Okanagan Business Examiner

SEPTEMBER 2010

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Love amid the Financial Columns - 11Really. It’s hard to say much more than that, but businesswoman extraordinaire Lorraine McGrath says it’s for your own good. She gives you reasons why you need to love your banker. Page 11

Smooth Sailing - 13Recession? What recession? If that sounds too good to be true, it is, but even so Vernon has charted some remarkably smooth waters in the past two years despite choppy economic squalls swirling all around. Page 13

Collett Manor - 21Why has it taken more than eight years for a concept that is a no-brainer for patients and their families, supported by business people, doctors, Interior Health and medical practitioners of every kind to get to first base in Kelowna? Even we’re not really sure about that one except for one word – bureaucrats. Page 21

Where Canadians do it - 24Advertising, that is. Are Canadian businesses too cheap to advertise? Some people say ‘yes’ and others ‘no’, but we know for a fact Canadians are spending lots and lots on advertising. Here’s where the money goes. Page 24

The Green Build - 28Our newest columnist, realtor Greg Kalyniuk, washes away some of the hoopla about building green in his inaugural column. With all of the hot air about taking care of the environment it might surprise you to learn just how many buildings aren’t going up with sustainability foremost on the minds of owners and builders. Page 28

Two guys, friends since childhood and now, both teachers, decided to go into business together to help Vernon businesses show up on everybody’s radar. This is the story of how Darrin Hatt and Ryan Reid wrote a new page for Vernon business.Page 15

A Local Commitment

insidE

Okanagan Business Examiner / September 2010 5

The Business of InfluenceTime to step up and meet the best and the

most influential that our business has to offer.

These are the men and women who know how business ticks, how to connect the dots

and make it all come together – these are the people who make up the

Business of Influence.

Find out in the

December 2010 issue

TheyTus Books 6

hooked on Books 7

shawnee Love 9

Mischa PoPoff 10

Lorraine McGraTh 11

The ediTor’s Take 12

vernon’s sMooTh saiLinG 13

cover sTory 15

vernon BuiLdinGs & ProjecTs 19

The coLLeTT Manor fiGhT 21

doMinik dLouhy on oiL 22

a TaLe of adverTisinG 24

Movers & shakers 26

GreG kaLyniuk 27

caLendar 30

COntRibutORs

GreG KalyNiuK

A RE/MAX Vernon REALTOR with Okanagan’s Home Team, Greg is fascinated by anything to do with Real Estate, especially emerging trends such as green homes. He says, “I really wonder why green homes have been so slow to catch on, especially considering it is the biggest and most expensive purchase most of us will ever make?” When not helping people to buy and sell Real Estate Greg is listening to his records, reading, hiking in the beautiful outdoors and chasing little white golf balls.

shawNee loVe

I founded Love HR to help businesses meet their goals through their people, and we take pride in creative, practical, positive solutions for people management, people practices & people skills. This month’s article speaks to the value of trust in an organization and how to cultivate trust to increase engagement. It will s likely raise a few eyebrows because I am using the business end of the Catholic Church to demonstrate my points. If you like this article and want to see more or disagree but enjoy different viewpoints, then you can see more by visiting www.lovehr.ca. You can also contact us directly via phone at 250.801.1341 or email at [email protected].

Penticton’s celebrated, but little known publisher of aboriginal books turns 30 this year. The company was founded by Randy Fred back in 1980 in Victoria.

Fred christened the company Theytus, from a Salish word meaning “preserving for the sake of handing down.”

Twenty-four years ago, in 1986, the shares used to set up Theytus were transferred to the Okanagan Indian Resources Society and the physical location was moved to Penticton reserve lands. The company is still there, located in a nook of the beautiful En’owkin Centre art centre, shelves of books crowded into a single room.

Over a period of time that has seen the decline and decimation of many book publishers, Theytus has transformed itself, but continued on, growing slowly both in terms of books sold and in reputation.

Sarah Dickie is Theytus’ operations manager. She says the company, which has a mandate to publish native authors, will publish 10 manuscripts this year out of approximately 150 submissions.

At this point Dickie says the full time staff of three, supplemented by one intern, is

almost at capacity and she believes soon they will need to add some more staff, perhaps beginning with a permanent in-house editor. Right now editorial work is contracted out.

Theytus does very little advertising; although Dickie shows off the premiere issue of Face, a magazine dedicated to aboriginal life and culture. Theytus’ full page ad takes the inside back cover. Despite that, Dickie maintains that the books they publish are their primary marketing. “Authors are represented by the quality of the books and that’s our best advertisement.”

The majority of Theytus’ books are purchased by non-aboriginals, and she says the company sports a healthy, and active backlist. A backlisted book is one that still sells well, even though it was first printed more than two years ago.

The novel Slash, by Jeanette Armstrong, is one such book. Dickie says the book is now in its tenth printing since it first came out in 1985. Armstrong is also, coincidentally, the executive director and an active instructor at the En’owkin Centre.

Making the best seller list for Theytus is

relatively modest, being 1,000 copies for adult fiction, or 2,000 for children’s books, unlike the usual rule of thumb in Canada wherein a best seller requires 5,000 copies. The company’s online catalogue lists 97 different titles.

Many copies go to schools and libraries. Not only are the children’s books better sellers, on average, than the adult fiction books, but they are often more profitable. That’s the case even though many of the children’s books are printed in bright colours and on heavy stock.

It’s the page count that matters – children’s books are much smaller. Even though How the Fox got his Crossed Legs is a 8x10 inch, full colour hardcover with an audio CD, and was published both in English and Dogrib, it is cheaper to print because it is only 32 pages long.

Printing in dual languages, even at Theytus, is not the norm. Most books are in English, but Dickie says native languages are increasingly important to her company. “The language has to be kept alive; it has to be kept relevant.”

Theytus’ Three Decadesby DeVoN brooKs

sarah DicKie

Continued on page 8


Last December Judy Zubriski and her family opened up their new retail shop, ‘Hooked on Books’, on Penticton’s Main Street in the downtown core.

You have to ask yourself why.

Industry analysts are predicting that the book industry is set to follow down the path carved out by music retailers less that a decade ago when the iPod and online music services began in earnest.

Although music-sharing-for-free certainly had huge appeal for the youth market, cost wasn’t the only factor in the decline of music sales. Just as important was the ability to pick only a few, or even only one song, rather than having to take an entire album or CD. In addition, the whole world of music, literally, could be searched and picked from at any time, in any place with a good high speed connection.

Today there are striking parallels with the advent of ebooks. Instead of just one, there are several different devices available for purchasing books including the iPad, the Kindle and Sony’s Reader (actually the lack of one definitive format may slow ebook sales). Google has undertaken, albeit with

some controversy, the digitizing of thousands of books.

Google says it has already digitized more than a million books, which seems a lot unless you consider conservative estimates of 411,000 English-language books published in the U.K., the U.S.A., Canada, Australia and New Zealand in 2005 alone.

If selection is still limited, it is certain to grow and probably very quickly.

In addition book sales are declining in Canada. Statistics Canada reports that revenues for the book publishing industry fell by 1.3% from 2005 to 2008, at the same time that the general economy, as measured by GDP, grew 16.5%. If that’s not enough, independent book retailers are up against Indigo-Chapters (which also owns Coles) and Amazon. While Amazon has no brick and mortar locations, it, along with Chapters, sells books to every community via the Internet.

Zubriski is determinedly optimistic anyway.

