Profit Sharing
Just because a professional relationship doesn’t work out long-term doesn’t necessarily mean that long term benefits can’t be derived from most working relationships. I’m thinking of my relationship with a big accounting firm out of Middletown NY who I cycled through in due course and actually left quite frustrated - however, the accountant in charge of my account advised me back in 2012 that it was a no brainer to start a small business 401k program from myself and my employees, and you know, 10 years later - between what I have put away and what my employees have, we have cumulatively put away over $1,200,000 of pre-tax dollars into investments. There are young people in my company that have over $100k, and carpenters who are right behind them.
It’s an interesting program, and I’ve said it bunch but I’ll say it again - it’s a real life example of government program that works. It’s just a good thing, with few unintended negative consequences that I can see.
Our 401k program allows our employees to put away 5% of their salary - pre-tax meaning worth 30% more than after tax - and Catskill Farms matches it, So in essence, if an employee makes $100k, and puts away $5000 (which is actually only $3500 since it’s pre-tax) I match with $5k, meaning the employee puts away $3500 and gets $10,000 worth of benefit.
We also have a profit-sharing program, engineered based on age of employee and length of service to Catskill Farms. That can add another $3000 to $5000 per employee.
And just last year, we added a Defined Pension program which again can spin off $3000-$5000 per employee.
The bottom line is Catskill Farms spun off an additional $273,000 to our employees this past year in terms of sharing the wealth, and that’s quite a bit of money no matter how you spin it. It’s a great benefit, over an above a pretty decent vacation, holiday and bonus program. As an employer, while proud of this, it’s always scary to know you have this obligation now baked into the company’s expenses, in good years and in bad years. I can’t say it keeps me up at nights, but it is a real thing. You can’t just get up one morning and say, ‘Hey, I don’t think I’ll pay this year, things are a little tight”. Once in the program, you are in it.
I often muse, here on this blog, and just when I’m sitting around, at the wealth generation this company has provided across a lot of families and businesses. it’s really just endless- there are direct benefits such as those who work with us to build the homes and get paid well and regularly - these would be our trusted material and subcontractor partners. What I provide them is beyond the cost of individual jobs - it’s a ‘have their back approach’ where I don’t hang them out to dry if something goes wrong, we share the burden, and more times than not, I just pick up the tab as the cost of doing business.
There are the ancillary beneficiaries - the towns and their increased tax bases which then go to higher standard of living for town employees, the restaurant and stores our clients frequent, the realtors who take a large cut, the homeowners who resell their homes for good profits and the realtors who help them, the home inspectors, the banks who have financed tens of millions of mortgages to triple AAA rated homebuyers. We also inspire other people to take chances and start a business, motivate people to set up shop and increase the textured fabric of upstate life. Our marketing has probably exposed more people to the area than the chamber of commerces. Once our clients finish with the homes, they add garages, build pools, hire property managers, do landscaping, donate to non-profits
The bottomline, no matter how you slice it, is the efforts of Catskill Farms, - my personal efforts and that of the teams I have put together - have literally moved the needle of economic sustainability across a broad swath of Catskill life, and idea that that all happened because I had an idea, and worked at it tirelessly, is really the essence of the magic of capitalism. I’m not unique- many people do what I do, which is leave it all on the field nearly everyday - but it’s a club of people who have an outsized role in the quality of life in any given area.
This isn’t really a self-congratulatory self-back-patting, victory lap - though that would be fair enough at this point. It’s just a general reflection of the magic of the free market, where you efforts are measured by your efforts and the tens of thousands of micro decisions you’ve made along the way.
Lake Front Rental outside of Callicoon NY
Brand NEW Catskill Farms one of kind lake front rental on 5+ acres with stream in private community in North Branch NY. This 3 bedroom 3 bath rental has it all - decks, screened porch, lake, ping pong and over 2500 sq ft of space. Air conditioning. Is available seasonal or for an annual lease. Experience all the charm and convenience and style of a Catskill Farms home. Live large in the country. See more pics at CATSKILL FARMS RENTAL.
Our homes, your land
Without even trying to show it, my ‘tell’ is quite literally obvious. The reduction of blogging over the last two weeks must signify a corner-turning evolution to the transition the company is going through. The writing helps me 1, vent, 2, figure it out by thinking and writing about it. I can’t say we are fully recovered, but it does appear we are functioning pretty good right now.
And we didn’t replace, we reinvented, and they may allow us to do things differently, ie, better, then we did in the past. That’s the hope - that the last 3 months have allowed me to review the company with eyes toward the future, and clearly look at what could have been done differently in the past.
One thing is for sure is that my hands on participation across a broad array of tasks that I had delegated previously has had a few very tangible impacts - 1, I’m more seen, which is good for the business, 2, I’m part of the client-facing part of our operations in a much more pronounced and micro way, 3, I’m engaged with the subcontractors and team in a much more detailed way. All these things are good, since coming in to solve problems late in the task really isn’t that fun. Actively guiding and solving problems along the way, that’s not so bad.
I have a lot going on. We just finished 6 homes. We just started 3 and about to start another. I’m nearly across the finish line on a 9 lot subdivision in Olivebridge NY. We finished and furnished a house in North Branch that I will rent - it’s always eye-opening how much effort it takes to furnish a house well.
As I've written about, to diversify some risk, we began an initiative where we actively sought out families who had bought land during the pandemic and now were looking to get a project moving - so my idea was to marry our turnkey process with people who acquired land when they couldn't find a house they liked during the go go days of the pandemic hustle. It was a good idea, and I think we've done it four or five times now.
We are just wrapping up a fantastic project in Stone Ridge NY with this formula, and these owners conducted a masterclass in how to succeed in new construction.
Big Sky Montana, and another home sold
In Big Sky Montana, for our yearly (last 3 years) trip to Big Sky via Bozeman. Tip - if you decide to map out Long Term Parking at Newark, don’t search for the business Long Term Parking, since you can trust me when I tell you, it’s not the official ‘economy parking’ lot - it’s actually another business altogether not that close to the airport, in a pretty sketch part of Newark. You actually want to search for ‘economy parking lot’ at Newark.
So 5:30am in dark, we end up god knows where as we arrive at Long Term Parking, a little late for my comfort for our 7:15 flight out of Terminal A and realize this isn’t where we want to be. I’ve been to Newark dozens of times, so I had a good idea of the error, and the early identification and pivot saved us, though left us parking at the new parking garage at Terminal A so we will see what the damage is when we get back. Won’t be pretty. Probably a mortgage payment, if I had a mortgage payment.
Big Sky is a little less than an hour outside of Bozeman, a pretty drive. Lone Peak, the 11,000 ft mountain, is a grand mountain that is skiable on 3 sides and literally has something for everyone’s ability. Snowed today, really snowing tonight, so it’s a bit of a winter wonderland, fresh powder experience, and even though we are expert skiers we are good enough to appreciate some fresh powder.
It’s fun having Lucas along - missing 3 days of school and approaching truancy because I keep taking him out for these little trips. ‘That will go down on your permanant record’ - I think that’s a Pink Floyd song. Actually now thinking about it, it’s the Violent Femmes.
On the homes front, we sold a Big Ranch on 10 acres with woods, pasture and a stream running through it. Named West Fields, it was a collaboration between Amanda and me and it was one of the those ranches we don't build that often but has a lot going for it, including a primary suite on the 2nd floor of the home.
And a picture worth a thousand words of our efforts up in North Branch.
