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January 22, 2016, 4:52 PM  |  Business

It is one of life’s great ironies: we all strive to be unique and independent, while at the same time expecting everyone else to act and think like we do. We admire and respect the independent spirit, but more often than not we struggle to truly embrace it, choosing instead to follow trends and fads and shiny ads. We yearn to lead, but end up following.

Take a look around this beautiful city, and if you look hard enough you will see it: independence is dying. Neighbourhood stereotypes in Vancouver are almost too easy: if you live in Gastown, you wear a beard and skinny jeans; if you live in Kits, you wear yoga pants and Arcteryx jackets; if you live on Commercial, you wear patchouli oil and Birkenstocks. We aren’t independent; we are birds of a feather flocking together. And this lack of true independence does not just apply to what we wear. It’s how we think; its how we act; it’s how we eat and drink.

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How else do we explain the popularity of something like Starbucks? We live in a city with a plethora of local, independent coffee roasters and really good independently owned cafes, serving some very high quality coffee and food. Starbucks is owned and operated by a giant, American multinational corporation with shady political ties, a shady environmental record, and shady treatment of its employees. And their “coffee” and food choices certainly do not meet any definition of high quality. Given these black and white facts, the choice should be easy. But apparently it is not, because the popularity and ubiquity of Starbucks continues to thrive in this city, while the local, independent cafes and coffee shops struggle to stay alive. People seem to have no problem giving five dollars to a faceless corporation, where it will get lost in a financial vortex, as opposed to spending five dollars at a local coffee shop, where it might literally put food on the owner’s table. And where the product is most likely better.

And coffee is just one example. It seems when it comes to spending money, people muzzle their uniqueness and independence. We window shop at a local boutique, then buy our clothes at H & M; we ooh and aah over the cool aesthetics of a local cafe, and then buy our lunch at Subway; we admire the funky furniture on display at a local shop, then buy our furniture at Ikea.

Why?

Is it safety? Is it convenience? Is it fear? Is it purely financial? Do we care more about what our money buys than where our money goes? Perhaps it is simply something us consumers rarely stop to consider: small, independent businesses are struggling, and without our support, many will die.

Despite this foreboding landscape and uncertain future, local and independent businesses continue to pop up all over the city, as they have throughout our history. And they are being opened by a mixed bag of dreamers and optimists: families, couples, friends, partners, old and young, all well-intentioned in their pursuits, and all chasing the elusive dream of independence. It’s a noble pursuit, and many are motivated as much by the romanticism of owning their own business as they are by profit. It’s a romanticism fuelled by the media, and the examples set by the minority of successful local businesses. The pull is strong and the dream is even stronger: the freedom to call the shots, the opportunity to build and create something special, the chance to be a part of the community, the desire to do things the right way. It’s a tempting ideal, an attractive myth. But it rarely becomes reality.

And the numbers don’t lie. According to the most recent government study (https://www.ic.gc.ca/eic/site/061.nsf/vwapj/SEC-EEC_eng.pdf/$file/SEC-EEC_eng.pdf), only 50% of small businesses in Canada survive to their fifth year. The other 50% fail…for a variety of reasons. So in reality, it all comes down to a coin toss.

The Failure

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* names have been changed to protect those involved.

It seemed the perfect situation, the ideal opportunity. A prime location on the outskirts of Gastown with plenty of foot traffic, surrounded by a plethora of office buildings; a beautiful space, richly hued in dark wood and brick; an eager and intelligent family ownership, embarking on their first business venture; and a workable concept: serving healthy food, baked goods, and premium coffee. It was to be a truly independent, family-run business, and the future was bright. It was November, 2014.

By August of 2015, the business was forced to close its doors. In less than a year, it had racked up tens of thousands of dollars in debt, it had drained the bank accounts of its owners, and the bright, idealistic future had turned into a very sad, dark reality.

It is a heartbreaking story of bad luck, inexperience, and more bad luck. It is an example of what happens when idealism meets reality. It is a perfect illustration of a sad fact: that even with hard work, the best of intentions, and a good idea, many local, independent businesses will fail, ultimately because not enough people come through the door.

According to Peter*, the primary owner of the cafe, his expectations were actually quite modest.

“We just wanted to try and get through the first year,” he says. “And then take a look at things after that.”

It’s a common expectation, based on the fact that many small businesses have a limited amount of money, and a limited amount of operating expenses, generally lasting about a year. However, establishing yourself, building a reputation, and getting to the point where you can make any kind of meaningful profit generally takes between 3 and 5 years. It’s a classic catch-22.

And like many small businesses, Peter’s capital derived from a combination of personal savings and bank loans. Unless one is independently wealthy, most small business owners-to-be are faced with the arduous task of writing business plans and filling out loan applications in order to get started.

“There is so much work to do before you can actually open,” Peter tells me. “From hours of research to mountains of paperwork to construction, there is just tons to do.”

And it all costs money.

According to Peter, the biggest barrier to success was financial.

“Financing and working capital are always going to be the biggest challenges for anyone starting a business on their own,” he says. “Unlike big companies, there is always the risk that money is going to run out.”

