Not long after restaurant owner David Sheridan shut down Wheated, his bustling pizza and cocktail bar in Brooklyn, he had an enterprising idea: If the people can't come to the whiskey, then bring the whiskey to the people.
As a small business owner, Sheridan had initially "held out hope" that social distancing measures could keep the coronavirus at bay and he could keep Wheated open. But he wasn't optimistic. He had sensed a shift coming back in mid-February when his wife, who works in fashion and does business in China, had offered to send a co-worker there some masks. "But the co-worker was like, 'No, no, you hold onto them. You guys are going to need them,'" said Sheridan.
Despite his early inkling about the impact of the coronavirus, there was no way to fully prepare for the disruptions to come. Reality hit in mid-March, says Sheridan, as the virus spread in New York City and restrictions on public life were put in place. "That's when it really dawned on everyone, myself included, that this is going to have a major impact," he says. "You can't run a restaurant at half capacity that was designed to run at full capacity."
Without meals to serve or cash coming in, Sheridan decided the best course of action was to let his 20 employees go so they could collect unemployment. But Sheridan knew the abrupt loss of income would be hard for many of his employees. He brainstormed quick ways to raise cash for their benefit, and the answer turned out to be right in front of him.
Wheated boasts the largest selection of whiskey in Brooklyn, with offerings including a $28 Elijah Craig bourbon and a $55 Russel Reserve private barrel whiskey. Sheridan estimates the bar had about $100,000 worth of liquor before the pandemic.
"The quickest way for me to raise funds by myself [for employees] to was to sell off our whiskey," says Sheridan.
This isn't the first time Sheridan has pivoted in the face of uncertainty. When he lost his job in desktop publishing after the economic fallout from the 2008 recession, he decided to shift focus to something "near and dear" to his heart: pizza.
In 2013, after years of putting together a restaurant plan and looking for a space, Sheridan opened Wheated, known for its Italian-style pizzas and creative whiskey cocktails, in the Kensington area of Brooklyn. The unfussy restaurant has a strong neighborhood vibe.
Pies named after neighboring areas, like the East Williamsburg (topped with crimini mushrooms and mozzarella) and the Canarsie (with spinach and fennel sausage), pay homage to the borough's geography. Customers spend an average of $35 per meal for a pizza, drink, and part of a salad. "It's a happy place," says Sheridan.
Video by Jason Armesto
The community he'd built at Wheated made it particularly "devastating" for Sheridan to have to choose between making the company viable or letting his workers go. "My employees are like family to me," he says. Yet "many didn't have cash on hand." He was determined to do what he could to help.
Despite "so many unknowns," Sheridan knew the restaurant "wasn't going to collapse on itself."
"I felt up until this point I ran a very fiscally, financially responsible restaurant," says Sheridan. "We had cash reserves, we were able to absorb emergencies. Nowhere in the 'how to run a restaurant' textbook, or really any business I guess, was this in there, that you needed six months of reserves, or possibly longer than that on hand."
He also had a financial cushion himself, since Sheridan had made some smart money moves over the years: For one, he and his wife bought the building that lodges Wheated in 2014. His mortgage company agreed to work with him to defer his monthly payments. And his wife's income can cover their basic expenses.
Many of his employees, however, were not so fortunate. His first concern, then, was not his personal finances, but that of his employees, who had been earning $18-$19 per hour plus tips.
When he decided to sell off Wheated's whiskey, he first needed to make sure he complied with regulations from New York's State Liquor Authority on the sale of liquor for off-premises consumption. So Sheridan started whipping up large batches of homemade chicken soup using his mother's recipe. A $3 pint of soup is required with each purchase of liquor.
Sheridan based his sales on liquor store retail pricing. He took orders over the phone and made deliveries himself to customers in Brooklyn, Queens, and Manhattan.
Within two weeks, Sheridan raised $10,000 from whiskey and food sales and divided the proceeds among his 20 employees based on their average hours worked, similar to a tip pool. He's also raised an additional $4,300 in donations for his employees, mostly through GoFundMe.
"I plan to distribute that this weekend. The support and love for our employees has been fantastic," he says.
Sheridan admits he hasn't worked out some of details. For instance, he paid the $10,000 out directly to employees, rather than through payroll, and isn't sure about how they'll pay taxes on that since they are no longer employees. But, he says, he wanted to take action. "You'd be paralyzed if you try to do everything or get all the answers up front."
Sheridan has since raised an additional $20,000 in whiskey and food sales, which will go toward keeping the company viable. He plans to use some of the funds to cover basic expenses including water, electric, and insurance payments.
Sheridan has applied for PPP and though he knows he could apply for additional small business relief to cover some more expenses, he'd prefer to pay off as much as he can outright.
"We're not in such dire straits that we need to do it [get relief]," says Sheridan. "Again, because it's not forgiveness, it's put off [until later]. So anything that we can keep from owing later, I think will help our long-term survival."
Video by Courtney Stith
A restaurant is a "very cash-flow business" Sheridan explains. Once Wheated reopens, "cash reserves are going to be really important, because if you don't have cash, you get into trouble really fast."
Maintaining a balance from the cash coming in from sales and the cash flowing out to cover expenses can be hard to calibrate, particularly when a restaurant reopens and there's "an increase in everything," says Sheridan, from food purchases to utilities to payroll.
"My belief is that it's going to take deferrals, a loan of some [sort], and strengthening our cash reserves to weather the full impact of this," says Sheridan.
Reopening, he predicts, will be a gradual process. "We're definitely not going to be a [dine-in] restaurant when we reopen," he says. "It's going to be a takeout and possibly delivery place."
As long as his supply lasts, Sheridan is content to meet New Yorkers' demand for whiskey in quarantine. But he does "miss being a restaurant."
"It's a little sad selling things off that I've collected over seven years, but I can buy all those again. I miss my employees, I miss talking to customers," says Sheridan. "But you know what, you look around at what others have to go through right now, and it's no big deal."
More from Grow: