Module 1: Business Opportunity & Market Assessment

Entrepreneurial Case Study I

Tool Shed Brewery, Jeff Orr, President & Co-Founder

I’m Jeff Orr. I’m the President and co-founder of Tool Shed Brewing Company in Calgary,
Alberta. So Graham and I we go back a long way. We met as IT contractors in Afghanistan. We
actually live a couple minutes, but we met in Kabul, Afghanistan, so it was kind of a weird
circumstance. But we found really quickly that we have the same kind of nerdy hobbies and we
take them way too far. So our first one was getting good coffee. So we got a coffee roaster
because we couldn’t find the right beans after we spent a bunch of money on coffee makers. So
we kind of figured out early on that we like to take our hobbies too far. So we started
homebrewing, and the next thing you knew, we were trying to figure out ways to take our
homebrewing way too far. So we ended up brewing at home in the backyard in a tool shed six or
seven days a week, so it kind of became a second full time job really quickly. And so we tried to
figure out a way, if we could, you know, capitalize on our friends drinking all of our beer, at
first, and make some money back.

Obviously there’s a lot of weird legalities around beer, so that kind of morphed into can we turn
this into a legitimate business and maybe make some money and make a go at it? So when we
started looking into an actual, viable business plan and how we could make this a business and
become business owners and make a paycheck at the end of the day, we found some really
disturbing legalities and provincial requirements that were basically stopping breweries from
opening in Alberta. And so the minimum requirement law – is was what it was called – said we
had to make half a million liters of beer, minimum to open our brewery. So we needed the
facilities and the production capacity, and that’s a massive outlay of money to get to that point.
So we needed to find a way around that.

We knew we wanted to make a business, and we knew we wanted to get up and running, but
when we went to go see banks, tell them our business plan, they would kind of just laugh at us
because we didn’t have experience doing this before, we came from a completely different field.
So they didn’t have any confidence in the fact that we could pull it off. So we had to find a way
around this situation, and the way we found that was a brewery in a different province. That
brewery had some space that they weren’t using, so we were able to use their space – kind of
helped everybody. They got to use that space and make some money off of it; we got a chance to
make our beer there. And then we actually had to set up as an importer in our own province. So
we ended up making our beer in another province and then importing it back to the province we
lived in.
And that’s how we got started getting our product on the shelves, which got us some traction,
and we were able to show the banks that we were able to pull off some marketing and some
actual sales numbers that might give them a little more confidence. So we had been working a lot
in the background – and I don’t want to use lobbying, 'cause we’re certainly not a lobby group.
We don’t have the kind of money that large businesses would have to do that. But we were
working with the government body who looks after liquor in our province. And we worked with
them, we worked with some liquor stores, we worked some restaurants, and we were able to say
this is not helping the economy, this is not helping the choice in this province, so there’s got to
be a better way to do this. It took a couple of years and a lot of peoples’ input from different’
industries, but we were able to finally get rid of that minimum production requirement. So early
on, we looked at a bunch of different production numbers and how we could get started
anywhere from little tiny brewery to massive brewery, and we wanted a number kind of in the
lower to small range, but it was physically impossible to open that brewery here.

With the rule changes, we were actually able to open that size of brewery later on. So we were
able to move our business back home and open here, and now we have businesses that are tiny –
little, tiny, garage-size breweries up to large, industrial breweries in this province, so it’s a really
diverse market now that that law is gone. When we launched our beer, we were in a kind of very
small market, and a lot of the players in this market came from a common theme. So a lot of the
people who went out and started breweries before the minimum production was gone, they came
from larger breweries. And so a lot of large brewery thoughts on marketing and graphic design
were reintroduced and reused, so it gave us a good opportunity to stand out on the shelves and
make something that looked totally different. So we came up with some beers that were based on
our funny stories and the things we’d done in our life, in Afghanistan, and throughout our time
on this planet. And so we came up with some pretty funny names.