It starts with a love of books. Before coming to Penticton Zubriski lived in Winnipeg where she was closely involved in the literary community. There she

worked as a general manager in three businesses; although none were book stores. That combined with her business and management degree gives her the knowledge she needs to run her store; although she says she loves books so much she relies on her husband Ed to help pull her back. She smiles, saying, “I want to order every book out there, but I can’t.”

She says there are several reasons why her book store will resist the electronic pull that swamped the music industry. First it will take five or 10 years before the electronic model is functioning efficiently.

In addition, some books, like children’s books or large format picture books, are not going to migrate to a handheld reader easily, if ever. Next, she says, “Books are enduring.” There is a tactile satisfaction from handling and pulling out a favourite.

Part of that is the satisfaction of browsing through a stack of books, looking at covers, being tugged by whimsy or the sight of a beautiful cover. Despite what we were all told, we do judge books by their covers. Zubriski says, “For unknown authors a good cover can make it or break it. For a book I

Judging a Bookstore

by its Coverby DeVoN brooKs

Photos by DeVoN brooKsJuDy ZubriNsKi

Continued on page 8


In addition, Dickie says they are getting increasing interest from larger publishers including American ones. In fact, while selling books generated $5 less per capita in 2008 than it did in 2005, Theytus continues its growth pattern.

The recession and the pinch felt by book publishers in North America may not be an entirely bad thing, says Dickie. “I think people started being more creative when the recession started hitting the book publishing [industry].”

Asked about the advent of digital publishing, Dickie says Theytus is moving that way for some of its publications. Eight of their books are being digitized, but, she says, digital viewing of many of their books isn’t going to work, especially the children’s selections. To be effective in capturing the interest of children,

not to mention rugged enough for handling by eager little hands, books need to be large and colourful.

That’s something Theytus does very well. Says Dickie simply, “We publish beautiful books here.”

think is great, but it’s got a lousy cover, I’ll put it spine out and draw attention to it when I talk to people.”

That talking, discussing and book gazing is its own reward, like going to a coffee shop. People could make coffee at home, but flock by the thousands to coffee shops every day.

On a practical level, a book store offers immediate selection and an ability to compare, not only the words, but the size, images and grandeur. Zubriski says, “We always get people who say they won’t buy online because they can’t open them.”

In addition Hooked on Books has done what only an independent can do, which is get right into the community. She says, “I try to stay local when I can.”

The book store hosts several readings every month. Not only do

readers enjoy them, but the public readings increase sales for the authors. Zubriski observes, “We find if they’ll do a reading they’ll get better results.” It also puts her store in the public’s mind when people are thinking of books.

As a small store with a limited budget letting people know the store is there is tough. “One of our biggest challenges is to reach the people.”

Finally, Zubriski is not shying away from the Internet and is taking advantage of it for her customers. As a small independent store she can use it. If customers want a book she doesn’t stock she can source it, whether through her usual distributors, for whom she has nothing but good to say, or from around the globe. After all, if the big distributors can sell everywhere, she can find the odd, rare and unusual for her customers, providing personalized service no giant chain can match.

Continued from page 6

Theytus BookstoreContinued from page 7

sarah DicKie DisPlays oNe

of theytus’ chilDreN booKs,

which tells the traDitioNal

stories of oNe first NatioN’s

baND froM across caNaDa.


I spent a year in Japan in the ‘80s and given that there were few Caucasians in my Osaka neighbourhood, I was a novelty. When I finally learned enough of the language to get around, I had a lot of curious people asking me questions. Many were very odd and it took me awhile to realize their opinion of westerners was mostly based on the American TV shows. Unfortunately for me, at the time Dallas was big there so they assumed I was an expert horse rider and promiscuity was the cultural norm for all Westerners.

While reminiscing I started thinking about what lessons other cultures could learn about us from our current fascination with reality TV. That train of thought soon evolved into lessons companies can learn from Reality TV:

lesson 1: Means and ends are equally importantConsider the story of Russell on Survivor who got to the final three of Survivor in two consecutive seasons, and both times was denied his ultimate goal of being named Sole Survivor because his “means” turned the jury against him. Russell was the epitome of villainous smart, strategic moves (coupled with some browbeating and bullying along the way) and Survivor’s motto is Outwit, Outplay, Outlast and yet, when it came down to the final vote, a jury of Russell’s peers refused to reward his aggressive strategy with the million dollar prize. Instead, they voted for the finalist who was least deceitful and the most honest (because no one gets to the end squeaky clean). I guess Karma has spoken.

lesson 2: work your strengths and mitigate your weaknessesIn the Amazing Race, teams often have a choice between two activities, one of which usually requires more skill and/or effort than the other. For the longest time, I was amazed by teams selecting the choice requiring less skill and effort that could take much more time (unless the team is really lucky). After consideration, I realized their choice makes sense if they know they are weak at the activity where skill and/or effort is required – at least they know they can do the low skill/effort choice.

In the last season of Amazing Race at a detour where teams had to choose between carrying many heavy candles up stairs to a temple or balancing a huge flag pole on their chins and running across a field. Only one team did the flag balancing option, and it turns out they had practiced balancing poles on their chins before (Strange but true!) They selected the option they knew they had strength in, and completed the

challenge in record time. The other teams who realized flag balancing wasn’t a talent were almost left with no option.

In business, a way to mitigate weaknesses is to build a team based on complementary strengths, meaning you’ll be more likely to successfully rise to challenges.

lesson 3: healthy competition is good for resultsRivalry can spur competitors to reach for higher goals than they would normally strive for as long as the competitors aren’t allowed to be destructive. In the Iron Chef competitions chefs are competing with the same tools, equipment and resources and under the same constraints. Competitors know they are up against the best of the best and as such, pull out their A Game. The tasting process discusses each dish on the basis of a clear preset standard and as such, although the chefs hope to beat each other, they also want their dishes to be rated highly on their own merits. Value your competitors because they make you work harder and reach farther than you otherwise would.

lesson 4: Past performance is a good indicator of future performanceThe Apprentice (first few seasons only) and INXS’ Rock Star are both excellent examples of this lesson. In the Apprentice, the standout project managers and team members typically kept winning or rising to the top over and over and in doing so, avoided those fateful words “You’re Fired!” In Rock Star, INXS learned (surprisingly) that the ability to do the job isn’t the most important thing when recruiting a front man. JD Fortune had a great story of living in his car hoping to make it big one day before his big break came as INXS’ Rock Star. He made it big when he was selected as their front man and launched that one big hit ‘Pretty Vegas’.

Where is he now?

By 2009, after being fired from INXS, he was back in his car. Recently, I have heard he is trying to build a solo career or going back with INXS, but either way, he isn’t the front man they dreamed of. In business, ability to do the job isn’t enough. It pays to learn about your future hire’s past successes, mistakes, and values, because they are the foundation upon which future performance is grounded.

lesson 5: People are suckers for a good storyWhether you relate to reality TV characters

or love to hate them, one reason for reality TV’s success is because they share stories about the characters. Whether the stories are true or false and the characters are mere shadows of, or accurate representations of the participants is unclear, but they pretty much had us at ‘Hello.’

Characters are unveiled and you learn about their careers, their families, their goals, and their hopes and dreams, etc.

One of my new favourites, Pawn Stars, is a great example of this. This is a show of three generations of guys in Vegas who own a pawn shop. What they have seen and sold is incredible, but the best thing is the stories behind the people and the items that come through their doors. Tell a believable story and people will be interested. You show me your story and I’ll show you mine.

By Shawnee Love of Love HR. If you want to read more about HR for the real world, visit www.lovehr.ca/blog.

