Hello! Welcome to the underused blog! We’re making this post to share a few updates.

TLDR

1. We’ve changed the point system to require 200 points before getting $5 off (that’s a 2.5% discount rather than 5%) and your points expire after 3 months.
2. We’ve added a 2.5% packaging fee on all to-go orders that require our packaging, especially things in boxes or cups (if you’re just grabbing a cookie in a small bag we aren’t gonna add the fee).

Loyalty Program

In 2023, we introduced a fair wage surcharge of 20%. Several months later the government had a crackdown on “junk” fees intended to target service providers who sneakily add on fees to your bill. We were very straight forward about the fee even posting a blog with all of our financials in it. However, Square decided to do a sweeping compliance and made these kinds of surcharges unusable. We took it away, raised a few prices (not 20% across the board) and didn’t make a stink of it. At the same time as we introduced the original surcharge we introduced a loyalty program where every point is worth a dollar and 100 points got you $5 off. That’s a 5% discount and a really good deal. Our reasoning was that with the surcharge this would probably average out to about a 17%-ish revenue increase when everything was balanced.

After we took away the surcharge we didn’t change the loyalty program. Month after month we looked at the numbers and kept seeing this approximately $1,000 loss each month…from the loyalty program. After spending some time with that figure we recently decided to change the way the program works. Now 200 points ($200 spent) gets you $5 off. That’s a 2.5% discount rather than 5%. The goal of the loyalty program is to reward those who visit often so we’ve also opted to expire points after 3 months. We’ve always had restrictions on what items gain points but just to put them out there, no points can be earned on: whole cakes (regular or special order), dozens of cupcakes/minicupcakes, catering orders, wholesale orders, and items at the farmers market (again our goal is to reward loyalty to frequent cafe visitors).

Packaging Fee

Simultaneously we’ve found it necessary to add a 2.5% packaging fee to all to-go orders that require our packaging. If you bring your own cup/bag, cool! No fee! We’ve seen the cost of our cups & boxes increase to a point that we have to take some sort of step to mitigate the costs. If you’re just grabbing a cookie or a pastry in a single slip bag, we’re likely not going to charge you the fee as those are the cheapest of our packaging. We’ve also seen a large number of folks asking for things to-go then eating them here, which just doesn’t make sense and it doesn’t help us (or the environment!) in any way. We’re more than happy for you to use our dishes, that’s why we chose such pretty plates and cups! 

We hope that these two changes kind of balance things out so that we don’t see a $1,000+ loss each month (as an idea of what $1,000 gets us in this business, our MLGW/utility bill for August was $1,036).

After much financial scrutiny in July of 2023, we realized we had to do something to cover more of our labor costs. As of this writing we are all paid $15/hr with no gratuity in our cafe. We believe this is the base-level wage for Memphis, and we hope to be able to increase that for us in the future, but at the moment the prices on our menu do not accurately reflect the labor that goes into producing these items. With 6 months of data to back this up, we’ve decided to follow in the steps of many food-service establishments in recent years by adding a 20% Fair Wage Surcharge. In accordance with laws in the state of TN, this 20% surcharge also has to be taxed the standard 9.75% sales tax, otherwise it is considered gratuity and the rules get murky about how that is redistributed to us as workers. In order for us to maintain a healthy business, and at some point see a true profit to be shared amongst us as workers, we need take this step. 

We decided to go this route rather than raising the prices of menu items across the board. We believe it adds a level of transparency about the costs of labor going into the food. You could think of it like the labor charge you get from a mechanic. We make nearly everything in-house so there is a considerably higher labor cost for us. We couldn’t imagine making food any other way, and we think people deserve this level of quality in food. It’s what drove us to create this business.

We’ve also decided to include our financials in this post for utmost clarity & transparency. The numbers are as follows:

At the end of June 2023:

Net Sales – $104,323.77

Labor Costs (includes payroll taxes/fees in addition to hourly wages) – $63,442

Costs of Goods Sold (Food/Packaging) – $34,862 

Rent – $15,859

Utilities – $4,015

Taxes/Licenses (mostly sales tax paid to state on sales) – $8,651.13

Insurance – $2,414.85

Misc. Job Supplies – $3,100

Contractors (Fire Suppression System, Bookkeepers, etc) – $2,414.85

Total Expenses Listed – $134,488.83

Net Sales Minus Expenses – -$30,165.06

These are our biggest ticket items, there are a few other expenses but to get a general picture this data serves us. Quite the negative balance there! We do have access to a loan and that has helped us cover these expenses. However, that loan won’t last forever and we do have to pay it back. In total we’ve borrowed about $60,000.

