By Paul Andrew
A little shock rippled through the business community in Whistler a month ago when a local hair stylist was closed down by an organization which is designed to help small business — not put them out of business.
Clayton John’s Hair Design had missed its last two payments to Community Futures Development Corporation of Howe Sound and John said he expected to be closed down any day during his last two months of business in Whistler Village. A total of three payments had been missed in the months leading up to the end for John, who began hair styling in Whistler in 1992.
John said a combination of events led to the end of his career in Whistler as a stylist and a business owner. The main cause of his business failing, he said, was another hair salon opening "right below his shop," which was also financed by Community Futures, a federal organisation that has its regional office in Squamish and offers loans and business advice to people who wish to start a small business or who require advice for staying in business.
"I suffered huge losses between July 1 of last year and December," John said. "At least $50,000. I managed to stabilize but just barely. I missed three payments of $1,200 and (CFDC) sent me a warning letter saying I had 15 days to get it together or they’d shut me down. It’s a branch of the government that’s supposed to help people. I initially went there in 1992 to have them help me start my business and they were great. Now they’re so stupid it’s unbelievable."
Michele Mooney, a business analyst with CFDC, says the record season of 1998/99 in Whistler didn’t necessarily make anybody rich, but it did let many businesses in Whistler catch up after a two-year backlog of barely breaking even.
"Oh I could tell you many stories about Clayton," Mooney said. "But he simply closed down because he wasn’t making any money. We had to make a move. Many businesses fail because of bad management. It’s the school of hard knocks."
Contrary to John’s assertions, Mooney says CFDC does not award business loans to anyone unless they can show more than adequate research has been done and a practical business plan is in hand. Farfalla, a hair stylist and aesthetics salon in the village, was financed last year by CFDC only after owner/operator Emanuela Bertoia-Laverty and her husband, Robbie Laverty, did exhaustive research and rewrote their business plan several times until Mooney felt it was presentable to the nine-person approval board at CFDC. The husband and wife team are both are under 30 years of age.
"Robbie did a most impressive business plan," Bertoia-Laverty said. "It included forecasts that were pessimistic, realistic and optimistic. We knew a little about the approval process but we were given an outline of what the committee would like to see. Then Robbie and I went around the village and checked prices at other (salons). We didn’t want to rip anyone off and we didn’t want to be ripped off. Plus, I chose a natural/organic hair and skin product. It’s helped our business, helps the environment and everyone in our shop believes in it."
By the time the couple were ready to approach the committee, Mooney says CFDC also believed in them.
CFDC in Howe Sound is federally funded by Western Economic Diversification and is one of 35 offices in B.C. At least 90 offices are set up around the country, mostly for people who wish to start a business but have been refused at least once by a conventional financial institution. Mooney says the last thing CFDC want to see happen is a business closing.
"I’m dealing with 65 businesses in the corridor that have been declined by a bank. I help a lot of people and I do everything with them. I know what it’s like to start a small business because my husband and I are starting one and we work at it eight hours a day on top of the eight hours a day we do at our normal jobs. I’m booked solid in Whistler every Thursday because sometimes people don’t just need money, they need advice on how to avoid borrowing more money. We always help existing businesses."
Opening an outdoor adventure/mountain bike store can be a risky business in Whistler. Numerous bike stores and at least one outdoor adventure store in Whistler already provide more than adequate adventure service. But Katmandu opened its doors in Marketplace during the spring of ’97 and is now a busy store — one that may need to expand very soon.
And the hair salon business? You might think four or five hair salons for a permanent population of around 7,500 would be enough, and opening a hair shop would be suicide. Well, no. Farfalla opened its shop on the ground floor of a Whistler Village retail building in July of ’98 and is now holding its own in the village.
Bagel lovers in Whistler may recall when Benny’s Bagels in Village North came and went so fast, it’s hard to remember exactly what the inside of the store looked like.
But it was a licensed, upscale bagel store in a location that enjoyed as much foot traffic as anywhere in Whistler.
The Great Canadian Bagel, another franchise shop, was also here in Whistler for less than a year and closed its doors just months before Whistler’s record season of 1998/99. They may have survived, says Rick Hale, owner-operator of The Bagel Street Cafe, if they had stuck it out.
Hale went toe-to-toe with the two other heavily financed franchises in Whistler during the summer of ’98 — and won.
"Benny’s Bagel’s first mistake was they came up here primarily to make money," Hale said. "Everybody wants to make money. But in Whistler, you have to become known as a local or it won’t work. You can’t come in here and get rich quick. Benny’s might have made it but their biggest mistake was they gave up."
The most significant difference among the three bagel stores is the $350,000 investment, on top of the franchise purchase price, which both the Benny’s and Great Canadian proprietors forked out to open a business in Whistler. Location, although cherished by many small businesses for walk up service, didn’t help Benny’s at the foot bridge to Village North. Great Canadian, set up on Main Street away from foot traffic, was rarely found by visitors wandering the village.
But location didn’t play a large role for Bagel Street either, which is set up in an alleyway behind Whistler Village Centre.
Mooney says research is the key to a successful business — especially in Whistler.
"We don’t have a high interest in retail, such as clothing stores," Mooney said. "It’s so high risk. You already have The Levis Store, The Gap, Eddie Bauer... so we like to diversify the economy."
The recent closure of Clayton John’s was because of bad management, Mooney said, even though owner John had initially financed his business through CFDC eight years ago. Mooney points out other business that have succeeded despite the competition.
"Auntie Em’s just paid out $75,000 to us and Evolution has also paid us out. They’re both good examples."
Indeed. Evolution, a high end mountain bike store in the village catering to advanced riders and pros, competes with at least seven other bike stores in Whistler.
Because there were so many shops serving the competitive cyclists, Katmandu, which also asked for financing from CFDC, chose to cater more to the family or the recreational rider and offer deals to repeat customers. As a result, the business has grown.
"The business has increased but so has the labour costs," said Russell (Rusty) Long, who owns Katmandu. "I’m happy though. I started in 1993 in Function and in ’97 I moved to the Marketplace so I went back to (CFDC) and borrowed another $10,000. They’re great because they do seminars all the time and they call me to tell me about them."