10 Big Ideas For Small Businesses
by Max Fawcett
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These trends from today and tomorrow could be a big deal for small businesses
Illustration By Alexei Vella
Generally, when it comes to small business the idea usually precedes the investment. But that’s not always the case, and sometimes it’s the cash that comes before the concept. For those that are long on capital but short on ways to deploy it, Alberta Venture presents five investment-worthy twists on established business models, and five new ideas with an eye towards the future.
Five for the Future
If there’s one thing we know about the future, it’s that we don’t know much about it at all. One need only look back on the visions of the future created by Hollywood in years past to see just how far off the mark attempts to predict it can fall. There are, thus far, no signs of either the life-and-death conflict between men and machines portrayed in James Cameron’s Terminator movies (and no, your struggles to sync your iPod playlist do not qualify) or the lighter hearted one of Robert Zemeckis’s Back to the Future trilogy in which time-travelling teenagers traipse about on neon-hued hover boards.
Regrettably, we don’t think hover boards will be showing up on the shelves at Canadian Tire any time soon, but from our vantage point here at Alberta Venture we do see two dominant themes that will play a prominent role in shaping our collective futures.
The first, the aging of the baby boomers, is a demographic certainty that will create opportunities for enterprising businesses. In Canada, as in most other western countries, the baby boomers are big business. As a disproportionately large part of the overall population, they’ve always exerted an enormous influence on their cultural and economic surroundings, and it stands to reason that they’ll do the same as they move into their so-called golden years. In the process, they’ll transform what it means to be elderly, and how senior citizens are regarded by the rest of society.
The second theme for forward-looking entrepreneurs is the environment, and barring the unlikely discovery that carbon dioxide emissions actually prevent global warming, it stands to reason that its significance will only continue to grow in the years to come. While that growing green consciousness may have a dampening effect on the economic fortunes of traditional fossil-fuel dependent industries, it may also trigger a boom in greener sectors of the economy, from remediation and reclamation services to alternative energy production. For entrepreneurs, the inevitable transition towards a greener economy will provide them with a rare opportunity to combine cash and conscience.
These are the trends of tomorrow, the forces that will define the business landscape that lies ahead. Here are five ways to play them for profit.
|1||Build Brain Brawn
Vanity has been big business for at least the last 20 years, as the once-mundane pursuit of physical fitness has been transformed by a small army of exercise experts looking to do a lot more than just pump you up. But with the arrival of the baby boomers into old age, the brain will join the body as a target area for those looking to get brawnier. Workouts will increasingly combine physical activity with exercises designed to promote mental agility, while personal trainers will have to design programs that challenge the mind as much as they do the body. For fans of irony, meanwhile, the dumbbell will take on a whole new level of meaning.
Death and dying just aren’t what they used to be, and as with most trends in 2010 we have the baby boomers to thank for that. While it’s still in its infancy, the preplanned funeral business is poised to become a growth industry in the years to come, as baby boomers demand more than the usual program of flowers and faith. In fact, the funeral may soon replace the wedding as the defining cultural moment of a person’s life, that spare-no-expense expression of one’s personality. As such, the funeral director will one day soon occupy the place of privilege that the wedding planner currently enjoys, and it won’t be much longer before Hollywood churns out a mediocre romantic comedy on the subject starring Jennifer Lopez and Matthew McConaughey.
|3||Farm it Out
It’s no secret that local food is in demand, as consumers seek to re-establish a relationship with the fruits, vegetables, meats and breads with which they feed their families. While consumer-supported agriculture is popular among 100 Mile Diet enthusiasts and urban foodies, it’s still a niche business. One idea that might bring local food to a wider audience is the remote farm, a concept that blends the virtues of local food with the entertainment value of FarmVille, a farm simulation game that is the most popular gaming application on Facebook with 73.8 million active users as of January 2010. An Italian startup, Le Verdure Del Mio Orto, has already experimented with the combination, allowing users to build an organic garden on their web browser and arrange for its harvest to be delivered to their front door.
|4||Waste Not, Want Not
Home builders generate an average of three to five pounds of waste for every square foot they produce. But for those in the fledgling field of industrial salvage, those pounds of waste wood, drywall and other materials are a golden opportunity. The combination of growing green awareness and rising costs associated with sourcing and shipping raw materials will mean that second-use materials, like the bricks that Chinese companies are producing from waste concrete, will get first-class treatment.