Our data shows that we’ve been averaging about $4,000 – $4,200 in loan draws per month (the data above shows we would need $5,000 but we also have some outstanding credit card debt that has covered a portion of these costs). 

We tend to average about $20,000 in sales each month. With the introduction of our 20% Fair Wage Surcharge we would see that number increase to $24,000 and should be able to reduce/ultimately move away from reliance on this loan. 

All along we have strived to create an equitable workplace with a fair wage that doesn’t rely on the feast/famine aspect of gratuity. We are continually working towards that goal and this is another step in the journey. 

On your ticket you will see this service charge reflected. An example:

Mushroom Melt – $13

Fair Wage Surcharge (20%) – $2.60

Sales Tax (9.75%) – $1.52

Total – $17.12

In Addition

Loyalty Program

This past week we’ve also introduced a loyalty program! This is handled through our point of sale, Square. For every dollar spent a point is earned, the Fair Wage Surcharge counts towards these points too! Right now we have the reward set to be $5 for every $100 spent. You can redeem that reward on any purchase. Feedback on this? We’d love to hear it! Let us know what you think: [email protected]. In the spirit of Seth Godin we’re “shipping early and shipping often”. We want this program to work for our regulars and make sense for us too so the reward may change (potentially being sweeter (??!!) as we move forward).

Pay it Forward

We know this fair wage surcharge may drive the price of our items a little high for some folks so we’re also introducing a pay-it-forward system. If you are someone of greater means consider paying it forward with the following options:

Level 1 – cover an extra service charge

Level 2 – cover the cost of a coffee drink

Level 3 – cover the cost of a baked good

Level 4 – cover the cost of a sandwich or grab & go item

How This Will Work In Store

It’s a work in progress, as are most things, but we’ll have some form of a token at the register. If you decide to pay it forward we’ll add that to your ticket, reserve the token behind the register and when/if someone needs this we’ll use the token to cover the costs. Too easy!

At the end of each quarter we will take a portion of the pay-it-forward moneys and re-allocate them to an organization or person in need, reserving enough for in-store transactions to be covered. 

Thank You!

Thank you for allowing us to get this far in the journey. We hope to be around for a long time to come and appreciate all of the support in our endeavors thus far.

Farmers Market

Health & weather permitting we’re at the market for the next two Saturdays. Reminder that starting in November the market will open an hour later at 9AM. We’ll be thankful for a little more sleep!

Pop-up @ Boycott

Well folks the time has come for the pop-up to end. It’s been a blast and we’ve thoroughly enjoyed all the support! We’re nearing opening at the store front and need to focus all our energy there.

Van Stolen

Part of ending the pop-up is that our van was stolen from the parking lot at our space. Not really sure why someone wanted that little busted van but it’s their problem now. We’d love to replace the van but can make do for the farmers market without it for a little while.

What’s In Season?

We’re getting loads of dried out purple hull peas which will make their storage much easier! Traditionally we’ve gotten these frozen so we’re stoked that AOVS Urban Farm has let some dry for us.

Chicken of the Woods is out there! Maitake will be around soon. Don’s found a decent crop of chicken and will hopefully find more in the next week or two. We’ll put that on ice to be able to serve up down the road.

We’re having our first frost today/tomorrow for lots of farmers so we’re officially going to see the last of summer produce. There may be a few tomatoes hanging around but we’re definitively into fall lettuces, cabbages, greens and all sorts of other brassicas. They can be a challenge to put into baked goods but we’ll find our ways.

Next Steps For the Store

Giving ourselves more time to focus on the store is going to be good! Just today, Tuesday the 18th, we got a refrigerated display case picked up and delivered by Two Broke Bartenders. This is the second time we’ve used them for moving heavy equipment and give them a gold star! We got this piece of equipment from Kat at Muddy’s. She’s been a big supporter and friend to us behind the scenes. Hopefully this week we can at least start construction on some counters for the coffee setup and maybe even the seating bar. We believe this can be done by us to save a little cash so hopefully that goes smooth!

