BUSINESS 360Ëš ISSUE
STIRRING THE WATERS Plans for Ogden Point: a bright future or a bitter break with the past? THE BUSINESS COST OF DOING NOTHING THE WALK-IN CLINIC CRUNCH
CANNABIS BRANDS WITH HIGH DESIGN
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entrepreneurs on the edge STARTUP ANGST
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CON TEN TS FEATURES 30
Startup Angst: Entrepreneurs on the Edge It’s not always a cakewalk to success: local business leaders recall the sacrifices, fumbles and victories from their startup days. BY ALEX VAN TOL
Stirring the Waters The Greater Victoria Harbour Authority has big plans for Ogden Point, but some critics say the GVHA is putting cruise ships ahead of traditional marine-based businesses. BY LISA CORDASCO
The Clinic Crunch With a chronic shortage of family doctors in B.C. and over-crowded emergency rooms, many people have turned to walk-in clinics.
BY BILL CURRIE
8 FROM THE EDITOR 13 IN THE KNOW The proposed Press Building, film studio fantasies, retail trends, and tips for better Mondays. 20 CASE STUDY Cannabis meets high design.
22 IN CONVERSATION As executive director of the Songhees Nation, Christina Clarke is creating new ways for Indigenous entrepreneurs to succeed. BY ATHENA MCKENZIE
62 LAST PAGE Lens & Shutter’s shot in the dark.
BY SUSAN HOLLIS
INTEL (BUSINESS INTELLIGENCE) 56 GROWTH The cost of doing nothing. BY CLEMENS RETTICH
58 COMMUNICATION Facing Facebook’s changes. BY CORALIE MCLEAN 61 MONEY Meddling with income sprinkling. BY STEVE BOKOR AND IAN DAVID CLARK
VICTORIA – OAKLANDS
Beautifully renovated throughout & set on a pretty tree-lined street in the popular Oaklands neighbourhood, this immaculate home offers great versatility and a very workable floor plan as a 4 bedroom family home or as a 2 bedroom w/ in-law accommodations. Great schools and all amenities minutes away. Just move in and enjoy as there’s nothing for you to do but grasp this wonderful opportunity. $829,900
VICTORIA – JUBILEE
This beautiful 1998 built ‘heritage reproduction’ home is set on a quiet, no through street on a low maintenance 3150 sq. ft. garden that fits perfectly with today’s busy lifestyle. All you need at your fingertips in this dynamite central location – shopping, schools, the Jubilee Hospital and major bus routes. A house you will be proud to call home! $919,000
VICTORIA – SONGHEES
Enjoy the views from this southwest facing 2 bedroom unit at Pebble Beach. Front row and centre to the bustling activity of the Inner Harbour from Fisherman’s Wharf, to the cruise ships with the Olympic Mountains in the distance and gorgeous sunsets. Experience Songhees living on Victoria’s waterfront with downtown an oceanside stroll away. $688,500
FAIRFIELD/OAK BAY BORDER
This whimsical Tudor-influenced home was built in 1926 and is beautifully preserved with the character of yesteryear carefully blended with many modern conveniences. Located adjacent to a park and set on a private half an acre, let history envelop you as you step inside and appreciate the rich wood and leaded glass. Located just minutes to private and public schools, shopping and great amenities. $1,795,000
JEFFREY BOSDET/DOUGLAS MAGAZINE
FROM THE EDITOR
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Bus ride lessons and big reasons to take a 360-degree look at your business
GROWING UP IN B.C.’S KOOTENAY REGION and interior, I spent many summers on long Greyhound bus trips to visit family. It was an economical, safe and reliable mode of travel. And it was a solid employer — my dad was a Greyhound bus driver for a number of years. I haven’t ridden a Greyhound bus in about 20 years and didn’t notice the drop in ridership happen, so I admit it came as a shock to hear that our country’s main bus service, which launched in B.C. in 1925, will terminate its B.C. and Prairie operations this fall. Sadly, it’s the end of an era: the demise of a national bus system that knit together the towns and cities of Canada, socially and, to a certain extent, economically. It’s hard to survive a 41 per-cent drop in ridership, and that’s what Greyhound experienced over the past decade. It blames this drop in part on growing competition from subsidized regional and national passenger services, low-cost flights, regulatory issues and the growth of car ownership. But you could also argue that Greyhound’s Western demise is due to in part to its reliance on big buses, old ways of thinking and an image in need of serious rebranding and fresh marketing. In short, for more than a decade it has needed a 360-degree focus on innovation, instead of quarters turns. “Outlasting competition No business is immune to failure. It doesn’t matter how is difficult. Doing so over many years it’s been in operation or how big it is. When a decades or centuries often company lacks the means, financially or creatively, to innovate its way into the future, there’s nowhere to go but down. seems impossible,” says In light of what’s happening with Greyhound, I was very intrigued to read a new book by Howard Yu, LEGO professor Leap author Thomas Yu. of management and innovation at Switzerland’s IMD Business But he has a solution. School and the man known for “disrupting the theory of disruption.” Yu’s book, Leap: How to Thrive in a World Where Everything Can Be Copied, is about how companies must develop their own “leap process” to stay relevant and leverage market shifts. I’m going to over simplify here, but Yu’s premise is basically that with new technologies and a culture of innovation, emerging businesses no longer have to build factories, employ huge workforces and invest in major assets to topple market leaders. They can move quickly, with a 360-degree approach to innovation while the industry giants are still compartmentalizing innovation and investing in propping up old assets and closed-loop systems. “Today,” Yu says, “knowledge gets disseminated faster. Whether you protect it or not, someone else will discover what you’ve discovered. How can you open up the innovation funnel to embrace external ideas for your organization’s product pipeline? Maybe you co-create with your customer or leverage your supply chain network to come up with new product innovations with your suppliers. You may even get involved with amateur inventors …” Who knows what Yu might have proposed, if anything, to revitalize Greyhound, but his book, which details why some companies, like P & G, have survived while others have failed, should be required reading for business owners and managers. In business, there can be no downtime when it comes to innovating. The wheels have to keep turning. — Kerry Slavens firstname.lastname@example.org
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Your best life begin s with a hom e t ha t insp ires you.
UNIQUE OPPORTUNITIES »
« UNIQUE OPPORTUNITIES
CONDOS & TOWNHOMES »
IN T RO DUC I N G
price upon request
1850 Land's End Rd., North Saanich
1 - 501 Pandora St., Victoria
789 Lily Avenue, Lot B, Saanich
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BEDS: 4 BATHS: 3 3,762 SQ. FT.
1,626 SQ.FT. IN ICONIC DISTRICT
RS - 8 ZONED OPPORTUNITY
BEDS: 2 BATHS: 2 2,220 SQ.FT.
24.57acres non-ALR with 1500 ft. of oceanfrontage incl. foreshore lease, deepwater moorage, and private dock. 250.857.0609 Logan Wilson PREC
Zoned CA-6 (Central Area) including; retail, restaurant, artisan/craftsman and high tech, professional/general office & numerous other uses.
Newly developed lot coming soon located in the heart of Saanich just off of lower Quadra St. Great opportunity to build your dream home.
An absolute must see-fully renovated townhome with 2 car garage and wood-burning fireplace.
Victoria Cao PREC Mark Imhoff PREC
CONDOS & TOWNHOMES
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IN T RO DUC I N G
4 - 356 Simcoe St., Victoria
703 - 66 Songhees Rd., Victoria
212 - 1655 Begbie St., Victoria
308 - 1351 Esquimalt Rd., Victoria
BEDS: 3 BATHS: 4 1,484 SQ.FT.
BEDS: 1 BATHS: 1 675 SQ. FT.
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First time on market in over 18 years. Large private ground level patio townhome in James Bay. 356simcoe.com
Bright and open floor plan with hardwood floors, floor-to-ceiling windows, as well as gorgeous views of the ocean, city, and mountains.
Nicely updated, fully rentable, Fernwood 1 bed, 1 bathroom quiet condo in well maintained building. Close to everything and easy walking.
Welcome home to the Colonial House in Saxe Point. This recently updated top floor corner unit has everything you need. Sold fast.
Tom de Cosson
Donald St. Germain PREC
S I N G L E FA M I LY H O M E S
11317 Ravenscroft Pl., Langford
6435 Sooke Rd., Sooke
2250 Dolphin Rd., North Saanich
5074 Cordova Bay Rd., Victoria
BEDS: 4 BATHS: 4 5,188 SQ.FT.
BEDS: 7 BATHS: 6 4,157 SQ.FT.
BEDS: 4 BATHS: 3 3,295 SQ.FT.
BEDS: 5 BATHS: 3 2,342 SQ.FT.
Spectacular oceanfront masterpiece offering privacy, breathtaking views and exceptional craftsmanship throughout.
The Seascape Inn, in the heart of Sooke. as been in business over 20 years. Great revenue investment.
100 ft. waterfront and 3/4 fully landscaped acre. Revenue and Lifestyle privileges. A must see.
Water views and steps to the ocean. This home sits on almost a 1/2 acre of pristine gardens. The jewel of Cordova Bay.
Brad Maclaren PREC
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CONDOS & TOWNHOMES IN T RO DUC I N G
PH7 - 2277 Oak Bay Ave., Oak Bay
B1004 - 379 Tyee Rd., Victoria
412 - 21 Dallas Rd., Victoria
7 - 4701 Lochside Dr., Saanich
BEDS: 2 BATHS: 2 1,676 SQ.FT.
BEDS: 2 BATHS: 2 1,253 SQ.FT.
BEDS: 2 BATHS: 2 1,325 SQ.FT.
BEDS: 2 BATHS: 2 1,542 SQ.FT.
Exclusive penthouse located in the popular Hamilton Building right in the heart of the Oak Bay Village.
Stunning ocean, mountain and city views from the comfort of this south facing penthouse.
Shoal Point corner suite with harbour views, 2 fireplaces, custom closet, large jacuzzi, heated flooring.
This bright townhome in Broadmead offers perfectly landscaped grounds and a private lake.
Sophia Briggs PREC Nancy Stratton
Victoria Cao PREC Mark Imhoff PREC
Nancy Stratton Sophia Briggs PREC
S I N G L E FA M I LY H O M E S »
S I N G L E FA M I LY H O M E S IN TRODUCIN G
INT RODUCI N G
2457 Tryon Rd., Victoria
5185 Agate Lane, Victoria
1829 Marina Way, Sidney
1259 Garden Gate Dr., Victoria
BEDS: 5 BATHS: 4 5,730 SQ. FT.
BEDS: 3 BATHS: 4 5,100 SQ. FT.
BEDS: 4 BATHS: 5 5,317 SQ. FT.
BEDS: 5 BATHS: 6 8,058 SQ.FT.
Magical waterfront retreat on a pristine 1.55 acre property, with world class views and sunny exposure. Spacious home enjoys total privacy.
A Malibu beachfront lifestyle property. Stroll from your oceanside patio onto miles of sandy beach with breathtaking ocean & Mt. Baker views.
Classy waterfront, custom Zebra Design home with over 5,000 sq. ft. of seaside tranquility. Lovely quiet setting. Truly remarkable.
Elegant & private gated 2.23 acres estate with stunning gardens. Quality home, mostly main floor living. glynismacleod.com
Glynis MacLeod PREC
Lisa Williams PREC
« S I N G L E FA M I LY H O M E S IN TRODUCIN G
price upon request
3935 Scolton Rd., Saanich
1980 Gillespie Rd., Sooke
2002 Hannington Rd., Victoria
744 Wesley Court, Victoria
BEDS: 5 BATHS: 4 2,168 SQ.FT.
BEDS: 2 BATHS: 2 1,548 SQ.FT.
BEDS: 5 BATHS: 5 4,063 SQ.FT.
BEDS: 4 BATHS: 4 3,772 SQ. FT.
Charming family home, 5 bedroom, 4 bath. located steps to Cadboro Bay village, Gyro park and Frank Hobbs.
Breathtaking sunsets are on offer at this pristine waterfront retreat affording the best of West Coast living.
This home was quickly and efficiently sold for over 22% more than the tax assessed value. call Neal today for details.
Unrivalled serenity and timeless elegance. A private oasis in coveted Cordova Bay with principal rooms backing on to protected parkland.
Don St. Germain
Canadian Owned and Operated. E.&O.E.: This information is from sources which we deem reliable, but must be verified by prospective Purchasers and may be subject to change or withdrawal. PREC is Personal Real Estate Corporation.