Business Lessons in Reality TV

February 2010 Okanagan Business Examiner | 15

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Some say the squabble over the census is going to be “the summer’s preeminent political debate.” Yawn... seriously?

If invasion of privacy by government wasn’t such a serious topic we could all just go back to sleep, especially because career bureaucrat Munir Sheikh resigned over Tony Clement’s decision to make the long-form census voluntary. I mean, will the poor guy is still get his three-million dollar indexed pension with benefits?

Come on mainstream media! Sheikh’s resignation might actually have meant something if he wasn’t going straight to hog-heaven. Instead it just shows this overpaid bureaucrat’s lack of loyalty to his department.

The purpose of Statistics Canada is no longer

to buttress the “purpose and practice of government.” Its purpose is to provide work for federal employees! Most of the information collected in the 40-page long-form census is five years old by the time it reaches government, which probably explains why poverty activists, radical feminists, minorities and drug addicts are its main beneficiaries.

Those who attack the Conservatives for daring to preserve a Canadian’s right to keep personal information private have yet to provide a single example of how the long-form census has ever helped Canadians at large. Not one!

Oh sure, StatsCan can tell you where social housing is needed because their billion-dollar budget allows them to track homelessness. Zzzzzz… Oh sorry, I dozed off there for a second. Seriously, we already know that activists want more social housing in Vancouver and Toronto, but why not move the “homeless” to Fort McMurray where the jobs are?

The census supports neither freedom of the individual, nor the free market. By its very nature it supports big government, collectivism and socialism. Probably the single most important function of the census is to determine how to divvy up transfer payments so “have-not” provinces receive their annual handout from “have” provinces. Is that really the cornerstone of democracy?

Information pertaining to everything that working Canadians need to lead healthy, meaningful and fulfilling lives is already provided by the two most accurate information-gathering systems ever conceived, neither of which requires an expensive ant heap of bureaucrats to keep it running.

The free market, along with democratic elections, provide all the information our leaders need.

There’s a reason the free market doesn’t build social housing: there’s no money in it.

Everything else you need to lead a normal, civilized life, the free market provides. Instead of just having a degree of accuracy like polling or census data, general elections are 100% accurate! (Oh sorry…your party lost? Then

we obviously need a mixed-member, largest-remainder, proportional-representation, single-transferable voting syst– zzzzz...)

There’s still a place for StatsCan, and even for bureaucrats like Sheikh, but instead of a federal leviathan, how about something about one-tenth the size that helps ensure Canadians are equally represented in Parliament instead of allowing a riding-distribution that makes Alberta − Canada’s richest province − the most underrepresented province in the country?

Enumeration used to be the primary purpose of the census. StatsCan doesn’t draw up the map for federal ridings, but you have to wonder if all the information it gathers proves useless for something as basic as the number of citizens to warrant a seat in Parliament, what the hell good is it?

Oh, that’s right, it tells government how to dole out employment insurance, where to put the next safe-injection clinic, and how many medical-marijuana grow-ops there are across the land. We all know how important those things are, right? Zzzzz...

Governments mess things up! They slow things down! Instead of pretending there’s a wealth of scientific data being accumulated, collated and filed in ways your puny little brain can’t begin to comprehend, those who support this invasion of privacy should provide a few salient examples of how the census makes government more efficient. Come on Sheikh... just a few? Okay, how ’bout just one? Oh darn, he’s gone already.

Critics charge that Harper is driven by ideology on this decision, not science. Imagine that– a politician with ideology! That’s just so completely unlike Jack Layton, Elizabeth May, Gilles Duceppe and, oh, you know… that other guy from Harvard. Seriously, can someone please tell me what’s more scientific than a general election and the laws of supply and demand? Anyone?

Mischa Popoff is a freelance political writer with a degree in history. He can be heard on Kelowna’s AM 1150 with host Phil Johnson on Friday mornings between 9 and 10.

ThisDemocracyThe Big-Government Census

February 2010 Okanagan Business Examiner | 45

You’ve heard the saying, “you’ve got to spend money to make money”. While that may be true, when you’re a small business owner it is easier said than done. If money is going out of your chequeing account faster than it is coming in there are things you can do to deal with the challenge of the cash crunch.

Perhaps you can identify with Karen Murphy, owner of Express Gift Baskets in Kelowna. Over the past 10 years her company experienced tremendous growth. “I started Express Gift Baskets in 1997 with a $10,000 personal line of credit. I soon realized that because my business was inventory-based, I could quickly become under-financed as orders became larger. If I wanted to go after bigger accounts where I would require stock before payment of orders, I was going to have to make a decision to take on some long term debt.”

Trickling sales don’t tend to produce a lot of income. There is an inevitable lag between what it costs to generate business capacity and being in a position to reap its rewards. Difficulties arise in managing the costs that must be incurred in order to meet the demand of business growth, especially rapid growth.

Resultant cash flow crunches mean taking on debt. That was the case for Murphy who recalls her first expansion, “After a year, we took on about five times the original start-up money required. That was enough to carry substantially more inventory, allow for better equipment and also to hire an assistant.”

Acquiring business debt can be unimaginably frightening. It’s one thing to take out a loan for a car or a new piece of furniture where you can touch it, feel it, or put it in your living room. A business, on the other hand, is more intangible – and more risky. Then there’s always the chance that the business might fail. Do you really want to put your hard-earned assets on the line?

Women are often reluctant to take on business debt because we are uneasy taking a gamble on ourselves, particularly when there are others, like children or an elderly parent, who rely on us financially. Regardless of why you fear debt, to grow a business, you’re going to need cash. Under-financing often shows in inconsistent service, an inability to fill large and potentially lucrative orders and even poor morale.

Resist the temptation to pay those bills as soon as they come through the door. Hold on to them for the penalty-free period, and you’ve acquired for yourself an interest-free loan for usually up to 30 days.

On the other hand, when you are the supplier, the quicker you collect on your outstanding accounts the better. Small businesses typically can’t afford to finance their customers for very

long and if you’ve ever been in the position of having to chase down a delinquent client, you know it’s not fun.

Following through on collections can be an intimidating task. We worry about offending our customers and have them not like us. The next time this sounds like you, ask yourself whether you feel flush enough to extend an unlimited, interest-free loan to the customer who falls behind on payment. Here are a few simple strategies to help make sure you are paid on a timely basis:

1. Require that new customers submit a credit application and actually check their credit references or, alternatively, require new customers pay in cash;

2. Do not continue to sell to customers who repeatedly fail to pay on time. Remember, a sale is not complete until the money is in your hands;

3. Apply strict penalties on late payments, including surcharges and/or loss of credit privileges;

4. Contact – preferably call - customers immediately for payment of overdue accounts.

Growth in business and delinquent customers are not the only reasons cash flow comes under pressure. A new company often has money tied up in inventory and other assets like equipment and vehicles. It’s important to know the difference between what’s necessary and what’s ‘nice to have’.

To ensure you have enough cash is to prepare a cash flow statement. This statement forecasts and tracks money flowing into and out of the business as it changes hands. A cash flow statement reflects sales when they are confirmed, not when payment is received and costs when they are incurred, rather when payment is made.

The mistake many business owners make in forecasting is bundling inventory and production costs with related revenues in neat little monthly packages. Essentially, they assume the net of those two figures will fall into their hands every month in the way of cash. Not so.

Realistic cash flow projections can save you the heartache of fatal cash deficits. Plan ahead to cover shortfalls, and resist the temptation to spend every cent as it comes through the door. That makes for a healthy business and takes a lot of the stress out of financial management. With stress levels down, it also makes for a healthier you.