The opportunities available to scrap and salvage entrepreneurs are even greater here in Alberta, where the provincial economy’s habit of swinging between boom and bust produces a similarly manic rhythm within the construction industry. After all, when home builders face a climate in which there’s an almost unlimited demand for their product, as there was during the boom of the early 21st century, waste management and other efficiency-oriented objectives tend to get neglected in favour of sheer volume and speed. In their wake, ecopreneurs will be able to clean up, both literally and figuratively.
|5||Drink It Up
While we still get it for free, at some point in the not-too-distant future, water, the single most precious commodity in the world, will be valued as such. For private entrepreneurs, the market for water, even if national governments exercise control over the vast majority of the global supply, will be too profitable to ignore. It’s not clear yet what the legal framework for the transaction of water will be, but there are certain to be opportunities regardless of how and where governments decide to regulate it, from the brokerage of water licences to the installation and management of rainwater harvesting systems. One thing’s for sure, though: they will be regulating it, so this isn’t a field that will accommodate fly-by-night operations or half-baked ideas.
As Coca-Cola executives learned in 1985 when the release of an updated version of their bestselling product made the Titanic’s last voyage look like a success, new isn’t necessarily better. With that in mind, we present five twists on some more traditional small business ideas, as well as the challenges and opportunities associated with pursuing them.
|1||Get In the Doghouse
The childcare sector may no longer be a growth industry, given modern demographics that point to shrinking families, but that doesn’t mean there aren’t opportunities for those who know where to look. That direction is down, and in the direction of the nearest garbage can or source of food, because the family dog, having been elevated to the rank of deputy child, is now driving demand for a wide range of new services. A network of previously inconceivable businesses have popped up to feed this growing hunger for canine comforts, from dog bakeries to dog boutiques to – yes, we’re serious – dog reflexology clinics. But the biggest new dog-related business by far is the “doggy daycare,” where daschunds and Great Danes alike are cared for with a degree of attention and affection for which the charges at more traditional daycares could only hope to receive.Barriers to Entry: Moderate Unlike those who care for children – human children, to be specific – there’s no formally recognized training required to operate a doggy daycare. Meanwhile, the decor and design budget can safely be kept to a minimum since most dogs would just as soon pee on a carpet as look at it. But while the space doesn’t need to look good, it ought to be located centrally, given the fact that those most likely to avail themselves of the service will live downtown or in similarly dense urban neighbourhoods.Secret to Success: Authenticity This isn’t a job for cat people, curmudgeons or anyone else who doesn’t love dogs in all their ball-chasing and butt-sniffing glory. According to Brian Martin, the owner of Edmonton dog spa the Pampered Puppy, “If you don’t really like dogs, eventually they’re going to get on your nerves.” Feigning an interest in them isn’t a viable strategy, Martin says, and a lack of interest in dogs and their habits could prove costly. “The rule of thumb is that eventually you are going to get bit by a dog,” he explains. “In order to avoid getting bit, you have to totally understand the temperament of dogs. You have to understand their nature, and you have to watch for the warning signs. You just have to know what they are.”
The introduction of do-not-call lists and other forms of consumer protection may mark the beginning of the end for the telemarketing business, but the companies that subsidize their behaviour aren’t about to give up on getting your information. It’s valuable stuff, after all, and there are now far better ways to collect it than harassing people while they’re eating dinner or relaxing in front of the television. The most popular and efficient new method of soliciting information is through the email inbox, but marketers are turning to other online forums as well in their seemingly endless effort to find out whether you are, in fact, happy with your long distance service.Barriers to Entry: High It’s a business that you could run from your mom’s basement, but that doesn’t mean it’s an easy one to crack. Knowledge is power, as Sir Francis Bacon once observed, and it’s particularly true in this field. More importantly, unlike telephone numbers, email addresses are neither readily available nor obtainable. That said, newer entrants can make ends meet by focusing more on the service side of the business –designing emails, managing existing lists – until they build up a more robust database of their own.Secret to Success: Stay focused Gregg Oldring, the founder of Edmonton-based firm Industry Mailout, believes that one of the keys to his company’s growth is its steadfast focus on doing what it does best, rather than expanding to areas in which it isn’t as strong. “We have a very singular focus,” he explains. “We only do email newsletters. There have been a lot of opportunities along the way to get into other kinds of applications or things that are related, but we’ve stayed true to this particular focus.”