Tom de Cosson
www.douglasmagazine.com VOLUME 12 NUMBER 5 PUBLISHERS Lise Gyorkos, Georgina Camilleri
EDITOR-IN-CHIEF Kerry Slavens
DIRECTOR OF PHOTOGRAPHY Jeffrey Bosdet
PRODUCTION MANAGER Jennifer Kühtz LEAD GRAPHIC DESIGNER Jo-Ann Loro DEPUTY EDITOR Athena McKenzie STAFF WRITER Susan Hollis
ASSOCIATE GRAPHIC DESIGNER Janice Hildybrant
PHOTO ASSISTANT Belle White ACCOUNTING MANAGER Neville Tencer
ADVERTISING REPRESENTATIVES Deana Brown, Sharon Davies, Cynthia Hanischuk
DIGITAL COORDINATOR Karin Olafson
CONTRIBUTING WRITERS Steve Bokor, Ian David Clark, Lisa Cordasco, Bill Currie, Coralie McLean, Clemens Rettich, Alex Van Tol CONTRIBUTING PHOTOGRAPHERS Jeffrey Bosdet, Joshua Lawrence, Jo-Ann Loro, Belle White
PROOFREADER Renée Layberry
CONTRIBUTING AGENCIES Thinkstock p. 51, 55; Shutterstock p. 48-49
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INNOVATION | DESIGN | BUSINESS | STYLE | PEOPLE
[IN THE KNOW ]
JEFFREY BOSDET/DOUGLAS MAGAZINE
MAKING HEADLINES When the Times Colonist’s printing press stops running on September 30, it will bring to an end the publication’s legacy of locally printed newspapers started in 1858 when The British Colonist rolled off an old hand press. While the building at 2621 Douglas Street that houses the press will still be home to the Times Colonist and many of its departments, production will move to an offsite facility. Parent company Glacier Media is considering a couple of printing possibilities, both on and off Vancouver Island. DOUGLAS 13
Approximate direct spending in 2017 from film productions. 2018 is on track for a similar total.
FILM STUDIO FATE OR FANTASY?
Local productions, including: major film productions, such as Deadpool 2; television series, such as Murdoch Mysteries; and commercials for companies such as Volvo and Canadian Tire.
Requests for location packages, crew and accommodations.
DESPITE MULTIPLE EFFORTS OVER THE LAST THREE DECADES TO ESTABLISH A LARGE STUDIO IN THE CRD, VICTORIA STILL LACKS PROPER FILM-PRODUCTION INFRASTRUCTURE. DOES THIS BLOCKBUSTER-SIZED CHALLENGE HAVE A SOLUTION?
[ NEW + NOTABLE ]
e’re ever hopeful” is how Kathleen Gilbert describes the outlook on having a film studio set up on the South Island. As commissioner of the Vancouver Island South Film and Media Commission, Gilbert has witnessed numerous attempts, from the proposed use of the CRD warehouse on Viewfield Road to the conversion of the former Thrifty Foods warehouse on Butler Crescent. “The Viewfield Road space was not really suited for this use because of height issues, as a studio needs to be able to accommodate large sets,” Gilbert says. “The other effort [at Butler Crescent] fell apart after the death of two of the partners involved. But there is still a party interested in that property. It is still in play.”
Gilbert believes the building’s location on the peninsula is an ideal placement for a studio, pointing to traffic and parking issues in other areas that deter film productions. “Another challenge in Victoria is the lack of space to grow into,” she explains. “When a crew sets up, they need parking for trailers and a lot of storage. The peninsula has more options for growth.”
LOOKING NORTH A local studio could also provide space for film-crew training, similar to the trial program established this year by the provincial government and North Island College at the new Vancouver Island Film Studios in Parksville. Built by Ron Chiovetti, the Island’s first purpose-built film studio is already home to the Hallmark Channel’s Chesapeake Shores.
“We see it as a benefit to the Island as a whole,” says Joan Miller, film commissioner at Vancouver Island North Film Commission, which serves the Island from Ladysmith to Cape Scott. “Many projects involve collaboration with the South Island. With Vancouver and the lower mainland bursting at the seams, a lot of people are looking over here.”
Progress in Parksville The recently opened Vancouver Island Film Studios features over 50,000 square feet of production space, a construction shop, office space and parking.
[ NEXT-GEN CEO FOR MONK ]
[ BIDCENTRAL CEO’S BOLD VISION ]
[ NEW PRESIDENT FOR ROYAL ROADS ]
Caitlin McKenzie is the third generation of the McKenzie family to take the reins of Monk Office since 1956. “My father, James, and I have discussed this for years,” she says. “I have big shoes to fill and a lot of respect for the people and team who have led this company prior to me.” With 140 employees, Monk has 10 Island retail locations.
Sue Connors is the new CEO of BidCentral, part of the BC Construction Association. Connors, formerly VP, Business Development at RevenueWire, says, “BidCentral is ready to grow ... I’m looking forward to expanding our services and reach, further solidifying BidCentral as B.C.’s largest construction bidding marketplace.”
Dr. Philip Steenkamp becomes Royal Roads University’s fourth president and vice-chancellor for a five-year term starting January 1, 2019. He joins RRU from UBC where he served as VP, External Relations since 2015 and was key in the development of UBC’s strategic plan “Shaping UBC’s Next Century.”
HOW THEY DID IT INNOVATE
BUSINESS IMPACT THREE ISSUES BUSINESSES SHOULD KNOW ABOUT
DESIGNING A LESS-PAINFUL NEEDLE NO ONE LIKES GETTING INJECTIONS, and kids are especially susceptible to the fear and anxiety that come with routine or medically necessary shots. Chemainus-based Mark Syme and a small team at Biopreme Medical Technologies have spent the past decade redesigning the traditional hypodermic needle to deliver less pain with its poke.
CHALLENGE To reduce pain while effectively delivering medication, a needle should reach an optimal subcutaneous depth of three millimetres in a stabilized injection site. Working backwards from this protocol, Syme and Dr. Aleksandr Kavokin, a Yale-trained physician based in Russia, designed a suction tube controlled by a squeeze bulb that draws the flesh gently toward a hidden micro-needle. “We went into the customer discovery process with open eyes,” says Syme. “We realized that a very viable niche [for] pediatric applications would be something to focus on.”
RESULT With support from famous U.S. physician Patch Adams and mid-Island tech organization Innovation Island, Biopreme has raised $200,000 in grassroots funding and is working with StarFish Medical to bring the Effi-Q syringe adaptor to market. Though a release date and price are pending, Syme says each adaptor will be sold for less than a dollar. Added benefits of the new design include improved safety for medical personnel through a lowered risk of needle prick incidents and blood spatter.
Single-use plastic bags remain banned in the City of Victoria. The B.C. Supreme Court dismissed the Canadian Plastic Bag Association’s challenge to the Checkout Bag Regulation.
UPCYCLE THIS A WEST COAST COMPANY’S WEAR IT, DON’T WASTE IT PHILOSOPHY HAS INSPIRED ITS MOST SUSTAINABLE CLOTHING COLLECTION YET.
Lifestyle Over Luxury (L/L), a Victoriabased goods and apparel company whose HQ is a solar-powered van called “Lucy,” has launched a limited-edition clothing collection made from 100-per-cent upcycled, pre-consumer waste. The collection is made with new materials — from leftover fabrics to warehouse off-cuts from other brands — that would have otherwise ended up in landfills. “The most sustainable product is the one that already exists,” says Jeff Duke, who founded L/L in Australia in 2014 before moving operations to Canada. By turning recycled materials into new, high-quality products, L/L claims each purchase saves about 2,600 litres of water, a third of a pound of pesticides and eight pounds of carbon emissions. The packaging is totally biodegradable. L/L’s limited edition line is available online and at select Whole Foods Markets.
Get ready to pay. B.C.’s Employer Health Tax (EHT) is sticking, despite business push back. Covering salaries, vacation pay, bonuses, salaries and tips, and employer contributions to RRSPs, the EHT affects employers with payrolls over $600K.
Changes to B.C.’s Employment Standards Act came into effect this spring, giving employees more generous and flexible pregnancy, parental and compassionate care leaves.
3 MUST-KNOW RETAIL TRENDS 1
MAGIC POINT OF SALE With smartphones, visual search and personal assistants, more consumers expect brands to respond on demand. To compete, brands have to be ultra-responsive — or very worth the wait.
Retailers must make the leap from customer experience (CX) to intimate experience (IX). That means digging deeper to find out what customers want so you can offer personalized services, products, discounts, shopping and events to prove you know your customer isn’t just an anonymous face in the crowd.
The so-called older demographic is tired of age clichés about penny-pinching seniors who only want walk-in baths. Research shows 75 per cent of marketers underestimate how much consumers 55-plus will spend, and design and market with stereotypes in mind. It’s time for businesses to think about older in newer ways.
BRIGGS & STRATTON
“FRIENDLY COFFEE FOR FRIENDLY PEOPLE,”
WHERE BUSINESS HAPPENS
says PiCNiC Too co-owner Jon Perkins. “That’s the tone we try to set. It’s not for a powerlunch but a friendly business meeting with lunch or coffee. We’re not trying to be hip or cool. It’s a comfortable environment where everyone can feel welcome, whether they’re wearing a suit or shorts.”
BELLE WHITE/DOUGLAS MAGAZINE
PiCNiC Too is a hot spot for Fort Street’s biz community, from the tech set to shop owners to non-profit leaders.
LIVE VICTORIA Together, this dynamic team offers their clients an in-depth knowledge of Victoria’s real estate market and the characteristics of the array of neighbourhoods under consideration.
SOPHIA BRIGGS 250.418.5569
THE NOSH PiCNiC co-owner Melissa Perkins keeps the menu fun and inventive by creating daily salad and sandwich specials, as well as an internationally inspired brunch.
SOUNDTRACK Crucial to the vibe is PiCNiC Too’s Spotify playlist, curated by Jon. “There is a particular sound I look for,” he says. “I stay away from pop and anything too mainstream.”
OFF THE MENU Jim Hayhurst of Pretio Interactive is a regular who hopes his Jim Dandy Shandie (ginger kombucha and beer) becomes a menu item like the sandwich named for tech champ Owen Matthews.
NETWORKING To inspire conversation outside the office, Hayhurst lets Pretio employees charge their PiCNiC coffee to his company’s tab — as long as they bring another person.
Personal Real Estate Corporation
NANCY STRATTON 250.857.5482 REALTOR®
strattonandbriggs.com Sotheby’s International Realty Canada, Independently Owned and Operated. E.&O.E.: Not intended to solicit properties already under agreement.
END OF THE ROAD
other major Island routes. John Wilson of Wilson’s Transportation Greyhound Canada has announced says his company will team with Tofino Bus Company to it is pulling its bus services for handle Island freight. He adds Western Canada, starting October that his company is in talks with 31. Greyhound had already Greyhound regarding off-Island cancelled its last Island bus route, routes, and with the B.C. Ministry from Victoria to Nanaimo, in of Transportation regarding February. Tofino Bus Company subsidies for specific routes. now covers the route along with
HOW TO DO MONDAYS BETTER IT MAY NOT BE YOUR FAVOURITE DAY, BUT MIKE VARDY — THE PRODUCTIVITYIST — HAS TIPS TO MAKE MONDAYS WORK.
START YOUR WEEK ON SUNDAY Monday can feel dreadful because all your planning and execution is often slated for that day as it kicks off your week. Try spending part of your Sunday setting up your week by mapping it out.
KILL MONDAY MORNING MEETINGS If you have meetings scheduled early on Mondays, see if your superiors and colleagues would be willing to shift them to the afternoon — or better still, Tuesday. Freeing up that time gives you an opportunity to focus on your plans for the week before anything can derail you.
BE MINDFUL WITH EMAIL Don’t add to other people’s inboxes and overwhelm them with messages that can be deferred to later in the week. If that isn’t doable, try batching your email messages so the recipient gets
everything in one fell swoop.
SPREAD OUT THE WORK Remember that Monday is just the beginning of the work week. If you keep that in mind then you’re going to be better equipped to disperse your work throughout the week and better prioritize in the process.
THEME YOUR TIME By defining portions of the day with specific types of tasks (communication work, research work, administrative work, etc.), you’ll have something to anchor you when distractions steal your attention. Place these themes in your calendar and let them guide your focus through the day.
805 Fairfield Rd Victoria, BC V8V 0A7 T 250.595.3888 W clinic805.ca
Writer, speaker and productivity strategist Mike Vardy is the founder of productivityist.com and the creator of The Productivityist Playbook and TimeCrafting.
SKIN IN THE GAME: HIDDEN ASYMMETRIES IN DAILY LIFE is a book for business and for life by Nassim Nicholas Taleb, author of The Black Swan. Sharply provocative, Taleb posits that having skin in the game is risk management’s backbone and is the “ultimate B.S. buster.” Without it, he says, “fools and crooks will benefit.” Don’t say you weren’t warned. (Random House Canada)
AL’S BUSINESS TIP FOR SUCCESS “Good leaders know how to listen. Listening is not a skill you improve by simply taking a course. It takes practice. Start listening more.”
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Assembly of Corvette When the build begins Landing is expected to take on Corvette Landing half the time of traditional in Esquimalt this fall, construction, according to don’t expect this the developer’s submissions to Esquimalt council. 12-storey, 83-unit condo development to rise in a typical way. Corvette Landing is a modular building whose condos will be pre-built offsite, shipped from a factory and assembled onsite. A big draw is the speed of build and cost effectiveness. “It’s about providing marketaffordable housing to the ‘missing middle,’” says Troy Grant of Edmonton-based Standing Stone Developments. “People with incomes from $60K to $140K who are caught in the middle between dedicated affordable housing and pricey condos.”
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Victoria and Saanich have agreed to ask their voters an identical question on the October 20 municipal election ballot.
“Are you in favour of spending [an amount to be determined] for establishing a Citizens’ Assembly to explore the costs, benefits and disadvantages of the amalgamation between the District of Saanich and the City of Victoria?”