Women’s Enterprise Centre is the go-to place for BC women business owners for business loans, skills training, business advisory services, resources, publications and referrals. Call us at 1.800.643.7014 or email [email protected] from anywhere in B.C.

Cash Matters

Okanagan Business Examiner / September 2010 1118 | www.businessexaminer.ca February 2010

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Okanagan Falls

takes a bOw in the

spOtlight

Okanagan Film Commissioner Jon Summerland assisted Cannery Studios in its move from West Kelowna to an advantageous facility in Okanagan Falls. Summerland told Castanet that the new property has better working space for film productions including 32,000 sq. ft. for staging film shoots, a separate 3,000 sq. ft. carpentry section, first aid and security rooms, a fenced lot and three acres for

parking. In addition it is attracting attention from a number of companies that support film work across the country. Several of them, including Harold’s Custom Equipment, HollyNorth and Offset Rentals are expected to open their doors in Okanagan Falls.

In an unrelated story the province is moving to boost video and digital effects work in the province by extending the tax credits given to films to digital media sectors. None of that work occurs in the Okanagan currently, but with the rise of the Canadian dollar to near parity film makers have

been urging the government to give the industry all the breaks it can to keep the work happening here.

pandOsy bia

mOves ahead

The South Pandosy Business Improvement Area in the Mission district of Kelowna is going before Kelowna city council to make their case. The new BIA has put together a proposed budget of $124,000 annually, based on a rate of $1 per thousand of assessed commercial value. Points of interest to members include parking, signage, more community events, better lake access and creating an identity for the business area.

less gets altitude

Adam Less, founder and former half owner of Think Marketing, has sold his share of the business and struck out on his own. His new company is Propeller Creative Brand Strategists, and uses the logo of “Altitude is Everything”. Less believes his strengths combine creative skills with experience in marketing. He says, “I'm a graphic artist and a writer, but I'm also a strategist with a career’s worth of experience developing brands and strategic platforms behind me.”

vernOn Chamber

talks tO vernOn

Chamber

The Greater Vernon Chamber of Commerce announced its newest program to better connect with its own members. The 12@12 membership feedback program involves nine Chamber members sitting down with two staff members and one board member “to discuss the issues that most affect their business today.” The meetings will occur monthly and will continue until June of this year, when their effectiveness will be reviewed. Each meeting will be based on one business

JOn summerland

You might feel nervous when you make your appointment at the bank to get business financing. In your mind, you see a brusque fellow in a grey suit behind a big, black desk ready to say, “No.”

What will he ask? What information will he need?

Your business depends on money and you know it. What you may not realize, is that your banker knows that, too.

There’s no reason to fear your banker; in the long haul for your business, he or she can be one of your best business allies. He can be an important business partner and advisor as the needs of your business change.

So, it’s important to develop a good relationship with your banker. He’ll know what to look for to help you when you’re starting out, expanding your business or facing the challenges of a downturn in the economy.

Your banker can be your guide as you wade through the financial terms and procedures. Imagine you are in Europe and each country represents a stage of financing. In Germany you need to know some German phrases and customs. It’s the same in France and Italy. While each country tolerates and uses some common language, such as English, there are specific differences that you must learn in each country to move around easily. It requires a good interpreter.

The same holds true with financing. The needs, lingo and criteria are different at every stage of financing from angel to venture capital to mezzanine to traditional bank financing.

Remember, though, a professional will add significant value to the process. Think about it: you have your accountant deal with the Canada Revenue Agency and you have your lawyer respond to a litigation probe. It’s the same in finance. A professional can also assist in showing the company in the best light, look for alternatives and negotiate the best terms.

Here’s the tricky part. Just like with your accountant or lawyer, you have to be open and honest about everything.

Look beyond the numbers. You’ll need to go through the non-financial aspects of your company such as the state of your industry, what drives customers and some of the risks you’re facing. It’s as important your financial situation.

Here’s a list of what you can expect to have ready before you meet your banker:

• Make sure you have an executive summary of your business plan. It’s integral to your business and for financial information.

• Provide a brief history of the company and the background of the owners.

• Provide management team information and any relevant succession issues or plans.

• Indicate the industry and market factors. What are the key trends, characteristics and performance indicators of your industry? What is the nature and size of your market? What drives your customers? Why does your business matter to your customers?

Identify the key financial information including the past three years of operations and your projections for the coming year. A new business should provide a three-year projection. Your banker needs to understand your needs depending on the stage of your business and type of financing you are seeking.

Outline the possible risks to our business. This is important to let your banker know in advance any risks that may impede your business success including legislation, economic or environmental impacts. It is a mistake to leave out the risks as it raises skepticism when you paint a totally rosy picture.

It’s important to be prepared when you meet with your banker so he or she can give you the best possible financial information to help your company, whatever the needs are.

No need to be nervous. It could be the beginning of one of your most valuable business relationships.

Lorraine McGrath, MBA, of McGrath Executive, is a strategist, corporate director and advisor to businesses that are driven to succeed. Her achievements in business, community-giving and role-modeling have been recognized with several significant awards including Distinguished Alumni, Athabasca University, Woman of Distinction, Woman of the Year and Honourary Fellow. www.mcgrathexec.ca.

Love your banker


A hostile take over offer last month for the Potash Corp. of Canada by BHP of Australia bid $140 billion. This raises the age-old, hand wringing that Canada will be hollowed out by foreign corporate interests who have little interest in Canada, Canadian jobs or Canadian welfare in general.

Part of this, the part about these companies not putting Canada first, is probably true.

Business people do care about where they live, but the larger the company, the more removed they tend to be from personal day-to-day decisions that affect the lives of the people that work for them, their families and the communities that depend on these self same companies for taxes and wages to keep the local economy going.

Ultimately we all know that if sentiment rules in the boardroom, the boardroom likely won’t be there for long.

In Canada, we wax long and loud about protecting Canadian companies and jobs, but rarely when it hits our own bottom line. A friend of mine, a successful Kelowna business man by any measure, complains regularly about the difference in the costs of buying an automobile in the United States versus Canada. So he buys his autos in the U.S. I note he is less vocal about the difference in what he charges for his services than what is charged for similar services in the U.S. Most of us share in his partial hypocrisy though – those of us who are old enough may lament the passing of Eaton’s, or the takeover

of the Hudson’s Bay Co., but we do so while we shop and save at Wal-Mart or its scared Canadian competitors.

That aside, Wind Mobile made waves last year when it moved to enter the mobile phone service in Canada, competing against Telus, Bell and Rogers.

You can predict the sequence of events: Wind promised lower costs, noting that Canadians pay the highest rates in the world for mobile phone services (which has improved the last three years, but is still high). The big three objected, saying Wind wasn’t playing on a level field.

Their objection is that the CRTC requires a majority of ownership by Canadians and Canadian companies. Since Wind Mobile received just under two-thirds of its funding from Naguib Sawiris, head of what is reputedly Egypt’s largest, richest business empire, the Canadian telcos are claiming unfair competition.

The CRTC agreed and told Wind Mobile ‘No.’

There are two issues here. One is to ask why an investment restriction precludes telcos from offering lower rates, to which they answer that Canada comes with burdensome rules and restrictions, which raise costs.

The second issue is more basic: why do we create these barriers in the first place? That answer is partly buried in the last century, when telephone companies were less likely to invest in Canada.

Back in the first half of the twentieth century, the best profits were to be had by laying telephone land lines between, say, Montreal and Toronto (or other large cities), and much less from laying lines between Kelowna and Prince George.

