On Farmers'Markets and Football

Right around 1PM this past Sunday, a hundred market farmers breathed a huge sigh of relief. The rest of the city was grieving but we’d just had our livelihoods handed back to us

Business is business. Adversity happens. Equipment breaks down, customer tastes change, and competition is relentless. Farmers are especially adept at backup plans and contingencies because their fortunes ride on the weather, which was dealing hard hands even before things started getting really strange the past few years.

But football?

For many of us vendors, markets are our main source of income this time of year. Wind, rain, and even snow take their toll on sales, but football hits us even harder. Other than the Pike Place Market, there are four year-round farmers’ markets in Seattle: University District, Ballard, Broadway, and West Seattle. Three of these four markets run only on Sundays. Unlike baseball, basketball, and soccer, which happen throughout the week, football owns Sunday, and it doesn’t share. Even the church down the street reschedules its Sunday services on game days.

Football hits some markets harder than others. A market that bills itself as an entertainment venue, with a music stage and a roster of food trucks, will be hit harder than a mature shopping market, where serious cooks and shoppers show up early, in all kinds of weather. Football hits the markets harder as the season wears on, as the tension grows and the stakes increase.

Some market managers try to drum up sales by encouraging vendors to wear team colors, show team spirit, and sell game-day snacks. But no showing of blue clothing or blue cookies is going to up your sales if fans aren’t browsing at the market in the first place.

We can’t compete with a phenomenon whose advertising budget handily exceeds our combined annual income. It’s humiliating to feel angry and alienated over something that brings our loved ones so much joy.

But that’s all behind us now, at least until next season. Please come back to the markets. We’ll be waiting, with Brussels sprouts, sheep cheese, smoked salmon, and grilled vegetable quesadillas. We’ll be overjoyed to see you.

 

Humble Feast Dinners at the Neighborhood Kitchen

A year ago I was browsing commercial real estate listings with a long term plan to invest in a building for a long term home for Patty Pan. I stumbled on a property close to my house that was just the right size and just the right price. It was a commercial space in a residential neighborhood and I've always liked those very much. The savvy broker had included an email from a neighbor testifying to the neighborhood's readiness to support a community-minded food business. The neighbor's email went on to wish for a Fair Trade espresso bar or a bistro run by an established chef.

We had no intention of opening a coffee shop or café. (Been there, done that.) But we certainly were looking for a place that we could grow into a neighborhood institution, fostering connections around food.

Back in 2011 I launched a series of monthly local foods dinner events dubbed the "Humble Feast", an antidote to the lavish, expensive local foods galas featuring celebrity chefs and ingredients donated by hardworking farmers and fishermen. Instead of a mind-blowing meal made up of dishes few home cooks could replicate, I wanted to prepare simple, tasty, affordable fare that could also inspire home cooking.

It seemed like an obvious, appealing idea but it turned out to be a tough sell. It was hard to find a comfortable, affordable space where we could host our dinners and we just weren't very good at getting the word out. We had some reasonably successful events and some morale-busting evenings when almost nobody showed.

Early this year I bought the building in Briarcrest, which included a small dining room off the kitchen. We built a beautiful pass-through window with an onyx counter and bamboo plywood trim. And we invited the neighbors for dinner. They came, they ate, and they told their friends. They've come month after month, enjoying our humble endeavor, filling our tiny dining room to capacity and spilling into the kitchen and the parking lot.

The dinners are going so well that, starting the first of the year, we'll begin holding them weekly rather than monthly. We're so grateful to have landed in this neighborhood.

Here's a recipe for the Shepherd's Pie that we served at the last dinner. It's tasty and adaptable, and makes a great winter comfort food.

Shepherd’s Pie (makes 6 servings)

 6 medium-size potatoes (any kind but russets)

4 tablespoons olive oil
1 onion
2 cloves garlic, minced
1 pound ground beef, ground lamb, crumbled tofu, finely chopped seitan, or cooked lentils or beans
2 teaspoons salt
2 cups finely chopped vegetables (I recommend carrots, parsnips, turnips, rutabagas, and winter squash)
¼ cup chopped fresh parsley
2 tablespoons other finely chopped fresh herbs (I recommend rosemary, oregano, and thyme.)