For as long as there have been lawns to be mowed, walks to be shovelled and kids looking to earn a little extra pocket money, there have been families contracting out household chores. But in 2010, with the two-income family rendering the archetype of the stay-at-home mom almost obsolete, the list of chores that are being farmed out has grown considerably along with the money that can be made by doing them. With twice the number of incomes and half the amount of time spent at home, families are turning to the 21st century equivalent of a butler-for-hire, businesses that offer to take care of the time-consuming chores associated with household management for a fee.Barriers to Entry: Low Overhead costs on a new home services business are minimal, with operational costs limited to the odd cleaning product, transportation and administrative duties. Perhaps the biggest hurdle that those looking to enter this business must overcome is their own attitude towards the job. After all, not everyone’s going to be happy spending their days cleaning up other people’s mess.Secret to Success: Reputation This is one business where word of mouth means everything. Do it well, and you’ll soon have more clients than you can handle. “Most of our business now is word of mouth,” says Catherine Tortorelli, the owner of Calgary-based Purple Orchid Cleaning Services. “You have to have a really good team, one that does more than the average cleaning company.”
|4||Shelve the Storefront
Location, location, location. It used to be that an integral part of any successful retailer’s formula was a good location, one that was as easily accessible and highly visible as possible. But the Internet, as it has with a great many other things, has undermined the importance that physical geography plays in retailing. Today, thanks to websites like eBay, Amazon and other online retailers, enterprising entrepreneurs can run a successful operation out of their spare bedroom.Barriers to Entry: Low All that’s required for a successful e-tailing operation is a digital camera, a product that’s in demand and a willingness to spend a significant amount of your time schlepping between home and the nearest Canada Post office.Secret to Success: Repeat business With big-box stores and other deep-pocketed organizations getting into the e-tailing game, your chances of competing with them strictly on price are about as good as those of a mom-and-pop operation trying to undercut the local Walmart. But by doing what it takes to cultivate a loyal customer base, you can carve out a profitable portion of the market. That’s been the experience of Tom Dryden, a Raymond-based ammonite dealer who does most of his business online at Ammonite.com and his eBay store. “The secret is to find some good customers and keep on providing them with what it is they’re looking for,” he explains. “You also have to be flexible in terms of complaints and shipping, because it’s a lot easier to keep them than get new ones.”
|5||Balance the Books
We’re not there yet, but most experts agree that it won’t be long before we revisit the sky-high energy prices of 2008 that forced many Albertans to seriously examine their energy usage. When that day comes, people may find themselves turning to an environmental auditor to help them balance the books on their newest bottom line. Like the dollars-and-cents accountant with which most people are familiar, an environmental auditor would help people pinpoint inefficiencies, eliminate waste and take advantage of government credits and programs. While government organizations like Alberta’s Climate Change Central are helping guide businesses and consumers in a greener direction, many will require more hands-on help.Barriers to Entry: High Credibility is the name of the game when it comes to a field as technologically oriented and technically challenging as this one, and that means a bachelor’s degree in some sort of science-oriented discipline is a bare minimum. However, aside from a bicycle to transport you between jobs and a notepad and a pen on which to jot your observations, overhead costs are virtually non-existent.Secret to Success: Salesmanship As a relatively underdeveloped field, the ability to sell is critical to any aspiring environmental entrepreneur. “To really shine as a small consultant or a small business in this sector, you have to develop your networks,” says Gwendal Castellan, a Vancouver-based certified energy advisor with City Green Solutions. Likewise, he explains, you have to be able to deploy those interpersonal skills with prospective clients. “It’s a new service, so you have to be able to sell it to people. You have to know how to market your services to people so they feel that there’s value to it, other than just the touchy-feely part.”