Canadian governments and regulators believed we needed

telephone service for a modern economy (they were right) so they regulated. I believe a good part of the regulations requiring Canadian ownership arose from a belief by the governments of the day that it is notoriously difficult to control giant U.S., British or other international companies from Ottawa or Victoria.

Sawaris has dismissed Canadian telcos as dumb, deaf, slow and being coddled by an old, restrictive, backward looking government. At the same time he predicts the world’s mobile markets will be controlled by five or six conglomerates within a relatively small span of time, a couple of decades at most.

Industry Minister Tony Clement overturned the CRTC ruling.

That being the case, Clement should also overhaul the rules that prevent foreign investment, and possibly the take over, of our telcos. If Sawiris is going to compete, it should indeed, be on an open playing field.

If he does expect a lot of moaning about more “hollowing out”. Nor should we expect that huge telco conglomerates in Paris, Cairo or Shanghai will consider Canadian interests first – that isn’t their business.

Canadian consumers will receive lower rates, but I’m less sanguine, if Sawiris’ prediction of world amalgamation is true. When a few giants run the telephone service here and around the world they constitute an oligopoly. Oligopolies become self-serving elephants much more interested in giant, semi-protected profits than in competition, but those are elephants that future governments are going to have to worry over.

Devon Brooks is the editor of the Okanagan Business Examiner. You can send comments or complaints to him at [email protected].

In a room with Elephants


Vernon charts smooth sailing

The City of Vernon has long been one of the economic smooth sailors in British Columbia. In 2009 Vernon was rated by the Canadian Federation of Independent Business as the fifteenth best city in Canada, and first in B.C., in which to do business, as voted on by small business owners.

The Downtown Vernon BIA is thriving with over 500 member businesses and the Chamber is well north of 700 members. Community Futures is engaged in a strong portfolio of projects that plays to community and business strengths, and the City’s economic development office is moving forward on a recently released development strategy and a new research system to assist local business.

The published strategy was part of a two year program by the City, looking at adding capacity in economic planning and business support. To that end, in early 2009 Economic Development and Tourism departments were created, and in mid-2009 Economic Development Officer Kevin Poole was hired.

The City’s new economic development strategy, which came out at the end of May 2010, has three phases. The first shows where the community is right now.

The short version is that Vernon has a growing population with a median age of 44.5 years compared to the provincial median age of 40.8 years. A high proportion of the work force is in high-paying, foods-producing industries, while

“forestry and manufacturing are facing major challenges to their ongoing viability.”

A bright spot is the vibrant core made up of small businesses and entrepreneurs.

The information has provided Poole with several priorities for the foreseeable future. “We are trying to promote young families moving here. We know we don’t have enough industrial land, but we have good relationships with the surrounding communities, and we are working to find creative solutions to land availability and labour force.”

Building on what already exists is one of the quickest ways to economic development says Poole, who points out that 80% of growth comes from within. “It becomes making the existing base happy, and creating the conditions where they can grow.”

Poole is spearheading a research project that will feature in depth interviews with local companies to create a solid data pool and detailed understanding of business in Vernon. Poole is hoping to “create a true North Okanagan perspective. We need verification from the business community about what is happening.”

Information collected will be input to a new database. With solid analytical abilities in the new software Poole and the City will be in a much better place for helping to plan a responsive, helpful business environment.

Then there’s the wider range of topics and projects being pursued by Vision North Okanagan (www.visionnorthokanagan.ca). This grassroots group brings together residents, experts and key decision makers from across the Vernon and all the North Okanagan to pursue concrete goals like affordable housing, regional rail, and regional government collaboration.

Participants are organized into ‘Action Teams’ who work on the projects near and dear to them. Large volumes of information in the forms of reports and recommendations on a dozen different topics are readily available online.

Since Vernon is the largest population centre in the region, it is necessarily an important part of many of the group’s deliberations.

At Community Futures North Okanagan (CFNO), Manager Norm Metcalf oversees 37 full time staff. Programs at CFNO include an extensive employment program featuring a self directed job search, plus a broad range of business services including lending.

Metcalf can see the effects of the recent recession most clearly and notes that youth were the first to be affected. There is a ‘cautious optimism’ among Vernon employers and businesses right now, he says, lauding local business’ recent management of the recession.

Another resulting trend is growing interest in self-employment: “We have seen the rise in self-employment where people create their own

Continued on page 14

Photo by DeVoN brooKs

this oVerView of VerNoN shows its uNique PositioN;

althouGh surrouNDeD by laKes the city ceNtre itself straDDles

the hiGhway well reMoVeD froM a waterfroNtby bobbi-sue MeNarD


jobs. In lending we have had more applications for small loans.”

Overall Metcalf is looking for, “Steady, sustainable improvement” in the health of Vernon business.

That cautious optimism has Community Futures supporting several new initiatives. OurOkanagan.ca is a new website designed to bring business across the Valley together (see sidebar). Businesses can add their profiles for free, post jobs and more. “It is economic development for the region and it has a lot of potential and power,” says Metcalf.

In light of the workforce and human resource needs of many Vernon businesses, Community Futures is also organizing a conference, ‘Shifting Directions’ September 27-28.

The conference is designed to help businesses understand and plan for their human resource needs.

Metcalf provides an example of possible employees that Vernon businesses might want to consider. “Retirees. Sometimes they are looking to reenter the workforce and they bring a lot to the table.”

Many retirees not only want to work, he says, they also want to shop and participate in their own community, something the Downtown Vernon Business Improvement Area’s 550 businesses are keen to encourage.

“Right now there is a positive atmosphere in the downtown core,” says Downtown Vernon Association (DVA) Executive Director Earl Hansen.

The DVA maintains a full schedule of events to attract residents and tourists, but, says Hansen, “We need to look to the rest of Vernon and the surrounding North Okanagan. Those businesses that depend on tourism were down, and definitely, there were some bruised knees in the last year.”

That makes local residents even more important to the strategy. One of the inducements the DVA has is a coupon book marketing plan.

The downtown is also on the City’s agenda. Next up on Vernon community planning and economic development radar is a draft plan for the future of the city centre neighbourhood scheduled to be released in late September.

Whatever the report suggests, today Vernon seems to be riding slow and easy, propelled by a wind of gentle optimism.

City of Vernon Economic Development

[email protected]

Recognized by the Canadian Federations of Independent Business as the Most Entrepreneurial Community in BC.

Contact us today to find out how your company can join in the success.

www.ourokanagan.caThink of ourokanagan.ca as a “buy local campaign for the Okanagan,” says Kevin Poole. The well laid out website includes an economic overview for the whole valley. But what is really different is the professional space for local business to post their business profile, post job openings and seek out local business opportunities. The service is free to users with funding in place until 2012. Supporters include UBCO, the Southern Interior Development Initiative Trust, Community Futures in the Valley and the BC Ministry HSD – Employment and Labour Market. The goal is to have every business and non profit in the valley list their business and use the service.


Vernon


Back in 2008, as the Great Recession was heating up and taking down media companies, two men, friends since grade school and now working as teachers at W.L. Seaton Secondary school in Vernon, sat down to discuss business.

It was, according to one of the two, Ryan Reid, a discussion initiated by Darrin Hatt. Says Reid, “This was Darrin’s idea from the get go.”

Hatt shares more of the credit, saying it was a team effort.

The pair tossed around several ideas before coming up with VernonDeals.ca, an Internet advertising and news service that would focus on, and cater to, Veron-based businesses.

It seems like an odd decision to start at that time and even Reid admits, “In a tough economy people drop back to what they know and what’s comfortable.”

During a downturn one of the first places businesses cut back is usually advertising, and the Internet world is crowded with sites trying to solicit advertising money from companies, especially in the Okanagan, where Castanet is the acknowledged king.