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DESIGN | BUILD
THE FUTURE OF THE PRESS
ith its new project, developer Merchant House Capital is looking to transform midtown and give new life to the unique space at 2621 Douglas Street, currently home to the Times Colonist and its printing press. The mixed-use development, called The Press Building, will incorporate a restoration of the decades-old office and retail complex into 120,000 square feet of commercial and social space across three levels, while 4,000 square feet of “garden” retail spaces will front onto Douglas Street. Merchant House Capital is working with CBRE Victoria to attract tech and commercial tenants. The Times Colonist newspaper will remain as the anchor tenant of the modernized building. A proposed residential tower is under zoning application.
The renovated Print Reel Room will feature a new entry on Kings Road and elevator access to the rooftop common area. With over 50-foot ceilings, a dedicated loading dock, reinforced concrete floors and a freight elevator, the historic space is being rezoned for a distillery/brewery and tasting room.
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PROVIDING OCULOPLASTIC COSMETIC & AESTHETIC TREATMENTS SINCE 2000
CASE STUDY ■ BY ATHENA MCKENZIE ■ PHOTOS BY JEFFREY BOSDET
THE CANNABIS INDUSTRY MEETS HIGH DESIGN With its new flagship dispensary in the downtown core, FARM challenges the stereotype of the pot shop
ITH ITS ELEGANT LIGHT FIXTURES, terrazzo-inspired flooring and sophisticated tile work, customers of the new FARM dispensary on Douglas Street might feel like they’ve entered a high-end café or wine shop — and that’s completely intentional. “For a certain demographic, they don’t feel like they’re in a cannabis store and that makes it much easier,” says FARM co-founder Allen Spillette. “That’s really what we’re trying to accomplish: to take away the stereotypes and to have it like any other well-run business in the city.”
LOCATION, LOCATION, LOCATION To achieve this goal, Spillette and co-founder Michael Supowitz purchased the historic building at 1402 Douglas Street, known as the Porter Block. Originally a butcher shop, R. Porter & Sons, the two-storey, brick-and-stone building was most recently home to the Aveda Institute.
CANNABIS HIGH-LIGHTS 20 DOUGLAS
StatsCannabis is Statistics Canada’s initiative to crowdsource cannabis prices across the country. Crowdsourced data from January 25 to May 30, 2018, shows the average price per gram in B.C. was $6.91.
Canada sold just over $1 billion worth of cannabis products abroad in 2017. British Columbia accounted for 59 per cent of these sales.
Essentially, we were trying to create a really safe, clean, bright experience that takes away stigmas… a place that our moms would feel comfortable shopping in.”
“We chose the location for a couple of reasons,” Supowitz says. “We wanted a downtown presence — and it’s a fantastic building that comes with architecture and all of this history. It was the prime canvas for us.”
Meade and the FARM owners also wanted to include as many Island-sourced elements as possible, including the terrazzoinspired flooring by Stone Design and the stained-glass window from SGO Victoria.
BRAND FORWARD FARM worked with designer Ivan Meade of Meade Design Group to create a space that would deliver the ideal customer experience. “When you are designing a commercial project, you have to design the focal points as one moves through the space, so in each area the customer sees something,” Meade says. “I wanted to create the whole experience with the flow.”
By choosing elements such as the dramatic light fixtures, the millwork counter and the brass foot rail, Meade created an esthetic that wasn’t too traditional or too contemporary. “Through the design, we wanted to tell the story that the space respects history and the business is trying to do it right,” Meade explains. “The subliminal messaging is that this business has been here forever and is here to stay.”
1 The repeating brass elements throughout the space, such as the logo and the specially imported brass tiles above the retail counter, contribute to its high-end esthetic. 2 Meade looked to create numerous focal points for customers as they move throughout the store, including the brass logo with accent lighting in the waiting area. 3 The heavy brass doorpull with FARM’s “F” monogram gives a sense of arrival, and was inspired by the statement door pulls used at luxury boutiques around the world.
4 To lead customers through the space, Meade incorporated the dispensary’s logo at eyelevel over the reception counter, using a brass inlay in the black subway tile.
In 2017, about 4.9 million Canadians aged 15 to 64 spent an estimated $5.6 billion on cannabis for medical and non-medical purposes. Of Victoria users: 13.1 per cent
used it for medical purposes with a medical document; 37.4 per cent used it for medical purposes without a medical document; and 49.5 per cent used it recreationally.
In Canada, B.C. produced the most cannabis products in 2017, accounting for 36.6 per cent of total production. Quebec (31 per cent) and Ontario (22.7 per cent) were the second and third largest producers, respectively.
IN CONVERSATION WITH CHRISTINA CLARKE, EXECUTIVE DIRECTOR, SONGHEES NATION
CREATING A NEW PATH As executive director of the Songhees Nation, Christina Clarke is pushing past barriers and finding new ways for Indigenous entrepreneurs to succeed. BY ATHENA MCKENZIE
PHOTO BY JEFFREY BOSDET
hen Christina Clarke was studying Canadian history in university, she became interested in the lack of information on First Nations. “In history studies, it’s always the first chapter in every book, and then it stops,” she says. Now, as the executive director of the Songhees Nation, she’s passionate about furthering First Nation development and ensuring that Indigenous people “are part of the whole story” — now and going forward. “We use property taxes to build up our governance and administrative structure,” she says, explaining how the Songhees Nation is furthering economic growth. “When you implement property taxation under the Indian Act and now under the Fiscal Management Act
… it builds capacity within the Nation for self-government, and people stop thinking, ‘We are running government programs,’ to ‘We are a government.’” Clarke is also focused on building relationships and promoting economic growth in the entire region. The Songhees Nation was an early member of the South Island Prosperity Project (SIPP), which seemed a natural fit, given each shares a mandate for collaboration. “The Songhees Nation showed incredible leadership and helped develop the model for SIPP,” says CEO Emilie de Rosenroll. “Christina, in particular, has been so involved in reaching out to other First Nation communities — and you can’t undervalue that role in increasing engagement. She works hard to boost community and that translates into success for the Songhees Nation and the entire region.” Douglas visited Clarke at the Songhees Wellness Centre to discuss the Nation’s
philosophy toward business, the challenges of Indigenous entrepreneurship and a new era of economic growth.
What are the things that drive you in your job? I’m driven personally in my career path by thinking about growing this ecosystem. This nation fits in the ecosystem, and the ecosystem needs work. We talked to other nations and we’re not competing if we both do tourism. We’re building the pie — so a bigger slice for everyone. I would just love to see more collaboration between the communities, and I think there are tons of opportunities there. For example, we’re talking to Beecher Bay First Nation about tourism projects. We could put
“Not only do we have the potential to develop on reserve but we also have properties that we own off reserve. We are no longer tethered to the reserve — we are competing and collaborating with other businesses in the region.”
tourism packages together that go all the way up the Island. Doing business together, as we’ve found with our other partners, just brings out the strength of everyone.
Other than tourism, where do you see the business potential for the Nation? Our four main focuses are tourism, hospitality, property development and industrial marine.
In addition to tourism, how does collaboration play into these? We have a partnership with Esquimalt Nation and the Ralmax Group of Companies for Salish Sea Industrial Services. They do dredging and pile driving and that sort of thing. It’s not a
staff-intensive company, but Ralmax has been fabulous about actively pursuing an Indigenous workforce in all of their companies and having programs for those going to apprenticeships too. So that’s a really good example of a partnership.
Does the Nation also encourage Indigenous entrepreneurs in the technology industry? It does. I think it’s not one of the main pillars because with the ones we chose, we had some natural talents and already had businesses in those industries. The Songhees Innovation Centre is partly about addressing that. Our anchor tenants are technology companies like Animikii. They are a great example of an Indigenous technology business, and our members witness DOUGLAS 23
“I was more frustrated in the past than I am now.... The barriers are still there but the willingness to address them is also there.” their work and work with them — they are building a website for our tourism hospitality. They are talking about running a coding camp and that really speaks to youth and seeing an Indigenous person in that job really makes it real for them.
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What are some of the challenges facing Indigenous entrepreneurs? There are systems in place that are not designed for Indigenous business people to succeed. As an example, it’s very difficult to get a business licence if you are on a reserve and want to do business in another jurisdiction. We have a food truck and when we were trying to get a business licence, we struggled with each municipality saying we couldn’t do that. The staff who were working on it kept coming back to me, saying ‘we got another no.’ It wasn’t that people didn’t want to help, it was just that the default is “no” when there is no path laid out. We’re always having to pave a new path … The reserve system has a different set of laws and a different path forward, so just fitting in with these existing systems is a real challenge. For a new entrepreneur, starting up and not knowing how to navigate the system and getting a lot of nos, a lot of them will just give up, believing that it can’t be done.… Building companies ourselves is building capacity and pushing past some of those barriers to help create a pathway for others to follow.
What frustrations do you have about the path forward? I was more frustrated in the past than I am now. There have always been barriers, but there didn’t seem to be the will to break those barriers down. [With regards to] our previous Conservative government, a lot of their law making just increased the barriers. I think they were thinking they could mainstream everything, but there isn’t a path to go along that main stream — there is no entry path. We have these parallel systems. We do need parallel systems because we are coming from a different place but there needs to be crossconnections between them. It is an ecology. The barriers are still there, but the willingness to address them is also there.
What other changes have you seen? There are more conversations between the communities happening. There is more of an awareness that our economy is an ecosystem and in order to be healthy, all parts of it need to fit together and work together. If you have one marginalized group outside of that, it hurts that group, but it hurts the system too. The system is not benefiting from what those people can bring to the table.
How does your involvement with SIPP play into that? That is part of our outreach, and it is really led by Chief Ron Sam and his personal philosophy about the need for collaboration and working together. When he became chief, he started more outreach to other local governments, and that outreach led to business partnerships like the tourism and hospitality training with Camosun College. We very quickly realized the benefits of having conversations. Even if we are at a table to disagree, we’re having a voice in our region and the region is incredibly receptive to that.
To help fund the building of the Songhees Wellness Centre, the Songhees Nation implemented the First Nations Goods and Services Tax (FNGST), a revenue-sharing agreement with the federal government.
What has come out of this collaboration? Our Indigenous Connect program, sponsored by SIPP, runs out of the Innovation Centre in the upstairs of the Wellness Centre. They’re helping to bring speakers and facilitate meetings and letting it grow on its own. Right now, we are learning about business models that have entrepreneurship in them but also meet the expectations of bankers and investors. That’s one example of an action that is happening out of that partnership. A big part of it too is that we are being seen as a partner and as being invested in this region and its economy. It’s helping others not forget, so the Lekwungen people, whose territory this is, are not a footnote — they aren’t just the first chapter in the book but part of the whole story. ■
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WAYPOINT INSURANCE SERVICES SEEING INSURANCE DIFFERENTLY WITH TONY HAYES
TONY HAYES CEO, Waypoint Insurance
aypoint Insurance is a thriving independent BC insurance brokerage, and a company embarking on a transformational journey. When CEO Tony Hayes joined in mid-2014, the 14-location firm was named Vancouver Island InsuranceCentres and all operations were solidly focused on Vancouver Island. “I remember being impressed with the depth of relationships our people and our branches had with our communities,” said Hayes when asked to look back at his early days. “You don’t get this feeling in most places. It is really unique, and I knew our biggest successes would come from encouraging and growing that piece of our culture; our customer experience.” Not one for complacency, Hayes immediately began a path to reinvigorate the company. “Tony has an energy around him that pulls people in,” quotes Melanie Davies, Waypoint’s Director of Sales and Marketing. “Once he understood where we needed to go, he worked tirelessly to help everyone understand the vision and get excited for the future.”
Tony’s vision for the future was simple: make it easy for clients to get their needs met, and work to exceed their expectations wherever possible. Since 2014, Waypoint has completed some major foundational projects: the opening of 4 new locations – 3 of which are on the mainland, a rebrand of the company from VIIC to Waypoint Insurance, and the conversion to a new computer system. “And we aren’t stopping,” notes Hayes. “We are working on our digital presence and we continue to look for existing insurance brokerages that want to join the Waypoint family.” Waypoint Insurance is continually looking at ways to make insurance easier and more accessible. With over 30 years of experience operating a custom-designed program for personal and commercial clients, the company knows a lot about how to build a product to fit the unique needs of their clients. Waypoint also knows that the level of service and response provided in a claim situation is where the real value of their A D V E R T O R I A L F E AT U R E
product shines; they have dedicated partnerships with local adjusters as well as an in-house claims department ready to assist 24 hours a day. Transformational and unique are not common words for describing an insurance brokerage, but Waypoint Insurance is working to change that view. Visit Waypoint Insurance in person, online at waypointinsurance.ca, or by phone at 250-310-8442 and see how they do insurance differently!
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“We have had such wonderful service from GableCraft and we are so happy with our home. Everyone that we have worked with has been top notch!” — M. Dixon, GableCraft Home Owner
ableCraft Homes is a dynamic home builder committed to creating sustainable and welcoming communities where families thrive for generations. Using creative site planning, meticulous attention to detail and the highest quality of craftsmanship, they build homes that are inspiring and highly functional, with all the features that modern families need to live their best lives. The experienced builder-developer has ongoing and completed projects in British Columbia and Alberta, including neighbourhoods in Comox and Nanaimo. Royal Bay is the first GableCraft community in the Victoria area but is not unfamiliar with the locals, with more than 100 new homes sold and occupied since the launch of Royal Bay in 2016. “We are striving to be an inclusive community offering homes suitable for firsttime home buyers, families and downsizers” says president and chief executive officer Lance Floer. “We want GableCraft Homes to be a leader for Colwood and we have started by building Built Green single-family homes and implementing our Customer Care Program.” TOWNHOMES GableCraft Homes is currently selling their new collection of townhomes, West Commons, offering 2, 3 and 4 bedroom plans with two car parking from the high $400s.
