Project Chenango: Chenango's small businesses

By Melissa Stagnaro

Special to The Evening Sun

stagnaro.melissa@gmail.com

CHENANGO – For 42 years, The Silo Restaurant has been a fine-dining destination for patrons from across Chenango as well as neighboring Broome and Otsego counties. Those diners are willing to make the drive to rural Coventry for the picturesque setting, delicious food and exceptional service.

Owner Gary Kurz is proud of the service he and his staff provide to their guests, whether they are there for dinner, Sunday brunch, a wedding or special event. They even come on snowmobile during the winter months.

It’s the people, he says, that make it all worthwhile.

“I like seeing them happy,” he said. “That’s what makes my day.”

Being a small business owner, especially a restaurant owner, isn’t without its challenges, however. One of the biggest is controlling costs. For Kurz, that means payroll costs, food costs and operating costs.

“Every time you turn around, costs are rising,” he said.

Some of those costs are within his control, but many are not.

“The state makes it difficult, the federal government makes it difficult,” he said, citing taxes, mandates and regulations that become more burdensome each year. “There’s no way to control that kind of thing.”

He’s already anticipating the impact minimum wage hikes will have on the business as a whole – not just his bottom line.

The first to hit will be the increase in the minimum wage for tipped employees, slated to go into effect at the first of the year. That wage will be increasing by 50 percent – from $5 per hour to $7.50 an hour. The real cost to Kurz will be another 25 percent on top of that, once payroll taxes, workers compensation and unemployment insurance are added in.

What real gain will those tipped employees see in their checks? Not much, according to Kurz. His tipped employees are averaging between $20 to 30 an hour in tips, he explained. For them, the additional hourly wage won’t necessarily mean an increase in what they take home.

“All the state wants is more tax revenue,” he said, since servers’ checks often zero out – or close to it – once taxes are taken out based on the tips they claim.

He’s also anticipating what a $15 minimum wage will mean. He doesn’t have a large number of employees that will benefit directly from this. Those that will are typically students who work for him part-time.

“These are kids getting those wages,” he said.

The unintended consequence of this hike will be the employees already making over that threshold.

“I won’t be able to give those people a raise,” he explained, that includes the chefs and kitchen staff so key to his guests’ dining experience.



He’s already calculated the addition burden these two wage increases will put on the restaurant each week. He doesn’t know how he can absorb it without passing some of it on to customers, especially in the current business climate.

“The last 4 years have been the most difficult since I’ve been in business, and this year is topping it all,” Kurz said.

That comes from a man who had to rebuild his restaurant in 1985 after a devastating fire.

Will it turn around? Kurz, and the 35 people he employs, are counting on it. For the time being he himself has stopped drawing a paycheck. A temporary move, he said, until they are over this rough patch.

He knows he is not alone.

“It’s really tough being in business in New York State, and to be a small business anywhere in the U.S,” Kurz said.

SWEET TREATS

In Norwich, a former employee of Kurz also knows how rewarding and challenging small business ownership can be.

Sharon Jeffers is proprietor of The Parson’s Daughter, a specialty shop selling gourmet chocolates and unique confections. It’s a business Jeffers says she ‘fell into.’

“It just happened,” she said.

She had made the decision that restaurant management was no longer for her and given notice without a clear plan of what she wanted to do next. The answer, she said, came to her while swimming at the Norwich Family YMCA. She laughs when she tells the story now.

“I know no one else under the water heard ‘chocolate’, but I sure did,” she said.

A conversation with a friend who had once opened a candy shop solidified the idea in her mind. And on July 9, 2002 – with neither business plan nor retail experience – she opened her shop at 6 West Park Place.

Fourteen years later, you will find her behind her display case Monday through Friday between 11 a.m. and 5:30 p.m., and on Saturdays from 10 to 2.

She remains a one-woman show because she says the costs associated with bringing on an employee – particularly the taxes and insurances - are too high for the shop to support.

“I do it by myself,” she said.

While sometimes it would be nice to have help, she loves the interaction with customers. Her favorite part of the business is seeing a customer’s face light up when they see a candy that transports them back to their childhood. Or witnessing them share those memories with a child or grand child.

“I love being part of the community,” she said. Just as she loves personalizing each transaction, taking the time to put a purchase in a decorative bag or including packaging so a customer can ship their gift more easily.