Reid for his part, didn’t worry about Castanet because he didn’t know about it. He says, “I didn’t know that Castanet existed; although Darrin did, but our vision was different – we wanted to cater to the business world.”

That is perhaps stretching it. A look at the ‘Business Directory’ on VernonDeals’ website shows the expected grouping of business listings that are aimed at consumers as much, or more, than at other businesses. There are headers for ‘Accommodation’, ‘Automotive’, ‘Brewers & Vintners’, ‘Entertainment’, ‘Financial

& Legal’, ‘Health & Beauty’, ‘House & Home’, ‘Industrial’, ‘Moving & Storage’, ‘Real Estate’, ‘Recreation’, ‘Restaurants’, ‘Services’, ‘Shopping & Retail’ and ‘Travel & Tourism’.

The website also shares national and international news from CBC and links to local news on KISS FM. In addition it allows people to post news about community events. Reid says the enthusiasm of locals who want to post took them unawares. “We didn’t anticipate this, but people are taking pride in putting up their news.”

If VernonDeals has the many of the same advertising headings that can be found on almost any large community portal, including Castanet, the reasons for its success must be found somewhere else.

Against all Oddshow two Vernon

businessmen

hammered out a new,

and profitable,

internet venture in a

crowded market

by DeVoN brooKs

Photos by shawN talbot



Reid attributes it to being local: “There is no homepage that Vernon sees as their own.”

Another reason is the unique decision in how it handles ad placements.

Most online advertising echoes, in some way, Google’s approach, which is those that pay more get a premium listing so viewers are likely to see those first.

VernonDeals rotates placement of ads and time of placement so that small businesses get premium placement as much as the big guys.

According to Reid, “We will never drown out a small business – that’s how we are different from other businesses. We think in the long run

we’ll do better than [charging] the traditional higher costs for the best spaces.”

He also believes that, paradoxically, this gets more respect from bigger advertisers. By treating the bigger advertisers, like the big banks for example, as just “one of the guys” it increases their standing within the community.

Big and small, everyone gets fair play and if the big guys agree to those terms, it suggests they want the community of businesses to do as well as they do.

It may be a lot of semantics, but Reid at least, is convinced this is

part of the success to VernonDeals.ca.

Reid ponders before suggesting what has really built their business: trust. “If people trust you, they’ll trust what you’re selling. Our partners really had to trust us because we were new. They gave us resources that they could have given someone else.”

Another reason for the success is the ‘daily flyer’ format, that allows retailers to put up daily updates and specials on the site. As everyone who works on the Internet knows, getting many people to your site depends on having fresh material for viewing and it turns out advertising is no different.

Reid says, “The online flyers provide daily new content – that’s really the secret to advertising.”

They are successful already. Even in the downturn it only took the two of them –with both working part time at this while they had full time teaching jobs– a few months, says Hatt, to become profitable.

In the beginning says Hatt, “We went door to door with flyers to get our name out there.”

Reid adds, “At the beginning we shared every job, but now he has his end of the business and I have mine.”

They now have about 150 clients, which keeps them so busy that the two barely have time to talk to each other most days. Hatt laments, “Half the time Ryan and I don’t know what the other is doing.”

He’s exaggerating, explaining how they meet at

Greater VernonChamber of Commerce

to be held September 15, 2010(Networking at 7:15 a.m.)

7:30 a.m. to 9:00 a.m.at the Best Western Vernon Lodge

Tickets can be purchased through the Greater Vernon Chamber of Commerce at 250-545-0771, via email at

[email protected] or register online atwww.vernonchamber.ca

Pre-registration is required.

Guest speaker:The Deputy Vice Chancellor of UBCO, Doug Owram, will be speaking on the economic impact UBCO has had in the Okanagan and on Business

Sponsored By:

Against all OddsContinued from page 15

ryaN reiD: “we taKe it PersoNally wheN a

clieNt DroPs us.”


“We feel it is almost

our responsibility to

support local business”

– Ryan Reid

KALEDEN

VERNON

LAKE COUNTRY

WK

SALMON

ARM

NARAMATA

ARMSTRONG

osoyoos

Linking Okanagan Communities to the WORLD

Cancun

Phoenix

ChicagoDenver

New York

Boston

Portland

Seattle

PuertoVallartaMaui

Calgary

Regina

Halifax

Toronto

Montreal

Vancouver

ylw.kelowna.ca

KEL_3799_NBE_FINAL_SEPT.pdf 1 10-09-03 10:41 AM


the end of almost every business day to discuss what’s happened. “Every night Ryan and I are talking and planning the future.”

During the day though; Hatt says, “Ryan does most of the sales because I still do most of the service.”

Reid echoes that thought, “Darrin

is the back end guy; he’s the motor that drives the business.”

The truth is that the company can only work with both partners fulfilling their parts successfully. While Reid is out rustling up business, Hatt spends his days putting updates online, dealing with technical issues and answering typically around 100 e-mails a day from new and

existing clients.

Both men believe the company’s success comes from its extremely low overhead (they have no office, still working from home with no staff), and its reputation. Says Reid proudly, “Over the last two years we’ve retained 94% of our clients. We’re really proud of that number, given the economy.”

The 6% that have left don’t just slip away into the night. Reid confides, “We take it personally when a client drops us.”

For the future, both men are very confident. Hatt says, “We’re both pretty ambitious guys.”

He adds, “I tell Ryan all the time we could handle the business if it was 10 times this size, but realistically we’d burn out.”

The growth of the website has a theoretical upper limit because of their commitment to share ad placement with all advertisers. There can only be so many ads on the front page (on this particular day there are 45 different ads or logos visible), and only so many hours in a day for each to get their turn. Time of showing is also

considered so that no company is on the front page only at 3 am when views are much less frequent than during prime viewing hours.

Having said that, there is still lots of space and time available for the company to keep expanding.

There is also the growing importance of reaching customers on devices like mobile phones and devices like Apple’s iPad. Hatt says, “With the home page we’re looking to adapt the content for mobile pages [on mobile phones].”pg_4286_niche_final.pdf 1 10-08-27 10:54 AM

BritishColumbia

Conference: Vernon, BC / September 27-28, 2010

Shifting Directions: Preparing the Next Workplace will prepare growing businesses and human resource professionals for success as our economy recovers.

Visit www.shiftingdirections.ca today for extensive conference information.

SD_businessExaminer.pdf 6/29/2010 1:12:55 PM

DarriN hatt: “i tell ryaN all the tiMe we

coulD haNDle the busiNess if it was 10

tiMes this siZe, but realistically we’D burN

out.”


