But without having years of business tax returns to show off his record, it’s been a challenge for Kirk to obtain small business funding and loans, which are necessary for many new businesses that aren’t part of a well-funded hospitality group. And it’s coming while he’s trying to pay off an outstanding tax debt of about $ 5,000 that was unpaid by his previous business partner (who handled the finances), put up another $ 5,000 for the vinyl wrap for his food truck, and keep the payroll going for his dedicated kitchen staff.
That $ 15,000 in necessary expenses is also on top of the financial pressures he’s facing with inflation, where placing a food order is like playing a math game where the numbers change on a daily basis.
“I couldn’t order chicken this week because I didn’t want to have to charge people more for a chicken taco than a beef taco,” said Kirk, who explained that the price of chicken has skyrocketed.
Kirk turned to GoFundMe, where he’s asking for help to fund payroll and pay off the back taxes.
“I’m not one to ask for handouts but part of growing up and becoming not only a better person, but also employer, business owner, etc is admitting when you need help and reaching out before things hit crisis mode,” he wrote to his “Masa family.”
So far, he’s raised nearly $ 6,000 from more than 50 donors.
Kirk isn’t the only small eatery facing significant financial burdens, despite his success. The turbulent supply chain has sent many commercial kitchens into chaos, where chefs are having to rethink their menus and even reach out to diners for help. This is coming when many Americans are feeling the impacts of inflation in their local grocery stores or at the gas station.
Full-service meals are up 9.7 percent and take-out is up 7.2 percent over the last 12 months, according to a recent Consumer Price Index report. It’s the largest 12-month increase since the index was founded in 1997, according to the US Bureau of Labor Statistics.
So just as restaurant owners are feeling the freedom of operating without COVID-19 restrictions and erratic foot traffic, a still-struggling industry is still facing mounting challenges that are testing their futures.
Wholesale food costs were up 7.9 percent in 2021, and hourly labor costs were up another 8.6 percent for the year, according to the National Restaurant Association. Industry suppliers, like Tyson Foods, saw its average sales prices for the last fiscal quarter rise nearly 20 percent compared to the previous year. The Producer Price Index found that food prices jumped 12.8 percent in a year, which includes a more than 33 percent increase in cooking oils and nearly 185 percent in eggs as of May.
“But you can’t increase your prices by 80 percent,” said Dale Venturini, the president and CEO of the RI Hospitality Association, on a recent episode of Rhode Island report. We have to account for every dime today. ”Today, we’re treating nickels like manhole covers … We have to account for every dime today.”
Kevin Bryla, head of client experience of SpotOn, a software and payment company that services restaurants, said while the biggest average price increase appeared in seafood restaurants (up to 19 percent, nationally), there was also a 10.5 percent increase in the price of tacos alone over the last year ending in May.
“The fluctuating market will continue to present challenges to maintaining a healthy restaurant profit margin,” Bryla said.
Kirk, back at Masa Taqueria, said there are a lot of chefs and owners who will “eat the cost” of their food orders each week, and just keep buying the same things. He said he rather change his menu items up, based on availability and price of products.
“At a small restaurant, it doesn’t make sense for us to [eat our losses]We’d be losing just too much money, ”said Kirk, who is constantly working with his distributor to find out the best times to purchase meats and produce, as the prices are constantly fluctuating.“ Avocados even: One week they are $ 40 [per case]. The next week they’re over $ 100. I just won’t order them unless they’re under $ 70.
Another small eatery, Providence-based food truck TrapBox, was started by Welbi Genao after he was laid off from his job during the pandemic. He serves modern Latin bites and has been successful until he found himself in a bind last month. Heading into the summer, he expected to have his biggest month in sales this June when his food truck’s motor blew. It’s taken a month to get a new one. Without any decent sales during that time, Genao had to use nearly $ 10,000 of their tax savings to get the truck back up and running.
And now he has a balance with the state to pay off. He, too, turned to GoFundMe to raise $ 10,000. Each donor who gives more than $ 20 could get free food from his truck for a year.
“In those hard moments when you don’t even know if you have enough money to put gas in your car at this point, let alone eat,” he wrote on the GoFundMe page, which has raised about $ 950. struggles as you and we hope at least a free meal will help you like you have always helped us. ”
If they don’t pay off the owed sales taxes to the state by June 30, Genao will lose out on renewing his tax license.
“It’s a headache to deal with right now but I guess it’s part of the highs and lows of businesses,” he said.
Alexa Gagosz can be reached at firstname.lastname@example.org. Follow her on Twitter @alexagagosz and on Instagram @AlexaGagosz.