West Commons provides fresh modern coastal living with a wide selection of amenities for buyers, including a community garden and outdoor picnic area. “We are extremely excited to introduce buyers to the West Commons project, in just two months phase one is already more than 50% sold” area manager Patty Castello. “Buyers are recognizing the value West Commons has to offer and what a great opportunity it is to get in early.” SINGLE-FAMILY Phase two at Royal Bay is now selling, which is just a short walk to the ocean! The Laned and Front Garage Collections in start from the high $600’s. “People are drawn to our Laned Homes if they are looking for that perfect workshop space in the backyard, also the detached garage allows a more spacious main level floor plan. Whereas our Front Garage homes offer a full 8-foot basement that can be the ultimate entertainment space or just a place to hide the kids’ toys” says Castello. GableCraft Homes also sells an Executive Collection, a larger move-up home for growing families looking to expand their living space. Starting at 2,580 sq. ft. with an unfinished walkout basement and backing onto future parkland. PAIRED RANCHERS Looking for a master bedroom on the main floor? Then the Paired Rancher collection might be just what you need. Offering A D V E R T O R I A L F E AT U R E
versatility and variety in a single-floor home that backs onto Meadow Park. Choose the 1,543 sq. ft. model with two bedrooms and two bathrooms or if you want more space then you can opt for the loft model, adding 580 sq. ft. in the form of two more bedrooms, another bathroom and common space.
3549 Ryder Hesjedal Way Colwood, BC email@example.com 778-265-8350
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MARWICK INTERNET MARKETING HELPING COMPANIES SUCCEED ONLINE
DID YOU KNOW?
3 out of 4 people who conduct a local search on their smartphone visit a related business within 24 hours. CHRISTIAN THOMSON CEO, Marwick Marketing
very business owner understands that digital marketing moves quickly. With powerful technology advances and machine learning, consumers are light years ahead of advertisers. This provides an opportunity for forward-thinking business owners, and kills complacent businesses practicing redundant marketing techniques. The development of digital marketing is not slowing down anytime soon; in fact, it’s speeding up. As CEO of Marwick Marketing, a Premier Google Partner agency specializing in digital marketing, I had the pleasure of attending the Google Marketing Live event in July in San Jose. Every year Google hosts this event to highlight the latest trends in digital marketing and share new insights for the coming year. Here are my most important takeaways every business owner should be aware of. In 2018, consumers have been more aware of how they are marketed to; they are frustrated by slow experiences and annoying ads. They know what a Google Ad is verses an organic placement. They ignore or get “banner blindness” when they see useless banner ads too often. They will skip ads on
YouTube if it doesn’t provide value. Never before have consumers been more aware of being marketed to. Consumers now expect a helpful, personalized and frictionless experience when shopping for your service or product online. Marketing can provide this in a meaningful way, avoiding the annoying, repetitive and unimportant ads. Business owners should be creating valuable advertising to assist the user. This used to mean giving a quick answer on Google, but now people expect a meaningful experience, and so we as business owners need to understand what they need in that moment. As business owners and marketing professionals, we all want better results from our marketing. In 2019 and beyond, relevance will drive results. Relevance starts with understanding consumer intent and the journey online. And there is a lot of intent from our potential new consumers, with 3 out of 4 people who conduct a local search on their smartphone visiting a related business within 24 hours. That’s intent, and it’s up to our business leaders and marketing departments to be relevant. As such, in the coming month, Google’s A D V E R T O R I A L F E AT U R E
new platform releases include remarketing across multiple devices, cross-device reporting, TrueView with Action Ads and Responsive Search Ads to name just a few of the new features released. These new products will enable business owners just like you to better adapt and be there for your consumer. It will allow you to do more, by providing more value. It will create opportunity for business owners ready to take action to be at the forefront of marketing into 2019. At Marwick Marketing we partner with your business to ensure you are at the forefront of marketing. Give us a call and let us show you what is possible in 2018 and into 2019.
Victoria, Vancouver, Squamish, Prince George 604-390-0065 firstname.lastname@example.org MarwickMarketing.com
PHR BC & Yukon is a professional association with more than 5,700 members encompassing CEOs, VPs, directors of HR, HR generalists, HR advisors, consultants, educators, students and smallbusiness owners in BC and the Yukon. 765 of these members can be found on Vancouver Island. The National Designation of the HR Profession The association is the grantor of the Chartered Professional in Human Resources (CPHRTM) designation in BC and the Yukon. As a member of CPHR Canada, CPHR BC & Yukon contributes to setting and upholding the national standards for the CPHR. Connecting People Who Support People Locally, the Vancouver Island Region offers professional development, networking and volunteering opportunities as well as resources for every stage of a manager or HR professional’s career. Upcoming events include mixers, topic or functional area specific roundtables, plus our Legal Symposium on September 25th with topical subjects relating to #metoo and marijuana in the workplace. Our
members volunteer and lead roundtables, host mixers and speak at schools and organizations. Celebrating and Looking to the Future We combine our CPHR Recognition Event to recognize members who have achieved their designation each year with a fundraising event that supports scholarships for students at the Vancouver Island University in Nanaimo and Camosun College in Victoria, as both post secondary institutions are accredited with the association. Each year we participate in a mock interview event to coach and encourage high school students who may have never had a job interview.
"I am a member of CPHR BC & Yukon to keep current with my profession, both from an educational and people perspective. I thoroughly enjoy the passion, commitment, friendship and community the association continues to provide.” — Linda Beaudry, CPHR & Member since 2011 The association has resources and articles for everyone through our PeopleTalk Online, and members can access resources like a tool kit of templates and resources, membership database and our LinkedIn group.
"Credibility and connection. As an educator in university business programs, I need to represent the profession that I am helping students prepare for. CPHR BC & Yukon is a key component of that and the best way for me to role model being part of the HR community." — Bryan Webber, CPHR & Member since 2008 The Vancouver Island Region has a strong community focus and is led by an Advisory Council made up of a variety of members and Carolyne Taylor, Member Relations Manager who has been with the association since 1989. A D V E R T O R I A L F E AT U R E
Vancouver Island Region PO Box 30247, Reynolds RPO Victoria, BC 250-479-4235 http://bit.ly/CPHRBC_VANCOUVERISLAND
CHARTERED PROFESSIONALS IN HUMAN RESOURCES OF BRITISH COLUMBIA & YUKON (CPHR BC & YUKON) WE ARE ALL HUMAN RESOURCES
ENTREPRENEURS Sure, they’re running some of Victoria’s most successful companies. But it hasn’t always been a cakewalk for these entrepreneurs. Douglas asks some of the city’s business leaders to recall the sacrifices, fumbles and victories from their startup days. BY ALEX VAN TOL
PHOTO BY JEFFREY BOSDET
ON THE EDGE
MATT PHILLIPS, PHILLIPS BREWING & MALTING CO.
J.K. Rowling wrote Harry Potter and the Philosopher’s Stone in hurried bursts while her infant daughter slept beside her in coffee shops. John Paul DeJoria lived in his car while he launched Paul Mitchell Systems with a borrowed $700. And Guy Laliberté scrabbled hard on stilts, eating fire and playing accordion until his calculated gamble on a travelling troupe opened the door for him to develop Cirque du Soleil. They all had it: that fire in their bellies — that desperate need to make it work, dammit — that separates the true entrepreneur from the mere dabbler. BREWING A BEAUTIFUL BEGINNING Matt Phillips started Phillips Brewing & Malting Co. on that familiar startup shoestring: credit cards and lines of credit. “It meant that I needed to live in the brewery for the first few years and shower at a local gym,” Phillips says. Because his small space had no windows, with every passing day he ended up going to sleep later and waking up later. “I had to install timers on lights so I wouldn’t get my days and nights mixed up,” he says.
CRAIG AND MARISSA BENTHAM, BACKFIT
Phillips wore every hat as he built the company, doing everything from brewing and bottling to selling and delivering. “I used to rent a cube truck every Sunday night and fill it with unlabeled beer, then head for the ferry,” he says. “I’d spend the waits and the crossing labelling beer in the back.” For about two years, he’d take the 9:00 p.m. to Vancouver and sleep in the warehouse parking lot. “I’d make the delivery at 6:00, when the warehouse opened, and then rush back to Victoria to brew or bottle more beer.”
Seventeen years later, Phillips presides over a multi-pronged beer-brewing empire that includes the brewery, a distillery, a malting facility, a soda company, and, of course, a significant presence at local events like Rock the Shores, Fernwood Bites and its very own Phillips Backyard Weekender. The experience of “doing it all” in the early days now provides Phillips with critical insight into his people’s needs: “There is something important about doing every job in a company that gives you context for the struggles that staff have,” he says.
FROM BROKE TO BACKFIT It was 1999 and Craig and Marissa Bentham had just begun dating. Fresh from chiropractic school in San Jose, Craig took a job working for a chiropractor friend. When he learned his pal had overextended himself, Craig found himself out of a job. It was decision time: go join another doctor, or launch independently.
He decided to launch a chiropractic practice — but it wasn’t an easy road. “We had $400,000 in student debt,” Craig recalls. “But we took this gamble to start off.” Along with a chiro friend, Jeff Bartlett, and his wife Tammy, Craig and Marissa cranked another $30K onto their credit cards and rented an 1,100-square-foot space. “We watched online videos about how to mud our own walls and paint,” says Craig. “We had no idea. We just had no option but to make this work.” The night before the clinic opened, Craig was fitting the final pane of glass into the wall of their X-ray room. “We were coming down to the wire because our rent was due and we were supposed to open in the morning,” he says. “It’s 3:00 in the morning, Marissa’s sleeping on the floor. I literally put the last screw in and I was just about to celebrate, and the screw hit the glass and — ” [he mimes a cataclysmic explosion]. “It was a moment like, ‘Oh my gosh, we’re never going to make it.’” But they did. Nineteen years, several businesses and a few more nail biters later, their business Backfit — whose team is now made up of 30 staff and includes cofounder Ryan Doyle — offers 11,000 square feet of full-body health care from its svelte space in Saanich.
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“We had $400,000 in student debt, but we took this gamble to start [Backfit].” — CRAIG BENTHAM, BACKFIT
FINS AND FIDDLEHEADS FOR SUPPER In 2006, Certn’s CEO Andrew McLeod was still a student at Acadia University in Wolfville, Nova Scotia. But he was also a kid with a big shiny idea: an online auction site. Determined not to borrow money while he was launching his company, CampusBay, McLeod looked for ways to pinch pennies. “I went on this thing I called the Wilderness Diet,” he says. “I was so poor that I would only eat things that I could kill, catch or collect.” His diet included fiddleheads (very nice), ferns (not very nice) and maple leaves (absolutely wretched). He scrounged tiny bass from a pond near where he was living. “I was probably a day away from going after squirrels,” he laughs. Despite the pain, there’s something satisfying about pushing through and doing things for yourself, says McLeod. “Part of the motivation is: I don’t have any money and I have to have a breakthrough. My parents did OK, and I’m sure if I called and needed money they would have flown out or DOUGLAS 33
sent me money and I would have been fine. But how do you have a breakthrough if there’s no pressure to succeed?” In 2007, McLeod sold CampusBay, which he had by then refashioned into a classifieds site. It was aggregated with other classifieds sites into what is basically Kijiji today.
HOT WAX AND TEQUILA
ANDREW MCLEOD, CERTN
“I went on this thing called the Wilderness Diet. I was so poor that I would only eat things I could kill, catch or collect.” — ANDREW MCLEOD, CERTN
“Every potential client who came into the bar, I gave them a Foxy Box card and I’d say ‘Come see me,’” she recalls. “Girls would come in, I’d feed them a shot of tequila and wax them in my dining room for $20 cash.” On paper, Dufresne didn’t make enough to qualify for a business loan — so she bootstrapped her way to the present day. Key to Dufresne’s success is her drive. “This is my baby that I grew and built with nothing,” she says. “I employ 40 women and our company did $1.7 million in revenue last year. To look back and reflect on that is like, ‘You did
She didn’t have a business plan, she didn’t have rich relatives — she didn’t even have her highschool diploma. But what Kyla Dufresne did have was grit. It’s what has built her esthetics empire, starting with Victoria and Comox, and soon to expand onto the Lower Mainland, other parts of B.C. and across the western U.S. The foundation for that empire took years to build, though. Dufresne started Foxy Box in the dining room of the Fernwood house she shared with four roommates, working nights at the bar and KYLA DUFRESNE, FOXY BOX waxing bikini lines by day.
“This is my baby that I grew and built with nothing … when you put in the footwork it shows. This is how you create a culture.” — KYLA DUFRESNE, FOXY BOX
this, man.’ When you put in that footwork it shows. This is how you create a culture. People see that and they want to be a part of it.”
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When Christine Susut was brewing the idea for Cultured Kombucha — a fermented health drink made of black or green tea and sugar — she had just welcomed baby #2 but she knew the time to launch this business was critical. “I had to figure out how to be a full-time stay-at-home mom and get this business off the ground,” she says. So when the baby slept, Susut got to work, shoehorning R&D into nap times. “When it was clear I needed more than naptime, I joined a gym that provided childcare while you worked out. But,” she says, “they also had a café! So I went down to the café and wrote my business plan.” And that’s how Susut rolled, five days a week for two hours at a time, until her proposal was solid. “From there I was able to get funding,” she says — but she still juggled motherhood with building a business. “It was just fitting everything I needed to do in the cracks,” she says. Along the way, Susut battled other people’s doubts. “I was faced, all around me, with this feeling of, ‘That’s a crazy idea, That’s never going to happen.’ And I just really dug deep and found my, ‘You know what? Actually, it is!’ The resourcefulness came out of the determination and just the belief that this was the time to do it.” Today, Cultured Kombucha is picking up new clients with every passing week. The majority of the company’s sales are by the keg to restaurants and retailers who then act as fill stations for customers.
“I had to figure out how to be a fulltime stay-at-home mom and get this business off the ground.” — CHRISTINE SUSUT, CULTURED KOMBUCHA
THE IMPORTANCE OF THE ASK In 2011, Connor Tobin was working at a deadend e-commerce job for a police supply and distribution company. He realized that to make it work, he was going to need a 300-per-cent raise. “So I go and tell the boss, ‘Hey, I need a 300-per-cent raise or I’m out of here — and I know you need me,” says Tobin. His boss told him to take a flying leap — so he did. “What we negotiated on was that I take a two-day work week,” Tobin says. That allowed Tobin to pursue a contract with e-commerce company eBuyNow, building out Skype’s web store. After that contract closed, Tobin knew he wanted more. “I just thought, ‘I’m in touch with these big brands and this big company … I can’t let this career opportunity get away,’” he recalls. So Tobin went to eBuyNow’s owner and asked whether he would partner with Tobin in a new venture and be his CEO. “And he said, ‘Absolutely not,’” Tobin laughs. “But also: ‘I really think you’re valuable to this company, and I’d like make you a partner.’”
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Now CIO of eBuyNow, Tobin says it’s his persistence that got him to where he is today. “Showing someone that you really care is the most important thing to a business owner. The passion that someone brings to the job is the only thing that really matters. I think I showed up with that in spades. And it turned out in my favour.”
PITCH (IM)PERFECT Carmanah Technologies is known worldwide for its dependable, durable lighting systems, but back in 1996, the company was just a
glimmer of an idea. It was up to engineering physicist David Green to push his idea for solar LED lights onto centre stage. “I had to do these presentations in front of so many people, trying to raise money,” says Green, recalling the drudgery of drumming up $10,000 at a time toward meeting his million-dollar target. It was during one of these presentations — at the Union Club, 1996 was the date, and he remembers these details because it happened to be one of the days that CBC’s Venture had its cameras on him — that Green’s future as CEO took a sharp turn. “I would bring someone out of my audience
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“I would bring someone out of the audience and give them a hammer, and I’d say, “Try to destroy this thing. That was my selling pitch for [the lights].” — DAVID GREEN, CARMANAH TECHNOLOGIES
and I would give them a hammer, and I’d say ‘Try to destroy this thing,’” says Green. “That was my selling pitch for how the lights were so durable.” Except, on that day, he picked the biggest dude in the room. “He came out and put this light on the floor of the Union Club, and took a hammer to it,” says Green, “and he just laid into it.” The light flew three feet in the air and smashed back onto the stage, while the audience tittered. Alarmed, Green offered for the man to have another go with a fresh light. This hadn’t ever happened before; surely it wouldn’t happen again. Yet the gong show repeated — and this time, the audience roared. Afterward, Green and a fellow Carmanah investor agreed that perhaps he should step back from the CEO role and let someone with more, uh, sales experience take the fore. Green hired Art Aylesworth as CEO, who grew the company into a global giant, and took a less front-facing post as chairman. It all worked out okay: now Green heads up Carmanah Management Corporation, an investment company that boosts promising tech startups with leadership, advisement and funding. Whether it’s sassing the boss, sleeping on floors (or in trucks) or foraging in the wild for food, Victoria’s entrepreneurs won’t stop at anything to bring their burning ideas to life. Sacrifice, hardship, humiliation, sleeplessness — it’s part and parcel of the calling. How bad do you want it? ■
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Stirring the A Closer Look at the Ogden Point Master Plan
The Norwegian Bliss, which is the largest cruise ship to ever dock at the Ogden Point Cruise Terminal, will call every Friday from June to October. Victoria is already Canadaâ€™s busiest port of call, with 245 ships, carrying close to 600,000 passengers expected during the 2018 cruise season. 38 DOUGLAS
The Greater Victoria Harbour Authority says its proposed Ogden Point Master Plan is critical to diversifying its revenue stream in order to maintain and upgrade some of Victoriaâ€™s key waterfront properties. But critics say that the GVHAâ€™s focus on the cruise industry may be sidelining traditional marine business and the concerns of neighbours.
BY LISA CORDASCO PHOTO BY JO-ANN LORO
hen the 304-metre-long Norwegian Bliss arrived at Ogden Point on her maiden voyage in early June, the Greater Victoria Harbour Authority (GVHA) wanted to make sure her 2,000 passengers were given the red-carpet treatment and that Victoria shone as a port of call. Onboard, executives from Norwegian Cruise Line, travel writers, agents and members of the media travelled from Seattle on the megaship that can hold 5,700 passengers and crew, to spend the day touring Victoria. Victoria’s popularity as a cruise port, where 245 ships carrying close to 600,000 passengers will arrive during the 2018 cruise season, owes at least something to a U.S. trade law called the Passenger Vessel Services Act. Stopping at Ogden Point for a few hours saves cruise companies a quarter of a billion dollars annually in fines they’d face under the act if they sailed directly from one U.S. port to another. But according to GVHA CEO Ian Robertson, Victoria has become a popular cruise port based on its own merits as tourism destination, not because visits are legislated. A study by Business Research and Economic Advisors (BREA) commissioned by the Cruise Lines International Association in 2012 and revised in 2016, found cruise companies and their passengers add close to $50 million a year in direct spending to Victoria’s regional economy. The BREA report indicates most of the money spent locally by cruise lines is on ship repair at Ralmax’s Point Hope Shipyards and the Esquimalt Graving Dock, or for dockside services provided by cosm10142_2pg Horz_Be Skin Smart_X1a.pdf 1 2018-03-16 Western Stevedoring. Passengers and crew spend an average of
NEW PORT TERMINAL A rendering of the proposed Pier A Home Port Terminal, looking southeast from the water. The GVHA plans to integrate the terminal within existing warehouse space, allowing the organization to build two floors for arrivals and departures. 9:36 AM
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$50 each per visit on bus tours and other transportation, and $16 on food, drink and other consumer products. Robertson acknowledges the importance of the cruise ships to Victoria, but says that, despite what some critics say, the GVHA actually understands the need to diversify from the cruise business and develop new revenue streams. “The Ogden Point Master Plan,” says Robertson, “is a critical part of that.” But some critics say the GVHA’s Ogden Point plan still favours the cruise industry at the expense of other marine-based industries.
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Planning for the Future The Ogden Point Master Plan has been in development for the past eight years and lays out the vision for the development of Ogden Point over the next three decades. The December 2016 draft of the plan is a 135-page document prepared by Stantec for the GVHA. (Former Stantec senior associate Mark Crisp was hired by the GVHA as property manager once the latest phase of the plan was complete, according to Robertson.) It proposes an elevated cruise-ship terminal with bus parking below, an expanded warehouse, plus year-round amenities such as a brewpub, a First Nations Cultural Centre, an improved public boat launch, cycling
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One of the goals put forward in the master plan is to diversify the economic base of Ogden Point, with more amenities, including retail and gathering spaces.
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The master plan prioritizes the creation of a “high-quality public realm” that includes public art and landscaping.
Ogden Point Proposed Changes
➊ Commercial, institutional and retail development above a parking area along Dallas Road, including a potential hotel opportunity near the head of the breakwater STANTEC CONSULTING 2016
infrastructure, a pedestrian walkway and 63,000 square feet of office space along with several four-storey office buildings along Dallas Road. The plan also envisions a hotel near the head of the breakwater walkway, which ties in with the GVHA’s goal of expanding Ogden Point as a “home port” where smaller cruise ships carrying between 800 and 1,200 passengers would begin and end their journeys. Other proposed changes include a revitalized marine services area allowing for small yacht storage and a boat-lift operation, and a new hangar for an air ambulance integrated with a new heliport terminal. Helijet CEO Danny Sitnam says the Ogden Point Master Plan does not materially change Helijet’s business plan, adding, “We are pleased with the elements presented to us, to date.” 42 DOUGLAS
The Master Plan seeks the city’s approval for three interrelated regulatory and policy documents, including an amendment to the City of Victoria’s Official Community Plan and the creation of a new comprehensive development zone as part of the City of Victoria’s zoning bylaw. Jonathan Tinney, the City of Victoria’s director of sustainable planning and community development, describes the master plan as a step before the rezoning process, providing a blueprint to the city about how and why 13.7 hectares of land surrounding the deep-sea port should be rezoned to include a range of new uses. “It’s similar to what we do with developers of larger sites, like Dockside Green,” says Tinney. Robertson says revenue generated through implementation of the master plan will also help pay for an estimated $40 million to $60 million
➋ New pedestrian- and bicycle-only gateway to encourage stronger community access and visitor accessibility to downtown ➌ Revitalized marine services area allowing for small yacht storage and a boat lift operation ➍ Improved public boat launch ➎ Dedicated open area for celebrating First Nation cultural events and retail space
➏ New raised terminal on Pier B, incorporating tour bus parking beneath the terminal ➐ Potential future “home port” facilities within the existing warehouse on Pier A ➑ New hangar for ambulance helicopter integrated with new heliport terminal ➒ Revitalized pilotage, emergency rescue docks, and amenities ➓ Revised traffic and road circulation layout, including a central, stacked parking facility
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in maintenance and upgrades to its properties, including Ship Point and Fisherman’s Wharf, without relying on public funding. “If we don’t [diversify],” he says, “in 15 to 20 years our ability to fund that would run out and we would run into a challenge.” Right now, Ogden Point is the single largest revenue generator for the GVHA. The other half comes from marina and commercial permits on its other properties at Fisherman’s Wharf and the inner harbour, as well as revenues from tenants in the Steamship Terminal, which the GVHA leases from the Province. The GVHA became the landlord of Ogden Point, Fisherman’s Wharf and much of Victoria’s inner harbour in February 2002 when the federal government divested control of its public wharfs and small-vessel docks to local governance. While Transport Canada’s larger waterfront holdings were divested to heavily regulated port authorities, like Port Metro Vancouver and the Port of Nanaimo, in Victoria, a rare hybrid was created. The GVHA is not a port authority or a public entity, but a private not-for-profit society.
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Not everyone has been happy with the GVHA’s vision for Ogden Point — or its process. “The GVHA has been captured by the cruise industry, at the expense of local, marine-related businesses,” says Harold Aune, co-owner of Whitehall Rowing and Sail. Whitehall employs 12 people who build and sell boats to customers around the world from its Ogden Point headquarters. “No one can get a lease for more than three years at a time, which makes us feel as though things are nowhere near as secure as they should be in terms of business planning,” Aune adds. Robertson says he understands leaseholder concerns, but “the GVHA will not be offering long-term leases because we’re not really able to commit to a particular operator that in 10 years from now, [they] will be at the same spot at Ogden Point. We sincerely hope that in the overall plan at Ogden Point, there will still be a space for them, but until we get approval from the city for the master plan and the rezoning, it’s difficult for us to pinpoint when development may occur.” Whitehall’s neighbour, Mercury Marine, is the oldest and only marine repair shop on the Victoria waterfront. The GVHA offered it a two-year lease extension last February, but it withdrew its offer in May. The GVHA’s letter to Mercury Marine says the withdrawal is “due to a change in strategic planning.” The letter informs the long-time marine repair shop it must vacate when its current lease runs out in December. Mercury owner Milt Barnes says the GVHA has a mandate to help marine businesses thrive
Many Decades, Many Hands A HISTORY OF THE STEWARDSHIP OF OGDEN POINT
The federal government, by Order in Council, entrusts Ogden Point to the Canadian National Railway (CNR).
1918 The federal Department of Public Works transfers Ogden Point’s one-year-old breakwater, warehouse and piers to the Department of Marine, who transfers them to the Department of Railways and Canals (DNR).
A fire destroys much of the Ogden Point facility. CNR gives Ogden Point to Transport Canada; WestCan Terminals leases the site. Pier A is raised and a 100,000 sq.ft. warehouse is built. CNR discontinues service to Ogden Point. Westcan and parent company Western Stevedoring continue to manage the deep-sea operations at Ogden Point to this day.
The DNR transfers responsibility for Ogden Point piers to the Canadian Northern Railway (CNoR). Faced with the near bankruptcy of CNoR, the federal government purchases a majority share in the railway, then creates Canadian National Railway (CNR).
Victoria/Esquimalt Working Harbour Association is founded. Transport Canada announces a harbour commission will be established. Less than a year later, the federal government alters course. A Victoria Chamber of Commerce meeting is told by a government official that the harbour will be divested to its stakeholders, not to other levels of government.
GVHA commissions a study of Ogden Point to explore opportunities for the next 50 to 100 years. The study reverses earlier concepts outlined in the “Matulia” concept developed by Vancouver consultants Envisioning & Storytelling and refocuses GVHA on operating Ogden Point as a deep-sea terminal.
A group, including lawyer Stewart Johnston (then VP, Transportation for Tourism Victoria), attends a City of Victoria meeting and says stakeholders will take an “independent pathway” to divestiture, inviting Victoria, Esquimalt and the Province to join them as partners. The federal government creates 19 Canadian port authorities. For Victoria, however, the feds offer divestiture of the harbour instead.
1996 Stakeholders create a Harbour Advisory Committee (HAC) with Stewart Johnston as chair and, and Victoria and Esquimalt on board. The Province takes an “observer” role. A harbour steering committee is set up as a governance body for the divestiture.
2015 GVHA hires Stantec to provide a road map for revitalization of Ogden Point through the Ogden Point Master Plan. The next year, GVHA hosts an open house to reveal the final phase of the plan. In December, a draft master plan is submitted to the City of Victoria, where it remains today pending further reports.
The Greater Victoria Harbour Authority (GVHA) is established as a non-profit through a memorandum of understanding between the Provincial Capital Commission, Esquimalt Nation, Songhees Nation, City of Victoria, Township of Esquimalt and the Victoria/Esquimalt Harbour Society. Ogden Point and the breakwater are among the initial divestitures.
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and grow, but he says his experience has been exactly the opposite. “The GVHA does not communicate with its leaseholders and makes no effort to help marine businesses grow. It just makes decisions behind closed doors,” he says. Barnes hoped to grow his business by submitting a plan to the GVHA 10 years ago, for a covered repair facility that would also reduce noise from its neighbour, Helijet. He says the proposal also offered an apprenticeship component. But the GVHA never responded to his proposal, he adds, yet it did include those UNIVERSITY OF VICTORIA MASTER OF GLOBAL BUSINESS ideas in the Ogden Point Master Plan. They are the only examples in the plan of what the future might hold for marine-based businesses. When asked via email about the change in the strategic plan, why Mercury’s lease is not being renewed and how mariners will get engines repaired after Mercury’s lease-end in December, Robertson replied, “We do not comment on details of client leases.” He also added, “We anticipate going to RFP in late 2018/early 2019.” Bob Fraumeni, owner of Finest at Sea agrees that small marine businesses have not been a focus for the GVHA. “In 2004, the GVHA encouraged me to lease some space and I did, with the idea of eventually building a fish-processing plant, but after a year of using the area for storage, I was given notice to move out,” says Fraumeni. “They said the work I was doing was too noisy. Just after I left, a GVHA board member account art copywriter: creative producer: studio DOCKET #: 132103131-7 CLIENT: UVC DESCRIPTION: MBA print ads 710executive: Red Brick director: Street director: artist: was given permission to construct three FILE NAME: 3131-7_UVC011_MGB_DougMag_4-94x4-7.indd One block south of Mayfair Mall houseboats on the very same spot. He left and jc dt dg sd mf the site has sat empty ever since.” TRIM: 4.94" x 4.7" (250) 595-5212 Fraumeni, whose company employs more than approval: (sign off required) IMAGE INFO: 300 dpi 200 people, subsequently built his processing PLEASE NOTE: colour lasers do not plant across the street from Fisherman’s Wharf C M accurately represent the colours in Park. His fleet is moored in the upper harbour, in the finished product.this proof is Y K strictly for layout purposes only. CREATION DATE: 03/07/18 MODIFICATION DATE: March 9, 2018 12:04 PM an area not controlled by the GVHA. Former leaseholder, Trotac Marine says it was driven off Ogden Point in 2012 by an exorbitant rent increase and unreasonable demands by the GVHA. Campbell Thomson, a partner in Trotac, says he moved the region’s largest marine supplier inland to Gorge Road after the GVHA offered a three-year lease and hiked its rent from $8,000 a year to nearly $8,000 a month. Despite efforts at arbitration, Thomson says the GVHA refused to compensate Trotac for constructing the 20,000-square-foot building at Ogden Point that Whitehall now occupies. Robertston, who was hired as CEO by the GVHA in 2015, says it is the organization’s policy, directed by the board, to charge market rate at all of its facilities. “Every two to three years, depending on the property,” says Robertson, “[the] GVHA goes to market and seeks various appraisals to ensure our rates are fair and in-line with similar “Improving andCommunity” Community” “Improvingthe thelives Livesof ofour our Clients, Clients, Team Team and properties.”
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He notes Trotac had a Transport Canada lease from 1986 to 2005 focused solely on bare land. When the lease expired in 2005, the GVHA obtained ownership of the improvements — Trotac had levelled out the lot and constructed a 20,000 square foot building — with a policy stated at divestiture directing GVHA to charge market rate for all properties. An appraisal was conducted in 2006 for improved and vacant land — the area was re-measured and increased. According to Robertson, a draft lease presented in 2006 was never approved by the GVHA board nor finalized and executed by the parties. He adds that Trotac disputed and chose to settle via a mediation process, which resulted in the subsequent rates being levied. While the GVHA sees implementation of the master plan as key to protecting and enhancing Victoria’s marine heritage and ensuring a vibrant commercial and tourist industry in the future, Victoria City Councillor Ben Isitt, who sat on the GVHA board from 2015 to 2017, says he is concerned about the future vitality of the working harbour for Victoria. “We don’t have a lot of industrial land that’s in proximity to foreshore areas,” he says, “and I can’t escape my concerns that a private, non-profit entity should be entrusted with the management of these vital public assets.”
with the local shops along Government or Douglas Street. The vision that we have for this is like a Granville Island or a Seattle Pike Place Market, so a real mix of what I’ll call industrial and consumer-friendly shops. “We’re not building this for cruise-ship passengers,” Robertson adds. “We’re building this for residents of Victoria and what we think will attract them to that space 365 days a year. In conversations with the cruise lines, what they’ve been telling us is ‘build it for the residents first. If the residents like it, then the cruise-ship customers will like it.” Robertson insists all stakeholders will
continue to be consulted as the Ogden Point Master Plan moves forward. Dave Cowen, GVHA chair and Tourism Victoria’s representative on the board, did not respond to requests for an interview for this article. “We want to get it right,” Robertson says, “not just from our perspective, but from the community’s perspective as well, so that we’ve got a site that everyone in Victoria can be proud of.” The GVHA believes its Ogden Point Master Plan will achieve that. A number of local marine businesses and groups like the JNBA have yet to be convinced. ■
Getting it Right Marg Gardiner, president of the James Bay Neighbourhood Association (JBNA), which took part in the Ogden Point community consultation process, says, “We have real issues with what is being planned for there. It could destroy downtown if it’s done wrong.” She also fears development on the site will bring more noise, pollution and traffic congestion to her neighbourhood. Growth issues are also on the minds of city planners who are reviewing the Ogden Point Master Plan. That’s why the plan has been stalled since it was submitted to city staff 20 months ago. Tinney says the GVHA has been asked to provide a more detailed market-feasibility analysis and more in-depth traffic studies before city staff makes any recommendations to Victoria council. “We have some questions about the rationale for some of the land uses,” says Tinney. “Where is the market for those and what impact will they have on the office uses or retail uses downtown? We’re just asking for the backup. What transportation is affected by those uses? And how would you work to mitigate the impacts?” Robertson says those studies will be delivered to the city in the fourth quarter of 2018, after municipal elections this fall. He says local merchants and residents have nothing to fear. “We’re not going to open up another Bay Centre. We’re not going to in any way compete DOUGLAS 47
The Clinic Crunch WITH A CHRONIC SHORTAGE OF FAMILY DOCTORS AND OVERCROWDED EMERGENCY ROOMS, WALK-IN CLINICS HAVE TAKEN UP MUCH OF THE OVERFLOW. NOW THESE FRONTLINE CLINICS ARE ANXIOUS TO KNOW HOW CHANGES TO B.C.’S PRIMARY-CARE SYSTEM WILL IMPACT THEM. BY BILL CURRIE
IT’S A PAIN GETTING SICK. But it’s an even bigger pain trying to get into a walk-in clinic these days. And with a severe family doctor shortage and growing population in British Columbia, that’s what an increasing number of people are trying to do. It’s fairly easy to find a walk-in clinic — they’re all over the place and business is brisk. In fact, lineups and waiting lists keep getting longer due to the demands on our health-care system. Just ask Dr. Ian Bridger, who runs four clinics on the South Island. “It can be challenging,” says Bridger, who owns Burnside Family Medical Clinic, Tillicum 48 DOUGLAS
Medical Clinic, Uptown Medical Clinic in Walmart and St. Anthony’s Treatment Centre in Langford. “Our focus is on anyone who comes to our door that day — we will do our best to see them.” Driving these lineups and walk-in wait-lists is a chronic shortage of family doctors and overburdened hospital emergency rooms that have forced many people to turn to walk-in clinics for their primary medical care. “There is no competition for patients,” Bridger says. “What we are competing for is doctors.” In fact, Dr. Bridger’s LinkedIn profile states in capital letters WE ARE CURRENTLY RECRUITING PHYSICIANS.
According to the College of Physicians and Surgeons of British Columbia, there are currently no general practitioners in Greater Victoria accepting new patients. But there may be relief afoot for those seeking doctors, although where walk-in clinics are concerned, it’s not yet clear how a new provincial government strategy will play out.
HEALTH-CARE REFORM In response to the health-care crisis, in the spring of 2018, the British Columbia government announced the hiring of up to 200 new general practitioners, 200 nurse practitioners and 50 clinical pharmacists as a part of its plans to reform primary health care.
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The following is a quick reference guide to E colors, fonts, and logos. Colors PMS 116C PMS 5535C PMS 160C PMS 647C “At the heart of the strategy is a new focus on team-based care that will see government fund and recruit more doctors, nurse practitioners and other health professionals, to put patients back at the centre of health-care delivery,” according to a B.C. government news release on May 24. The strategy includes setting up primary care networks (PCNs), the first of which will be created in Surrey. It will also include 10 urgent primary care clinics (UPCC), with the inaugural location in Richmond. Asked when Vancouver Island can expect PCNs or UPCCs, there was no information from the government at press time. “Our new primary health-care strategy will help reduce wait times and make it easier for
people to find a family doctor,” says Adrian Dix, B.C.’s Minister of Health. And to get there, Dix is planning to pay some doctors a salary, while maintaining the fee-forservice model for others. And his sights are set on medical graduates, attempting to attract them into family medicine, a field that many young doctors are reluctant to go into under the current fee structure and demanding work schedule. Promotional logotype “We’re making sure new doctors are Used in our national supported to focus on diagnostic medicine brand campaign and and developing strong relationships with their patients, and receive a good salaryThe while marketing materials. they are also paying down their student debt,” preferred treatment is says Dix.
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“This kind of support,” he adds, “can encourage more residents educated and trained in B.C. to stay and serve in the province’s primary-care system.”
“It is a start in the right direction,” says Mike McLoughlin, founding director of the Walk-in Clinics of BC Association, a lobby group advocating on behalf of walk-in clinics in B.C. and gathering information from users to petition the government. However, he adds, “if you are going take 200 GPs out of the fee-for-service and put them on salary, then what are you replacing those GPs with in the “THERE IS NO fee-for-service system?” COMPETITION FOR McLoughlin is concerned that filling the new salaried positions PATIENTS. WHAT WE will not only come from new ARE COMPETING graduates but also from existing FOR IS DOCTORS.” family doctors. — DR. IAN BRIDGER “We will not limit this opportunity to only new graduates,” says Laura Heinze, media relations manager with the B.C. government. So if existing physicians or nurse practitioners (NPs) with more experience and who currently do not have primary-care practices may be interested, there is also opportunity for them. “How are they going to distinguish between those who are and those are who are not in that practice? There is nothing to stop doctors from quitting a family practice and then taking a government salary job,” says McLoughlin, who sees difficulties
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A SOLUTION, BUT WILL IT HELP WALK-INS?
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ahead for walk-in clinics. “It is going to make it more difficult for walk-in clinics to recruit new grad GPs because they cannot offer the same level of [job] security.” And that opinion is shared by Dr. Bridger. “We have not had a new payment system brought out for a long time,” he says. “If they introduce a new payment system for some doctors and it is very successful, they would need to expand that to all family practices and all walk-in clinics. The $30 we get for seeing a patient needs to be revisited.” But for Bridger and other owners of walk-in clinics, the B.C. government has so far unveiled the “what” but it has not yet revealed the “how.” That’s still to come, according to the B.C. government. “Walk-in clinics are encouraged to work with their local division of family practice and health authority partners to define their role and to become part of the primary care network,” says Heinze, adding that that “walk-in clinics are well-positioned to evolve their service model in order to become urgent primary care clinics as part of the primary care network, if so desired.” Bridger agrees that walk-in clinics are in a good position to offer urgent primary care; in fact, he argues that walk-in clinics have been delivering urgent primary care for years. And in his case, that’s been nearly a quarter of a century.
