Keep your Business Healthy With The Right Funding

Jennifer McCluskey

Having access to the correct type of funding stream at the right time can be very important for keeping your business healthy. Even if you don’t need funding right now, a great regular health habit for your business is developing and maintaining a solid relationship with your bank. When you find that your business is ready for additional capital to be able to grow, you have several options: 

Loans vs. Lines of Credit 

    There are several differences between loans and lines of credit. A loan is usually a large chunk of money that is given to you by the bank to buy something specific, for which you repay principal and interest for a set time period. Loans are usually best for larger purchases like land, buildings, larger equipment, etc. When starting a business, working capital (A.K.A money to start and keep your business going for the first few months) can be built into a business loan, too. 

    A line of credit can be more useful when a shorter repayment term is anticipated. For instance, if a lawn care business needs equipment in the spring and knows they will make enough money in the summer to pay the equipment off, a line of credit might be a good idea. Or another example is if a business is doing a project for a government entity, often the business will not be paid for the project until 30 or 60 days after completion. In that case, the business could use a line of credit to cover materials, supplies, and salaries until the bill from the government entity is paid. Usually, a loan is for something specific, while a line of credit can be for pretty much anything the business owner needs, once it is set up. Another useful thing about a line of credit is that it is a revolving account that lets the borrowers draw, repay and redraw from available funds throughout the life of the line of credit. Payment and interest will only be due on the amount spent. Lines of credit will likely have a higher interest rate, however, and may be harder to get if the business owner does not have good credit or less solid performance. There often needs to be some collateral available to secure the line of credit. 

Other Types of Business Funding 

    You can seek a loan from your bank or from other banks in the area that do business lending, or there are alternative lending sources available. Sometimes your county or your town will have a loan or grant program, so it’s always worthwhile to stop by your local economic development office or SBDC to find out what funding options are available to you in your county. Contrary to popular belief there are not many grants available, and those that are often have stringent requirements like job creation. Most grants available for business owners in our area are obtained by municipalities from the state and are administered on the local level. There are a few others, such as ACCES-VR’s small grant program for people with disabilities to start a business, and larger government SBIR and STTR programs for tech companies. In St. Lawrence and Jefferson counties, there are also some small grants for artists through the SLC Arts Council. 

    Some kinds of businesses, specifically those that are scalable and may involve a patentable product or service, may be of interest to an investor. Local investment groups will usually need a business plan as well as a pitch presentation. Obtaining this kind of funding can be a challenge, but rewarding. Similar kinds of businesses, like those that have a fun product or are in the tech arena, may be able to get some funding through crowd funding, but that requires a very strong marketing strategy and the right kind of product. Loans and lines of credit have a broader application and are (relatively) easier to get. 

    If you are looking for funding for your business and would like to learn more, contact the SUNY Canton SBDC at (315) 386-7312, SUNY Canton SBDC at Clinton Community College at (518) 324-7232, or the Watertown SBDC at JCC (315) 782-9262 for free business counseling. 

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. 

Change Is Gonna Come

Sarah O’Connell

Wouldn’t it be nice if things always stayed the same and we old dogs didn’t have to keep learning new tricks?  But unfortunately, things don’t happen that way.  I think more often than not, changes, while hard to push through at first, end up making our lives more efficient. We’ve seen a lot of things changing the past couple of years with small businesses.  

Social Media

                Of course, we know that social media evolves almost daily.   Remember MySpace, then Facebook?  Now Instagram and Twitter are where it’s at, and although we seem to be slow adopters up here, businesses need to know how to use these platforms to keep up.  The same thing is true when developing a website.  We have to make sure it’s mobile-friendly.  I only look up a business once or twice on my phone, and if they haven’t gotten with it, I probably won’t go back.  Posted hours?  Check.  Menu if a restaurant?  Check.  Quick response to a message?  Check.

Cybersecurity   

                If you do business with the federal government, you already know that cybersecurity rules related to the Defense Acquisition Regulations System have been heavily tightened.  As for doing business with the government, just the process of registering as a federal contractor in the System for Awards Management has gotten more complex; new and existing businesses now have to send a notarized letter by snail mail(!) to the General Services Administration confirming the authorized Entity Administrator.   

