Is Your Business Planning (ahead) For A Successful Transition?

Michael Besaw

Across the north country region, family business owners are debating their future, and determining how the business they’ve worked diligently to create, will transition after they retire – is it letting a younger family member take the reins, or having a business valuation to prepare for an open market sell, or maybe moving to an employee-owned model; these are the complicated decisions that business owners in the north country are trying to navigate.

The ‘Need for a Transition Strategy’ estimates that more than 10,000 businesses in the Adirondack north country are owned and operated by Baby Boomers, who are planning to retire in the next few years in what has been referred to as the “silver tsunami”. Closure of these businesses means loss of services and tremendous loss of employment. Unfortunately, only 15 percent of businesses nationally have an exit strategy planned. This is where the inspiration came from for the Adirondack North Country Association’s “Center For Businesses In Transition” (CBIT) — a collection of public, private and nonprofit partners working together to provide the training, resources, and connection to existing services to support a business in creating their transition strategy, as well as matchmaking services, in an effort to match the newer generation of aspiring entrepreneurs with a business already established in the north country.

How Community Liaisons for the CBIT are helping
Transition planning isn’t often mentioned when passing a business down to the next generation, whether it’s family members or exploring less traditional transition options such as employee ownership models. In the north country region, there are community liaisons in Ticonderoga County, Franklin County, Hamilton County, Lewis County, and St. Lawrence County who are making the effort to connect with transitioning businesses to help them understand the process and how to plan for it. These individuals have been chosen for their understanding of area business and involvement in their communities are part of their county Chamber of Commerce, Economic Development Agency, or the Small Business Development Center (SBDC); ensuring the sharing of resources, information and objectives.

Workshops Planned for Transitioning Businesses and Entrepreneurs
A top priority of the CBIT is helping businesses connect the dots to the resources available for transitioning. To accomplish this goal, the CBIT is holding monthly workshops across the north country from April to August. Each workshop covers an element of transitioning planning or the process of purchasing a business, including “Business Transitions Overview: Where do you start?”, “Preparing to Sell Your Business”, “Transitioning to Worker Ownership”, “Intergenerational Family Transitions, Creative Solutions & Alternative Structures”, and “Entrepreneurs: Taking over an existing business”. Registration and the date/time for the workshops are available online at www.adirondack.org/CBITWorkshop Series, or on the St. Lawrence County Chamber’s website www.SLCchamber.org.

Using the latest technology, the workshops will also be live streamed at “Viewing Parties” to offer a level of convenience to both businesses and entrepreneurs who are unable to travel to workshops out of their county. Workshops will also be recorded so that interested business owners can view them at their convenience and as needed in the future.

The Real Deal
Transition planning can take up to five years, and it’s never too early to get started. North Country business owners looking to transition their operations to new owners or a new ownership model, as well as aspiring entrepreneurs looking to take over an existing business, can contact the Center at transitions@adirondack.org or 518-891-6200 for more information or to be connected with a community liaison in your county.

Let’s work together to keep businesses in the north country and continue to grow the beautiful region that we all love to live, work and play in!

Michael Besaw is a native of Massena, and the Assistant Director/CBIT Liaison of the St. Lawrence County Chamber.

Best Stories Of the North Country Are Its Human Ones

Rande Richardson

“I am bound to them, though I cannot look into their eyes or hear their voices. I honor their history. I cherish their lives. I will tell their story. I will remember them.” — Author unknown

Funeral directors don’t deal well with mortality. Staring daily into the face of death has many effects, including a continual awareness of the fragility and transitory nature of life. At the same time, it has a way of helping sort through the things that matter, creating urgency around living your life with purpose and meaning.

    Last month, one of my funeral director mentors died at the age of 80. There were feelings of regret for not having had that last conversation, that last opportunity to say “thank-you” for the way he shaped my life. I learned so much from him and his son. In many ways, his funeral service served to provide the bridge to the next step in accepting a world without him in it. In that moment, too, as I witnessed the memorializing of someone who had always been on the other side of serving families in need, the importance of remembering became even more fundamental. In so doing, we remind ourselves that each of us, in our own time, is responsible for carrying on, just as those who have come before us.

    I am often asked where I work, what I do. In many ways, what I do is very similar to what I did as a funeral director. I am the temporary custodian of something preciously valued. I am honored with the duty of care in honoring the memory of our community’s people. Ultimately, the stories of the north country are its human ones; people who, during their lifetimes, lived, loved and cared in a way that affected others.