She also loves being a unique destination that travelers driving through on Route 12 remember from one year to the next.

“That’s always heartwarming,” she said.

Being a specialty retailer, however, does have its challenges - some as unique to her business as the chocolates and bon bons that she stocks. The concept of ‘gourmet’ items has changed, for example, now that brands that were once only available in specialty shops are readily available on grocery shelves or in Walmart.

“I try to carry things that you can’t find other places,” she explained.

Getting that product mix right, can be a challenge all its own.

“People will always tell you what they want,” she said, “sometimes by not coming back.”

Her downtown location can also have its downside, as during peak times parking can be a challenge. And it is sometimes difficult to compete with big box or online retailers with large selections and extended hours of operation. She worries that will eventually be the death knell for specialty shops like hers.

“Someday places like this may not be around,” she explained.

To help keep downtown vibrant, she is a staunch supporter of ‘Shop Local’ initiatives, like Small Business Saturday, but said they don’t always have the desired effect.

“People say it, but they don’t always do it,” she said. “For a small business owner, that’s frustrating.”

SUPPORTING SMALL BUSINESS

Steve Craig agrees with Jeffers on the importance of Chenango’s small businesses.

“They add texture to the fabric of our downtowns, providing the amenities people seek when considering a place to visit or live,” the Commerce Chenango CEO said.

According to Craig, the chamber considers a small business to be one with fewer than 50 employees. 290 companies fitting that belong to the chamber, representing a full 90 percent of the business advocacy organization’s membership.

The role they play in the Chenango economy is a vital one, he said.

“They provide employment,” he explained, “[and] the small retailers and food service businesses give young people an entry point into the workforce.”

According to Craig, the wages they pay are not the only way that small businesses contribute toward economic vitality.

“Through their advertising, small businesses support local media, events, non-profits and community programs, such as sports teams and school plays,” he said.

Many of the chamber’s activities are dedicated to supporting small business.

“[We] offer them low cost advertising; marketing and networking opportunities; training and continuing education; medical and dental insurance; and by our ongoing push for economic development we help them create more and bigger paychecks that are earned, cashed and spent locally,” Craig said.

The chamber encourages small business owners not only to join the membership organization, but to get involved with advocacy efforts.

Betsey Baio, who owns New York Pizzeria in New Berlin with her husband Frank, is very familiar with those efforts. In April, Baio stepped down after chairing Commerce Chenango’s board of directors for a two-years term.

She speaks from experience when she talks about the challenges faced by small business owners.

“There are always more regulations and more codes,” she said. “They start out as a good idea, but become over regulated.

She and her husband purchased a second lot in the Village of New Berlin with the intention of building a larger, more efficient restaurant. But while the sale was being finalized, new codes went into effect, which have prevented them from developing the site.

The hold up, she explained, is due to the amount of water regulators deem necessary per day. Despite the fact that, in their 33 years in business, they’ve never used close to that amount.

Baio says employee retention can be an issue, but their biggest challenges are related to taxes and rising insurance costs. The latter includes liability as well as disability and worker’s compensation.

“We’ve never had a (worker’s compensation) claim in 33 years, but it still goes up,” she said.

“We could reward our employees with better pay if we could decrease these costs.”

Despite the challenges of doing business in the Empire State, Baio isn’t going anywhere.

“There are so many positives about living in New York,” she said, from the rich history of the area, the change of seasons and the number of cultural activities available in Chenango relative to its size. She also appreciates her proximity to metropolitan areas like Albany, New York City and Philadelphia – which she says are all within a reasonable drive.

She raves about apple picking with her family this past weekend at an orchard in nearby Leonardsville, where the apples are especially plentiful this year.

“I could never imagine not living in New York State,” she said.

It’s hard, too, to contemplate New Berlin without New York Pizzeria. The restaurant, which employs 27, is not only a popular dining option, but is actively involved in community activities and events. The Baio’s support any number of organizations like Helping Hands, the Boy Scouts and New Berlin Fire Department. They’re also a go-to business for organizers looking for donations of gift certificates for their fundraisers. And it’s not uncommon for a grieving family to receive an unexpected food delivery.

Baio is humble about those types of things. The community supports them, and they return the favor.

“We try to give back as much as possible,” she said. “We’re really grateful for where we are.”

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