Whitehorse Business Resources

In light of working with commercial real estate, and having had a long career involving entrepreneurial projects and ventures, I expanded my site to include commercial real estate information and entrepreneurship.

Doing Business in Whitehorse

The Right Climate for Business

Richard Branson’s 13 Tips On How To Build A Multi-Billion Conglomerate

Richard Branson: Advice for Entrepreneurs

Richard Branson on Marketing and Business

It’s the external variables that catch us off guard, i.e. things out of our control, such as the economy. It is good strategy to research your project, before making a big financial leap. Interviewing business owners, and studying the market are key to learning about your business and the local industry. The Yukon is actually a tough place to launch a small business. I give a lot of credit to those entrepreneurs who survive in this market. We have a small population, with local, national and global competition. We need to know if our target market can sustain a new business, cover fixed expenses, variable costs and grow to pay back our investment of time and money – It’s not uncommon to build a business that runs you!

Some links to get started…

Issues & Questions (Answers are below)

  1. Is 49% better than 51% ownership, with a 2% buyback strategy? Control = Liability
  2. Partnerships can go from friends to business partners to liabilities – are you prepared?
  3. Government guaranteed loans – no statute of limitation
  4. Low prices/high volume vs. high-end/low volume vs. middle of the road/failure
  5. Passion is key to success in most everything we do!
  6. A business degrees does not teach you how to survive in business.
  7. Trades make good business sense.
  8. Most millionaires did it through real estate investments.
  9. The high failure rate of small businesses.
  10. The pros and cons of running a franchise.
  11. What business are you in? i.e. is Mcdonald’s business food or real estate?
  12. Exporting from the Yukon.
  13. Brick and mortar vs. online commerce – It’s about overhead and reach.
  14. Breaking a commercial lease – Do you know what happens?
  15. Pros and cons of incorporating
  16. Investing in real estate? – becoming a landlord? – what makes sense?
  17. Seasonal business can send you into a slow downward spiral.
  18. Becoming a slave to your business – When is enough, enough?
  19. National chains – Product life cycle is so short, you may get in, but is it worth it?
  20. What is involved in a marketing plan, a business plan, a proposal for the bank?
  21. Marketing mix: Product, Price, Place, Promotion (and positioning)
  22. Marketing channels that fit your business
  23. Why target a market? Why not sell to everyone?
  24. Before creating it, build marketing strategy into your product/service.
  25. Are you passionate enough about your business to eat “no name” for a few years :)
  26. Are you focused on money or lifestyle – what do you want from your business?
  27. You thought 40 hours was a time killer. Are you ready to double that?
  28. You can know all the business in the world, but WHO do you know?
  29. Outsourcing might seem expensive, but factoring in the benefits, is it cost effective?
  • More to come…