    I prefer to answer the question of why I do what I do. I feel a tremendous obligation to tell our community’s stories honorably in a way that helps ensure that those who have come before us are lovingly remembered. Perhaps more lasting, though, is how their lives provided an example of a continuum of care for where they spent their lives — the teacher who left an imprint on thousands, the doctor or nurse who was there to comfort and heal, the person from any walk of life who simply chose to make a difference. Not only is it right to honor these legacies, it is how others are inspired to continue that tradition.

    After a decade at the Community Foundation, I’ve been there long enough to carry out the wishes of those whom I had previous conversations regarding how they intended their support of important causes to endure when they were gone. Because of their thoughtful planning, they continue to support the people, places and organizations of the region with consistent, thoughtful, lasting care.

    At the end of the day, the things that make our community more than average are made possible by the work and mission of our region’s charitable organizations, through the support of donors of time, talent and treasure. Many caring citizens have partnered with nonprofit organizations as a tangible expression of their interests and values. These range from education, health care, a wide scope of human services, animal welfare, arts and culture, history and recreation.

    The early citizens who made gifts to build the Community Foundation did so long before many of today’s needs were clearly apparent. A donor in 1929 likely would not have anticipated the desire to offer hospice services in the region 50 years later. They would be pleased to know that the stewardship of their desire for a better community could impact lives in meaningful ways far into the future. It is hard to separate honoring one’s memory and telling the story of the forever effect of their existence. Just as matter is neither created nor destroyed, kindness, caring and generosity has an extended half-life. One way or another, each of us is forever part of our community’s story.

    In a recent CBS “On The Road” feature, Steve Hartman remembered his dad, stating “His death makes me an orphan. I can tell you this is a unique kind of emptiness. When there is no one left on earth to love you quite so unconditionally.” Sooner or later, we all can relate. “Although losing such a parent can feel like kryptonite, remembering them in all their glory can make your heart fly.”

We are at the intersection of today and tomorrow. Remember that our own lives will continue to ripple throughout our communities for a long time to come. Be ever aware of the story you were born to tell. Focus not only what you leave behind but what you made possible. Not so much for the gifts you give, but the love behind them. Do so with purpose so that others will want to remember you in ways that causes many more hearts to fly and the goodness in our communities and its organizations to endure across the generations.               

 

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Women’s Roles in Agriculture Grow Strong

ALYSSA COUSE

I recently attended The New York Farm Bureau Young Farmer and Rancher Conference in Albany.  The theme of the meeting was “Young Farmers- The Future Agriculture Superheroes”.  It is no secret that the agriculture industry has experienced volatility in recent years, whether it be changing markets, new regulations, or extreme weather, so investing in the future of the industry is more crucial than ever.  Building versatile, resilient, invested young leaders is becoming more of a focus and as you look around the room, there is no doubt a growing proportion of lip gloss wearing, braid-bearing farmers. 

    The keynote speaker of the conference, Vance Crowe, director of millennial engagement for Bayer Crop Sciences, discussed the importance of telling the story of farming and building relationships with consumers.  It is evident that this is a significant task, even just from the fact that millennial engagement and consumer relations are now job titles within agribusinesses.  More often than not, it is the mother, sister, aunt, etc. on the farm that takes on the role of managing social media pages, community events/tours, and newsletters. Most women have the inherent finesse to connect emotionally in creative ways, which is key to building relationships with consumers these days.  In addition to online or written outreach, many farms today are incorporating more opportunities for visitors to get a hands on experience. 

    Some farms take advantage of their home being a tourist destination and participate in some form of agritourism.  Agritourism involves encouraging visitors to a farm/ranch for any agriculturally based operation.  Activities offered can be equine boarding facilities, u-pick fruit and veggie patches, farm tours, hay rides, petting zoos, and open houses just to name a few! This can also be an extra source of income for farms and an opportunity to diversify from everyday production. Such experiences are quite literally being craved by consumers today as they yearn to learn more about when, where, and how their food came to be.  This need stems most directly from the fact that many young people today are four to five generations separated from the farming lifestyle.  What the agriculture industry once took for granted was the innate trust and knowledge of the food system that once was, when almost every family had a part in the production from dairy farms to road side stands.  Today, less than 2 percent of the population are involved in production farming.  Yes, those 2 percent are feeding themselves and the other 98 percent.  Thus, reestablishing people’s connections to their food and how it was produced is a growing need.

