I’ve been really intrigued with all the references I hear from our guests about what Nick’s Pizza & Pub went through and the classic movie “It’s a Wonderful Life.” I realize that I’m so “in” my company and this experience that it’s hard for me to imagine what it must be like for people on the outside looking in, watching.
I should have known that the answer was in the community.
Financial Hardship Threatens the Business
In the not-too-distant-past, Nick’s Pizza and Pub had a near-death experience as a company. Things were so bleak that every option imaginable was on the table. Instead of hiding and hoping for an answer, I decided to write a note to our guests and reach out to our communities for support, to keep our business alive. I had no idea the communities of Crystal Lake and Elgin would turn out in such massive numbers to support us. The message I received was that all the work I’ve done in building a values-based company and giving back to our restaurants’ communities was the right thing to do, and the people in those communities were grateful. The guests dined in, they carried out, they booked parties, they used our catering services, and they told their friends.
Their actions led to not only a huge increase in sales, but also a huge increase in spirit and moral for me and the entire team at Nick’s.
But believe it or not, it wasn’t enough.
Although this huge sales bump really helped us get caught up with our vendors and make payroll, I also knew that if sales dropped back to those previous levels, we would be right back in the same situation.
It took five or six weeks, but eventually the sales came back down to levels they were at BTE (Before the Email) in the Crystal Lake restaurant, and they held about a 5% increase in Elgin, which was supported by the new Super Wal-Mart that opened across the street.
The dilemma hanging over our fiscal head was the debt structure for Elgin. It needed to be adjusted down to support a normal percentage rent. At current 2011 average sales levels, the mortgage for the Elgin restaurant was double what the industry would deem normal.
I needed to negotiate with our bank—a bank that calls itself a community bank—and it was the time to find out how true that identification was.
Approaching the bank was another business lesson in itself.
On the one hand, I thought I was fortunate to have some pretty high-level fiscal experts from all over the country that could help me with the mortgage situation at Nick’s Pizza & Pub in Elgin. The problem (as it turned out to be) was that these experts were basing Nick’s situation on what the big banks do in the big cities. Our situation was unique and needed to be dealt with that way, and at first I worried that the community bank would not act in that manner. The funny thing is that as hard as you try to be proactive and stay current with payments, banks won’t really take you seriously until you start missing payments...
An “Angel” Investor...of Sorts
Enter the man on the white horse—or perhaps he was my version of Clarence, my angel: Jim Nixon.
Jim was the right guy at the right time with the right strategy. With all the great support from the email I had sent out, some 400 emails also came in from businesspeople with all kinds of messages for me. Within that group were a handful of people who had some real expertise and were willing and interested in helping me and my company. Jim was one of them. He had a very extensive financial background with years of experience, and he was a local fan of Nick’s. He was a family man who had raised his kids on Nick’s pizza and he was a frequent guest–a great values match for us.
He reached out and offered to take a look at our books and even join the negotiations with our bank, free of charge. I felt overwhelmed by his kindness and generosity. He wasted no time and dove deep into our numbers. Although Jim is a kind man, when it came to the numbers and our performance, he was tenacious. He asked all the tough questions to be sure that we had made every tough choice we could make. Nothing frivolous was to be left uncut.
Then we worked as a team to be realistic about our projected sales. None of my pie-in-the-sky optimism was to be accepted.
Armed with this knowledge, we prepared to approach the bank.
A New Plan for a Sustainable Business
It was now or never to bring the bank our plan. Jim approached the bank on our behalf and presented the case for refinancing. I was anxious at first, but found a calming comfort in Jim’s kindness and his dedication to preserving Nick’s place in the community.
If you’ve never been to one of these types of meetings, you aren’t missing anything. Let me tell you, they are not fun. No one was happy to be there and none of us wanted to be having the conversation we were having. Yet, I felt that the bank was not against me personally or my company, it was all just business. I felt like we were in the room to create a win-win situation that would benefit everyone. Jim’s experience and expertise supported this and his presence made it visceral.
After a few meetings, we came to an agreement with our bank—who I’m now proud to call my COMMUNITY bank—to defer our principal payments until the end of 2012 and make only interest payments for this extended time. The bank in turn asked the SBA to defer our payments for the same period. It’s what we needed to allow us to rebuild sales again while construction of the new retail developments was completed across the street from our Elgin restaurant.
It Really Is a Wonderful Life!
Guests have been comparing our story, our journey over these past three months, to “It’s a Wonderful Life.” Cheesy as it may sound, it doesn’t matter. I’m forever grateful to the community for believing in Nick’s and to Jim, my Clarence, for his compassion to show us the way.
In business, and especially as an owner, you will hear everyone’s opinion on how you should solve every problem, which is not always a bad thing. The challenge is to filter through all of the options, choose the most effective, and ultimately find the one that fits who you are.
For us, we are an integral part of our community. And more often than not, the answers are in the community, right there in front of our big moose nose.