Data Protection

                The new General Data Protection Regulation concerning data protection and privacy for all individuals within the European Union (EU) and the European Economic Area (EEA) is being implemented this year. It also addresses the export of personal data outside the EU and EEA areas. The GDPR aims primarily to give control to citizens and residents over their personal data and to simplify the regulatory environment for international business by unifying the regulation within the EU.  It is going to impact any U.S. company doing business with counterparts and customers in Europe.

Taxes 

                No one is exactly sure how the new Tax Cuts and Jobs Act that took effect in 2018 is going to affect individuals and small businesses, but we’re going to be finding out pretty soon.

                The main effect on small businesses, the mom and pops and DBAs, is the same one that’s going to benefit individuals in that the individual tax rates will be lower, leaving business owners presumably with more money in their pockets.  At the same time, some traditional deductions will be disallowed. 

                At the SBDC, we try to keep up with all these changes as best we can so we can give our clients the most up-to-date information as possible.  We’re currently revamping our Entrepreneurial Training courses to expand on some of these areas, particularly social media and taxes.    We rely on our guest presenters who are professionals in these fields to bring our participants timely information.  Of course, any individual business can also contact us to try to find out how they will be impacted because they may be getting conflicting answers from the internet, from friends, family and other business owners.  We can access our research network in Albany or our statewide network of advisors to assist.

                We like to say that our Entrepreneurial Training Courses help would-be and existing entrepreneurs learn the necessary steps to building and growing a stronger business. Both the seven weekly sessions of the class held on the Jefferson Community College campus or the online version are coming up in early October.  If you are interested in learning more about the courses for yourself or a family member, please give us a call or check out our website at http://watertown.nyssbdc.org.

                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 SUNY Jefferson Community College. She is a former small business owner and lifelong Northern New York resident. Contact her at soconnell@sunyjefferson.edu.

Small Business Success: Agriculture 2.0

Sarah O’Connell

In rural Northern New York, agriculture has been one of the major economic drivers of the region since it was first settled by European immigrants.  According to a 2015 article cited in Wikipedia, New York is “one of the top five states for agricultural products, including dairy, cattle, apples, cabbages, potatoes, beets, viniculture, onions, maple syrup and many others.”  But for a variety of reasons including declining milk prices, global competition, and so on, the iconic small family farms are disappearing.  Or are they?

                What we’ve been seeing in the past few years is a variety of new ways to keep young people on the farm.  They are discovering new opportunities, improved technology, and niche markets as ways to stay (or move here) and earn a living.  As I mentioned in my May column, there are several distinctive ag-related enterprises that make our own north country marketable, whether it’s locally sourced foods (meats, cheese, maple, honey) and beverages (wine, beer, cider, liquors) or ag-tourism (the American Maple Museum, farm tours, bed and breakfasts on operating farms, edible or flower garden tours, etc.).

                At the most recent Business Leaders’ Breakfast sponsored by Lewis County Economic Development, some local food producers were spotlighted.  Cedar Hedge Farm, owned by Jan Virkler and Jeff Van Arsdale, has been producing artisanal goat cheeses: feta, sharp feta and unsalted chèvre as well as a variety of jams, jellies and breads using their cheese products.  Two things that really stood out for me in their presentation.  One is that, although it’s a third-generation farm in the Virkler family, Jan decided to move back  here in 2012 with Jeff from professional jobs in New Jersey to embrace the ag life. The other thing I loved was its motto:  “If we don’t grow it, we don’t make it.”

                If you’ve been at any local events or craft fairs or farmers markets in the past couple of years, you’ve probably seen (and hopefully tasted) the caffeinated creations from Tug Hill Artisan Roasters.  Their various roast blends are also carried by and served in several area restaurants and shops. The company is the brainchild of brothers Ian and Scott Gilbert and friend Gregory Widrick and opened in April 2017.  It meets a couple of the marks of current trends – artisanal coffee represents a unique niche as well as a locally produced product, although of course, we haven’t yet figured out how to grow coffee beans in  Northern New York.  But who knows – no one thought we could grow grapes hardy enough for local wines a few years ago! Two transplants from the New York City area, Julian Mangano and Alice Waite, recently founded Of the Earth for the Soul company, which operates Della Terra as a small, bio-intensive farm in Castorland. In their “About” section on their Facebook page, the farmers note, “We are dedicated to providing food with integrity, engaging in organic, non-chemical, non-GMO practices.”  While not certified organic, they do not use herbicides or pesticides and grow an amazing quantity and quality of vegetables in a very small space called square foot gardening.