Against all Odds


2101 32nd st (institutional add/alter) – Vernon Jubilee Hospital

General contractor Graham Construction & Engineering – 250-765-6662

Project New 181,500 sf patient care building

stage Construction Start – underway – construction completion anticipated 2011

2303 18th st (institutional add/alter) – Vernon Secondary School Replacement

owner School District 22 North Okanagan – 250-542-3331

architect MQN Architects – 250-542-1199

Project Replacement of Vernon Secondary School

stage Construction Start – anticipated October/10

2583 lakeshore rd (mixed use dev) – Tourist Commercial

owner Conscious Developments – 250-275-7649

architect Pacific Rim Architects – 604-581-7750

Project New mixed use development – 3 structures – 8 to 9 storeys – approx 250 condo units – ground level commercial – amenity space

stage Rezoning Application – submitted – final design changes underway

2808 30th ave (institutional new) – Okanagan Regional Library

owner Okanagan Regional Library Board – 250-860-4033

Project Manager Task Construction Management – 604-433-8275

Project New library building facility – approx 30,000 sf – 2 storeys – u/g parking

stage Design – completion anticipated fall/10

3705 24th ave (multi family new) – Viridian On 24th

owner Constructive Concepts – 250-542-1801

Project New townhouses – 2 structures – 2 storeys – 12 units – wood frame construction

stage Development Permit Application – approval anticipated fall/10

3721 razorback ct (mixed use dev) – Turtle Mountain

developer Wesbild Holdings – 604-694-8800

architect

Lunde Architect – 250-503-3000Project

New multi family community – approx 300 SFD lots – approx 235 townhouses

stage Construction Start – 20 SFD lots underway – construction start of 1st multi family development anticipated 2013

5100 5200 anderson way (commercial new) – Anderson Village Buildings 3 & 4

architect Hans P Neumann Arch – 250-868-0878 General Contractor Worman Commercial – 250-762-0040

Project Buildings 3 & 4 of new commercial plaza - Building 3: retail & offices, 4 storeys, approx 44,800 sf – Building 4: retail, approx 4,840 sf

stage Construction Start – of Building 3 anticipated August/10 – construction start of Building 4 pending market conditions

7417 brooks lane (multi family new) – Tourist Accommodation

architect AP3 Architecture & Planning – 250-712-3200

Project New tourist accommodation and residential complex – 18 units

stage Development Permit Application – submitted early spring/10

8500 rising View way (commercial new) – The Rise Golf Club Clubhouse

owner The Rise Golf Club – 250-545-7425

Project New golf clubhouse – 2 storeys – approx 25,000 sf

stage Construction Start – anticipated late/10

992 994 Mt ida Dr (multi family new) – Eagle Point at Ridges on Middleton – Phase 1

owner/General contractor Aldebaran Enterprises – 403-228-9355

Project Phase 1 Eagle Point - 15 units

stage Construction Start – in various stages from site servicing to framing underway

Monashee rd, silver star (mixed use dev) – Firelight Lodge at the Pond – 2nd Structure

developer Firelight Developments – 250-545-1055

architect BKDI Architecture – 403-233-2525

Project 2nd building in the Firelight Lodge at the Pond development – 4 storeys –

wood frame construction stage

Construction Start – of 2nd building anticipated January/11

2400 43rd st (institutional new) – Transit Facility

owner BC Transit – 250-838-2551

consultant Omicron – 604-632-3350

Project New transit facility – 2 storey admin building – 1 storey 4 bay maintenance building with storage space – fuel station – automated bus wash facility – parking

stage Development Permit Application – submitted

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3.55” wide x 4.71” tall

Tel: 250-542-5353 Fax: 250-542-7273Toll-free: 1-800-243-5353

4th Floor, 3201 30th Ave.,Vernon, BC V1T 2C6

THE RIGHT CHOICE> > > PROCEED WITH CONFIDENCE > > >

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VERnOn PROJECts On tHE GO

921 33 ave $290,000 residential new – SFD, 155 sm Contractor: Landing Construction – 250-542-3276

9241 Kokanee rd $377,000 residential new – SFD, 169 sm Applicant: John & Paytra Jacobsen

2305 26 st $120,000 residential add/alter – addition, access bldg, interior renovation, 43 sm Contractor: Woodstyle Homes – 250-558-9765

8 1800 35 ave $25,000 residential add/alter – basement, suite, 68 sm Applicant: Okanagan College – 250-762-5445

2600 hwy 6 $1,000,000 institutional new – Polson Park Pavillion Applicant: Bruce Carscadden Architect – 604-633-1830

2706 30 ave $250,000 foundations – Nixon Wenger Building Applicant: Silver Rock Land Corp – 250-558-0999

VERnOn buildinG PERmits


VERnOn snAPsHOtIncorporated: 1892Area: 94.2 sq. kmLocated in the North Okanagan Regional

District

statisticsPopulation 38,968 (2009)Population growth rate for 2008-2009:

1.6% (B.C. 1.6%)Population aged 65+ in 2006: 22.0% (B.C.

14.6%)

Employment & Labour Force - 2006 figuresTotal labour force: 17,705 people Labour force as % of total population:

49.2% The three biggest employer sectors in

2006: retail trade (14.8%); health care & social assistance(12.0%); construction (9.6%)

incomeMedian household income in 2006: $56,211

(B.C. $65,787)Average income from those filing tax

returns (2007): $37,277 (B.C. $40,802) Main source of income for residents in

2007: Employment (56.3%), Pension (18.0%), Investment (11.1%), Other (5.4%), Self-employed (5.3%)

Unemployment Rate for Thompson/Okanagan in 2009: 8.7% (B.C. 7.6%)

businessBusiness incorporations: 308 (2009); 393

(2006)Business bankruptcies: 5 (2009); 20 (2006)Total # of firms with no employees: 2,510

(2009)Total # of firms with employees: 2,508

(2009)Chamber of Commerce members: 740Downtown Vernon BIA members: 550

(membership is mandatory)

building PermitsNew residential units built: 143 (2009); 571

(2006)Typical house value: $391,657 (2009);

$207,901 (2005)Typical house taxation: $3,790 (2009);

$3,011 (2005)Value of new residential construction:

$45.0 million (2009); $121.5 million (2006)

Value of other construction: $119.5 million (2009); $45.6 million (2006)

-most numbers courtesy of BC Stats Community Facts (www.bcstats.gov.bc.ca)


Kelowna General Hospital is the largest, most advanced medical facility between Vancouver and Calgary. Even before the construction of 360,000 sq. ft. of additions that started in 2008, KGH had 345 beds and served 19,030 patients. The average length of stay was 6.7 days in 2007/08.

In addition to the patients themselves are thousands of visitors who have needs of their own, but are still related to the hospital itself whether that is finding a place to stay while visiting patients or putting support services in place for them after they leave the hospital.

These needs came to the forefront for Alana Marrington when her parents were sick. She says, “This was a project that I felt so passionate about after helping my parents go through some health problems.”

She decided a support facility was necessary, one close to the hospital that would provide a place for medical students or visiting medical professionals to live in with short term rentals for those visiting the ill, along with room for a suite of support services from pharmacies to medical equipment rental and offices for therapists and other medical support specialists.

With her husband Ross, they researched the idea extensively, visited similar facilities in place in other countries as well as ones next to

Vancouver General and Royal Columbia in the Lower Mainland.

The Marringtons paid for an architect to design the facility, which they call Collett Manor.

They talked to Interior Health, local professionals and several business people about the need, design, desirability and economic feasibility of building and filling such a building.

Ross says, “We have had overwhelming support for this and been told that it is a no-brainer.”

Support from every quarter except one: there is no property zoned for such a facility near KGH. Alana and Ross purchased five homes right across from the street and began the process to persuade the city to rezone it.

The score so far: city planning obstructions - 6; the Marringtons - 0.

Politely, Alana says, “The glitch comes down to planning.”

Ross says they have had six different meetings with the City of Kelowna’s planning department. Each time they went they were told they’d need different studies to proceed, but after completing the last one and having the application turned down, Ross says he was told it would never be approved.

The only concrete objections they’ve been given is parking and traffic, but he points out the facility will have an extensive parking garage

on the ground floor and that the entire region is zoned for a substantial increase in density so there is going to be a lot more traffic along the road anyway.

Under the new proposed Official Community Plan a zone has been proposed next to the hospital, that would allow for a facility like Collett Manor. Unfortunately the boundary for the new zoning excludes the properties the Marringtons have put together.

