Small Business Startup: Island Bay Pier House

HOLLY BONAME/NNY BUSINESS
Island Bay Pier House co-owners Brandi Wanecski and Adam Beaman stand behind the restaurant’s illuminated bar.

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Small Business Startup: Seabound Yachts

Jeremy Cohen, owner of Seabound Yachts

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Adjusting Business Plan for Seasonal Changes

Jennifer McCluskey

Many businesses, especially here in Canton and Potsdam which have large college student populations, struggle with slower summer months.  Others in more touristy areas, such as near Higley or out in Clayton or Alex Bay, have the opposite seasonal changes.  A survey from Wells Fargo reported that 45 percent of business owners say they reliably have several times of the year that are faster and slower than others.  But no matter when your business’s slow season is there are many strategies for dealing with slower seasonal sales. 

    One strategy is to close up shop during the slow months. You’ll keep having to pay rent, but utilities, employees, and other costs will be gone or minimal.  This is the strategy that is often employed in some predominantly tourist areas.  However, if your product can serve locals as well, possibly staying open when everyone else is closed might lead to some small profits, or possibly large ones if there is an ice fishing derby or some other event. The Wells Fargo survey mentioned previously also reported that 62 percent of small business owners said they reduce their capital expenditures during slow seasons, and 43 percent said they reduce hours for their employees.

    Another strategy is to set money aside during the high sales months.  This is hard for many business owners.  Forty-one percent of business owners surveyed said seasonal differences make it more difficult to manage cash flow.  Planning can be difficult when you don’t know what’s right around the bend, or if you’re just barely making it during the better parts of the year.  If this is the case for your business, you may want to use your slow season to take a hard look at your financials and see if there are ways you can trim costs during the rest of the year so that you can be better prepared for next year’s downturns, or create a financial budget if you’re just winging it.  Make sure you are realistic with your cash flow projections for the future by having a good idea of past trends and sales in both slow and peak times. Update your forecasts regularly to make sure you are on top of any changes in trends.  Your SBDC advisor can help create and analyze projected budgets. 

    You may be able to delay some expenses until different times of year.  Talk to some of your vendors, for example your insurance company, to see if you could pay at a different time of year.  Even if they say no, I’m sure they won’t mind if you pay your bill ahead of time in the spring so that you’re all set when it’s due in the summer.  Another idea to improve cash flow during slow months is to collect a deposit from customers, for example half down and half on delivery.  This works especially well when there is a substantial gap between booking your service and service delivery. 

    Also, develop a positive relationship with your bank.  There are possibilities of obtaining a seasonal line of credit to get equipment and other items you need to get ready for your high season and then pay it off when the sales start coming in.  This could work well for something like a lawn care business which will need new equipment in the spring but won’t have money to pay for it until the summer. During slower times of the year, one in five business owners (21 percent) reported increasing their use of business lines of credit or business credit cards to bridge cash flow gaps. During busier times, two-thirds (64 percent) said they pay down debt or reduce their use of credit.   

    If you would like assistance planning for seasonal changes in your business cash flow, you can get in touch with your local Small Business Development Center office.  You can 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.  The Wells Fargo survey referenced can be viewed at https://wellsfargoworks.com/small-business-optimism-reaches-highest-point-in-a-decade.

               

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. 

Small Business Startup: St. Lawrence Stables

Photo by BRIANNA WEST

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Invest In Your Businesses Online Presence

Jessica Piatt

Here in Northern New York, the idea of not having enough time or resources to invest in your business’ online presence is widely accepted as a fixed fact by many businesses and organizations.  It can be difficult to see the value in planning ahead in a digital environment where content is comprised of click bate, feedback is instantaneous, and comment trolls come by the dozen.  When you challenge the idea that you do not have the time, the resources, or the savvy to plan, you will find that this strategy is an investment in your brand, it will make your life easier, and it will prove to be effective.

It’s an Investment

                When you take the time to plan your social media content, you’re making an investment in your brand’s online awareness and therefore you’re making an investment in the growth of your business.  Planning your content ahead of time can be as basic as setting aside time in the beginning of the week, evaluating your business’ needs, offers, or values, and selecting content to reflect those priorities.  Craft a message with your followers, costumers, or clients, in mind, then schedule a time to post.

It Will Lighten Your Load

                Once you’ve taken the plunge and commit to investing in your brand’s digital presence, aim for consistency.  In being consistent, you will make this investment routine.  Once it’s become common practice, this routine will help transform your tendency to be reactive in the digital arena, reclaim control of your brand’s narrative, and be proactive with your online presence. This mega metamorphosis, you will likely free up valuable time at the office and reduce the paralyzing stress surrounding the use of social media as a tool.

It Will Yield Results

                When you commit the time, and maintain consistency, your efforts will yield results.  I’m talking real, quantifiable results here.  When you plan your content keeping your brand and consumers in mind, schedule your posts using measurable data to maximize your impact, and maintain consistency in your diligent efforts, your business will reap the benefits.  Not only will this strategy reduce the time you squander thinking of clever captions at the last minute or reduce the stress you associate with pressures of social media, it will benefit your brand’s overall awareness.  Being present, intentional, and consistent, on social media, makeup the cornerstone of building trust with your audience. 

Resources are your Friends

                Choose platforms which augment your brand.  Once you get started, use the platform analytics available to enhance your objectives.  LinkedIn, Facebook, Instagram, and Twitter, all offer free engagement analytics for business accounts.  This information is essential to the enrichment of your content production and scheduling.  There are also external resources that can be used to supplement your efforts and strengthen your overall effectiveness.  Give resources like Canva, ColorStory, Hootsuite, Planoly, and/or VSCO a try.  See which apps/websites work best for your brand and implement them into your routine.  If you’re still hesitant, or simply have questions, additional resources such as the Greater Watertown – North Country Chamber of Commerce, or other organizations dedicated to promoting and supporting business are a great start!

A Bright Future

                It’s time to invest in your brand’s online presence and take advantage of what the digital world has to offer.  Social media platforms help businesses grow.  When used intentionally, social media can lead to increased brand awareness and build trust with your audience. When you challenge the idea that you do not have the time, the resources, or the savvy to plan, and you recognize that these platforms can enhance your brand and better your business, you will discover the plethora of possibilities that planning content can bring to your business in the North Country. 

Finding the Funding: Small businesses find financial support

HOLLY BONAME / NNY BUSINESS
Laurel K. Zarnosky stands behind the ice cream counter at her newest business Simply Sweets at the Top of the Square Plaza, Watertown.

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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.

Small Business Startup: Thousand Islands Custom Woodworking

HOLLY BONAME / NNY BUSINESS

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