We have People Skills, which was a beer named after a guy who is a complete jerk and has no
people skills. We have Red Rage, which is named after my business partner, Graham, who is a
redhead and gets angry and throws things. And then we have Star Cheek, which is named after
my face that goes all red except for a star on my right cheek when I drink beer. And then we
have a stout called Flat Cap, which is named in honor of the person who invented micro canning
that got us to be able to put beer in cans at a brewery our size. So there’s kind of an identity and a
personality to each of our beers, and there’s a very unique graphic design to each one of those
that kind of speaks to our demographic and looks different to what else is on the shelf. So we
have a lot of different products we use, from raw materials to packing materials. We try to find
local as much as we can. We’re in a really unique spot here in Alberta where we get barley that’s
grown and malted a couple hours up the street. So breweries and distilleries around the world are
bringing in train cars of this product from here because they want our product, but we get to talk
to the farmers who are growing it. So that’s a really unique and important thing for us.

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We also get hops from Washington and Idaho area of the US. That’s close to us, again, so we’re
able to actually go down – once a year we have the opportunity to go down and find those
products and give them a smell and a taste and go meet those farmers. So we try and get as close
to the producers of that raw material that we can. So we’re continuing to grow our business. We
haven’t been able to keep up since we started this business almost four years ago. We continue to
try and make more beer to keep the shelves stocked. So we’re continuing to grow that, but we’re
trying to keep it local. Our product is not one that travels really well. We don’t pasteurize our
beer; we don’t filter it. So it needs to be sold within a local area. So our real distribution
standpoint is that we’re going to keep beer in an area that we can distribute beer to within a day,
so it keeps it fresh and we know where it is. So we have some work ahead of us to keep growing
there. In Alberta alone, there’s almost 8,000 licensed liquor outlets, and we’re only in a couple
hundred, so we’ve got lots of work to do.

Entrepreneurial Case Study II

Baby Gourmet, Jennifer Carlson, President & Co-Founder

I’m Jennifer Carlson, co-founder and director of Baby Gourmet Foods. We are Canada’s
leading brand of organic baby food. We manufacture high-quality baby food in a
flexible, convenient pouch for mom, and have a number of products from baby through
toddler and into healthy kids’ snacking. We started the company when I had the idea
for – or saw the market opportunity for – high quality gourmet baby food. My daughter
was six months at the time, and I was in the grocery store looking at products on the
shelf and noticed that everything pretty much looked the same. It was a massive
amount of shelf space allocated to jarred baby food. And I thought this is probably just
what mom does, and I bought some and found out that it wasn’t very appealing. I
wouldn’t eat it myself, so how could I possibly feed it to my daughter? And knew from
that moment that there was a huge opportunity to make a difference in this category
and the lives of moms.

We – I loved cooking, and I have a passion for food. And started making her food from
scratch and coming up with really unique, interesting recipes that she loved and that I
really felt good about feeding to her. And found that there was a number of moms in
my mom group that wanted to buy the food I was making for her. They would say,
“Finley [ph] is eating better than everyone else in our family.” So I started making it for
everyone else, and truly found that what I loved about it was that I was not only
feeding these babies amazing, great-tasting food, but I was helping mom out, because
she didn’t have time to make it herself, nor did she have a desire to do it. But looking at
her and how good she felt about feeding her baby was so rewarding to me. And I
wanted to bring it to every baby and every mom.

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So I went to my sister and brought my idea to her, and asked if she’d be interested in
doing this with me and embarking on this adventure. And she thought it was the first
great idea I had in a long time. And we talked about how are we going to tackle this,
and we knew it was a great idea, but we needed some evidence and some proof that it
could really work. And so we went to the Calgary farmers’ market, and that was where
we thought would be the best first place to sell our product, to do our market research.
I’ve always believed in market research and the importance of understanding your
consumer. And if I had this big vision really didn’t know what to do next with it,
getting our market research and then building a business plan from that seemed like it
made the most sense.

So we started at the farmers’ market in 2006, very early January, and started making our
food out of a commercial kitchen, packing it. We hired some ladies to help us peel – and
we called them the “chop and chat” ladies – would prep all of our fruits and vegetables.
We’d pack them in ice cube trays, freeze it, package them on Thursdays, and work the
farmers’ market Friday, Saturday, Sunday. And it was a long haul, but it was so worth
it to really, truly understand what our consumers were looking for, what price points.