Answers

  1. Is 49% better than 51% ownership?
    If you are getting into a partnership agreement, under a new corporation, read my partnership article. If you are excited about your new business idea and new partnership arrangement, it’s easy to skip over the “what if” scenarios when you team up with your friend, investor or another business. Apart from a bullet proof, $5000 partnership agreement, or controlling interest, there are circumstances where it makes sense to consider setting up the partnership so that you own 49 percent and your partner owns 51%. Your partner gets control, which takes the liability off you, because you do not have a controlling interest when it comes to the decisions of the company. In return, you include a simple clause in your partnership agreement, which allows you to buy back 2%, for control, at any time. Disaster prevention is important.
  2. Partnerships can go from friends to business partners to liabilities.
    You’ve heard the stories before. Partnerships gone bad and partnerships that have lasted for decades. In my experience, partnerships change for two reasons: 1) money and 2) money. The first change happens when months or years pass and you are not earning enough revenue. The second change comes when revenues are on the rise. If you believe in “what comes around, goes around” or Karma, keep that in mind when you tie your financial success to someone else, in a partnership – food for thought. My best advice is to prepare your partnership agreement in a way that addresses all conflict scenarios. When you draw up the agreement, pretend you are going into business with a stranger. When life gets in the way, it’s best that the partners and the company are protected from emotional decisions and unresolvable conflicts, by establishing clear rules and resolution procedures, first. – Or go with the 49/51 arrangement.
  3. Government guaranteed loans – no statute of limitation
    There is no statute of limitations on this type of loan, if you default.
  4. Low prices/high volume vs. high-end/low volume vs. middle of the road
    Middle of the road is a poor pricing strategy. If you are going to open a business, review the market. Remember what happened to Woolco, Kmart, Eatons and Zellers?
  5. Passion is key to survival in business.
    When you find your passion, you find success. It’s not a job working 80 hours a week if you are passionate about your work. It takes passion to be the best. Passion is a competitive advantage that is not taught in business. Going into business for the sake of money is not a good strategy, unless your passion for money keeps you sharp, energized and up for the “game”, through all of the problems and challenges along the way. Either way, it’s your passion that will keep you going in difficult times; money will naturally follow.
  6. A business degree does not teach you how to survive in business.
    Reading a cookbook doesn’t make you a great chef; experience does. Business education is a place to start, but academics is not real world. On the job training, in my opinion, works well. Business is a wide scope of knowledge, from negotiations to customer service, most of which is learned by doing. I had a conversation, recently, about recruiting the right person to manage high-end customer service in a high profile, financial institution, based only on education. The big question in this conversations was, who would you hire to position your company as a top customer service provider? Do you want someone with a Doctorate or Masters degree in business or someone with a basic degree in Psychology? If it were my business, I would take the psychology degree, because customer service is about knowing people, not business.
  7. Trades make good business sense.
    OK, so you have a business degree; now what? Without a product, whether it be a skill/service or a tangible product, you are destined to be an employable graduate, for the foreseeable future. On the other hand, trades pay well, you learn on the job and build an inventory of tools, knowledge and expertise. It’s only a matter of time (and not a lot of time) before you can put up your own sign and call yourself the boss. You will have established connections and relationships in the community and within your industry. You will understand customer service, and to a large degree the entire scope of business behind your trade. You will know your business, service and skill-set; all of which won’t life-cycle off a shelf or go out of style.
  8. Most millionaires got there through real estate investments.
    That is just statistical fact, which can be searched out, online.
  9. The high failure rate of small businesses
    Small Business Statistics – July 2012
  10. The pros and cons of running a franchise.
    PROS: Lower failure Rate, help with start up and operation, buying power, brand awareness, national marketing, fast and healthy profits, proven business model CONS: Initial cost of buying into the franchise. You are not running the show; you are following the rules. There will be franchise fees, royalties, marketing fees, and a healthy percentage of revenue to pay each month.  You will be responsible for management and operations, after start-up. If it is not a major franchise, you may be buying a franchise from a company that is only in the business of selling franchises; they don’t care if you survive.
  11. What business are you in? i.e. is Mcdonald’s business food or real estate?
