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ANCA aims to keep businesses running after owners retire

September 8, 2018
By AARON CERBONE - For the News (acerbone@adirondackdailyenterprise.com) , Lake Placid News

SARANAC LAKE - As part of a Northern Border Regional Commission grant package announced by U.S. Rep. Elise Stefanik on July 26, the Adirondack North Country Association was awarded $248,364 toward creating the Adirondack North Country Center for Businesses in Transition.

This $373,130 project aims to help Baby Boomer business owners find successors for their businesses and transfer their responsibilities to the new ownership.

Jacob Vennie-Vollrath, ANCA's regional advocacy coordinator, said an ANCA study of the regional economy last year, conducted with the help of local businesses owners and universities, identified that in the next five to 10 years there will be a need for aging business people to plan to transition the business ownership as they retire.

"We have a lot of resources dedicated to creating new businesses; we don't have a lot of resources dedicated to assist existing business owners in transitioning to the next generation," Vennie-Vollrath said.

Though there is no regional data showing how many business owners are prepared to transition, the study identified 10,000 to 16,000 businesses in a 14-county region that will need to make decisions in the coming year, and the center plans to reach over 4,800 of them, retaining approximately 1,440 jobs.

Nationally, Vennie-Vollrath said, fewer than 15 percent of business owners have a formal exit plan in place, despite 75 percent planning on selling their business. He said owners need to plan at least three to five years in advance to transition smoothly. Because many store owners plan to fund their retirements through the sale of the business, if they do not have a solid plan they often end up liquidating all their assets and selling the building but not the business.

"What we're trying to prevent with this program is the loss of these businesses, trying to prevent empty storefronts, trying to prevent loss of jobs," Vennie-Vollrath said.

There are similar programs to assist what Vennie-Vollrath called a "unique niche" in Kansas and Minnesota, which were referenced in the creation of ANCA's plan, but both are fairly new as well.

"I think we're kind of at the forefront here in terms of really having a specific initiative," Vennie-Vollrath said.

The project model will be similar to ANCA's energy program, with the money going toward funding three to four "circuit riders" across offices in seven counties who are the "boots on the ground," talking with businesses and learning what they need, training sessions and consultants specializing in family- or employee-owned conversions.

Vennie-Vollrath said the lion's share of the grant money will be put toward outreach.

"It's a huge cost benefit in terms of if you consider the award amount for this grant versus the loss of jobs, versus the loss of tax revenue, versus an empty storefront on any of our main streets," he said.

The rest of the project will be funded through matching from chambers of commerce, small businesses and counties, which will contribute 33 percent.

Vennie-Vollrath said ANCA has done around 100 hours of outreach so far and has spent around $10,000 in time.

Sen. Kirsten Gillibrand, D-New?York, visited the village of Saranac Lake in May to meet with ANCA officials regarding this program.

 
 

 

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