The biggest thing that we took away from the farmers’ market was one: moms are very
viral. This was before Facebook and social media, and we found that we had moms
from all over the city and outside of the city coming to the farmers’ market, which
meant moms were really – when they find something they like, they share it with
everyone they know, and we really built a community based off of that. Two: we
realized that they’re willing to spend more money. It’s their baby. It’s their most prized
possession. They’re willing to spend more. And I felt like the competitors had missed
the mark with the processed baby food in the jar, and selling it for 69 cents. I mean low
quality. They didn’t realize that moms will actually spend more if it’s something they
feel good about. So we took this critical information, and after two years – it was a little
bit longer than we wanted to spend at the market, because you find that you just get so
caught up working in your business that you’re not working on it and planning it. And
our vision was every baby and every mom, so it was time to cut that down and really
focus on the business and how to grow it.

So after we discontinued at the market, against advice from a number of people, we

spent two years researching the food processing, so we knew nothing about how to
bring a product to market. And we utilized all the resources we could, with the Alberta
Government Business Development Bank, a number of organizations that are geared to
helping start up entrepreneurs in the food sector. We reached out to everyone we could
and learned how to do this. So within the next two years, we did our research, our
homework. We built a solid plan, found manufacturing. We located the packaging,
which was turned out to be one of our most innovative attributes to the company that
we brought to the market. And we brought in an executive management team.

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We raised capital, and after that two-year mark, we were now in a position to sell
nationally. Again, with the big vision, you start with the largest retailers, and that’s –
we kind of, again, went against what a number of people had said, “Start at the bottom
and sell to the low-hanging fruit.” We wanted to be first to market with this innovation.
And going to the top was where we felt we needed to go. So we did it, and started
selling Wal-Mart as our largest consumer – or customer – followed shortly by Loblaw’s,
and within a year, we were in the majority of retailers across Canada. Primarily because
it was innovation. They had – nothing was being done in the baby category, and hadn’t
for a long time, so it was the right timing. We had great innovation, and the timing was
right. Now that was in 2010.

Now six years later, we are 30% market share in the baby food category in Canada. And
as the company has grown and evolved, we – our kids have grown and evolved. And
we developed products for their age. So starting with your baby food and your cereals,
we came out with a product for toddlers called Squoosh. So we tried to develop our
innovation along with Jill and I’s story and where our kids were at in their life, and now
we have an active – a healthy snacking product for active kids called Slammers that is
sold nationwide in Canada and predominately in the United States. So we’ve managed
to secure over 4,000 listings in national retailers across the US with our Slammers
product. And Jill and I are still involved in the business and still highly believe in what
we do and what we’re providing for our consumers, and just want to continue
innovating with new products that are in the right time in the marketplace.

Entrepreneurial Case Study III

Main Dish & Fit Kitchen, Jason Zaran, Owner & Founder

My name is Jason Zaran. I’m the owner of The Main Dish and Fit Kitchen, and I’ve been an
entrepreneur now for over 10 years. So we celebrated our 10-year anniversary just this past May,
which is exciting. And our business is The Main Dish, and also, again, we have another business
called Fit Kitchen. And they’re both kinda – they’re both centered around healthy prepared
meals, and convenient healthy eating for busy people that don’t have time to cook. And so today
we’re sitting in The Main Dish, which is a Marché, which for people in western Canada – don’t
always have an idea of what a Marché is, but it’s a fresh food market – where you eat, and you
can drink, and you can break some bread and have a really nice dining experience. But you can
have healthy meals that you can take home, heat, and eat. So it was interesting, over 10 years ago
when I worked in the corporate world, and I worked for one of those – 20 years I was in
packaged goods.

I worked for a company called H.J. Heinz, which everybody knows, which is your favorite
ketchup company – most people’s favorite ketchup company. And working in the packaged
goods business at that time for 20 years, I had that entrepreneurial thing where I always knew I
wanted to do something.

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Even though I was in my 40s at the time, Iwasn’t really crazy about continuing to work for the
big company and potentially move out east. And the beauty of working in the food business is
they always share a ton of data, and you always get – I was lucky in the sense that not only did I
get the training from my – the company I worked for, this first-class company that I worked for –
but they share all kinds of information. So you can see consumer trends, where they were
coming from the United States. You can see what the next five years is going to look like. And
then you know what you experience yourself, and so on my side I was experiencing that I wanted
to eat better, and there really wasn’t the food options out there for me to eat better that were
convenient. So there was a lot of fast food, but there was never really healthy food that was
convenient. So I looked at things, and I said, “Well, why don’t we – I can put two and two
together here. I’ve got this entrepreneurial thing I want to do.