                It’s impossible to talk about Lewis County agriculture without mentioning maple syrup.  One of the newer local maple syrup businesses is Silver Sap Maple, owned by Cassandra Buell, who also happens to be the Lewis County planner, and her husband, Brian.  While still very new to the maple business, they are adding their taps by leaps and bounds each year and successfully selling their sweet wares.

                We’re now officially in the summer season.   Just as we encourage people to shop small and local in the winter holidays, we hope everyone will pledge to support our local food (and beverage) producers this summer and EAT local!

                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.

Branding for Success

Sarah O’Connell

In April, Jefferson Community College presented its annual Jefferson Business Symposium for high school and college students and members of the community.  This year’s theme was “Build Brand U” and featured a variety of presentations during the day about developing yourself a brand as a student, a job seeker, a leader or a businessperson.   Keynote speakers for the event were Jody and Doreen Garrett, founders of several successful local businesses.

    During the day, I gave a presentation called “Building a Winning Brand for Your North Country Business.”  I talked about what it means to be an entrepreneur as well as how to choose what kind of business you might want to start here in Northern New York.   Besides the usual “how to start a business” information, I also highlighted determining what local business opportunities exist in our area and then making sure it suits your passion, your personality and your pocketbook. 

    For example, are you the type of person who would be happy with someone else giving you a blueprint for your business model? In other words, would you be a better fit as a franchisee, or as an independent business that creates your own path?  

    Maybe you’re a fan of the emerging disruptor or collaborative/sharing economy.   Uber, Lyft and AirBnB are examples of this, and they are turning many traditional industries upside down (mass transportation and accommodations) and requiring municipal entities to figure out how to capture licensing and taxation revenues from these new models.

    Again, in a broader sense, there are opportunities in the technology fields as the need for new products and services changes rapidly – software, ecommerce, cybersecurity, digital marketing, games, apps and so on.    The retiring Baby Boomers need services in property maintenance, senior care, etc.  The mobile Fort Drum community and young professionals are markets looking for upcoming trends they would like to see here, such as niche clothing shops and different dining experiences. The resurgence of Watertown’s downtown also offers a refreshing assortment of shopping – fashion eyewear, yoga studios, juice bars, an art gallery, craft brewpubs, wine lounges, spas, thrift and vinyl record shops.  Some of these have been around for quite a while but are seeing an uptick because of increased foot traffic from the new businesses and events designed to bring people to downtown.

    Last but not least, take a look at the distinctive enterprises that make our own north country marketable, whether it’s locally sourced foods (meats, cheese, honey) and beverages (wine, beer, cider, liquors), crafts made by artisans (wood items, candles), tourism and agri-tourism venues and winter/summer sports.

    Still not sure what business to start?  Each year Jefferson Community College’s Center for Community Studies undertakes a Survey of the Community for Jefferson and Lewis counties (available on the JCC website).   Viewing the responses to the survey questions on what people feel is missing may just give you an idea of a need waiting to be filled.

    What’s the next step?   Do a target market analysis, come up with a business plan and then develop a sense of the startup costs.  This is where your purse or wallet comes into play, because it needs to be a concept that you can afford to invest in with or without the assistance of a commercial bank and/or a public lender. (Check out what funds might be available through jcida.com under “Financing Assistance Applications.”)  The SBDC can assist you in developing the business plan and creating financial forecasts for your loan package.  Building a strong business brand will point you on the way to success.

    Note: Planning is underway for our 14th annual Business of Women networking conference in June.  Watch facebook.com/BusinessofWomen/ for more information.

    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.

