantly in her ear, insinuating themselves into the decision-making process or vying for power. Ari had a hard time breaking the habit of trying to make everyone happy. As a result, she began questioning her own beliefs on how Streetcar should run. This spawned results that hurt the restaurant’s profitability and image, to include slow service times, unsatisfactory menu items, poor bartending, inhospitable music, and so on.
When the COVID restrictions went into effect, things grew seriously problematic. One of the first things Ari had to do was lay off 25 employees. She gathered the staff together on March 17, gave them the bad news, and promised to do everything in her power to help them survive the coming months. These were hard workers with children, bills, physical and emotional challenges, and life-long dreams that suddenly seemed impossibly distant. A person of conscience never forgets making decisions like this, but Ari had no choice in the matter. She promised to bring back everyone who was willing when the time was right, and then she set about trying to save the restaurant.
A trying chain of events shaped Streetcar’s destiny from this point on. During the March-April dining room shutdown, which lasted for about a month, the restaurant ran with a skeleton crew of two people—Ari and Winn Kirkpatrick, who had recently taken over as bar manager. Winn has a wife and three sons, yet he worked for nothing but tips during this time because he was sure they could make it through the tough times, and he wanted to turn the bar into a first-class operation.
Ari and Winn worked to exhaustion every day taking to-go and delivery orders. They traded kitchen and bar duties and delivered food orders out of their cars to avoid the prohibitive costs from outside delivery companies. As a helpful bonus, the National Restaurant Association lobbied for and got a dispensation allowing restaurants to sell take-out alcohol so long as it was served in cups with lids. Within a month, they generated enough income for Ari to make payroll and cut all Streetcar employees checks for the money owed them. Then she closed the restaurant for a month to recuperate and figure out what to do next.
The heaviest weight of uncertainty was financial instability. Ari had no cushion of working capital for a restaurant that wasn’t generating any significant revenue. Meanwhile, she was still trying to find the true identity of her relatively new business. Yet how could she do this when she had just laid off 25 employees, didn’t know how to cover her fixed costs, and couldn’t pay back her investors? Things looked bleak.
Ari began contacting people with useful professional knowledge and strong critical thinking skills. She called her sister Shannah, who writes grants for a Portland homeless outreach team, and explained everything. Shannah listened carefully, then replied, “Hey, don’t worry. It’ll be OK. Remember that you’re not alone. The entire world is feeling this. There will be help. There’s money out there. You just have to ask for it.”
These words were the game changer Ari needed. If financing was the lifeline, then grant writing would be the hand that grasped the lifeline. She learned how to write grants on her own. Then she contacted the Small Business Association (SBA) to get Paycheck Protection Program (PPP) money. To secure a PPP loan, the potential borrower’s bank must be SBA certified. Ari’s bank is. The loans are distributed on a first come, first serve basis, so on the first day the program started accepting loan applications, Ari submitted the requisite paperwork, which amounted to 77 pages of financials. Her loan request was accepted immediately, and she received $124,000 within a week.
Ari became expert at raising money. She secured a $2,500 grant from the Colorado Springs Downtown Partnership, two rounds of loans worth $9,500 from Energize Colorado, and $16,000 from the Colorado Restaurant Association. Then she secured $136,000 in a second round of PPP money. All told, she raised $288,000 in grant money, with the strong likelihood of 100% loan forgiveness. To get the loans forgiven, borrowers simply need to submit financials proving that they spent every penny of the money they had been given. This financial relief allowed her just enough time and financial stability to rebuild the business in an image that would finally approximate her ideal vision.
Her first week in the kitchen was a come-to-Jesus moment. She quickly realized that back-of-the-house operations were far too prep intensive. For instance, why was the kitchen staff spending 2 ½ hours every morning making its own French fries, especially when almost no one was raving about how delicious they were? And what did so much unwarranted prep time do to labor costs and morale? Moreover, the menu was a confusing jumble of offerings that drained the restaurant’s profits by alienating guests. It wasn’t aligned to Ari’s original business model.
She contacted Sysco, her major food purveyor, for help. Sysco gave Ari everything she needed to tear down and rebuild the menu structure. Most notably, they put her in contact with their consultant chef Adrian, who ran the entire Sysco test kitchen and shared his expertise with Ari in precise detail. Ari brought Andy Finkbeiner, her kitchen manager who had worked with Ari for 11 years, into the process, and from this point on, Adrian, Ari, and Andy fine-tuned everything they could in the Streetcar kitchen.