There’s an amazing opportunity, I think, for someone who’s going to be a bit of a trailblazer in
doing something that’s new to the marketplace and doing healthy convenient meals, healthy
convenient food. And with my knowledge of the food industry, I thought now’s the time to take
a chance. So we opened up Main Dish in May of 2006, and it’s been an exciting 10 year run to
have the store. And I think a lot of people, when I started – you’ll get a lot of people that they
look at you and say what is the – the stats are funny. It’s 90% of new business fail in the first five
years, and then the remaining 10% that make it, there’s another 50% of those that fail in the next
three years. But I went into it saying failure is not an option. And if I plan well, and I can sell
myself on it, and I can build a business case for what I’m about to do, and do all my homework,
there’s a pretty strong chance that it’ll work. And I think a lot of people had said, “Failure to
plan, plan to fail.” And so when we started, we had a really good feel for what we were bringing
to the marketplace, and we’ve grown over the years up to five locations, and it’s been an exciting
run.

Entrepreneurial Case Study IV

Ryan Scott, Ryan Scott, President & CEO

My name’s Ryan Scott. I am CEO of Avalon Master Builder. Company’s been in business for
just about 35 years now. My father started in 1983 – very interesting time to start a home
building company. It was the time where interest rates were about 21%. Home builders had
recently just gone through a really big shakeup, where there was a lot of failures in the business
economy at that time. He was in a region in central Alberta with a large international company,
and was actually one of the divisions that was doing well. So he said, “Well, maybe I can do this
myself.” And that’s kind of the entrepreneurial spirit he raised in myself and my two sisters.
Why work for somebody else when you can go out and do it yourself?
So I worked with my father for a number of years, and I think – both myself and my sister
actually worked together, and we probably got a little big for our britches at the time. We’re
thinking we were pretty good, so he decided we should move back to Red Deer. He had a little
piece of land, and “sink or swim” was the thought. So we actually did quite well on it. We
learned a lot of lessons, and from there, I both built up our Red Deer division, but came back into
Calgary and started our Calgary division. And at the time where we really took over in our
Calgary division, we were looking for “Who did we want to be?”
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So we wanted to kind of make the company our own, make it special to us, really have a vision
that drove us. And the vision that ended up driving us, that we were all very interested in, and we
brought all of our company together as well to talk about what our employees might be interested
in, was a green vision. How to get to net zero for no extra cost to our customers. So we really
worked hard at getting to that net zero vision. And that’s kind of been the driving force of our
company, is that net zero vision.
Our business model – really we look at buying a piece of land from a developer – larger
developer – usually raw piece of land, though. It’s got servicing into the site, but nothing done
within the site. So we decide what product we’re going to put on it, what that looks like. We
service the sites. We put all the sewer, water, gas, electricity into the ground. We build the
buildings on it. We sell the buildings. And for a year, two years, we warranty the homes we
build. So we really have this great opportunity to build a fun vision, and to build on our green
vision. Our business is built on our partners’ belief in our ability to get the job done. So we build
– we work with a number of partners, from developers to bankers, and at each case, developer’s
looking to get their land sold. They’re looking for a product to come in and move through in an
orderly fashion and not disturb what else is going on within the community, and really build a
more vibrant community. So they’ve got to under– they’ve got to have a belief that you can
achieve that goal.
When you go into a bank, they’ve got to believe that they’re going get their money back and
they’re going to get their return. And then, when you hit some challenging times, both of those
partners can either be your best friends or your worst enemies, depending on how that
relationship goes. So our business, both with our customers – they’re very relationship driven –
but also with our partners. And I’d also include our trade partners, who build the homes. They’re
very critical in both the green vision we have, as well as ensuring that our customers are happy
with their homes.
Entrepreneurial Case Study V
Alberta Apparel, Thomas Mo President & Founder

Hi, I’m Thomas Mo from Alberta Apparel. I’m the President and founder of the company. I’d
seen ideas like this, similar to Alberta Apparel, years ago when I was travelling in different parts
of the world. And I realized through some research that nobody was doing a clothing line that
reflected Alberta in particular. So I did a bit more research in early 2015 and started creating the
company, essentially. I want to take the idea further, though, and not just use one or two different
themes of the province to put on the clothing. I want to take other peoples’ artwork and designs,
as well as photography to put on the clothing, to really have everything as central and
meaningful as possible when it came to where the clothing come from, who did the designs and
the photography. And on top of that, I also wanted to create a clothing line that meant something
socially and economically to our province. Obviously with what we’re going through - right now
we’re experiencing a bit of a downfall in the economy, and I wanted to create a line that actually
contributes something back to our economy.