New Business Advisor Advances Online Marketing Strategies

Jennifer McCluskey

Brick-and-mortar stores looking to revitalize our downtowns sometimes overlook the power of the internet in bringing in new customers. I have seen several stores in the north country that don’t have a solid website or engaging social media. If this is the case for your shop or business, it might be time to think about improving your online presence. Think about this: If a tourist drives by, will your pizza place pop up on their smartphone when they are looking for lunch? If not, your local Small Business Development Centers can help you bring in more tourists and more locals, too, by assisting you with your online marketing strategy.
     At the SUNY Canton SBDC, we have a new business advisor who is doing just that. Her name is Renee Goodnow and she is working with small businesses in St. Lawrence County to help them improve their online and social media presence. The position was funded through a grant from the Alcoa Foundation, which is looking to help small businesses in the region expand their services beyond brick-and-mortar stores into e-commerce, where they can reach a significantly larger customer base.
     Renee has a background in industrial design and has also helped run a local small business, so she comes to the SBDC with a wide range of skills that she will use to assist business owners in meeting their internet marketing goals. Renee can assist with website design, the revamping of an old website for a more modern look, and also help you learn how to market the site to reach more customers. For those of you who would like a website or a stronger social media presence, but don’t have the time to do it yourself, Renee can help you get connected with a local web developer who can be a long-term resource for your business.
     Renee can also connect your business with local resources in the community, such as photographers and videographers, who can improve the way your business communicates visually with the world. She can help you craft your message and your brand by helping you communicate what is unique about your business. She can also help with logo design, or hook your business up with a local company for logo and other branding designs. Just as with the rest of the services the Small Business Development Center provides, there is no charge for this assistance.
     Renee can meet with you one-on-one and can assess your needs. Some of the ways she is helping clients already include:

• Working with several business owners to help them develop their first websites.
• Talking with business owners about setting up and marketing their business Facebook pages.
• Helping business owners decide which social media outlets are right for them and how to maximize their presence on each.
• Logo development.
• Assistance with creating compelling photographs and videos for marketing.
• Teaching business owners how to rank higher on search engines through search engine optimization (SEO) techniques.

     Renee also will be setting up free training at different locations around the county to help business owners learn how to better market themselves online. The first training in January about social media marketing, presented by Molly Williams from Railroad Productions, was a great success drawing over 30 business owners who learned how to use Facebook, Instagram, and other social media outlets to better share their voice and their brand with customers. The second training in March, with co-presenters Nate Lashomb from the Massena Chamber of Commerce and Jason Hendricks from H3 Designs, also drew a wide variety of business customers and covered a lot of information about web design and search engine optimization.
     If you are interested in developing your social media presence, brand, or would like to have Renee assist your business in improving your online presence, you can contact her at the Small Business Development Center at SUNY Canton at (315) 386-7312 or via email goodnowr@canton.edu. Keep an eye on the SBDC’s Facebook page to find out about more upcoming trainings. The Watertown SBDC at Jefferson Community College also has many resources available to assist your business with your online presence, and can be reached at 315-782-9262.

 Jennifer mccluskey is a certified business advisor with the New York State Small Business Development Center at SUNY Canton. Contact her at McCluskeyj@canton.edu. 

Strengthen your brand with Instagram

Jennifer McCluskey

Jennifer McCluskey

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August 2016: Small Business Success

Understand options for crowdfunding

Jennifer McCluskey

Jennifer McCluskey

Crowdfunding, using various internet platforms like GoFundMe and Kickstarter to reach multiple investors, has been increasing by leaps and bounds over the last few years. So is crowdfunding a possibility for your business?

Certain types of products or businesses work better for crowdfunding than others. New and exciting businesses and products, nonprofits that can help people connect to a cause, or anything else that could get regular people excited to donate their hard-earned money may do well with crowdfunding. [Read more…]

July 2016: Small Business Success

In business, school is never on break

Sarah O'Connell

Sarah O’Connell

One of the basic tenets of good small business management is to keep learning as much as you can about the business you’re in, whether it’s watching the horizon for up-and-coming trends in other parts of the country, observing what innovations or new products are being introduced in your industry or scanning trade publications and websites to check out ways to make your business more successful. [Read more…]

June 2016: Small Business Success

Selling a business takes many steps

Jennifer McCluskey

Jennifer McCluskey

At the Small Business Development Center, we work with many clients who are trying to buy a business. However, business owners who plan to sell their business can also benefit from a solid plan. If you are thinking of selling your business now, or at some time in the future, there are specific actions you can take and documents you can begin to prepare that will make this transition go smoothly. [Read more…]