INSIDE DISH: Patrick’s finds room at the Inn in ‘X-mas miracle’

Welcome back to IBJ’s video feature “Inside Dish: The Business of Running Restaurants.”

Our subject this week is Patrick’s Kitchen and Drinks, which in November found itself on the receiving end of what owners Patrick Mullen and Beth Dickerson now call “a Christmas miracle.” Needing to vacate the strip-mall space the restaurant had leased since its inception in 2007, the husband-and-wife team had a long wish list of qualities for a new location but no obvious options.

They required a place with an existing kitchen, because they couldn’t afford to build a new one. They needed a more intimate and economical space with curb appeal. They wanted to stay in Zionsville, where they had developed a loyal following for their “comfort food with a twist.”

And they needed a deal by Nov. 30, when the owner of Boone Village Shopping Center expected them to vacate their space, tucked in the corner of the “L”-shaped development. After five years, Mullen and Dickerson had decided against a long-term lease extension.

“We drug our feet in renewing our lease because we knew we needed to change something,” Mullen said. “We weren’t making money. We couldn’t continue to throw resources at it. We weren’t even breaking even.”

With less than a month to go, a real estate agent (and regular customer) suggested they look at Brick Street Inn, located on Zionsville’s brick-paved main drag. It had a modest street-side space designed for an eatery that needed a new tenant.

Phone calls were exchanged. Property was shown. Negotiations commenced. Minds met. And Patrick’s had a new home with days to spare.

But they still needed to move.

“I put a little sentence in our e-mail newsletter that if you’d like to help us move, we could really use the help,” Dickerson said.

Over the three days beginning Nov. 28, close to 30 patrons lent a hand in the moving process. Some packed a few items and transported them to the new locale. Some stayed for days, patching drywall, hefting appliances, removing signage and disassembling fixtures.

“It was a real outpouring of community support,” Dickerson said. “It was really something. … You never knew who you’d see next.”

Tim Sparks, a local handyman, joined a cadre of other good Samaritans who also helped build out the new space and get it ready for inspection.

“I said, ‘Whatever you want done, I’ll do it,’” Sparks said. “[Mullen] is a guy who will jump in first to volunteer his services, whenever there is a need in town. He cares about the community. He cares about the businesses here. And he doesn’t hesitate one minute to share what he’s got.”

Patrick’s reopened on Dec. 9, literally with a new lease on life. And it was badly needed. The eatery had lost more than $180,000 in its first five years, in part due to the recession, and, as Mullen readily admits, in part due to his own mismanagement.

He and Dickerson continued to operate with a Small Business Administration loan and line of credit  ($50,000), credit card debt ($40,000), and a parade of customers, friends and family members who were willing to loan them money ($85,000, on very agreeable terms, if any at all).

“Every time we turn around, somebody is putting out their hand to help,” Mullen said. “And we’re repaying those. Those aren’t gifts. But what are you going to do? You come to work every day because so many people believe in you.”

In the new space, Mullen sees an opportunity to finally turn a profit and help satisfy about $160,000 in remaining debt within as little as four years. The restaurant’s labor and food costs were acceptable in the former locale, but the rent and debt-service costs were way out of whack.

The Inn eatery has about half the space of the strip-mall locale (1,400 square feet versus 3,200 square feet), so rent has shrunk by about 50 percent as well. And the owners just recently paid off their original bank loan for $200,000, after paying a very aggressive $3,900 per month for five years.

“If we continue to keep our food costs in line and our labor costs in line, and if we can even do 60 percent of the business we were doing in the other place, then we’ll be OK,” Mullen said.

In the video at top, Mullen and Dickerson discuss creating the restaurant in 2007, their struggles as the recession hit, and the fortuitous opportunity to change locales. In the video below, they recall the many surprises they encountered as restaurant owners, despite Mullen's 20-plus years of experience in the food-service industry.

Patrick's Kitchen and Drinks 175 S. Main St., Zionsville (317) 733-8755 www.patrickskitchen.com Concept: Moderately priced comfort food in a relaxed, family-friendly atmosphere. Founded: June 2007 in the Boone Village Shopping Center at the intersection of North Ford Road and West Oak Street in Zionsville; opened on Dec. 9, 2011, in current location. Majority owners: Husband-and-wife Patrick Mullen and Beth Dickerson. Startup costs: $270,000, funded by a $200,000 bank loan and $70,000 from investors. Later funding for the restaurant included a $50,000 SBA loan, about $100,000 in gifts and loans from friends, patrons and family; and $40,000 from credit cards. Gross sales/net profit: 2007: $358,000/$50,000 loss; 2008: $470,000/$66,000 loss; 2009: $530,000/$39,000 loss;   2010: $585,000/$25,000 loss; 2011 (year to date): $525,000/$13,000 loss. Seating: 100 in previous location; 48 in current location, not counting future seating on patio. Employees: About 25 in previous location; 16 in current location. Goals: Adding patio seating during warm-weather months; featuring more local and seasonal products on the menu; taking advantage of the restaurant's role as exclusive caterer for the Inn; and using the Inn's meeting spaces to host private events. Good to know: To handle their living expenses while the restaurant struggles to turn a profit, Mullen and Dickerson have taken out a $100,000 home equity loan, and Dickerson works as a bridal seamstress.