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All of the clothing is made in Canada, shipped to Alberta, where all the work, all the silk
screening and all the embroidery is finished here in Alberta using local, small businesses. So
when somebody buys a product from my website, about 80% of the money stays in the province,
which is important that we’re supporting these small businesses that might be experiencing some
harder times right now. The clothing line itself is really simple. I have my own logo for Alberta
Apparel, and on top of that, I’ve used different motifs and themes, such as a map of the province,
photography around the province, in the mountains, to put it on my clothing. So the items that
you would see on my website are simple hats that you see on my head, the polo shirts that you
see I’m wearing, t-shirts, pull-over hoodies, zip-up hoodies, crewneck sweaters, and I’m getting
into more athletic apparel. And once again, everything is made in Canada.
So essentially, I have my online store that you can buy items from, and then I have eight retail
partners across the province right now: four here in Calgary, two in Edmonton, and two in
BANFF, and soon to be in Kenmore as well. And then the third aspect of my business is the
corporate apparel line that I have, where I talked to small/medium size business about their
apparel program and to see if I can be a part of that, and see if they’re keen on learning more
about the Made in Canada program and what it means to us and the economy in general. So right
now, if you look across the province, nobody does that. Nobody is a clothing line and an apparel
line. And on top of that, nobody sources only Canadian-made product for their clothing.

Entrepreneurial Case Study VI

Bumpy’s Café, John Evans, Owner & Founder

My name is John Evans, and I own Bumpy’s Cafe in the Beltline in Calgary. We opened
in August 2005. We opened in the Beltline in Calgary because it was just outside of the
downtown core. A lot of the business that are in the core really depend on the
businessmen and businesspeople that are down there all week, rather than depending
on any of the residents that are around. In the Beltline, we’re such on the fringe that we
were able to capitalize on the businesses around here, still have connection with
downtown, and benefit from the residents that were around the cafe. We opened up
with a vision of creating a great cafe with great coffee, comfort foods - basically an
escape for people to escape from their work life. So they could come here, relax, take a
little bit of a breather, have some great food, great coffee, and then go back to the office
feeling refreshed.

So the whole idea of it was not just to get a recharge from the caffeine, but just get a
recharge in general. We offer breakfast all day, we serve breakfast all day, and then we
have a lunch menu as well. Any of our menu items are available all day. We know
people have different lifestyles, different work habits, different schedules, so we wanted
to make sure that whether you wanted breakfast at 6:30 in the morning or you want it at
2 o’clock in the afternoon, it was available for you.

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We make everything from scratch, so everything we do is homemade. We bake it fresh
here, so we have a variety of muffins, scones - we make our own biscotti. So we do all of
our baking in house. First and foremost, within the cafe we’ve kept our storage really
minimal. We’ve done that on purpose. Especially in the food service industry, we want
to make sure that our product is fresh all the time. So there’s no opportunity for extra
storage; there’s no extra freezer space. What we have is what we have. So it really helps
us maintain our cash flow and helps us maintain that we don’t have an overabundance
of inventory in stock. We do bring our supplies in in smaller quantities so that we can
use them up faster. We try to use as much sort of within Canada as we can. It was a
little harder in the beginning when we first opened, and there were a lot of espresso
supplies that I had to outsource from the United States.

I’m very lucky now we have all those opportunities in Canada. Our main vendor is our
roaster, which is JJ Bean out of Vancouver. They’re a very like-minded company. They
think like we do, they believe in community. They believe in their employees. They
believe in sustainability. They just have a really good business model. So we chose
them, at the end, as our roaster because they fit so much of our profile. And in the end,
it’s created a great working relationship, where I not only work with great vendors, but
I also have friends that I’ve created out of my vendors as well.

