Business Succession Needs a Plan

Staten Island commercial bank urges owners to focus on keeping it going

 

STATEN ISLAND, N.Y. – One of a business owner's most important challenges is continuity.

Whether a key person retires or passes or becomes incapacitated, Victory State Bank urges owners to have a succession plan for their enterprise to stay in business.

Studies have shown that the overwhelming reason that businesses fail in the next generations is the lack of a succession plan.

In a family business, sometimes a parent-child relationship also needs to be addressed, if not healed. When there are several siblings, their respective interest in being part of the business also can be an issue.

The matter of succession is especially germane for a family business that has lasted through a couple of generations but where the next heir apparent has strong opinions at odds with its existing nominal head. Think of a son or daughter wanting to manage the enterprise in a different way, and disagreements ensuing with the father.

A succession plan usually is carefully nurtured in the way it gradually unfolds. Victory Bank stresses that owners should begin a plan now and not procrastinates.

Roles can be tried or modified as individual strengths or weaknesses emerge without losing sight of the main objectives.

And in the context of succession, certain kinds of insurance may be suitable once a plan's components become implemented.


One example is key-person insurance, a life-insurance product -- typically term insurance in force during the interval of an individual's anticipated length of service. This kind of policy reimburses the business for the loss or incapacity of whoever is considered uniquely valuable. These funds can then be used for interim expenses according to the plan of succession.

Succession planning likely is unfamiliar territory for many business owners, who may not even be aware that some guidelines and general principles exist. 


The federal Social Security Administration (SSA), in fact, has a free course posted online at 
www.ssa.gov/section218training/basic_course_8.htm.


"Management succession planning in the family company," SSA says, "requires focus on the four key departments present in any business of any size: administration and finance, operations and customer fulfillment, sales, and marketing."


The course then goes on to look at ownership succession planning, leadership development, and a host of questions such as "How do I start?"


By necessity, some of SSA's precepts are rather general so that they can be adapted for individual situations.

It is also rather practical, however: "Keep [the plan] plain and simple. Succession planning is more a mindset than a set of instructions. Therefore, don't overcomplicate the process by inundating it with steps and procedures."

 


About Victory State Bank

VSB Bancorp, Inc. (OTCQB: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank.  For additional information, Victory State Bank may be reached at 718-979-1100 or visited online http://www.victorystatebank.com.

Media Contact: 

Relevant Public Relations, LLC

Headquarters: 718‑682‑1509

Mobile: 917‑715‑8761

Email:  This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

 

Small-Business Optimism Rises

Staten Island business bank notes index's positive indicators 



STATEN ISLAND, N.Y.  -- Today's release of owners' outlook for expansion and for general business conditions was welcomed by Victory State Bank for what it may foretell.


The  National Federation of Independent Business (NFIB) and Small Business Economic Trends (SBET) survey, which polls NFIB members, looks at several indicators like hiring, sales, and wages, among others.

 

EMPLOYMENT UP

NFIB said owners increased employment by an average of 0.01 workers per firm in July (seasonally adjusted), the 10th positive month in a row and the best string of gains since 2006.  Seasonally adjusted, 13 percent of the owners (up 1 point) reported adding an average of 2.9 workers per firm over the past few months.  Offsetting that, 12 percent reduced employment (down 1 point) an average of 2.7 workers, producing the seasonally adjusted net gain of 0.01 workers per firm overall. 

The remaining 75 percent of owners made no net change in employment. Fifty-three percent of the owners hired or tried to hire in the last three months and 42 percent reported few or no qualified applicants for open positions.  

Twenty-four percent of all owners reported job openings they could not fill in the current period, down 2 points, but a solid reading.  Fifteen percent reported using temporary workers, up 1 point.

 Job-creation plans continued to strengthen and rose 1 percent to a seasonally adjusted net 13 percent, the best reading since September, 2007.   Not seasonally adjusted, 16 percent plan to increase employment at their firm (down 2 points), and 6 percent plan reductions (up 1 point).  On a seasonally adjusted basis, job creation plans improved and job openings held at a solid level. Actual job creation remained positive, although modestly so. 

The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past three months compared to the prior three months fell 1 point to a net negative 3 percent,  still one of the very best readings since 2007. Thirteen percent cited weak sales as their top business problem, one of the lowest readings since December 2007, the peak of the expansion. Expected real sales volumes posted a 1 point decline, falling to a net 10 percent of owners expecting gains. 

PROFIT IMPROVEMENT

Earnings trends were unchanged at a net negative 18 percent (net percent reporting quarter to quarter earnings trending higher or lower), one of the best readings since 2007. Rising labor costs are keeping pressure on earnings, but there appears to be an improvement in profit trends in place, even if not historically strong. This is one of the best readings since mid-2007 with the exception of a few months in early 2012 when the economy posted decent growth rates for several quarters.