 

Preheat the oven to 375 degrees Fahrenheit.

 Boil water in a large saucepan. Cut the potatoes in quarters, add them to the water, and cook them for about ten minutes, until they’re very soft.

 Meanwhile, heat two tablespoons olive oil in a large skillet. Add the onions and garlic and cook for about 5 minutes, until the onion is soft and translucent. If you’re using beef or lamb, crumble it into the pan once the onion is well cooked, along with one teaspoon salt. If you’re using a vegetarian protein, you’ll add it later.

 Cook the meat on medium-low heat for 5 to 10 minutes, until it’s nicely browned. Add the vegetables and salt and cook for about 10 minutes longer, until they’re very tender. If you’re using a vegetarian protein, add it now. When the protein and vegetable mixture is heated through, add the herbs.

 Drain the potatoes, add the remaining tablespoon two teaspoons olive oil and one teaspoon salt, and mash well. Spread the protein and vegetable mixture in the bottom of a large casserole pan, and spread the mashed potatoes on top. Divide them in four portions and drop them in different portions of the pan to make the potatoes easier to spread.

 Bake for 15 to 20 minutes, until it’s piping hot.

Cooperative Economics

Traditional businesses use a relatively straightforward formula for evaluating success. Profit means a job well done while loss spells trouble.

The equation is fuzzier for a cooperative which, by definition, exists to benefit its members. Profit is anything left over after subtracting operating expenses from incoming revenue, but wages and salaries weigh in as operating expenses. The more a coop pays its members, the less it has left over in profit.

Earlier this year I bought the building where Patty Pan Cooperative now operates. The business pays rent to me and this rent goes to pay down my mortgage and increase my equity in the property. The rent benefits me personally, yet it comes out of Patty Pan's bottom line.

We've been grappling with these equations all summer as we've earned our livelihoods and set aside funds to pay for the expensive build-out we completed last spring. We need profit to pay back our loans, and we need profit to create a cushion because it's good to save for emergencies and a seasonal business tends to be short of cash half the year.

We recently launched a Kickstarter campaign to raise money to buy equipment to make our own tortillas out of local, organic, whole grains. Naturally we evaluated whether the tortilla project would make our business more profitable, and concluded that these tortillas will probably cost the same as the ones we currently use. However, some of the costs will switch from the material expense of buying a finished product to the labor expense of making it ourselves.

In other words, the tortillas will cost the same according to traditional calculations, but the process will give back more to our members. There are other benefits as well. By buying grain from local growers, we'll cycle funds back into the closely knit farmers' market economy. Our quesadillas will be tastier and healthier. And we'll stay interesting. When you've been around a lot longer than any of your competitors, staying interesting can be an uphill battle.

Speaking of interesting, the research and development process for our tortilla project has been fascinating. It's challenging to create a light, flexible tortilla using 100 percent whole grain flour. We're open to harmless add-ins like lecithin or baking powder, but we'd really rather study the behavior of the dough and learn how to achieve the results we want using just flour, olive oil, salt, and water.

We've made appealing prototypes using a small electric tortilla press designed for home use, but the real work will start once we buy and install the professional equipment that can press tortillas to a consistent thickness, and cook them at a consistent heat.

We're curious, we're engaged, and our morale is high. We're looking forward to getting started.

Reflections on Kickstarter, After One Week

As soon as we launched our Kickstarter campaign, we started getting emails from helpful consultants and companies offering to boost our showings with the Kickstarter algorithms that determine whether a project will be prominently featured on the company's site. Naturally we reported these messages as spam and deleted them, but they did provide food for thought.

Fundraising isn't for the faint-hearted. You throw yourself at the mercy of close and distant friends and associates with the humbling and often distasteful mission of asking for money. Then you ask again. And again.

The internet makes it possible to reach more ears, at least in theory. More people receive your message, but they receive it in the context of a sea of messages that they have to filter for information worthy of giving a damn.