NUMBER OF BRITISH COLUMBIANS WHO DON’T HAVE ACCESS TO A FAMILY DOCTOR
PERCENTAGE OF BRITISH COLUMBIANS WHO CAN GET IN TO SEE THE DOCTOR ON THE SAME OR NEXT DAY
56% BRITISH COLUMBIANS WHO SAY THEIR LAST VISIT TO THE ER WAS FOR SOMETHING THAT COULD HAVE BEEN TREATED BY THEIR REGULAR DOCTOR, HAD THEY BEEN AVAILABLE. SOURCE B.C. GOVERNMENT, 2017
Bridger, 59, is a family doctor who has been practicing medicine in the Capital Region for 24 years. In 2005, he was looking for a new office with more services nearby for his family practice. He bought a clinic on Burnside Road that also had a walk-in clinic, which was not in his original plan. “Having purchased a building with a walk-in clinic, I set my mind to making it successful,” says Bridger. “So I had to learn the business of walk-in clinics and I was absolutely fascinated by it.” Since then he has purchased Tillicum Medical Clinic, Uptown Medical Clinic in Walmart and, in 2016, St. Anthony’s Treatment Centre in Langford. Bridger’s clinics are four of 320 walk-in clinics in the province. While Bridger won’t talk specifically about his walk-in clinics’ finances, he is willing to talk generally about how the money breaks down. He says of the $30 per patient that doctors receive from BC Health, doctors get about 60 per cent, 30 per cent goes to overhead and the clinic makes about 10 per cent in profits. He adds that in the current climate of supply and demand, some doctors can command more than 60 per cent. “Because there is a shortage of doctors,” he notes, “available doctors have demanded a greater percentage of the fee for themselves.” He describes this market force as one of the principal causes of clinics failing.
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As the medical director of his four busy clinics, Bridger is well-versed in market forces and how to respond. He says his business model starts with autonomy: the ability to make business decisions without the need to seek approval from other owners for things such as spending money on technology. “The first thing I did in my business model is I took all of my clinics to the same electronic records level so that all of our doctors could instantly learn how to use and find information,” he says. Another key to his business model is not to start up walk-in clinics from scratch, but rather take over existing ones with existing patients. “When you first start, you are not seeing enough patients per hour to keep the doctors happy or pay the staff, and doctors get upset and leave,” he says. He admits that the exception to this rule was the opening of a new clinic in Walmart at Uptown Shopping Centre. But the location came with plenty of foot traffic, allowing the clinic to quickly see enough patients to break even. “The interesting story,” says McLoughlin, “is how retail stores are supplying primary care — and this partnership between retail and walk-in clinics and family practices is providing the growth [of walk-in clinics] in British Columbia.” And it’s that retail piece that has been the driving force behind successful walk-in clinics, enabling them to secure subsidies, often in the form of lower rents or landlord improvements or changes to make the space suitable for a clinic. The retail-clinic strategy works for retailers because it means there is a clinic located near their store pharmacy. That’s not only convenient for patients, it also attracts more foot traffic to the stores in general. Another key to whether a walk-in clinic survives, thrives or dies is its proximity to other medical services, such as pharmacies, X-ray facilities and medical labs. Bridger argues that this proximity helps clinics attract doctors and generate enough profit to grow the business.
HISTORY OF WALK-IN CLINICS IN B.C. The history of walk-in clinics in this province can be traced back to the late 1980s. These clinics were able to dispense basic pharmaceuticals and prescriptions and treat everything from head colds to broken bones. As intended, walk-ins took some of the pressure off increasingly busy emergency rooms. Despite that, over the years many family physicians have been critical of doctors working in walk-in clinics. They believed that walk-in clinics got the easy, less timeconsuming patient care, while family doctors 52 DOUGLAS
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were left with the more complex and chronic care that required more time with the patient, resulting in less money earned than walk-in clinic physicians. To level the playing field, the provincial government of the day brought in a fee structure for all family doctors, whether in a traditional family practice or in a walk-in clinic. Traditional family doctors also received additional money for specific specialized care for people with chronic or complex needs. There was relative calm until about a decade ago when the province began to experience a family doctor shortage. More and more patients were unable to see a doctor in a
“BECAUSE THERE IS A SHORTAGE OF DOCTORS, AVAILABLE DOCTORS HAVE DEMANDED A GREATER PERCENTAGE OF THE FEE FOR THEMSELVES.”
timely manner — and so more and more people began turning to walk-in clinics. Wait times increased and the pressure meant that the walk-in aspect of many walk-in clinics was no longer as convenient or timely. “What is holding us back at the moment is that we do not have enough family doctors,” says McLoughlin. “Doctors choose to go where the money is better.” While the B.C. government’s latest healthcare reforms are being welcomed by many in the medical system, concerns will continue until more is known about how the reforms will be rolled out. “Generally, I’m optimistic because the minister made a commitment to primary care [and] that is a very good sign that the government is taking access to care seriously,” says McLoughlin. “But it will not benefit walkin clinics directly, only indirectly.” While the new approach may stabilize young grads coming into family practice, McLoughlin says, “If those young grads who are working at the walk-in clinics decided it is better to work under an alternative payment arrangement and walk-in clinics cannot cover those shifts, it just means less capacity at clinics and longer line- ups.” There is, however, one thing that most health-care providers agree on: it is unacceptable that more than 780,000 British Columbians are currently without a family doctor.
DAILY CAP SYSTEM Dr. Bridger argues there are two remedies that would quickly address the family doctor DOUGLAS 53
shortage. The first is to pay doctors a premium to work off hours to keep walk-in clinics open longer. The other would be to allow doctors to see more than 50 patients a day at full pay. Currently, B.C. doctors have a 50-patient per day cap. After 50 patients, they get paid 50 per cent of their payment fee until they reach 65 patients, after which they receive no payment at all. “We have physicians willing to work 10 or more hours a day,” he says, “but they reach their maximum number that the system will pay them for in eight hours. Now, if those patients go to the emergency room as their only recourse, it costs the system in the region $600 to see that patient in a hospital emergency room.” McLoughlin’s association is calling for more flexibility in the cap system. It wants the provincial government to spread the cap over a longer period of time, say a week or a month. The argument goes that doctors can work more hours when more patients come to the clinic, and less hours on days when fewer patients walk though the door. “By taking away that daily cap, clinics could stay open and see more people and we would not have the frustration the public has currently.”
CURRENTLY, B.C. DOCTORS HAVE A 50-PATIENT PER DAY CAP. AFTER 50 PATIENTS, THEY GET PAID 50 PER CENT OF THEIR PAYMENT FEE UNTIL THEY REACH 65 PATIENTS, AFTER WHICH THEY RECEIVE NO PAYMENT AT ALL.
However, Dr. Rita McCracken, a family doctor in Vancouver and a clinical assistant professor at the University of British Columbia, says she would be worried if the cap were removed and doctors could see more patients in a day. “Episodic visits by different providers is not the high standard of care that people in B.C. need,” she says, “and doctors being able to see more patients in a day is not the answer to our health-care needs.” McCracken believes the new reforms are heading in the right direction, with an emphasis on team-based care that is patientfocused. “Walk-in clinics currently play a role in our stressed medical system, but to continue to be relevant, they need to be a place where patients can access team-based care, including nurses, 54 DOUGLAS
medical assistants, social workers, counsellors, etc.,” says McCracken. Bridger says he also favours a team approach in his clinics, but “the money would have to come from another purse,” he says. “The current fee model of $30 per patient would not sustain a team model.” He also says the way patients’ electronic medical records are treated presents an issue. “A patient’s medical record cannot be shared between clinics due to privacy concerns, which means if [patients] cannot get into their walk-in clinic on any given day, they will have to wait another day or go to another clinic, which would not have their medical records.”
IT’S CRITICAL There’s no doubt the system of delivering primary care is at a critical stage. As the provincial population increases and ages, and as more family doctors retire, the demand for primary health care will only intensify. According to the most recent Statistics Canada census figures, the number of Canadians who are 65 or older grew by 20 per cent between 2011 and 2016. It’s the
THE NUMBER OF CANADIANS WHO ARE 65 OR OLDER GREW BY 20 PER CENT BETWEEN 2011 AND 2016. IN B.C., BY 2031, ALMOST ONE IN FOUR PEOPLE WILL BE OVER THE AGE OF 65.
biggest increase for that age group in seven decades. In B.C., by 2031, almost one in four people will be over the age of 65. Dr. Bridger himself is heading toward retirement. He has sold his family practice to a young doctor from the United Kingdom and his immediate plan is to continue to manage his business and work part-time in his clinics, looking forward to the day he can finally pull down his shingle. “My driving force throughout my medical life has not been to make lots of money and
run a business,” he says. “It is to look after the health care of my community.” And here’s the irony: it’s not easy looking after the health care of a community when the health-care system itself is in urgent need of care. UPDATE: On July 17, Mike McLoughlin of the Walk-In Clinics of BC Association told Douglas that the BC Ministry of Health has now invited walk-in clinics to the table to discuss ways for them to participate in the ministry’s primary-care initiatives. ■
■ GROWTH BY CLEMENS RETTICH
THE COST OF DOING NOTHING
en years ago, I would spend about four to five hours a year talking with business owners about “the end.” By that I’m referring to the allimportant topics of successions and exits. But in the past year, the number of discussions I’ve had about “the end” has increased to four or five hours a month. I can see a future coming very soon where successions and exits will become the topics of daily conversations. Here’s the reason for the increasing interest in successions and exits: 60 per cent of Canadian business owners are now age 50 and over, and many of them are waking up to the fact that they’re twice as close to turning off the lights for the last time — and most of them have done little or nothing about it. In fact, 40 per cent of Canadian business owners have put little in place to cash in on what should be the most valuable investment in their lives. The individual and social cost of this reality is going to be enormous. Many of these business owners have not contributed to CPP and, in my experience, many never have enough left over at the end of the year to contribute to TFSAs or other retirement investments. There is no value in their business, and they have little or nothing set aside. So why is this?
THE PERPETUAL MOTION MYTH I think it’s because too many business owners believe their businesses are perpetual motion machines, which are the mechanical engineer’s version of alchemy (oversimplified, that’s the magic of transforming lead into gold). Perpetual motion machines are supposed to run forever without needing any more energy after an initial kickstart. It would be a beautiful idea were it not for the fact it breaks the first law of thermodynamics, which says you can’t create or destroy energy, only transfer it. To keep a machine going, energy “in” must at least equal energy “out.” There is no machine that operates in a perfect vacuum and with zero friction or heat loss. So all machines require external energy to keep moving. Yet too many business owners think about their businesses as perpetual motion machines: get them going, make a minor tweak 56 DOUGLAS
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Hardly anyone likes to talk about business succession and exits, but a failure to talk about and plan for “the end” could be the costliest business decision you ever make.
WITHOUT SIGNIFICANT INVESTMENT IN GROWTH, YOUR BUSINESS WILL NOT HOLD ENOUGH VALUE FOR A SUCCESSFUL EXIT.
here and a small investment there — and life will be grand forever. The truth is, unless you are growing your business, you are allowing it to die. There is no standing still. Further, in the context of this column, there is a cost to doing nothing: without significant investment in growth, your business will not hold enough value for a successful exit. The sobering reality is that for many business owners, their business is their retirement safety net.
WHY DOING NOTHING IS NOT A GOOD OPTION So what should business owners do about this problem? The formula for creating and sustaining a value-creating business is actually simple: your investment must generate returns that exceed the sum of inflation and other external market costs plus the sum of all internal costs including the cost of growth itself. If we understand the first law of thermodynamics, that last phrase shouldn’t be a surprise: growth is an activity and therefore has a cost. As we say in our work, growth eats cash. This is also why bootstrapping is so difficult. Unless your business has remarkable internal efficiency (approaching zero waste) and remarkable market efficiency (top-quartile pricing and customer
Nathan Suter, president at Redline Glass (whose company installed the glass at 1515 Douglas, shown here) plans for his business’s future value by making significant investments in modernprocess improvement and restructuring logistics, as well as investing in software and consulting.
retention; customer acquisition costs approaching zero), you can’t generate enough cash to reinvest back into your business as growth capital. Bootstrapping becomes its own perpetual-motion-machine trap. If you are going to build a business that holds sufficient exit value to make the whole exercise worth it, there are several areas where doing nothing will stop you cold. They include:
› Human Capital
Adopting a cost-based accounting attitude toward labour means we are always trying to invest as little in labour as possible — no more than needed to get the current job done. The trouble is that only getting the current job done (exactly matching work available this quarter or this year) isn’t enough. Inevitably, the owner or anyone responsible for growing the business (for creating ultimate value) is working in the engine room instead of the wheelhouse — or working in the business rather than on the business. Building a value-creation business for your future means you need to start thinking of labour as an investment, not just a cost. Razor-thin labour margins, which result in decision-makers constantly putting out fires, will stop you cold.
When we invest something now for a planned-for return in the future, we’re
accepting a degree of risk. The longer the timeline at play, the higher the risk. Since we’re talking about the “ultimate business” (ultimate in the sense of “end of the journey”), we’re also talking about the ultimate risk. The only approach that works is all-or-nothing. Holding back is a false security. Holding back doesn’t reduce risk — it increases risk. The more you go for middle of the road, the more you are guaranteed an exit without a return on your lifetime investment. Be smart, be a voracious learner, but don’t be too safe. If safety is your inclination, get a job. Searching for guarantees and perfection will stop you cold.
MORE THAN JUST TENTS ...
Feedback is at the heart of all successful organisms and organizations. We act, we analyze the results of our actions and we act again, incorporating what we learned in the previous round. Feedback reduces risk because it reduces the chance of making the same expensive mistake twice. It’s the core of high performance: the ability to incorporate the learning from our last round into the next round, tweaking, dialing in, getting closer to centre. The failure to seek, provide, understand, and act on feedback will stop you cold.