Depending on the type of business you plan on opening, start up costs can range from $50,000 to $150,000. For a medium-sized cafe, such as Peter’s, start up costs are around $100,000. For an established company or corporation, this is veritable chump change, but for an independent business owner, this is a massive commitment, no matter if the money comes from a bank account, a bank loan, or a combination of the two. For that kind of financial commitment, you pray pretty hard that you win the coin toss.

And although Peter lost the coin toss, he is somewhat philosophical about the whole experience.

“Experiences like mine are a higher education,” he reflects. “Sometimes things don’t work out as planned, but there is always another opportunity around the corner.”

The New Kids

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A literal new kid on the block, Hey Jude opened for business at the corner of Cordova and Abbott a mere three months ago. Hey Jude is a niche boutique – selling mostly hand-picked vintage items, clothes and jewellery from local designers, and a variety of quality sundries. It is vintage in a boutique setting. Located at the Northeast side of the Woodward’s building, in a tiny but beautifully decorated space, Hey Jude has the built-in advantage of walk-by foot traffic, a bonus for any small business.

Having established itself in 2010, Hey Jude gained a measure of popularity with its pop up shops around the city. Bolstered by that success, co-owners Lyndsey Chow and Lauren Clark decided to open a permanent retail site for their store. They knew it wouldn’t be easy opening an independent boutique in a city as unpredictable as Vancouver, and in a neighbourhood with no shortage of them.

But for many business owners who start out in the minor league world of pop up shops and website sales, the pull of joining the big league of retail is often hard to resist.  They knew what they were getting into, but they jumped anyway.

“We were definitely scared,” Chow says. “But it was still something we wanted to do.”

Luckily for Chow and Clark, they were able to raise most of the money themselves, and they had lots of friends and family who chipped in to help, from construction to cleaning to painting. But once the euphoria of opening their own store was over, the requisite stress and anxiety took over. Like most small business owners, it’s a stress and anxiety they deal with daily. The key seems to be finding perspective and balance.

“There are days when you don’t sell anything, and there are days that are incredible,” Chow says. “You have to accept that and not get too down when things aren’t going well, or too up when they are.”

Unlike many other independent businesses, Hey Jude had one advantage before their doors evened opened: a following. after two years of successful pop ups, Chow and Clark had cultivated a loyal following, which provided a built-in customer base when they opened their retail shop.

But that doesn’t mean they won’t be facing the same primary obstacle as other small businesses: getting people in the door.

“We have to create customer loyalty, especially in a city like Vancouver,” Chow tells me. “When people shop at big name stores like Aritzia and Zara, they basically know what they are looking for and what they are getting. In Vancouver, it seems harder to get people to spend their precious time browsing or shopping in a boutique, where they might not know what they are looking for. It’s a struggle.”

And it’s a struggle faced by most independent businesses who are battling big name companies for consumer dollars, on faith and a shoestring budget. The hardest part is not getting people to buy things; it’s getting them in the damn door.

Due in large part to cheaper rents and its proximity to both Strathcona and Gastown, Chinatown has become a hot spot for new local businesses. One of the newest businesses to join the fray is Propaganda, a coffee shop near the corner of Pender and Main. Serving coffee from respected local roasters such as Elysian, Timbertrain, and Bows & Arrows, Propaganda is geared toward those who are pretty serious about the quality of their coffee. And with the venerated Matchstick and the requisite Starbucks and Waves all within a two block radius, Propaganda has had to fight for its place in the ‘hood.

Co-owner William Wang, a veteran of the Vancouver coffee scene, also knew it would not be easy opening an independent coffee shop in a city and neighbourhood filled with them. But it had always been a dream for Wang.

“I love coffee, and I always wanted to open a coffee shop,” he says. “And I felt I had the experience to do it.”

The coffee at Propaganda is exceptional, as you would expect from a group of owners who are passionate about the bean. And the aesthetics are stunning. It’s an inviting space, filled with cool furniture and lighting, and assortment of subtle and whimsical touches. It’s obviously designed by people who care.

Interestingly, Wang felt the biggest obstacle in opening the business was the long wait he had to endure between signing the lease and actually opening the doors.

“We had to wait ten months to get all of our permits and paperwork approved,” he tells me. “And we had to pay our rent the whole time.”

Dealing with red tape and city hall is always a bit of a crapshoot, and it’s no different when trying to open a business. Depending on the location, the amount of work to be done, and the type of business being opened, a new business owner can be faced with a fairly large stack of permits, each with its own variable waiting period. In some cases it may take a few months to get approval; in other cases, like Propaganda, it may take closer to a year. For three locals with limited capital, derived primarily from their savings accounts, ten months of paying rent without any income can be pretty darn frustrating.

And rent is not cheap. Depending where you are in the city, and the size of your space, rent can range from $2000 to $10,000 a month. And then there is hydro…and garbage collection…and recycling…and insurance…and a host of other monthly payments.