Before launching our project, we read quite a few blog posts and articles about how to get the word out. They mostly cautioned that Kickstarter support comes primarily from networks that are already in place by the time you launch: friends, family, and friends of friends of friends who have been quietly admiring your work. They advised anyone interested in starting a Kickstarter campaign to start creating a network months ahead of time by building a strong social medua platform and commenting prolifically on sites and feeds that attract like-minded would-be patrons.

We approached the process differently. Patty Pan is a business that meets customers face to face. We don't advertise and we couldn't care less about Yelp reviews: people don't buy our tamales and quesadillas because they've seen an advertisement or read a review. They buy our food because they're at the farmers' market and the vegetables smell good.

So we're bringing our Kickstarter campaign to our customers face to face. Instead of profiling the type of customer most likely to support our project and courting the websites and bloggers most likely to cater to that theoretical customer, we're asking support directly from those most likely to benefit from quesadillas made with tortillas pressed from local, organic, whole grain flour: people who already enjoy our quesadillas week after week, at market after market.

Whenever someone orders a quesadilla, we tell them about our plans to make those awesome quesadillas even better. We're bringing tortilla prototypes to the markets and sampling them. We're getting an enthusiastic response and we're on track to meet our goal.

Thanks so much to everyone who has pledged so far. Many of the names aren't familiar, but we suspect many of those names go with familiar faces and we look forward to putting the two together, after years of feeding you.

And if you haven't yet checked out our project, please do. Thanks again for listening.

COGS

Like most reasonably sane people, I'll do almost anything to avoid bookkeeping and data entry. But the strangest thing happens once I actually sit down and start inputting numbers: they tell a story, explaining why we've felt short on cash or where we're been spending too much.

This past winter I applied for an SBA loan, a bear of a process. I managed to pull together the accounting information necessary to convince the bank that I was loan worthy, although it took most of my waking hours for a stretch.

I worked with a loan consultant, who also happened to be my real estate broker. I showed him a draft of a cash flow projection, which I had prepared to show that the business could pay the rent even if it didn't grow much. If I were a loan officer, that would be what I would want to see.

The loan consultant commented that if my projections didn't project real growth then the bank would assume I had no confidence, and he asked me to revise the projection to show that we'd grow by 20 percent annually.

This was a reasonable request: we have, in fact, grown about 20 percent per year for the past 10 years. But when I plugged in the numbers, the profit barely changed. Scratching my head, I revisited some of the other figures. In particular, I looked at the payroll cost, which had been 46 percent of the gross last year.

I knew that payroll percentage was too high and I had some ideas about why that was case and how we could correct it. I changed the projected payroll cost to 40 percent, which was still higher than what we'd typically spent, at least up until last year.

The bottom line tripled!

So I've developed a new fixation with COGS, or cost of goods sold, the accounting concept that measures the direct costs such as materials and payroll that go into creating what a business sells, as opposed to indirect costs such as rent and vehicle expenses, which are also necessary but peripheral.

I'm observing correlations between ways of organizing tasks and number of hours spent to achieve outcomes. I'm walking that fine line between managing and micromanaging, seeing connections between the accounting information and day to day processes. I'm actually finding it fascinating.

An Excruciating Question

 

I just read an editorial by a restaurateur lamenting that a $15/hour minimum wage would send his business into a tailspin. As expected, comments were scathing, mostly agreeing that anyone who can find the money to start and grow a business should be able to pay workers more.

It's difficult to talk about the issue of fair pay from the perspective of a business owner without sounding like a privileged, entitled jerk. The best pieces I've read have focused on specific parts of the proposal, such as some proponents' unwillingness to make any exceptions, even for tipped servers who earn well over $15/hour overall.

 For most of the twenty seven years that I've run small businesses, I've earned less than my employees, who are legally entitled to at least minimum wage--however low it may be--whether or not the business actually earns enough to cover these wages. When the business didn't earn enough to cover wages, I accrued personal debt. When the business didn't earn enough to pay me, I didn't get paid.