Two percent reported reduced worker compensation and 24 percent reported raising compensation, yielding a seasonally adjusted net 21 percent reporting higher worker compensation, unchanged and the second best reading since the first quarter of 2008. A net seasonally adjusted 14 percent plan to raise compensation in the coming months (up 1 point). The reported gains in compensation are now solidly in the range typical of an economy with solid growth.


BETTER CREDIT CONDITIONS

Six percent of the owners reported that all their credit needs were not met, unchanged and only 2 points above the record low. Thirty percent reported all credit needs met, and 52 percent explicitly said they did not want a loan. Only 2 percent reported that financing was their top business problem compared to 22 percent citing taxes, 22 percent citing regulations and red tape and 13 percent citing weak sales. 

The net percent of owners expecting credit conditions to ease in the coming months was a seasonally adjusted negative 5 percent; more owners expect that it will be “harder” to arrange financing than easier (a 2 point improvement). This is the most favorable reading about credit market conditions since 2006, occurring at a time when the Fed is terminating its aggressive QE3 policy.  


CONSERVATIVE INVENTORIES

The pace of inventory reduction was steady, with a net negative 3 percent of all owners reporting growth in inventories (seasonally adjusted).  So, on balance, more firms are reducing inventory than building stocks.

The net percent of owners viewing current inventory stocks as “too low” worsened 1 point to a net negative 3 percent, mild dissatisfaction which will depress inventory investment.

Sales trends continued to deteriorate a bit but remained near the best levels in the recovery, just historically weak. Expected real sales did not improve as well, and this contributed to less urgency to rebuild stocks. The net percent of owners planning to add to inventory stocks rose to a net 0 percent. While inventories have been building solidly at the national level, it appears that the small business sector is adding little to the accumulation of stocks reported in the GDP accounts and sales are too weak to produce much liquidation.

SELLING PRICES' UPTICK

Twelve percent of the NFIB owners reported reducing their average selling prices in the past 3 months (up 2 points), and 25 percent reported price increases (up 2 points).  Seasonally adjusted, the net percent of owners raising selling prices was a net 14 percent, unchanged from June and 15 percentage points higher than December. 

Twenty-three percent plan on raising average prices in the next few months (up 1 point) and  only 3 percent plan reductions (unchanged), far fewer than actually reported reductions in past prices. Seasonally adjusted, a net 22 percent plan price hikes (up a point and one of the highest readings since 2008).  If owners continue to be successful, the economy will see a bit more “inflation” as the price indices seem to be suggesting.

   

 

About Victory State Bank

VSB Bancorp, Inc. (OTCQB: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank.  For additional information, Victory State Bank may be reached at 718-979-1100 or visited online http://www.victorystatebank.com.

Media Contact: 

Relevant Public Relations, LLC

Headquarters: 718‑682‑1509

Mobile: 917‑715‑8761

Email:  This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

 

 

Staten Island Business Bank Shines Light On Change in Credit-Scoring Process

 

STATEN ISLAND, N.Y. (Aug. 8, 2014) Victory State Bank is highlighting a consumer-friendly change in the way credit scores are determined.

Yesterday, FICO (NYSE:FICO), a leading predictive analytics and decision management software company, announced a modification in the credit-score creation process.

According to the company, its new FICO® Score 9 introduces a more nuanced way to assess consumer collection information, bypassing paid collection agency accounts and offering a sophisticated treatment differentiating medical from non-medical collection agency accounts. 

Victory State Bank points out that an article in today’s edition of the Wall Street Journal says the move “will likely make it easier for tens of millions of Americans to get loans.”

Additional details of the new FICO® Score 9 may be found online at www.FICO.com.

 

 

 

About Victory State Bank

VSB Bancorp, Inc. (OTCQB: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank.  For additional information, Victory State Bank may be reached at 718-979-1100 or visited online at www.victorystatebank.com.

Media Contact:  

Relevant Public Relations, LLC

Headquarters: 718‑682‑1509

Mobile: 917‑715‑8761

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Going Green Can Help Cut Business Expenses

 

Staten Island business bank says greenbacks pile up as discards diminish

 

STATEN ISLAND, N.Y.  – Although it has become socially correct to embrace environmentalism, the hard reality is that its precepts can save money for a small business.

In advocating the profit incentive, Victory State Bank, Staten Island's business bank, sees benefits for owners who need merely to make small adjustments in how they minimize what goes into the trash.

In fact, the federal Small Business Administration promulgates what Victory considers to be sensible quick tips for owners to save a potential bundle.

Being “green” or environmentally friendly, the SBA says, is probably not a new idea to you as a small business owner. In the last few years especially, the discussion of green business practices, services and products has become so prevalent that it’s often no longer the exception – but expected – to run a more earth-conscious operation. Consider these ways to green your business and, in the process, reduce unnecessary spending.

