Building the North Country Economy

Sarah O’Connell

The American economy has changed greatly over the last half century, and we’ve seen a lot of those changes right here in the north country.  Most of our paper manufacturers have closed down, national chains have changed the faces of our downtowns and our many small dairy farms have merged into just a handful of large agricultural enterprises.   Our largest employers now are the military, the hospitals, the various levels of government and educational facilities.

                So what happens when someone doesn’t fit into one of those types of businesses?  Maybe they decide to start their own business.   Every year we at the Watertown SBDC talk to around 700 would-be entrepreneurs.  Of those, many just want to kick around an idea or need some basic assistance with getting the business set up. Others decide to go forward and obtain a startup or expansion loan. 

                Many of the small businesses we work with are what the U.S. Small Business Administration calls “nonemployer” firms, meaning they are a one-person operation with no employees.  We could call them “starter businesses” – usually they are quicker and less costly to start, and also to close.  The median age of a nonemployer business is six years, about four years less than an employer business.

                Furthermore, startups are less likely than established businesses to create jobs, again because during those crucial first five years, the new business may be just struggling to find its place in the market, much less adding employees.  Less than half the jobs created by startups still exist after five years, while expanding, older businesses account for 60 percent of small business job creation.   The share of employment that microbusinesses (those with fewer than 10 employees upon start up) contribute has declined over the past 30 years – from 15% in 1978 to 11.6 per cent in 2011.  (SBA.gov).

                With all that being said, small businesses are very important to the local economy.  Besides providing employment for a local resident, new businesses may bring new ideas to the area.  They can provide support services or products that free up larger employers to do what they do best.    Small businesses also generate tax income through self-employment, payroll taxes and sales tax collection.  They can also be more reactive and flexible to market trends. Just look at the rise of the craft beverage industry in our area,  or ethnic restaurants and small niche shops; I think they make our community a more interesting and enjoyable place to live than large metropolitan areas that are just lines of chain store after chain store.  

                How about lawn care providers, plumbers, small contractors, or snow plow operators (shout out here to my guy Mike!)?    Small hardware stores, bakeries, crafters, web designers, our local news sources, and professionals like lawyers, insurance agents and accountants are here to provide us with their goods and services; they know their community and may even be our neighbors.

                So sure, you may find the Internet is quick and easy to search for something, order and pay for it electronically; it might even offer a cheaper deal than what you’d pay locally, and hey! – free shipping!    But at the end of the day, what is that doing to help your local economy?  If you want to support the north country economy, it starts with spending your money right here and creating growth and job creation, one local purchase at a time.

                For fiscal year 2015-16, the advisors at the Watertown SBDC serving Jefferson, Lewis and Oswego counties saw 735 clients, spent 5,174 hours counseling, helped them create 167 new jobs and retain 53 jobs and assisted 51 clients in obtaining financing for business startup or expansion in the amount of $15,166,933.

                The New York Small Business Development Center at JCC offers free, individual, confidential counseling to new or existing business owners in Jefferson and Lewis counties.  For more information, contact 315-782-9262, sbdc@sunyjefferson.edu.   St. Lawrence County residents can contact their SBDC at SUNY Canton, 315-386-7312, sbdc@canton.edu.

SARAH O’CONNELL is a certified business advisor with the New York State Small Business Development Center at Jefferson Community College. She is a former small business owner and lifelong Northern New York resident. Contact her at soconnell@sunyjefferson.edu. Her column appears bi-monthly in NNY Business.