You start a business from scratch. Cover startup costs. Survive the bureaucracy of becoming a business. Work out hiring, scheduling and payroll. And then? You hit a wall.
After half-a-decade in business, many entrepreneurs encounter new challenges. Just as they’re about to be profitable, pay off loans or have weekends again, new issues arise: growing marketplace competition; a hike in commercial rent or a need to invest to keep growing, so profit margins shrink.
“It’s pretty common,” says Jesse Rodgers, chief executive officer of the Halifax innovation hub Volta. “There are different stages to business and at a certain point, they hit new issues.
“One of the big issues is fatigue. It’s a lot of responsibility on their shoulders and, for five years, it hasn’t let up.”
SALT sat down with three Halifax entrepreneurs who opened businesses five years ago to find out about the biggest issues they’re facing now.
The Floatation Centre — Lindsay MacPhee, founder
At first, she felt uncomfortable and icky.
Someone had given Lindsay MacPhee a gift certificate for floatation therapy – a session in a sensory deprivation tank.
“But then something just clicked and I loved it.”
The chemical engineer was living out west at the time. When offered a job in her field in Nova Scotia, she moved back, but the job fell through.
“I was just lying in bed one day and I was like, ‘Man, if I could just go float, I could meditate on this and figure out what's next for me.’”
MacPhee searched for a floatation centre; the closest she could find was Montreal. Cue the proverbial light-bulb moment.
She leased a commercial space in Halifax’s North End, invested more than $120,000 in leasehold improvements including renovations and equipment and opened in 2015.
MacPhee has worked around the clock at The Floatation Centre ever since.
“I've been scrimping and saving and not paying myself on a regular basis.”
Things were looking up for 2020. Her five-year term loans would be paid off and she might start to turn a profit.
But, when it came time to renegotiate her commercial lease, MacPhee was slammed with an increase of more than 30 per cent.
Moving wasn’t an option. She had already made significant investments in the existing space, and relocating the heavy floatation tanks – and losing thousands of dollars in Epsom salts – wasn’t possible.
“I feel like I'm back at square one again.”
Despite the challenge, MacPhee says she’s determined to stay focused on providing a space where people can heal, relax, meditate and find happiness.
R Studios — Connie McInnes, founder
She started in gymnastics at age 2. By 5, she was competing. A couple years later, she was training 15 hours a week.
“Fitness has been part of my life forever,” Connie McInnes says.
When she launched her own business just over five years ago, it was a natural fit to work in health and wellness.
It started with the Rio Pilates and Yoga Studio in 2014 and then Rogue Kickboxing and Strength Studio in 2017 and Rebel Studio launched last April.
Collectively, the trio were among the first boutique fitness studios in Halifax and Dartmouth.
It was a gamble.
“Right from the get-go I knew I would just try this for five years. I was told it could take that long before we even see a profit.”
McInnes has created a well-recognized brand: blending fitness and fun with a focus on community and a loyal membership base.
But hitting the five-year mark presents challenges: increasing costs and competition.
“When I opened my first studio in the North End, it was super affordable, but, when we outgrew our space and started looking for larger spaces, the rent had doubled.”
She risked almost everything to buy property.
“We bought a commercial space, which was a huge shift for our business… we had to take everything we built and put it back into the business just to survive.”
R Studios is also facing increasing competition in the boutique fitness space.
The key is to be “super proactive, nimble and innovative,” she says, in order to stay on top of trends and adapt.
McInnes says you also can’t lose sight of why you got into business in the first place.
“Staying true to why you started is really challenging.”
Good Robot Brewing Co. — Joshua Counsil, co-founder
Good Robot Brewing opened in 2015, but its birth can be traced back another decade.
Joshua Counsil, Angus Campbell and Doug Kehoe met in a university dorm.
The three engineering students stayed closed, meeting up after graduating to escape the “robotic environment” of office jobs at music festivals and theme parks.
And then came the idea of a brewery and taproom. After honing a business plan, attracting so-called micro investors – mostly friends and family – and securing loans, the three friends opened a brewery in May 2015 and a tap room six months later.
Good Robot is tackling new hurdles as it reaches its five-year anniversary. While the brewery and taproom have grown steadily, Counsil says business can be fickle.
“This is a size of company that is a poor spot to be in. You’re big enough to require the people and systems to make you run efficiently, but not big enough to where those systems can be afforded.”
The brewery and taproom have scaled up quickly to take advantage of the momentum in the market, but with growth comes risk.
“Top line, absolutely, there’s lots of revenue. But my god, we’ve got loans on loans on loans for every single piece that we’ve built.”
But the trio is up for the challenge.
“We’re releasing a fermented seltzer soon, a low-calorie beer and a cold hop beer. You’ve just got to keep moving and coming up with new ideas.”
Resources for Entrepreneurs
Halifax BDC Business Centre: bdc.ca
Halifax Partnership: halifaxpartnership.com
CEED workshops and training: ceed.ca
Brett Bundale is a Halifax-based reporter covering business issues for SaltWire Network.
