A Silver Lining In Unprecedented Times

By Joe Knilans, National Rural Affairs Advocate

According to the Office of Advocacy’s 2020 Small Business State Profiles, Wisconsin is home to over 456,000 small businesses, employing 1.3 million Wisconsinites.

On July 31, SBA Administrator Jovita Carranza and Office of Advocacy Rural Affairs Advocate Joe Knilans visited one of those small businesses in Ashwaubenon, WI. Margarita’s Famous Mexican Food and Cantina is a small restaurant that has made changes to its business model to accommodate the state-wide lockdown in response to the COVID-19 pandemic.

During our visit, we spoke to Margarita’s owner, Tim Kuehn. Between the beginning of the lockdown in March through mid-May, Margarita’s had lost over $100,000. These losses had a huge impact on the restaurant’s bottom line, forcing Kuehn to think outside of the box.

In March, Margarita’s dining room was closed, causing the restaurant to apply for a loan under the Paycheck Protection Program (PPP). Kuehn credits the PPP for saving his business, allowing him to retool and open back up in mid-May for curbside pickup. Business was slow until Wisconsin allowed Margarita’s to package and sell its margarita mix with curbside orders.

The demand for curbside pickup has remained strong even as the dining room has reopened with limited occupancy. This has persuaded Kuehn to look at expanding his restaurant into the empty building next door. He hopes that by adding another smaller kitchen and a drive-up window, he will be able to compete with chain restaurants such as Chipotle Mexican Grill. Kuehn told us he would not have been thinking about expanding Margarita’s so soon without access to the PPP.

However, Kuehn explained that “it is hard to hire new employees at this time because of the additional $600 in unemployment insurance provided under the CARES Act.” He added that “not being able to hire new employees is taking my management team away from their duties to perform the duties of the employees that I cannot hire at this time.”

The mandated lockdown from the COVID-19 virus impacted small businesses in many ways. Many remain closed down until the lockdown is over. Some may never reopen. Margarita’s Famous Mexican Food and Cantina is one of the exceptions. “Thanks to the PPP, Margarita’s has found a silver lining and decided to expand its business to compete against big chains,” said Kuehn.