Reduce travel with virtual meetings

Do you find yourself traveling for business or to meet clients? Consider reducing the number of in-person meetings you might do and go virtual instead. You’ll reduce your fuel consumption, which is good for you and the environment. Plus you’ll save money with all the free online conferencing tools available. A number of free and low-cost web-based sharing sites have features that allow you to video conference, share screens, use text chats, upload documents, simulate a white board and more. An added bonus? Think of the time you’ll save by not hitting the pavement.  

Ditch the disposables (cups, cutlery, etc.)

Did you know that in just one year, the average American office worker goes through around 500 disposable cups? It has also been reported that Americans throw out enough paper disposable cups, forks and spoons every year to circle the equator 300 times. 

Instead of supplying the office with paper and plastic goods for coffee and lunches, switch to cutlery you’ll keep. Sure, you might spend a few more dollars up front establishing a stock of cups, plates and silverware, but you’ll make that money back and keep more trash from landfills. Looking for an even better deal? Visit a discount or thrift store to score your new kitchenware for less than you might pay otherwise.

Save energy – with paper!

Sure, you’ve heard about using sleep modes for devices and unplugging when electronics aren’t in use. But did you know that your business's paper use is another area to save energy? 

Use double-sided printing and copying. Even better – distribute or reference documents electronically instead, if possible. When making your paper purchases, select products with a high recycled content; then continue the trend and recycle as much of it as you can when you’re through.

This is just the beginning of what you can do to have a “greener” business operation. For more tips and insight, check out SBA’s energy efficiency and green business guides. From energy savings calculators to industry-specific materials and more, you’ll find a wealth of information about being an environmentally responsible small business owner, the SBA says.

 

 

About Victory State Bank

VSB Bancorp, Inc. (OTCQB: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank.  For additional information, Victory State Bank may be reached at 718-979-1100 or visited online http://www.victorystatebank.com.

Media Contact: 

Relevant Public Relations, LLC

Headquarters: 718‑682‑1509

Mobile: 917‑715‑8761

Email:   This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Starting a 401(k) In a Small Business 

Staten Island business bank sees overlooked opportunity for owners’ retirement funding

 

STATEN ISLAND, N.Y. -- Owners of small businesses may be overlooking one of the ways to fund their own retirement, Victory State Bank suggests.

Large firms have been offering 401(k) plans to their employees for years. But small shops with only a few employees also can have them.

In many places, having a 401 (k) plan has become a key aspect of recruiting and keeping valued employees. Moreover, a 401(k) plan has been trending of late as the primary means for an employee to build up retirement savings.

It so happens that such a plan can be an effective retirement-savings vehicle for small-business owners, as well. 


A 401(k) is an employer-sponsored retirement savings plan named for a section of the federal tax code. It lets workers, including owners, save and invest some of their pay before taxes are taken out. Taxes aren’t paid until the money is withdrawn from the account, presumably in retirement.

Generally after age 59 1/2 withdrawals are optional until age 70 1/2, when they become mandatory. Should retirement occur somewhere within this age span, the 401(k) can be rolled over to a traditional individual retirement account (IRA). Mandatory withdrawals, which then incur tax payments, also apply to an IRA.

The 401(k) plans are named for the section of the tax code that governs them. Until the 1980s, most employers offered pension funds. But the costs escalated and 401(k)s replaced them.

In a 401(k), an individual can control how the money is invested. Most plans offer a selection of mutual funds.

A person's annual contributions are capped at $5,500, or $6,500 if 50 or older.


Plans do have management fees as well as setup and administrative costs,  which vary by provider. One 15-year-old company has been administering plans for many small businesses, now numbering approximately 7,000, the New York Times recently reported.

Whether to match an employee's contributions is optional.

Moreover, a provision in the federal Employee Retirement Income Security Act (ERISA) sets limits on contributions by highest-paid employees into their own account.

The Times, however, described a so-called safe harbor scenario that appears to benefit both employer and employee while complying with ERISA's rules.

Safe harbor requires an employer's contribution while letting employees put in as much as they wish, up to the regular 401(k) limits.

Small businesses just starting a 401(k) plan can begin traditionally and switch later on to a safe-harbor arrangement as business revenue grows, the Times noted.

 

 

About Victory State Bank

VSB Bancorp, Inc. (OTCQB: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank.  For additional information, Victory State Bank may be reached at 718-979-1100 or visited online http://www.victorystatebank.com.

Media Contact:

Relevant Public Relations, LLC

Headquarters: 718‑682‑1509

Mobile: 917‑715‑8761

Email:  This email address is being protected from spambots. You need JavaScript enabled to view it.