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Small Businesses Encounter Capital and Employment Challenges

By Tim Rowland

When it comes to the delicate balance of nature, as the old saying goes, "the Lord knows when the smallest sparrow falls to the ground." However, if it’s the unique story of wild Adirondack apple trees that you’re interested in, there’s no one better to ask than Zach Clemans.

This summer, Clemans transformed his profound knowledge of abandoned orchards and foraged roadside fruit into Sandy’s Local Cider in Upper Jay. Here, he has carved out a niche by selling artisanal hard and sweet ciders made from wild apple varieties and expertly orchestrating weekend suppers that delight and engage locals and visitors alike.

Clemans has joined the ranks of the Adirondack entrepreneurial community, a resilient cohort that’s experienced a mix of remarkable successes and notable setbacks. Collectively, these entrepreneurs represent a significant part of the region’s economic future.

Jobs 2.0: An Ongoing Series

Fifty years ago, much of the industrial base in the Adirondacks was shuttered, leading to the loss of numerous jobs, capital, and tax revenue, which spiraled into an era marked by elevated unemployment and high poverty rates. A growing reliance on government jobs ensued, and by the time the COVID-19 pandemic hit in 2020, this troubling chapter was showing signs of decline. In this ongoing "Jobs 2.0" series, the Adirondack Explorer explores both the fallout from the decline of the industrial age and the potential forward-looking trajectory taking shape in the region.

The Adirondack Foundation’s generosity has made this exploration possible, showcasing a pivot as the region’s population ages and declines, remote work gains traction, and an entrepreneurial revival blossoms, intertwined with the effects of climate change and technological advancements, particularly artificial intelligence, on employment in the North Country.

To receive periodic updates on this pivotal topic, sign up for the “Jobs 2.0” email list at www.adirondackexplorer.org/newsletters, and you can catch up on all the stories in the series through the provided link.

Is There a Small-Business Renaissance?

Across the nation, there seems to be a resurgence in entrepreneurial activity. Recent surveys by ZenBusiness indicate that an impressive three-quarters of Gen Z members harbor dreams of business ownership, while Junior Achievement, a global nonprofit aimed at youth empowerment, reports that two-thirds of post-pandemic teens share similar aspirations.

While specific statistics for the Adirondack Park may remain elusive, trends from neighboring regions hint at significant change. According to the Center for Economic Growth, the startup rate for new businesses in the broader North Country region saw an increase of 7.3% from 2015 to 2019, with 7% in the Mohawk Valley and an encouraging 8.4% in the Capital Region.

The spirit of entrepreneurialism runs deep in the Adirondacks—a place where residents have thrived by relying on their resourcefulness for the past two centuries. Melinda Little, who leads Point Positive, an angel-investor group based in the Adirondacks, captured this essence succinctly when she stated, "If you’re a problem solver, there’s always something here to explore. If you love it up here, you’ll find a way."

The Employment Challenge

While the formation of new businesses has become increasingly visible, it hasn’t yet translated into a substantial uplift in employment opportunities.

Indeed, when analyzed individually, the impact of small business owners who might employ one or two people seems negligible in workforce statistics. Little pointed out that with a regional population of about 130,000, and considering that half of the general U.S. population forms the labor pool, it takes only a modest increase in employment figures within the region to have a measurable impact.

Yet, alongside this budding entrepreneurial spirit, there remains a stark reality; between 2018 and 2022, the total number of businesses employing fewer than 25 workers plummeted by nearly 6% state-wide, as per data from Empire State Development.

The Funding Dilemma

Although New York state allocated $1 billion in 2023 for small business investments, many Adirondack entrepreneurs face significant obstacles when qualifying for this assistance, which typically favors larger job creation initiatives. Fortunately, organizations such as Point Positive and Clarkson University’s Shipley Center for Innovation are stepping in to provide critical support, having assisted over 400 Upstate entrepreneurs to date.

In a surprising turn, county Industrial Development Authorities, often associated with substantial corporate projects, predominantly spend their time collaborating with smaller businesses, as noted by Jody Olcott and Carol Calabrese, who oversee the Essex County IDA. “Yes, we will handle a Sylvamo or big projects like the Plaza Hotel, but the majority of our workday is dedicated to small businesses,” Olcott confirmed.

