Feb 24 2009
When the economy hands them a lemon, smart Canadian firms make lemonadeWhen the going is tough, smart small businesses in Canada get going.
INCLUDES VIDEO. http://www.itbusiness.ca/it/client/en/home/News.asp?id=52130
2/23/2009 5:00:00 AM By: Joaquim P. Menezes
"When fate hands you a lemon," wrote Dale Carnegie way back in 1948, "make lemonade."
Carnegie offered that principle in his best-seller: How to Stop Worrying and Start Living as a prescription for personal peace and fulfillment in the midst of turmoil.
Today, 61 years on, smart Canadian small and mid-sized businesses (SMBs) are putting this astute – and abiding – precept into practice...with spectacular results.
At a recent roundtable in Toronto, two such firms shared how they are using today's dire economic challenges as a launching pad for unprecedented growth and profitability.
The event was organized by Mississauga, Ont.-based Microsoft Canada.
Virtual office, real savings
Today's bleak financial climate may not seem overly conducive to corporate success.
But even such widespread phenomena as downsizing and cost cutting can be turned to advantage, as Brian Monteith has demonstrated.
Monteith is master franchiser at Intelligent Office in Canada – a provider of "virtual office" solutions with seven locations across Ontario. The company offers entrepreneurs and businesses shared executive (and regular) office space, intelligent assistants, receptionist services, meeting spaces, and more.
One would expect mainly smaller shops to have a need for such offerings, but Monteith says his clients span the gamut – from small businesses all the way up the totem pole to Fortune 500 companies.
And a tough economy, he said, has actually boosted – and broadened – the appeal of such services.
"Where some see uncertainty, we see opportunity," Monteith said. He explained why.
According to Monteith, in today's tight market, companies are scrambling for ways to lower costs. "Outsourcing to us allows them to reduce their real estate, offering them the benefits of an infrastructure, without the high fixed costs."
Such an arrangement, he suggested, allows small and mid-sized businesses – as well as larger firms that are downsizing – to have their cake and eat it too. They can enjoy amenities such as remote offices, media rooms, receptionist services, a prestigious address and more, at a fraction of the costs of setting up and maintaining all these elements themselves.
It's a value proposition Intelligent Office emphasizes in its marketing – and with remarkable results.
The franchise opened its first Canadian location in Toronto in August 2005 with Monteith as master franchisee. It has since expanded to seven locations across Ontario.
Moving forward, Monteith believes expansion will be even more rapid. "We plan to be in 40 locations by 2015."
Ironically, the current recession is actually fuelling growth by increasing the appeal of the Intelligent Office business model.
"Since September 2008 our leads have actually doubled," Monteith told ITBusiness.ca. "January 2009 was a record month for leads and closes at all locations."
He said today businesses of all sizes – from small firms to Fortune 500 companies – are realizing the current office set up isn't ideal, and services such as Intelligent Office offer them a great way to save on bricks-and-mortar and even staffing costs.
"With the economy in a downward spiral, we're in a great position to target SMBs."
Intelligent Office franchises in Ontario are seeking to further enhance the appeal of their offerings by introducing greater flexibility and choice.
For instance, belonging to one location entitles clients to use all the others as well. "So if you're a member of the downtown Toronto location, you can use an office in Waterloo or Hamilton. But you only pay for it when you need it."
From Monteith's perspective, when offering such a service, size doesn't matter – at least not a whole deal. His own operations are a testimony to this. "Our current location at North York, employs just five people, but services hundreds more."
The reason his business has an impact and reach disproportionate to its size can be summed up in a single word: technology.
"Technology is the driving force behind our business," Monteith said. "We've heavily invested in our tech infrastructure."
A big chunk of this spend is in computer-telephony integration products. The firm will also be investing in remote data backup technology to offer customers – especially small office, home office (SOHO) clients – a one-stop data backup and recovery option.
Microsoft SQL Server – Redmond's relational database management system – will be a key part of this infrastructure, as well as other Microsoft products, Monteith said.
Investment in technology and new tech processes is also paying off big time at Fusion Homes that builds a broad range of homes in the Guelph, Kitchner and London areas of Ontario.
The company – whose mandate is to "combine the intimacy and quality of the small builder with high production levels" – was named Ontario Builder of the Year in 2008 by Tarion Warranty Corp.
It received Tarion's top rating for customer satisfaction.
"Our product ranges from entry level, to larger homes, to dwellings geared to empty nesters," said Lee Picolli, president of Fusion Homes, which he founded a decade ago.
Picolli said his company is currently rolling out "an enormous IT project" that involves reviewing software applications used by every single department and optimizing those. We're doing this by either implementing new products or enhancing ones we already have, he said.
It may seem strange an initiative of this scope is being implemented at a time of general market recession, when cost cutting is the name of the game. But Picolli is convinced the long-term payoff will make the venture worthwhile.
"When it became evident we were going through a slowdown, we evaluated our company, asking ourselves what we want it to look like once the recession is over."
He cited the three key objectives that emerged from this exercise:
• Don't compromise our competitive position – "We resolved cost cutting can't be at the cost of quality, service and customer experience."
• Keep talent – He said over the past few years when his firm experienced spectacular growth (430 per cent since 2003) it started to recruit and train for key positions. This process, he said, would continue as Fusion Homes wanted to be able to "hit the ground running" once the recession was over.
• Make strategic investments – The firm, he said, decided to invest in items that will catapult it to the top of the pile once the slowdown is over. One of these is land purchase. "Some competitors may be weakened by the recession, allowing us to make purchases on better terms or at a lower price."
The software project, he said, aligns with all three objectives.
Software implementation, he noted, is time-consuming for IT and now – when things are a bit slow – is an ideal time to get the project rolling. "It helps us meet our second objective which is keeping our talent as we have to keep these guys busy doing something."
Canadian small businesses such as Fusion Homes and Intelligent Office owe their success to an unwavering focus on "three Cs", according to Eric Gales, vice-president, small business and midmarket solutions at Microsoft Canada.
He said these are: cash flow, core competency and customers.
As part of his role, the Microsoft executive said, he's interacted with small and mid-sized businesses in every major city in Canada – and has been able to witness first hand the factors that drive success.
"Businesses that survive and thrive understand what they're trying to sell, why they're trying to sell it, and their market – and are able to react to the changing landscape."
He said companies serious about the three Cs can harness the power of IT to:
• Reduce costs – Technology can help companies better manage their costs by improving processes (repeat processes, improve quality, reduce infrastructure management expenses in key areas).
• Drive productivity –This includes the productivity in a broader sense – of decision making, of communications, optimizing existing resources.
• Realize business opportunities – Technology, said Gales, helps new businesses and existing firms expand their core competencies to new markets and domains.
Gales said the Canadian government – recognizing that technology can revitalize business in these difficult times – has recently offered various tax breaks. "They are an important incentive for businesses to invest in technology now."
He said while many SMBs say they will invest in IT after they grow, the fact is such an investment is the pre-requisite for growth.
Carolyn Hurley | High Road Communications
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