Those of us here (contributors and commenters alike) are an inside baseball crowd. We can debate the daily talking points with the best of them. We can talk policy nuance to hypothetical logical extremes. And we, consciously or not, usually invoke the concept of ceteris peribus – “all other things being equal or constant” – to show how our little suggested policy changes will make the world more perfect, and given the concept of ceteris paribus, we can chose to willfully ignore all the unintended consequences of our grand plans.
Small business owners and consumers are on the front lines of our policy changes when they are enacted. They don’t have the benefit of holding all other things equal. Actions have a cascade of reactions. Employers and consumers adjust. And those adjustments cause other adjustments. Eventually, there is a new normal, just as new “policy fixes” are handed down, and the cycle begins again.
Many of us have those discussions about how to fix the world at places like Manuel’s Tavern, a place where many a politico has tipped a pint or three. As such, they’re the perfect people to drive the point home that business and consumers have to deal with the real world around them. They aren’t just wealthy business people that can eat the increased costs of regulation, rising prices, and the ability to hire people, provide benefits, and have them get to and from work.
I hope as you read the comments below (that are incredibly well presented to show a multitude of impacts on the businesses bottom line) that you remember that all of our grand fixes are eventually paid by someone. Businesses, employees, and their customers all share these burdens in some way. With that, I leave you a word from Manuel’s Tavern:
Friends of Manuel’s Tavern,
You are not nameless and faceless. You are not just customers. You are family, and as owner of Manuel’s I want to share some difficult, upcoming changes. It is my hope that, after explanation, these necessary changes will be more understandable to you, and that Manuel’s will continue to receive your support.
Without you, Manuel’s would not be in business, and because of our established relationship we consider the impact of decisions on you. Nevertheless, uncomfortable and unwanted decisions have to be made. The changes below are being forced by financial need.
Every year management forecasts and surveys the business landscape and looks at any necessary adjustments to our business model. Most of the time, these adjustments are very small.
However, because of many circumstances beyond of our control, Manuel’s is facing some big business hurdles. As a result, small changes are not in our current forecast.
Manuel himself did everything he could possibly do to keep our prices as low as possible. A price increase was always a last resort. That same price mentality is true with me today.
Recently, however, Manuel’s has experienced the largest increases ever in our cost of goods. For a large percentage of menu items we now pay twice as much as we did a year ago. I cannot think of a single item we buy that has gone down in price.
The cost of regulatory compliance has risen significantly as well. What used to be free from the city now comes with cost. In addition to compliance costs, our property taxes have risen a large percentage.
As the building gets older, more frequent repairs and maintenance are required. The charges for these services have almost doubled.
Manuel’s hope is to soon provide health insurance for all of our employees again. We want to be ahead of the upcoming federal mandates. For decades we proudly provided it, but like so many small businesses trying to stay competitive, we were forced to drop it when we confronted years of nearly 30% premium increases and of competing against businesses that did not provide it.
I never liked dropping this commitment to our staff and wished it had been otherwise. Now that the competitive field will be level, we will begin to provide this benefit again. However, it will still require a heavy investment, 40 to 60 thousand dollars a year in early estimates.
I have rushed through the items with you, but here every day the fight against price increases is a tedious daily grind and battle. Everything we normally do to keep costs and prices low is now exhausted, and we are left with no choice but to implement some changes.
Menu price increases will be in effect very soon, always an absolute last resort for Manuel’s.
In the past we have favored targeted price increases, focusing only on items with major cost increases. But after running the numbers, this unfortunately is impossible this time. Instead we are looking at mostly modest price increases across the board, which spreads the burden and meets our needs.
However, a few items like our tuna will go up by as much as $1.25 per item. FYI: tuna before the Japan tsunami was around $5.50 a pound, and now I am happy to get it at $11.25 a pound.
In addition to the menu increase, our hours will be changing soon.
We will open Monday – Friday at 11 am, Saturday and Sunday at 9:30 am. Brunch will be served from 9:30 am – 2 pm Saturday and Sunday. We will close at 1 am Tuesday – Saturday and midnight on Sunday and Monday. The kitchen will continue to close one hour before the tavern closes.
The changing of hours helps our employees and helps Manuel’s as well. Marta has cut some service routes and reduced hours. This reduction in public transportation has made staffing at night very hard. Reducing our late hours gets people home, increases security and cuts cost.
A plan is underway to be completely smoke free by January 2014. Customer request and event coordinators continue to mention smoking as a problem here. Within a month the only smoking area available at Manuel’s will be in the main bar and that will end in January 2014.
If we are truly the business I think we are, and you are truly the customer I know you to be, then I know you will understand and continue to support us.
If you value honesty, please know I have been honest with you about our dilemma. It is scary and keeps me awake some nights. These changes are the best answers I have at the moment. They were conceived through lots of thought and meditation. I have not seen an alternative.
I pray you understand and continue to love and support Manuel’s.
Owner and General Manager