The Challenge of Sustainability

Nevertheless, the entrepreneurial journey in the Adirondacks has its unique challenges. Even when small businesses achieve a measure of success, it doesn’t always guarantee sustainability. Several successful startups have relocated outside the Blue Line seeking better access to workers or adequate manufacturing spaces. Others have been acquired by larger firms and subsequently moved from the Adirondack region to industrial parks.

A significant number of startups struggle to scale due to limited access to capital. Local small banks often impose tight lending limits, and venture capitalists typically overlook the Adirondack region for investment opportunities.

Interest remains high for lodging in many towns, yet potential investors are hard to come by, as Garry Douglas from the North Country Chamber of Commerce pointed out. Capital tends to flow toward ventures that promise optimal returns. Thus, while a hotel in the Adirondacks might prove profitable, a comparable establishment located along a busy interstate corridor would attract more lucrative investment prospects.

Going Solo: A Shift in Business Model

Interestingly, there is a growing trend of new entrepreneurs opting for solo ventures, which highlights an intriguing shift in the local business landscape. At Sandy’s Local Cider, the raw ingredients are close at hand—right from the nearest wild apple tree. Yet, Zach Clemans has consciously chosen to maintain a lean operation. His commitment to scouring abandoned orchards and utilizing underappreciated fruit reflects a budding creative enterprise model, rejecting the modern push for mass production.

His business resists the trend toward overemployment; Clemans deliberately designed Sandy’s local cider to counter regional labor shortages. “Finding capable, passionate people is tough, so I didn’t want to be tied to a large staff,” he explained. Moreover, he aims not to exploit the situation where driven young workers may settle for lower pay in exchange for a chance to be part of a community.

Filling an Important Community Need

Conversely, for those who are prepared to invest sweat equity and take calculated risks, the Adirondacks present fertile ground for those attracted to the area’s pristine beauty and adventurous opportunities. Amber and Dan Margies, for instance, made a life-altering choice when they transitioned from operating a restaurant in South Carolina to becoming small-business owners in Wells, a small hamlet in the southeastern Adirondacks.

Following a family visit in late 2022, they seized the chance to purchase a long-standing country store, which they officially opened on Christmas Eve. Their establishment, Hamilton Mercantile, offers essential supplies, including groceries, sandwiches, and even gasoline, saving residents significant travel time for basic necessities.

On busy mornings, the store buzzes with customers, and the community’s affection for the Margies is palpable; Dan’s Aunt Dee Dee, the store’s unofficial social coordinator, is a fondly spoken presence.

Entrepreneurs in the Adirondacks often contribute far beyond their own livelihoods. Their ventures are crucial for sustaining the social fabric of the towns they inhabit. Like Clemans, the Margies have opted to take on multiple roles, as finding affordable, reliable help can prove both challenging and financially daunting.

Amber and Dan’s experiences also reveal an underlying frustration common among small business owners. Beyond the everyday challenges—such as a convoluted liquor licensing process—are the quirks of bureaucracy. For example, despite their equal ownership stake in the business, they missed out on state grants available to women- and veteran-owned businesses, simply due to arbitrary ownership stipulations.

However, Amber reflects positively on their adventure, declaring that it has brought them the fulfillment they anticipated while enriching their connection with the community. "The town has been incredibly welcoming and supportive," she enthused. "I know it sounds cheesy, but we’ve found our home."

How AI legalese decoder Can Help

In this age of increasing complexities surrounding small business operations, the use of technology can serve to alleviate many burdens that entrepreneurs face. One such innovative tool is the AI legalese decoder. This machine learning application can simplify legal jargon and clarify convoluted regulations that often deter small business owners from pursuing necessary legal avenues.

By breaking down the legal complexities related to securing loans, understanding permits, and navigating compliance regulations, the AI legalese decoder enables aspiring entrepreneurs and established business owners alike to focus their efforts on what matters most: growing their business and serving their communities.

In a landscape where understanding legal aspects can significantly alter the fate of a small business, tools like the AI legalese decoder serve as invaluable resources, empowering Adirondack entrepreneurs to strive towards a sustainable and thriving future.

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