    Funny question to ask, but… from Rich Dad Poor Dad by Robert Kiyosaki“In 1974, Ray Kroc, the founder of McDonald’s, was asked to speak to the MBA class at the University of Texas at Austin. A dear friend of mine, Keith Cunningham, was a student in that MBA class. After a powerful and inspiring talk, the class adjourned and the students asked Ray if he would join them at their favorite hangout to have a few beers. Ray graciously accepted. “What business am I in?” Ray asked, once the group had all their beers in hand. “Everyone laughed,” said Keith. “Most of the MBA students thought Ray was just fooling around.” No one answered, so Ray asked the question again. “What business do you think I’m in?” The students laughed again, and finally one brave soul yelled out, “Ray, who in the world does not know that you’re in the hamburger business.” Ray chuckled. “That is what I thought you would say.” He paused and then quickly said, ‘ladies and gentlemen, I’m not in the hamburger business. My business is real estate.” Keith said that Ray spent a good amount of time explaining his viewpoint. In their business plan, Ray knew that the primary business focus was to sell hamburger franchises, but what he never lost sight of was the location of each franchise. He knew that the real estate and its location was the most significant factor in the success of each franchise. Basically, the person that bought the franchise was also paying for, buying, the land under the franchise for Ray Kroc’s organization. McDonald’s is the largest single owner of real estate in the world, owning even more than the Catholic Church.
  12. Exporting from the Yukon
    Yes, we are miles away from suppliers, and transportation costs are killer. There are a couple of ways that I know it can be done. Export Yukon specific resources, or import raw materials, put in added value and have the items back-hauled to a distribution center in Edmonton or Vancouver. In this case, you are looking at high-end, unique products that have a competitive advantage, which might involve a special recipe or concentrate, custom design or artwork. Online marketing is a good way to get started. Getting a market, out of the Yukon, may take years!
  13. Brick and mortar vs. online commerce; it’s about overhead and reach.
    My experience with brick and mortar and e-commerce brought to light a variety of pros and cons for both styles of business. E-commerce is a wonderful and interesting platform for doing business. There are competitive disadvantages, when competing with US etailers. Shipping is more expensive in Canada, but if the overall price is comparable, Canadians prefer to buy from Canada. For the most part, big chain stores dictate most everything to their suppliers, which makes suppliers/manufacturers apprehensive about incorporating online retailers into their supply chain, for retail partnerships. Depending on the product/s offered, returns can become problematic, with the cost of shipping. The upside is that whatever you do online, your overhead is lower than operating from a commercial building. From my experience, important skills to effectively operate an online store, include the ability to set up and maintain your own website. Being in a remote location, with a relatively small population, the Yukon is naturally a great place for operating an online business. Your reach is global and you can grow the business while still earning an income from your full or part time job. Another important fact about e-commerce, in Canada, is that it is still in it’s infancy. the timing is still great, if you decide to step into this business arena. An ideal setup would be to combine both, e-commerce and brick and mortar. They compliment each other. There is lots of information available, online, regarding ecommerce.
  14. Breaking a commercial lease – Do you know what happens?
    If you’re signing a commercial lease and you want to end the lease, you can be held responsible for paying the lease for the remaining term of the contract. What Are Your Options When Leasing Space?
  15. Pros and cons of incorporating
    There is more to know than just the pros and cons, so I will include a link to cover the details that you should know.
  16. Investing in real estate? – becoming a landlord? – what makes sense?
    This is another big topic. From my perspective, to get started, it makes sense to find a home with a legal suite, to build equity and eventually leverage that equity to purchase another property. That being said, I am going to provide a link, because there are many issues involved in this topic. I like the psychology involved in business, so I will start you with this article.
  17. Seasonal business can send you into a slow downward spiral.
    I’ll use basic math for this. Let’s say we open an upscale restaurant. A standard formula is 1/3 for food, 1/3 for overhead and 1/3 for net profit. Now let’s say our business is seasonal, from the middle of May to the middle of September, with peak months being June, July, and August. If we are lucky, we have 120 busy days. Lets take a look at a fictional fine dining restaurant that does $1000 a day in gross sales. That would be approximately 40 customers, or 10 tables of four, for fine dining, per day. $1000 per day x 120 days = $120,000 gross income, per season. Subtract $40,000 for food and $40,000 for overhead (employee/s, utilities, insurance, fuel, repairs, rent/mortgage etc). That leaves a profit of $4o,000, before taxes, for the season. Assuming this is a family operation, $40,000 is a tight budget to cover incidental expenses and the cost of living. When we look at seasonal operations, we need to find out what our net income will be, and make sure the passion for this business is in play, because we may just be building a risky, working lifestyle. If economic or environmental variables come into play, cutting our season short, or creating less demand, gross revenue goes down but our fixed costs still need to be paid.
  18. Becoming a slave to your business – When is enough, enough?
    Getting back to the restaurant scenario, let’s say the best we can do with our family operated restaurant is $100,000 gross, per season. That leaves us with net profit of $33,333. Considering the owners of many small, family owned operations don’t/can’t take a wage without eating into the net profit. Is $33,000 worth the liability, stress, time and work?
  19. National chain – Product life cycle is short…  is it worth it?