There are laws against exploiting other people but there are no laws against exploiting yourself. I've pulled all-nighters, worked consecutive eighty-hour weeks, and gone years without a vacation.

I'm not complaining. I love my work and feel lucky to have had a strong support system during the years it took to nurture my company into solvency. I've had social and economic advantages sufficient to break multiple falls.

I honestly don't know whether I'm for or against this minimum wage proposal. It's intriguing but drastic. I'm especially worried about the lovely farmers struggling to create successful business models in the context of an industry and infrastructure that sabotages them at every turn.

I'm certainly in favor of a living wage but I'm also all too familiar with the challenges of managing small business cash flow. Workers absolutely should be paid more, especially in the foodservice industry, but the money has to come from somewhere.

On some level every penny that an employee earns is a penny that a business owner does not earn. Whether you're talking about corporations and shareholders or independent business owners working grueling schedules and paying off heavy debt, this zero-sum scenario stands in the way of finding a productive solution to the minimum wage conundrum.

Last year Patty Pan became a worker-owned cooperative. I'm still an owner, but now I'm also an employee and most of the other employees are owners as well. Our cooperative hasn't always radiated sunshine and rainbows, but we have managed to successfully collaborate, building a business that is bigger and smarter than the company I created on my own.

In healthy workplaces the interests of workers and business owners are aligned. Fair wages motivate employees to give back in ways that bring in enough revenue to cover higher payroll costs. But  money is an imperfect motivator. Praise and purpose can yield even better results.

It costs little to show appreciation and build a work culture where contributions are meaningful and valued. These basic decencies can't stand in for a living wage, but they can keep workers engaged, improving a company's odds of success despite higher payroll costs.

The tragedy of the $15/hour minimum wage debate is that it pits workers against small business owners, especially if proponents insist on sudden, drastic changes and don't allow any exceptions. There's justifiable resentment on both sides, and this resentment will likely make employees feel less appreciated and make employers question whether their payroll dollars are well spent. Workers who don't feel appreciated are less likely to do quality work, less likely to help build the kind of thriving businesses that can afford to pay higher wages.

There's no way to know for certain how the proposed minimum wage hike will actually affect small businesses. It's useful to crunch numbers but the situation is really too complicated to predict. I only hope that once it's decided, we'll manage to find productive common ground and move forward without resentment and recrimination.

 

Permit Purgatory

We spent most of last week in permit hell, fending off a plan reviewer who kept springing new, expensive, time consuming requirements. Now we're in permit purgatory, waiting for final plan approvals and field inspections.

Believe it or not, I believe in the permitting process. I'd rather live in a world where plumbing and electrical work is regulated and inspected than one without oversight. But I suspect that nobody--including the plan reviewers and inspectors--would disagree that the process is deeply flawed.

The city creates a code based on national and international standards, and then hires plan reviewers and inspectors to enforce that code. They aim for consistency in situations whose specifics are far from consistent. They struggle with issues of safety and liability, balancing these concerns against the prohibitive costs that businesses like ours incur installing grease traps and fire suppression systems.

And then there's the human element. During my first encounter with the plan reviewer, he shook his head and told me that the building I'd bought was a small business graveyard. I walked away from the second encounter visibly close to tears when he informed me that we would have to install a vent hood over our under-counter dishwasher, delaying our project well over a month and doubling the cost of installing an already expensive machine.

I went home and slept, and awoke with a fresh perspective on power dynamics. Heading back to city hall, I suggested that, since the code required a vent hood but few restaurants have vent hoods over their dishwashers, the powers that be clearly had some leeway and discretion. Perhaps he could exercise that discretion in our favor?

He consulted with his supervisor, backed off about the vent hood, and came back with some additional questions about our project. I answered them respectfully and applied retroactively for an inexpensive permit covering some minor modifications we'd already made.

The other evening he called to say he'd been out of the office for some training work, and was catching up after hours on permit approvals. He had a stack of permit applications on his desk related to our project and only had time to review one at the moment. Which would we like completed first?