Ari’s confidence grew with each passing day. She rewrote the menu with labor costs as a main concern. After all, a labor-friendly food item requires less prep and therefore costs less. Moreover, menu offerings must be approachable to diners, meaning simple and consistent. The constant deconstruction and reinvention of the menu had to end. Streetcar needed to overcome its identity crisis. It wasn’t a farm table or fine dining restaurant, so there was no reason to pretend otherwise. For instance, using precooked grains for the Bodhi Bowl and premade French fries saved hours of labor. Similarly, avocados are inconsistent in quality, and their shelf life is terrible, so Ari switched to Kitchen Doctors’ crushed avocados. The Streetcar cooks could easily flavor them to perfection with salt, pepper, and garlic.
Ari took menu engineering to another level. Sysco furnished her with an online platform that allowed her to cost out every dish. She could plug in a desired food cost (e.g., 23%), and the program would tell her to adjust portions and price points accordingly, all the way down to a pinch of salt. The program would also calculate prep time and labor costs, to include the proportion of ingredients like breading and egg wash. It even suggested to-go product recipes for food that travels well.
When the dining room finally reopened to guests, the consistency and quality of the menu offerings produced a wave of glowing guest comments. The flavor profiles for each dish were approachable, and prices corresponded sensibly to the quality and size of the dishes. And because of streamlined kitchen procedures, front-of-the-house service speed improved to the point where ticket times averaged 18 to 20 minutes during the Friday night dinner rush. Food costs went from 40% to 23%. Moreover, by opening in the late afternoon on weekdays, Ari consolidated labor into one shift, again lowering labor costs. She and the staff were using the COVID-19 pandemic to their full advantage and turning Streetcar into a model of efficiency.
Meanwhile, Winn completely overhauled the bar menu. During the month the dining room was closed, they got rid of as much unwanted inventory as possible by selling it at a discount at a to-go table near the front door. Winn streamlined and simplified everything behind the bar. There would be no more dehydrated, deconstructed, or smoking cocktails made with obscure, prohibitively expensive liquors. Each mixed drink would contain no more than four ingredients.
As a result of these and other measures, the bar flourished upon reopening. Winn reduced bartender prep time from 20 hours per week to just 1 hour per week. Labor costs plummeted. One bartender instead of three could now work various shifts, and guests received far better service because the bartenders finally had time to engage guests in genuine conversation and give them the attention they deserved. Winn built an approachable inventory, too: each type of liquor included one recognizable brand; almost all the beers were locally brewed; the wines were delicious and sensibly priced. Consistent service and diverse drink options (ranging from classic cocktails to new innovations) became standard features. Drink times now averaged just 30 seconds, and best of all, liquor costs went from over 30% to 22%.
At this point, Ari trusted her own decisions because she could easily assess the positive outcomes she was engineering. She and the staff were fixing all operations in a smart, systematic manner. She set about incrementally growing Streetcar staffing back to pre-COVID numbers. A month after reopening the dining room at 25% of maximum capacity, two cooks were working in the kitchen and two servers were serving guests in the front of the house. Even after a second 2 ½ month state-mandated dining room closure that allowed only outdoor dining and to-go sales, Ari brought her staff up to 10 people right away, and then 16 soon after that. Staff came flocking back despite desirable government unemployment subsidies because they loved working with their Streetcar colleagues.
Ari fine-tuned dining room service protocol, too. She had always encouraged first-rate customer service, but she shifted the staff’s focus from fine-dining formality to casual excellence. Servers were encouraged to gauge each guest differently and engage them accordingly. Everyone who entered Streetcar was to feel comfortable and welcome.
Consequently, groups of women came in for baby showers and birthday parties. Single women felt safe and happy sitting alone at the bar. Families visited for Sunday brunch. Professionals entertained clients for business dinners. Restaurant staff from all over town showed up for Industry Night every Monday, where they got special discounts. And droves of people met for Happy Hour, which runs from 4-6 p.m. seven days a week and includes some of the best food and drink deals in the city. Ari also placed two “Black Lives Matter” signs and a “Hate has no home here” sign on the front patio railing by the sidewalk because she wanted to make sure that everyone who visits Streetcar knows they are in safe space. The signs get torn down or vandalized regularly. Ari replaces them with equal regularity.
Although Ari raised just six months’ worth of funding to cover her fixed costs, Streetcar520 was still going strong thirteen months after the pandemic regulations struck. The changes she and her team implemented made all the difference. Even at the state-mandated 50% maximum capacity level, revenue was better than what it was at 100% capacity before the pandemic. It took a lot of heart, intelligence, and networking to thrive in such devastating circumstances, but sometimes adversity spells positive change when little else seems to work. Growth can be painful, yet that very pain strips away misguided notions and allows the victim to see into the heart of things. Suddenly, the world looks different. True character is the only thing that comes into clear focus, and irony always plays a role. As Ari says to anyone who will listen, “COVID-19 was the greatest thing that ever happened to the business.”
