This photo I found the other day is from 10 years ago and represents a lot, including making one good decision and one bad decision that quite frankly almost cost us our business.
"Celebrating" the start of a new era in December 2018
In 2008, our business moved from one location on the West End of downtown to two locations; one being a space located in Victoria Park in a building called Stampede Station. In 2008, our business literally had to beg landlords to let us rent space, especially downtown. After negotiating and continually get pushed around to the back corner of the building leaving us no exposure to Macleod Trail, we signed a 10 year lease for just over 3,000 square feet (at over $40 per square foot plus operating costs of over $20). This was the market at the time, and since we were uncertain that we would be able to find alternative downtown main floor space again, we decided to sign a 10 year lease that finally expired in January 2019.
Our business grew and grew, and we eventually opened a third location in 2011, which is our current headquarters in Inglewood. However, in 2014 our business starting to feel the squeeze of the downturn and we consolidated our Stampede office into our Inglewood space. We had hoped to possibly sub-lease the Stampede Station location in 2014 with 4 years to go. The space was troubled, and the market had changed leaving us with a lease costing arguably 4-5 times market value, or in real dollars a $17,000 per month expense, drastically lowering our profitability.
Photo from January 2019, the day we gave the keys back after 10 years
The period of 2014 to 2016 saw us re-invent our business as we started to feel the loss of work from some major accounts. We increased our client base and product offerings (signage etc) and in 2016 again decided to consolidate and we moved over the staff from our signage division and half of the equipment to try and find a sub-tenant for the sign shop while we used the space as industrial space to run our router table. During this time, we even had one of our clients move into the space, in a deal that brought us more print business while allowing them some free space as they transitioned their business. We considered a lot of options, even changing the space into a new business; maybe a CrossFit gym or a Little Caesars. Fortunately, we didn't take these thoughts much further than conversation. But we made the most of this space, in 2014 we had listed the space for sublease with tepid results and decided to take a leap of faith and invest over half a million dollars into an expansion into signage - this meant adding $20,000 a month in equipment and labor into space that cost us $17,000 to rent to expand a division that was only generating $20,000 to $25,000 a month in revenue. Let's just say we didn't crack open many spreadsheets in the early part of this expansion to see if it was profitable.
For two years the business was losing money, and we exhausted all our resources to pay down this space while doing everything we could to grow our client base and revenue. Fortunately, it worked and from 2016 onwards we have grown our signage division five-fold and still growing. We have expanded our client list from 600 customers per year to 4,000 per year and no longer rely on one or two major accounts to keep us afloat. In fact, last year our largest of 4,000 accounts was 5% of our total business (down from 50% from just our top 2 in 2014).
The year ending 2018 was our best year in terms of revenue in our history. We surpassed previous highs from 2014, and prior. They say "what doesn't kill you makes you stronger" and I couldn't agree more. However, almost dying sure isn't a fun process to go through and I hope to never go through that again.
We learned lots of lessons:
- Don't overcommit on leases, the term is the enemy
- Landlords are not in the business of helping tenants get out of tough deals
- We learned that you just have to "keep on swimming". If you make a bad decision, the trick is to make a correcting decision as quickly as possible. There are no redo's in business and only we can save ourselves by making the best decisions we can daily.
- We stuck together as a family, we worked together with our team and we lived day by day to save the business and re-build it
This 10-year challenge was exactly that, we will see what happens on our next challenge, but I can tell you it will be a 5 year or less one! No more 10-year deals are crossing this desk!
The good decision was buying that iGen in the background, that was our first one and we now have two more.