In the months of May and June, the Moonflower Room is where Hole's Greenhouses and Gardens sells annuals and bedding plants. The rest of the year, it's an event space that hosts craft shows, weddings, and trade shows.Jessica Fern Facette Photography
Hole's Greenhouses & Gardens has been a staple of the Edmonton community since Lois and Ted Hole opened up shop in 1979. But as the company grew older, however, so did its customer base, and it wasn't attracting much interest from younger people.
Nearly 35 years after opening its doors, sensing that such demographic challenges would threaten the future of the family business, son and co-owner Jim Hole put a bold plan into action.
He got to work building a modern greenhouse garden centre that would serve as the centrepiece of a lifestyle and experiential shopping outlet, including an event venue and restaurant as well as retail space for complementary merchants to operate under one roof.
Opening the Enjoy Centre just outside of Edmonton four years ago with no experience in the restaurant, event venue and lifestyle businesses, Mr. Hole was keen to insulate the family business from the volatility of the Albertan economy. Little did he know how quickly his experiment would be put to the test by the economic downturn that plagued his home province soon after.
Whereas the family's original storefront primarily attracted an older demographic specifically shopping for gardening supplies, the Enjoy Centre now attracts customers of all ages, many of whom discover the greenhouse while attending an event or shopping at the complimentary stores located within the facility.
"The weddings we have here, the bistro, the plants, all the complimentary businesses, they all come together to help us weather the storm when there's a downturn," said Mr. Hole. "Had we not made the transition, it would have been extremely hard to attract the next generation. We would have seen, despite our best efforts, a continual decline in the customer base."
Small businesses in volatile, resource-based economies like that of Alberta have been encouraged to pursue greater diversification for generations. A study of nearly a thousand businesses between 5 and 499 employees in Alberta recently published by the Business Development Bank of Canada (BDC) revealed that those who have successfully done so see more profit growth, have higher revenues and are better positioned during times of economic distress.
"We were able to statistically prove the correlation between diversification and business performance," said Pierre Cléroux, BDC's chief economist. Mr. Cleroux adds that BDC defines diversification as not relying on a single client, having multiple product or service lines, operating in more than one sector, having a customer base in multiple locations and exporting.
"The companies that are diversified in all five ways were actually the top performers," he said.
Business leaders in resource-based economies like Alberta have long pushed for greater diversification, both from individual companies and more holistically away from their dependance on commodities. The Edmonton Chamber of Commerce published a white paper on the importance of achieving economic diversification in Alberta in 2012, but diversification has been top of mind for significantly longer.
"Our current policy is about four years old, but when I was board chair 20 years ago, we were talking about the need for diversification," said Janet Riopel, now president and CEO of the Edmonton Chamber of Commerce. "Right now more than 70 per cent of Alberta's trade is in oil and gas, and what the Chamber is saying is that we need to change that number if we want to get off this roller coaster we've been on for decades."
The Edmonton Chamber of Commerce has urged the province to create a diversification fund over the next five years that is equivalent to one quarter of a per cent of Alberta's annual budget. This fund would be dedicated to bringing new products to market and new business development opportunities for the province.
The federally owned BDC announced its own $500-million fund in late November, dedicated to providing financing and to assist in the diversification of small- and medium-sized firms in resource-based provinces.
"We wanted to make sure that companies have the funding they need to take action," said Mr. Cléroux, adding the funds will provide businesses in Alberta, Saskatchewan and Newfoundland with consulting services and help with acquisitions and business expansion projects.
At the same time the National Angel Capital Organization (NACO) recently announced a $1.5-million investment for developing and expanding angel networks in western Canada.
"In order for Alberta to become more diversified, it needs to expand beyond just oil and gas," said Yuri Navarro, the executive director of NACO. "The more investors that we can identify, and the better quality those investors, the better chance we'll see new companies emerge from Western Canada, and especially those provinces hardest hit by the recent economic turmoil."
When pursuing greater diversification, Mr. Hole's recommendation to fellow business owners is to ensure they are partnered with people that understand those new markets or strategies, and that they're completely transparent on the business's intentions.
"Make sure everybody who is involved in the process, from financial institutions to your existing staff members to your suppliers, understands exactly where you're headed," he said. "Don't try to fast-track something; you've got to be nimble but you've got to vet it completely and thoroughly."