Bumpy’s was named after my grandfather. So my older brother, when he got old
enough to say grandpa, he couldn’t say grandpa. He said, “Bumpy,” and it stuck. And
so we all ended up calling my grandfather Bumpy. And since then, I’ve learned quite a
few other grandfathers have come into the cafe, and they’ve come in because of our
name because their grandkids call them “Bumpy.” So for whatever reason, some kids
just gravitate towards that term. And my grandfather passed away from cancer when I
was young, so we’ve always wanted to create a cafe that sort of brought us back to our
childhood, those memories of our grandmother’s cooking and making us brownies in
the kitchen, and having lunch and everything else. So for me it was sort of - it was an
homage to him and an homage to everybody’s childhood - to bring them back a little
when they come in.

One of the things that I’ve really learnt over the years is that even though my education
at SAIT and Mont Royal University (MRU) in Business Administration was fantastic, it
was beneficial, my life experience really took a play into the cafe, but in the 11 and a
half years we’ve been opened, we always try to have the mantra that we are always
learning and always growing from our experiences at the cafe. So we never stop having
to figure out new ways of doing things, new challenges that we’re facing within the
economy, within the environment, within our own little micro area here, with the
businesses that have changed around us and how we adapt to what their needs are as
well.
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 Entrepreneurial Case Study VII
Legal Hustle Clothing, Albert Meija, Owner & Founder

My name is Albert Mejia, and I am the owner and founder of Legal Hustle Clothing, the creator
of Calgary sneaker community YYC SOLEdiers, and a co-founder of Empirical Freedom, a
collective of professional development for artists. Legal Hustle Clothing was created in 2011. It
was always a dream of mine to have my own clothing company, especially in the streetwear
industry. My company is based off of classic streetwear, so I do a lot of graphic designs, a lot of
sweaters, hoodies, hats, embroidery. I like to keep it classic with the designs that I do.
My company was created to change the negative connotation of the word “hustle” into a positive
word, to show that you can be a hustler as a student, as a working professional, working a career,
working a part-time job. We wanted to show that hustling wasn’t a negative thing. Growing up
as a kid, I was always surrounded by some big brands and some smaller brands, and there were
some brands that I grew up always wanting but we couldn’t always afford it. Especially growing
up as a kid, I shouldn’t have a lot of the stuff that I was always interested in. But for me, with my
clothing company, a lot of the designs and inspiration came from childhood things, music. I grew
up as a dancer and a sneaker collector, so a lot of the stuff came from there, where it be a
colorway, an inspiration from like a movie, just walking down the street.
A lot of my designs were created with stories. So for the designs, I am the sole designer for
Legal Hustle. Back in the past, I did have a business partner, Jeremey Alfon, who was also my
co-designer. But now I do most of all the designs myself. For all my t-shirts, I actually have
suppliers for all my blanks, so I can get my hoodies, my hats, my t-shirts, my tank tops, my
sweatpants – they carry a lot of the blanks for me. I do do a little bit of cut and sew, but it’s very
limited. As for stores selling my brand, Lexington Ave Culture Spot in Calgary is the sole store
in Calgary, as of now, that is selling my clothing. I also sell online.
My website is www.thelhclothing.com. And I sell at local events, whether it be in Calgary or
outside of Calgary. I’ve done stuff in Edmonton. I’ve done stuff outside of Edmonton. But a lot
of my local events here in Calgary I’ve sold a lot. The main one would be 10 at 10, which was
actually founded by a SAIT alumni Betty Johnson. I do a lot of events there. It happens once
month, so I’m there once a month at Commonwealth. I also do local hip-hop events as well. 10 at
10 is one of them, but I’ve done hip-hop festivals, concerts, street festivals.
With a lot of my designs – in streetwear, the culture is a lot – it’s based off of poking fun at
something or pushing the limit to certain things. I know growing up, I saw a lot of brands take
other companies, from Louis Vuitton, Tommy Hilfiger, and a lot of those big fashion brands and
put a twist on their own. For myself, one of my designs that I have was based off of like a
Tommy Hilfiger flag.

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The reason why I chose it was because growing up I had a handful of Tommy Hilfiger clothing,
and now to buy it it’s super expensive, and I thought to myself, “Well, with my designs now,
why can’t I just do it myself and put a twist on it with Legal Hustle?” So because of my website
and my social media presence, we are on a global scale. We might not be the biggest company
out there in the world, but we do have a lot of sales within Canada and some sales in the United
States. For me, it’s great – I’m loving it. It’s been my dream since I was in high school, and now
I get to experience it.

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