(Credit: Steve Thurston, 2022)
A customer stops by Saratoga Coffee Traders and orders from barista Grace Farone. The shop is expanding with Moxxi Coffee to Jay Street in Schenectady.
Saratoga Coffee Traders, the cafe and eatery on Broadway in Saratoga Springs, will expand to Jay Street in Schenectady this spring — they have a lease ready to roll in March. This is a way to pay down debt, keep the business afloat, and expose more people to Moxxi Coffee and the related Moxxi Foundation, owner Scott Swedish told FoothillsBusinessDaily.com last week.
Moxxi Coffee is the brainchild of Leslie Swedish, wife to Scott, and founder of the coffee roaster and foundation that supports women entrepreneurs. Saratoga Coffee Traders sells its own coffee brand along with Moxxi.
[Read our story on the Moxxi Foundation here.]
The move comes as the pandemic ends and Saratoga Traders is looking at about $400,000 in pandemic-related debt, despite the government aid the company received. There was only so much the government could do, Scott Swedish said, and his company still had to cover payroll, still had to pay for heat and other expenses.
"It's not like our vendor prices went down," during the pandemic, he said.
He took out loans to make sure he could continue to the run the store the way it always has been.
"That's how debt occurs," he said.
In fact, the rise in unemployment insurance and workers' compensation costs have added to the red ink, Swedish said.
Unemployment insurance costs have been passed on to small businesses as the state pays back an unemployment loan from the federal government. (In June, reports said the loan was $8.1 billion.)
In 2020, from March to June, Swedish had about 13 employees on unemployment. He pays six or seven thousand dollars more than he used to for unemployment insurance.
“It’s not the main reason, but it is a reason” for the debt and expansion, he said.
But he says there are really only two ways out as he sees it: work in his current location much more or expand to another location and gain revenue.
That is, he can save money by laying-off or not hiring people and then work those hours himself, or he can expand and develop more revenue. He said he saw this as the two business models developing post-pandemic.
“Either you work, or you open more locations and absorb it,” he said, adding later, “The only way to get out of debt is to create more revenue.”
He has been taking a cue from Uncommon Ground Coffee which just announced a new location in Stuyvesant Plaza and from Druther’s Brewery which has expanded during the pandemic.
“I watched as several others opened other locations,” he said, explaining that they, too, seemed to be looking toward new revenue streams. Other businesses held on as the owners worked more of the job themselves and still others went under.
He is not expecting his costs to go down, either, even after inflation slows. He pays $149 for a case of 30 dozen eggs that cost about $43 a year ago. The price of to-go cups is up. The minimum wage rose during the pandemic, even as the labor force shrunk and owners had to pay more than minimum. As well, business owners carry the burden of paying payroll taxes for employees.
Swedish said the March 1 deadline will be tough, and he is not totally sure how he will get it all done, but he said he trusts his own ability to see what needs to be done and then do it. He will figure it out, he said.
He has plans to promote an employee to manage the new location. It will be her chance to work for a modest salary and win bonuses on sales. He said he sees it as a good way to develop her skills and keep his involvement to a minimum. She will take care of staff and operations, he said.
“I want her to benefit by putting in time, hours and effort,” he said.