Thanks again for all the support and we’ll see ya soon!

Farmers Market

We’re back! October 1 & 8, 8AM-1PM. October is the last month of the summer hours so get ready for the market to start an hour later come November 1.

Pop-up @ Boycott

Back here too! As long as the weather cooperates: September 28 & October 5. Apologies for missing the one last week, Sept 21, but some other work came up despite the nice weather.

No More Food Festivals?

We HIGHLY appreciate anyone and everyone who came out to the Eat to Live Vegan Food Festival this past weekend but that was A LOT of effort on our end without a lot of return. In our experience it’s really hard to prove any actual benefit to these types of events. I’m reminded of a piece in the LA Times from 2019 that highlighted some of the issues with very large food festivals. It’s hard to say any of that was happening here but there are some valid critiques. We’re really on the fence about ever doing something like this again and leaning heavily towards never again.

And Now For The Best News

We’re funded baby!! We’ve been approved for our loan through Seed Commons and it’s the biggest sigh of relief to come our way in a long time. It looks like we’re approved for approximately $55,000 with about $10-11,000 of that being allocated for remaining equipment needs, a $4,000 cushion, and the remainder for however it’s needed. To this day we’ve put in about $20,000-$25,000 of our own funding that we’ve managed to save over the years. That’s come at the price of not paying ourselves but it all seems to be paying off now. This is the first debt we’ve incurred and in terms of loans we couldn’t be happier with the way this loan works. We cannot express our appreciation to the Southeast Center for Cooperative Development enough in helping us secure this and supporting us along the way. We’ve built a relationship with them that will continue to last as they help guide us in creating our co-op culture, hiring, and all of the nitty gritty things that come along with opening a business.

Next Steps For the Store

We’re really, really, really on the hunt now for hiring at least one other person but ideally a couple more. Here’s a link to our job post: https://luluscafeandbakery.com/open-positions/. While that’s happening we’ll be figuring out all of the other things we have to figure out like building out an espresso bar, getting a new breaker installed for the bread oven, troubleshooting our leaking ice machine, setting up the espresso machine, plumbing the dishwasher/ice machine/espresso machine, and surely one hundred other things that don’t come to mind at the moment.

Thanks again for all the support and we’ll see ya soon!

We’ve got a busy couple of weeks up ahead! Here’s a little rundown.

Farmers Market

There is no market this upcoming Saturday the 17th. We’ll have a super, super, super, super, super soft one day only opening at the new space on the 17th. We are doing the Eat to Live Vegan Festival on Saturday the 24 so we won’t be at the market.

Pop-up @ Boycott

Sept 14 & 21: as long as the weather’s cooperating these are on. We got about 70lbs of apples recently so for at least the 14th we’ll have smoked apples on the breakfast sandwiches again. Maybe we’ll switch it up to some maitake for the 21?

Super, Super, Super, Super, Super Soft One Day Only Opening

Sept 17, 8AM-Noon: We thought this upcoming weekend would be a good time to let you all into the store and see what we’ve done so far! It’ll be a scaled back version of farmers market goods and we’ll be doing breakfast sandwiches plus sausage biscuits HOT to order. If you’re reading this, well, you’re the first to hear about it! It’ll go to social media by Thursday.

Eat to Live Vegan Festival

Sept 24, 11AM-6PM at Grind City Brewing: this is open to the public and free to attend. Purchases can be made from the different vendors. We’ll be out there slingin’ sandwiches and probably some unique things that we don’t normally do (maybe a fried rice, maybe some cold lunch style sandwiches, maybe some smoked tofu to take home and use as you like). We hope this puts in front of some new folks and helps spread the word about the store opening.

Store Opening

We’re really hoping to have the store open by the end of the year, ideally in November some time. We’re working with the Southeast Center for Cooperative Development to try and secure a loan via the New Economy of Tennessee Fund that is ultimately funded through Seed Commons. Securing a little more funding is somewhat crucial to us being able to hire some folks and start paying ourselves. Very important factors to actually having the store open 😀 Our loan is up for review Sept. 15 so maybe we’ll know more after that! If you know anyone who might be interested in working with us here’s a job post that we’ve put together. We’re not quite ready to start hiring but we will be soon.