Farm 46, and Recession Retrospection
As originally posted at LinkedIn.
Since 2002, Catskill Farms has been on a 'slow' but steady climb to bigger. We now juggle a balance sheet with 25 properties in inventory, currently being improved. Houses in Kerhonkson, land in Stone Ridge, homes in Saugerties, Milan, Bethel, Narrowsburg, Livingston Manor, and Cochecton. Oh, and I forgot Olivebridge, Eldred and a rental portfolio that spans Eldred, Barryville, New Paltz and now even Valley Forge PA. In the Catskills real estate market, we found niches of business and opportunity throughout.
I don't mention this to boast, since just last week when my 9 year old son somehow bested me in Monopoly leaving me with little but over-mortgaged properties and a trail of debt and I commented that this could actually happen in real life (and he said I could come live his mom, her partner and him if it got too bad). It's an interesting story of step by step business building over nearly 20 years, and the challenges that creates.
I'm a big fan of How I Built This, a podcast that profiles business success stories ranging from Angies List to a snowboard company to yoga wear. All the interesting stories like this profile a process of unlikely forward progress with few attributes more important than old fashioned perseverance, which is different than risk tolerance, intelligence or education - in fact, many times it appears to be the opposite of intelligence, where any smart person would have changed tack long before instead of continuing to sail onward on a hopeless mission in stormy seas. I guess this makes sense that people would rather hear an 'up by your boot straps' rather than 'trust fund kid with unlimited resources turns small profit'.
For me, debt was a real motivator. Now the couple of hundred g's that loomed ominously over my head in the 2004 seems comical in small-time scale, but for my resources and ability at the time, it was proportionally gigantic. For me personally, debt was a motivator because I was the type of person who paid my bills, and it's funny how the credit score, regardless of how much money you have, really is a true weather vane of a person - there are those who pay their bills- however disruptive and inconvenient - , and there are those who find reasons -however credible and valid - who do not.
The thing is, there are few shorter-sighted actions a small business can do than neglect to pay a bill, or a bank, or a loan, or a credit card. The stain is real, its footprint lasts a long time, and its a real measuring stick for future financial asks. And especially for the small bank (Jeff Bank) experience that has fueled and sustained Catskill Farms, every single time I went back to the lending well, the small loan committee at the bank - regardless of their risk aversion- could fall back on the fact that not only did we pay our bills, period, we weren't late, we didn't ask for leniency, we didn't ask for favors - we borrowed, and we paid it back. Sometimes we had to borrow to pay it back. Sometimes we had to do without personally to pay it back. Sometimes we had to reinvent and reposition the business to pay it back. But it always got paid back - and it's a fundamental tenet of our strength as a business - our business decisions have allowed us to pay off our debts, and build those finance and vendor relationships uninterrupted.