    I know a fair amount about this industry. I could write a book on it. In short, supplying big chain stores is a course in itself. The bottom line is that the bigger the order the harder the financial hit, if anything goes wrong. Chains is a good name for these stores because they dictate everything, and if you get a product into a chain store, chances are it will life cycle out within six months to a year. Considering the cost to gear up to supply a national chain store, you need to be innovative. You need to be more than a one product company. You may need to hire a merchandising company, and outsource warehousing, logistics and manufacturing. Ultimately, a big factor in surviving this industry is to have at least three chains on board (2000 stores), with a line of evolving products. If you lose one chain, you can limp along until you find a replacement retail partner.
  20. What’s involved: marketing plans, business plans, proposal for the bank?
    This is a very long topic to cover, so I am going to provide two links for you to get started with some research. If you are putting a proposal together, to get a loan from a bank, have it prepared and presented to the loans officer by your business accountant. They tend to be networked and the accountant knows what needs to be said and done. Business plan sampleHow to write a marketing plan
  21. Marketing mix: Product, Price, Place, Promotion (and positioning) 4 Ps +1 Product: Does your product meet customer needs? What are their needs and wants? Does the product address a problem? What problems does it address/solve? What What are the unique characteristics of your product (service)?
    Price: How much will you charge? What does the customer pay (wholesale/retail)?
    Place The supply chain: where will your product be in relation to the customer? Is it in easy reach? Coca-cola’s strategy is to have a coke within reach of all of consumers.
    Promotion: What marketing and promotion tools/channels will you use to communicate your core marketing messages; for example: print, radio, online, magazines, flyers, direct mail, networking, telemarketing etc.
    Positioning: create an image or identity in the minds of your target market.
  22. Marketing channels that fit your business
    It depends on the business, but marketing should, for the most part, be targeted. There is no point in advertising to people or geographical areas that are not going to be interested in your product or service. For an in-depth look at marketing, including the 4 P’s of marketing, here is solid resource.
  23. Why target a market? Why not sell to everyone?
    Short answer: because you are wasting your money and time with blanket marketing/advertising. You need to position the product/service so that you effectively market to and reach your target market. Even Coca-cola has limited marketing resources. The long answer: here is a solid resource for marketing information.
  24. Before creating it, build marketing strategy into your product/service.
    This is about positioning – Remember Mr. Clean? The character is marketable and memorable. When naming/positioning your product or service, stay focused on marketing. Review your marketing plan, and design the look and feel of your product/service to fit your positioning and marketing strategy. Use sight, sound, touch, taste, smell, and emotion; whatever best relates to your target market.
  25. You’re passionate enough about business to eat “no name” for a few years?
    The reason I ask this question is because launching a new business takes so much of your resources, and likely more than you have to give. I could write a book about this issue, too. It’s funny, after the fact, but it is very challenging at the time. My point is that if you are passionate, you will make the necessary sacrifices to reach your goals. The minute you lose motivation, you lose traction and excitement for your business. If you are not passionate, you lose an important competitive advantage; it’s a recipe for failure. The hardest journey will be the last steps before you reach each milestone and before you lay the foundation for long term success. That’s why we say don’t give up. 
  26. Are you focused on money or lifestyle – what do you want from business?
    I’ll keep this short. Until you ask yourself what you are seeking in life, you will likely never find it. Do you want money, power, religion, spirituality, freedom, or wisdom? Before you journey down the entrepreneurial road, make sure it fits who you are and what you want out of life. This is an important exercise to help you hone in on your passion, and find your path to success (success isn’t necessarily business or money).
  27. You thought 40 hours was a time killer. Are you ready to double that?
    From experience, I can say for certain you will live, eat and breath the business you start. If you are successful, you might create the lifestyle that you envision; if not, you may become a slave to your business, or the business may fail. Either way, be prepared for 16 hour days, seven days a week, for a couple of years. The growth and launch phase are exciting. It’s the day to day grind that follows, which can wear you down.
  28. You can know all the business in the world, but WHO do you know?
    This is par for the course, but it should be said. Your business will be at a competitive disadvantage if networking isn’t close to the top of your to-do list. The same rule applies to rising up the corporate ladder. 50% of your time should be spent on networking.
  29. Outsourcing might seem expensive, but is it cost effective?
    This is about economy of scale, time, management, overhead, liability, responsibility and quality of product and service. Weigh the pros and cons, but keep an open mind when it comes to outsourcing. Your time is going to be more productive with a focus on networking and management.
Whitehorse Business Resources | Whitehorse, Yukon | by – AJ Malcolm | Dome Realty