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Another obstacle faced by Propaganda, and most other independent businesses, is a lack of funds for marketing and promotion. While bigger, established companies can have a healthy marketing budget, most smaller businesses cannot afford that luxury. After equipment and building costs (which invariably are higher than anticipated) and rent and labour and supplies and utilities and assorted bills, there is not much left for marketing and promotion. As a result, most small business rely on the two cheapest DIY marketing strategies: word-of-mouth and social media, neither of which guarantees anything.

Luckily, Wang is equal parts realist and idealist. He understands the risks involved in opening a coffee shop in a fickle city like Vancouver. He also understands that people will always go to Starbucks for their coffee, either out of convenience, ignorance or frugality. At the same time, however, he is a firm believer in the if-you-build-it-they-will-come philosophy.

“As long as we keep the quality at a high standard, people will keep coming back,” he says with confidence. “It will be slow, and I think we have to wait for the neighbourhood to grow, but I think we will get there.”

Here’s hoping.

The Success

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Founded in 1999 by Eva De Viveiros, Barefoot Contessa stands as a success story in the unpredictable world of independent clothing boutiques in Vancouver. With its flagship store on Main St., another on Commercial Drive, and another opening soon off Kingsway, Barefoot Contessa has managed to survive and thrive where many have bailed and failed. De Viveiros has faced the same hurdles as every other small business owner, but has managed to clear them all. According to De Viveiros, she opened the first Barefoot Contessa on Main street “with a dream, hard work and not much else.”

With a mother who was a seamstress and creative with her hands, De Viveiros grew up around dresses and clothing and creativity. It was in her blood. She still remembers trying to pretty up the windows of her grandfather’s corner store in Portugal. However, owning a boutique was not her first career choice; acting was. Having attended theatre school, she began slog her way through auditions, gigs and waitressing jobs. At the same time, she continued to knit, sew, and create on the side. Like many creative types, she had always fantasized about having her own shop. One day in 1999, a cute space opened up on Main Street, and realizing that she didn’t really have a lot to lose, she took a leap of faith.

“Back then, the lease was month-to-month,” she says. “So it was easy to take a chance, because if it didn’t work, I could just stop.”

And so, armed with a dream and some hard work, she took the leap. And the rest is history.

And while it is a leap taken by many new business owners, De Viveros was able to turn that leap and that dream and that hard work into a long-lasting reality. Barefoot Contessa is now 17 years old, which is a veritable eternity in the world of independent businesses. With little experience, little money, and little idea about what the heck she was doing, she made it a career. And today, despite juggling the needs of her young children, her family, her two businesses and the myriad of obligations that come with it all, she is happy and as passionate as she was 17 years ago. Yet despite her relative success in the world of independent boutiques, she admits that every day is a struggle, not only for her but for all small business owners. Yet struggling or not, she is still making it work.

How was she able succeed where so many others had failed? Is there a secret to her success?

“Tenacity,” she tells me. “And an absolutely stubborn refusal to fail.”

It seems an easy answer, but in reality it is not. No one wants to fail, but doing everything in your power to make sure it doesn’t happen is not easy. True tenacity is rarer than you might think. And those who have it are often more successful, no matter what business they are in. Mix that with a tireless work ethic, and a liberal dose of talent, and you can begin to understand why Barefoot Contessa is still standing.

But according to De Viveiros, there is one more key ingredient that every prospective independent business owner must have: passion.

“I sell the things I love, and I am passionate about them,” she says. “If you don’t have passion for what you do, for what you sell, chances are it will not work out in the long term. You have to enjoy what you are doing.”

When asked what advice she would give those just starting out, besides having passion, De Viveiros doesn’t hesitate.

“Be prepared for long hours, lots and lots of hours,” she says with a smile. “You have no idea how many hours you have to try and squeeze out of a day.”

There you have it. You want to be a successful independent business owner, go wherever you can, and acquire the following: time, money, passion, work ethic, tenacity, skill. And even then, you still have a 50% of failure. But that’s the glass half empty.

For the right person, with the right set of attributes, it can be a worthwhile endeavour, or in the words of De Viveiros, “a great ride.” But you have to know what you are up against. A fickle public, who seem to only embrace independence with their words, not their wallets. The ever-enduring popularity of big stores, with a seemingly endless supply of capital and marketing resources. The reality that you have to work harder and longer than everybody else.

Still, there are simply too many intangible, uncontrollable factors in play to truly predict any kind of success or failure. Ultimately, it’s still a coin toss.

In many ways, owning and opening an independent business is a classic trade off. Long hours, hard work, stress, and relatively little pay in exchange for freedom, being your own boss, and realizing your dreams. For the right person, it is worth the risk. It’s a little like having a child: you can read all the books you want and get all the advice you need, but you never truly know what it’s like until it happens. And you better be well stocked with fortitude, patience, passion, perseverance, and a gambler’s mentality. Because once that coin is tossed, there is no looking back…and it won’t hang in the air forever.

When all is said and done, however, it is the consumer who is ultimately responsible for the success or failure of an independent business. I could wax on and on about how the 21st century has messed with our priorities, about how convenience and frugality have usurped quality and care. But in the end it all comes down to one thing: choice.

So go make a choice.

By Tobin

 

 

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