Automation isn’t just robots and artificial intelligence. Automation is a nod to an irony: while perpetual motion machines
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are a fool’s errand, the relentless drive to get as close as possible to one is the only path toward a value-creation business. Our systems, our processes, our ability to delegate, our rejection of micro-management — the closer we can get to creating teams and systems that function on perfect autopilot, the more effectively we operate, the less energy we waste, and the more energy (capital) we have to invest in growth rather than maintenance. Automation is expensive to create initially. The costs of training, machines and systems all require a lot of front-loading. But without that investment, your organization runs on manual, and that will stop you cold.
› External capital Financial capital is the purest form of the external energy the system we call a business requires. Even human capital, the value of which is a better predictor of success than financial capital, requires cash to act at all. You can’t get great talent to invest in you for free, at least not for long. In most businesses, borrowing and equity financing are the most effective ways to get the external energy a business requires to achieve the “escape velocity” required to grow a value-creation business. Of all of the areas we have discussed, this one makes the most business owners nervous. Investing in human capital is more complex, but looking to external financial capital is more terrifying to many. The idea of going into debt, or even worse, selling fractional ownership of the business to others, stops the conversation in its tracks. But without external capital, the first law will usually stop your business cold. A FAILURE TO PLAN I’ve written previously about Deloitte’s report on the lack of courage in Canadian businesses — and I’m not merely being provocative. When we look at the succession tsunami, the grey tidal wave roaring down at us, this is real. Failure to understand that growth, investment, delegation, capitalization and risk are mission-critical requirements is resulting in anxious and confusing conversations with business owners every day. The absence of any exit plan is just a natural outcome of that. As a business owners, you need to know the real cost of doing nothing and get over the idea that simply running a solid business, day to day, is good enough. The sky isn’t falling yet, but it’s time to start exploring what an investment in your ultimate future looks like — soon and seriously. A failure to do so will, you guessed it, stop you cold. Clemens Rettich is a business consultant with Grant Thornton LLP. He has an MBA from Royal Roads University and has spent 25 years practicing the art of management.
■ COMMUNICATION BY CORALIE MCLEAN
FACING FACEBOOK’S CHANGES Take-aways from the social-media storm and how businesses can flourish in a new landscape.
o far, 2018 has been the year for news headlines involving Facebook. This was particularly the case in March when The Guardian broke the story that Facebook had misused the data of tens of millions of its users. Headlines have filled the media for months now. Just a smattering of them includes “How Trump consultants exploited the data of millions of people,” “Can Facebook restore public trust after Cambridge Analytica privacy scandal?” and “Facebook knows literally everything about you.” This uproar sounded alarm bells in the minds of the platform’s more than two billion users — or did it? While it certainly created a storm, it may surprise many of you to know that Facebook has remained unscathed.
FACEBOOK’S SHARE PRICE DIPPED TO AROUND US$152 IN THE DAYS FOLLOWING THE SCANDAL, BUT IT’S SINCE RECOVERED TO PRE-MARCH NUMBERS AND HAS BEEN HOVERING AROUND US$185, WHICH IS NEAR ITS ALL-TIME HIGH.
Facebook Updates Advertisers Can’t Afford to Ignore THE NEWEST CHANGES IMPLEMENTED BY FACEBOOK — OR NOW ROLLING OUT — CAN HAVE A BIG IMPACT ON YOUR BUSINESS.
POLL STICKERS Taking a hint from Instagram’s polling, which allows yes or no questions, FB will offer this feature through Messenger Stories’ poll stickers.
A/B TESTING FOR PAGE POSTS FB’s A/B testing tool, now rolling out, lets admins post two different versions of a single post to two different audiences and evaluate how each performs.
REVIEWS FROM 1 TO 10 FB is beta-testing a rating system that lets customers leave reviews and rate businesses out of 10 stars instead of five, for more variation.
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MARKETPLACE MONETIZATION FB is monetizing its marketplace and offering new placement options to show products and services to users while they’re actively shopping.
AUDIENCE TARGETING Advertisers must disclose the origin of their audience’s information when uploading new customer files. When users click “why am I seeing this ad?”, they’ll see why and how an advertiser got their info — and can flag brands that don’t have their permission.
How is that possible? In its Q1 earnings release, Facebook reported its monthly active user base saw an increase of 13 per cent compared to the year prior. A poll conducted by Ipsos Thomson Reuters at the end of April showed 49 per cent of Facebook users haven’t changed how much they use the social media platform, and 26 per cent reported using it more. In my conversations with many business owners and colleagues over the course of the past couple of months, I found the feelings about Facebook split into two groups. Half are hurt that Facebook would save and use their personal data to manipulate them; the other half have knowingly shared their data because they know “nothing is private anyways” and accept the old adage “if a product is free, it means you are the product.”
E-COMMERCE REVIEW TOOL With the e-Commerce Review Tool, users can flag advertisers who offer bad shopping experiences. Consistent complaints may cause Facebook to shut down specific ads, limit reach or ban the account.
IN-APP BIDDING FB’s Audience Network allows ad networks to engage in bidding amongst themselves in real-time for available ad impressions. Ad placements will go to who will pay the most rather than who has the highest average CPM.
In fact, these emails were actually a response to the General Data Protection Regulation (GDPR), which are the European Union’s (EU) new set of data protection rules that came into effect on May 25. These new rules apply to all businesses who may encounter or house the personal data of individuals in the EU, no matter where the companies are based. To avoid hefty fines, social media platforms, advertising platforms, applications, subscription services and news sites that operate globally and collect personal information all had to rework the way they collected and stored data. The GDPR was officially approved in spring of 2016, long before these Facebook headlines surfaced, although I’d have to say the timing was quite apropos.
HOW TO THRIVE IN THE NEW LANDSCAPE So, what are the key take-aways for businesses who still want to engage with their audiences and customers via Facebook?
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Be more strategic than ever. Even before Facebook’s scandal surfaced, the platform announced it’s rolling out a new algorithm that will show more “people content” in user feeds and less “business content.” With this said, businesses can still have highly successful pages organically if they do the following: Find optimal times to post — and post during those times. Post strong content that your audience will care about; don’t just talk about yourself. Collect data, but use it properly. Let your audience know exactly how you’re using it. The GDPR is just the beginning. When signing up for your offering or responding to your call to action, people outside of the EU are also now expecting simpler terms and conditions (TOCs) and clear explanations for what you collect and why. When you set clear expectations, you earn trust and happy and loyal customers from the get-go. By implementing these suggestions, you stand a better chance at having your organic content appear in more feeds, having your ads perform better and keeping your costs low. While Facebook is still a profit-driven machine and collects ad money from less-thanfavourable businesses, it does so for a much higher price. So the better you do, the more Facebook will reward you.
MORE CLARITY, PLEASE Despite Facebook’s unwavering usership and strong share price, we are collectively becoming more aware of ads that may try to sway our opinions, and are developing an increased sense for looking at things with a critical eye. It’s so important that we continue to grow this ability, so if we accept that we are the product, then we can at least move closer to controlling what it’s made of and who can access it.
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■ MONEY BY STEVE BOKOR, CFA, AND IAN DAVID CLARK, CFP
MEDDLING WITH INCOME SPRINKLING WHAT’S THE PROBLEM?
Now that the federal government has closed the lid on income sprinkling, our financial experts ask: are there any options left for business owners who have been unfairly targeted?
hanks to the recent move by the federal government, Canadian business owners and their families have been dealt a blow to their financial and corporate retirement planning strategies. Income sprinkling — or income splitting — has been hampered by the current federal government in a move the feds say is all about making the tax system fairer. In our opinion, the government is downplaying the effect on the average small business owner. The changes, which came into effect in January 2018, are actually an attack on the millions of small- and medium-sized business owners as the feds scramble to reduce a substantial fiscal deficit. According to Finance Canada, the federal tax department will see an additional tax haul of $190 million this year, rising to $220 million in 2022. But an independent analysis by the Office of the Parliamentary Budget Officer (PBO) shows the feds siphoning $356 million this tax year, rising to $429 million in 2022. The finance department hopes to collect over a billion dollars in new tax revenue in the next five years, while the PBO office forecasts an additional $1.9 billion in revenue. It’s the first time we actually wish the tax department is right. Canada’s SMEs make up 30 per cent of Canada’s GDP, 25 per cent of our exports and 95 per cent of our net job creation — and the owners of these businesses now face roadblocks in how they grow and share future profits. The unintended consequences may lead to job losses or slower job creation.
WHY INCOME SPRINKLING IS A GOOD THING Income sprinkling is a method where highincome owners of Canadian-Controlled Private Corporations (CCPCs) pass income from themselves to other shareholders, typically family members in lower-income brackets. The rationale is simple: since Canada has an aggressive, progressive tax system, corporate
business owners may feel the tax burden more than sole proprietors and private sector/ government employees with pension plans. Income sprinkling has been useful to reduce the burden and even the playing field. Prior to July 2017, business owners, in particular professionals such as lawyers, doctors and accountants, could do one of three things with their business income:
1 They could pay themselves a salary, which would entail paying CPP and higher personal income tax. This, in turn, would allow them to make RRSP contributions as an offset. 2 They could keep the money in the corporation (and have it taxed at the passive income rate, which is at a high rate that is no different than if they were to hold it personally); or, 3 They could distribute all or part of the profits to the shareholders. Most commonly, that meant paying a dividend to themselves, as well
as to their spouse and/or children (sometimes through a family trust). Before the rules change in January 2018, a professional in B.C. with a corporation generating earnings of $400,000 could declare a $200,000 dividend to themselves and $200,000 to the shareholder’s spouse. The combined tax on the family income of $400,000 was $70,242. The tax bill dropped more if the $400,000 could be split multiple ways with other family shareholders. Without income sprinkling, the business is forced to declare a $400,000 dividend to our engineer, whose revised tax bill now jumps considerably to $103,514. The federal government has instituted a number of tests to determine “reasonableness” with respect to who can receive income sprinkling from a corporation based on the amount of time, labour and capital contributed by each shareholder and the type of business. The new tax focuses on “service businesses and professional corporations.” Generally, to receive dividends taxed at the favoured rate, adult shareholders need to own a minimum of 10 per cent of the business and/or work an average of 20 hours per week in either the current tax year or any previous five years. There are exclusions to the reasonableness test for seniors over 65, adult children between ages of 18 and 24, and individuals who have inherited their share of the business from a related family member. The feds also limited the tax break on passive income inside a corporation. Once a business generates more than $50,000 in passive income, each incremental dollar will result in a $5 loss in the small-business deduction limit. The limit would be reduced to zero at $150,000 of investment income. God forbid a corporation holds passive investments to stabilize cash flow through business cycles or to save for rainy days or retirement.
WHEN IT COMES TO YOUR BUSINESS
AS OF JANUARY 2018, THE RULES CHANGED — AND THE CHANGES ARE COMPLEX, WITH A BIG IMPACT.
WITH INCOME SPRINKLING (BEFORE 2018)
WITHOUT INCOME SPRINKLING (AS OF JANUARY 2018)
The new rules are complicated, and since we’re not accountants, we suggest you consult a CPA who specializes in corporate tax to help you wade through these rules to determine the best course of action. We feel these rules will generate challenges, with business owners taking more salaries for themselves and family, who will then make use of RRSPs, executive pension plans and life insurance inside the corporation to shelter the tax burden somewhat. The new approach to income sprinkling for business owners over 65 will be more in line with the existing pension income splitting rules. This also reflects the fact that a business can play a necessary part in supporting its owners in retirement. Steve Bokor, CFA, is a licensed portfolio manager, and Ian David Clark, CFP, is a Certified Financial Planner at PI Financial Corp.
A SHOT IN THE DARK
Tofino Towel Co. follows a one-percent model of business, donating one per cent of profits to Vancouver Island non-profits.
FROM A DOWNTOWN VICTORIA BUILDING ALMOST AS OLD AS THE FIRST CAMERA EVER MADE, LENS & SHUTTER IS MAKING GOOD ON A CULTURE OBSESSED WITH DOCUMENTING ITSELF.
Call it a baptism by fire. When Roy and Julia King purchased B.C.’s camera-supply darling Lens & Shutter in 2013, the company was bloated, bankrupt and, like most camera stores, losing market share of its point-and-shoot models to the smartphone industry. But the brand’s respected name and almost half-century of retail in B.C. appealed to the new owners. Though the Kings had no direct experience in the photographic equipment retail world, they had business know-how — so they went about trimming the company fat, narrowing their holdings from eight stores to three, in Victoria, Vancouver and Kelowna. “People are taking billions of photographs ― most of them are on their phone camera, but there is that interest in photography,” Roy says. “One hopes we can kindle that and nurture that and bring people across from the phone to the camera.” Today the Kings’ focus is on people who are passionate about photography and on educating customers about what real, well-made cameras from industry giants like Canon, Pentax and Nikon can do. “The camera phone is now an excellent piece of equipment for your average shot, but if you look at a lot of the younger people today who want to have a decent blog or Instagram account, you do run out of steam …” Roy says. “To go to a camera ― the difference in quality is marked. There’s no comparison, really.” Technological advancements may make it difficult to predict what cameras will look like in the future, but the 1.2 trillion photos taken in 2017 ensure it will likely never lose its place as humans’ favourite gadget.
BELLE WHITE/DOUGLAS MAGAZINE
BY SUSAN HOLLIS
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Business 360 Issue – Aug/Sep 2018