The Only Constant is Change

Before Black Star was a restaurant or a brewery, Black Star was a group of people with a desire to create something that hadn’t been done before. They wanted to create the world’s first cooperatively-owned and worker self-managed brewpub, and with the help of all its members and an incredible staff, they succeeded.  Along the way, we brewed some award-winning beer.

In 2012, TABC approved 4 brewpub licenses in the state of Texas. In 2016, the number was 40 with 7 of them here in Austin, and at Midtown Commons, we are facing increased competition for customers and parking spots with the businesses that have recently opened in the complex. For the last two years, we have seen the impact of this increased competition in our decreasing revenue despite opening for lunch, no longer including sales tax in prices, increasing offsite distribution, and hosting numerous events. Even with a concerted effort and success in reducing expenses including a wage freeze, a 5% pay cut, and reduced staffing, in January of this year, Black Star faced its most serious financial challenge since opening.

Thanks to the patronage of our members and the community after a call to arms, January was a record-breaking month giving us runway to evaluate changes in our business. Since then, headcount has continued to be reduced to control costs, and we’re now leveraging a marketing firm to increase our reach in the community. We’re also in the process of developing a new organizational structure that will increase leadership and accountability within the worker’s assembly as well as completely revamp our remuneration strategy to keep costs in check.

Despite these changes, our financial trajectory forecasts that Black Star may be back in financial jeopardy before the end of the year. In the interest of transparency, the board and worker’s assembly is having to ask some fundamental questions about the business. With our lease up in two years and most likely increasing, what would be the financial implications and impact of moving to a more favorable location? As Black Star moves forward, what additional changes do we need to implement that may not be aligned with some of our main principles? Can we stay financially solvent, potentially through a loan, until more significant changes can be made? The board will be assessing these difficult questions but will be reaching out to its members with surveys and member extravaganzas to ensure that we understand your perspective.

The board has confidence that the worker’s assembly is doing everything they can to right the course of this ship but the headwinds are strong. We are proud of what we’ve accomplished as a co-op. Co-ops are built on their members and survive by responding to changes in the environment. That means we’ll have to evolve and we need your help with that.