    Agritourism was another area we focused on at the recent conference, specifically the new Safety in Agricultural Tourism Act.  The “Safety in Agricultural Tourism Act,” now part of New York’s General Obligations Law (“GOL”), provides that owners and operators of agricultural tourism areas “shall not be liable for an injury to or death of a visitor if the provisions of General Obligations Law Section 18-303(1)(a) – (e) are met.” Statutory requirements for protection include directional signage, employee training, warning to visitors concerning inherent risks of farm activities, operator provided written information, visitor responsibility signage, posting of notice of right to a refund, and operator duties. In a nutshell, in order to protect visitors and business owners, there must be posted signage stating any potential risks and well trained employees to help ensure safe and enjoyable experiences.  When thinking about compliance for your agritourism business, think like a paranoid mother of a toddler! What can they get into? What could go wrong? Then make a sign warning against those actions.  For example, if guests are able to feed livestock treats, warn them to be cautious of being nibbled, because fingers look a lot like carrots. It is important to make signage specific to the operation and not just post a few general warning signs. To ensure that coverage requirements are met, it is best to work with a lawyer.  

    For more information: https://www.agriculture.ny.gov/Press%20Releases/Inherent_Risk_Guidance.pdf

    Women’s roles in agriculture continue to grow exponentially.  Based on observations of the crowd at recent leadership conferences, you can expect the female voice to become louder throughout the industry in the years to come.  In addition to becoming great farmers, they will become leaders in technology, marketing, and communications.

Benefits of Owning Commercial Real Estate

Kiah Surgue

As a business owner, you should be aware of the many advantages to owning the commercial real estate where your business is located.  In order to pursue owning, you have to have a solid financial profile and a clear vision for growth.  Investors are more apt to lend to businesses with value and assets, combined with a low amount of debt compared to owner’s equity.  This is important to ownership and access to capital.  Ultimately this type of business investment can serve as a stable foundation for future commercial success. 

    The interest savings on purchasing versus leasing commercial real estate is huge.  When carrying a mortgage on the property, a portion of each monthly payment goes to principal and a portion goes to interest.  A business owner can use the interest portion as a tax deduction.  So, a property valued at $500,000 with 20 percent down, a 20-year term and an interest rate of 4.5 percent has total payments of $607,000 over the course of 20 years, of which $207,000 goes directly to interest.  Thus, a third of the total payments can be deducted over the term, a major tax bonus.

    Property tax write-offs are another advantage to owning commercial real estate.  When you own property, you are responsible for village, county and school taxes which are deductible expenses that can offset business income and business tax liability.  

    Additionally, depreciation on commercial real estate is a benefit come tax time.  All assets but the land will depreciate in value as soon as they are purchased, including the roof, siding, furnace, sinks, toilets, decking etc.  The IRS allows the depreciation of a residential rental unit over 27.5 years and a commercial building over 39 years.  For example, if you purchase a residential rental for $1 million, the annual depreciation that can be written off is about $36,000. 

    Many other tax deductions are available when owning a business.  Any maintenance or renovations done to the property are deductible, as well as purchases of equipment, furniture, fixtures, and inventory and working capital for common area maintenance charges, insurance, phone, electric, internet, office and supply expenses.

    Some investors purchase commercial real estate as a long term retirement investment to generate a valued asset, knowing that the capital gains tax rate on the sale of a building will generally be lower than the personal tax deduction associated with a traditional IRA.  This is another reason that owning commercial real estate can be favorable.

    Looking way ahead, if you plan to leave the property to a beneficiary such as a spouse, family member, partner etc. and they decide to sell the property, they will only pay taxes on the increased value from the time of the owner’s passing.  This is referred to as a post-sales tax savings and is another benefit to ownership. For example, a business owner purchases a commercial property for $1 million and it appreciates to $4 million over time.  Then the owner passes, the property goes to the beneficiary and the beneficiary sells the property for $5 million; the beneficiary only owes taxes on $1 million. What a tax savings!

    The benefits to owning your commercial property may outweigh leasing or renting a space.  If you have a business that is in a solid financial position, consult with your team of experts such as your business advisor, attorney, accountant and banker to see what your next move should be. 

                The New York State Small Business Development Center at JCC offers free, individual, confidential counseling to new or existing business owners in Jefferson and Lewis counties.  They also offer an entrepreneurial training course with presentations by area professionals in law, marketing, accounting, etc.  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. 

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