After informal talks with Mayor Shepherd and some councillors the Marringtons are now going to make a direct appeal to city council. The date has not been set yet, but Alana hopes it will be soon.

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How much is 60,000 barrels?

That’s about how much oil leaked into the Gulf of Mexico every day at the former site of BP’s Deep Horizon drill rig or it’s about 70 backyard swimming pools. That’s an Exxon Valdez every four days. Over four months, that’s enough to cover Kalamalka Lake to a depth of about 6 inches. (If that doesn’t sound like much, remember it spreads thin, kills most of what it touches and ultimately ends up contaminating coastlines and the sea bottom.)

The explosion on April 20 killed 11 and injured 17. Among other things it turned out that safety alarms had been disconnected. The “blowout preventer” that didn’t work was theoretically

incapable of crimping the pipe if there were welds in the area being crimped. The emergency plan on file appeared to be an off-the-shelf generic document that included discussion of walruses. All parties, from the companies involved in owning, leasing and operating the rig and oil fields share blame, along with the U.S. and state governments who allowed it.

Americans are known for their zeal for litigation, and lawsuits will likely run for years along with management time and the media focus.

BP has lost up to $90 billion from its market capitalization, about half the size of B.C.’s annual economy. There is no way of knowing how much will ultimately be paid out in

damages, or if the companies involved will survive.

Those who feel the death of BP would be a fitting price for its folly should remember many retirees around the world, and especially in the U.K., depend on BP’s dividend. The damage extends far beyond the vast and fragile ecosystems of the Gulf of Mexico.

What should happen next are some profound changes in the way offshore drilling is conducted, especially in the areas of safety, regulation and disaster management. They should also be a massive overhaul of the way government deals with offshore drilling, but that is less likely.

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On the corporate side, existing and future drilling operations need to be able to deal with blowouts, as Deepwater Horizon was not. They need to follow safety procedures, they need working blowout preventers and they need equipment in-place or nearby in case those fail, but doing it right will increase the cost of offshore drilling. The companies involved will need higher expected payoffs to meet those costs.

The logical implication is less offshore drilling at current prices, less oil supply over the next decade and higher prices. That’s a problem.

Western economies are addicted to oil. The U.S. is the world’s largest oil consuming nation at 19.5 million barrels per day of consumption (2008). That’s 80 Exxon Valdez per day. China came in second at 7.8 million barrels per day, but on a per capita basis, the U.S. uses 22.6 barrels per person per year while China uses 2.1. (Canadians use more than the U.S. at 24.6!)

U.S. consumption has leveled off with help from the Great Recession, but China’s continues to rise as they industrialize and modernize. If China’s consumption per capita were to increase to one half the U.S. level, they would need an extra 8 million barrels per day, or an extra 10% of current global production.

Oil producers in stable countries that don’t rely on offshore drilling (like Western Canada) are

likely to do well over the next decade. It also suggests increased emphasis and development of hydro, natural gas and nuclear power. This should be a boom for provinces from Saskatchewan to the Pacific Ocean.

There should also be continued and increased emphasis on “green technology”, in particular battery storage of electricity and solar power. There will be winners in those sectors, but it’s difficult to predict who they are.

Oil companies are likely to try to download their risks in offshore drilling, which means more work for consultants, contractors and service companies. There should be a bonanza for those with the expertise who are willing to take the risks, but potential liabilities will be huge.

The U.S. government’s regulatory failure means it bears a significant part of the blame for the BP oil spill. The U.S. attitude under the Bush administration oil exploration was best captured by Sarah Palin’s “Drill, baby, drill.” One can’t help feel that corners were cut to promote drilling at the expense of safety.

Work needs to be done with oil spill cleanup technology and regulation. The Dutch apparently offered to provide oil spill cleanup ships, which suck up oil slicks and return nearly clean water back to the ocean. Unfortunately, EPA regulations have a zero tolerance towards oil so nearly clean wasn’t good enough and they

couldn’t use them. The regulatory intentions were good, but in an emergency they made the situation much worse than it had to be. There need to be different regulatory regimes for daily operations versus disasters.

The technology also has room for improvement, and cleanup ships need to be within a day’s sail of potential oil spills. It should be another boom for consultants and contractors, but will probably –again– raise the cost of oil production.

Fortunes will continue to be made and lost in the energy industry. Investors with a tolerance for risk and the common sense to avoid concentrations in specific companies and high tech development should do well over the long term. The problem I see is not that oil prices will plummet again, but the potential for another recession as prices rise too fast for our economies to absorb.

Dominik Dlouhy P. Eng, MBA, CFA is a Chartered Financial Analyst and planner with Partners in Planning Financial Services Ltd. and The Fraser Financial Group LLP. You can reach Dominik at 545-5258 or [email protected] with any questions, comments or issues you would like to see covered in this column. The opinions expressed in this article are those of the author and not necessarily those of Partners in Planning or The Fraser Financial Group.

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You’ve NEVER seen anything like THIS!where canadians advertise and why they don’tby DeVoN brooKs


If you read magazines on a regular basis, you’re not alone, but would you subscribe to one that costs $1,580 for four issues? The magazine calls itself Contagious and describes itself as “a quarterly intelligence briefing in Magazine, DVD and Online format, identifying the ideas, trends and innovations behind the world’s most revolutionary marketing strategies.”

The British magazine has more than well written articles: it has an amazing website, fully indexed and searchable. Special reports (available online to non-subscribers for prices ranging from £250 to £450 each) go to subscribers. Contagious is no flash in the pan – despite its huge cost, the twenty-third issue is now on sale.

The president of DBB Canada, David Leonard, was so enthusiastic he quoted a conversation he had with one of his skeptical colleagues while talking to the Globe & Mail. He recalls saying, “This is the only magazine that our industry people should be reading.”

Leonard’s Toronto-based company was ranked as Strategy Magazine’s Agency of the Year in Canada in five of the last 10 years so he has credibility. Go to DBB’s site (www.pjddb.com) and click on the Canadian Tourism Commission project. The 30-second opening message is one of the most powerful and effective ‘visit Canada’ messages you’ll ever see.

You are now understandably curious about Contagious (I’ll save you the trouble of looking it up: www.contagiousmagazine.com), but, at the same time your first thought was likely, ‘Why would anyone spend $1,600 on a magazine subscription?’

That outrageously large amount suggests you haven’t seen anything like this.

That’s the essence of advertising: persuading you that the message/product/service/idea/price is unlike anything you have in your life now.

We Canadians like to believe we are not in your face or braggarts. It may be linked to the persistent claim among sales people that Canadians don’t advertise nearly as much as Americans; although you’ll be hard pressed to find many large, successful companies in this country that don’t market themselves within their business sector.

For that reason, Jennifer Taylor of Taylormade Ideas, a Penticton-based marketing firm, is skeptical about the idea that Canadians don’t advertise. She has never seen definitive numbers for making good comparisons, but her impression is that there is probably little difference between Canadians and Americans in marketing.

It’s hard to tell because there are more variables at play than you might think.

For example, determining if we are more or less frugal depends in part on deciding what counts as an advertisement. Consumer Reports wrote the average American sees 247 commercials messages a day. Others claim vastly different numbers, up to and including 3,000 ads daily. If you are awake 18 hours a day you have only 1,080 minutes to view advertisements, which means you’d have to see or hear three ads every minute of a long waking day.

Whether you see and hear 250 or 2,000 ads daily one thing is certain, very few of them will make a lasting impression on you. Almost as definite is that most of us aren’t aware of the many, many ways that we are marketed to. TV, radio and a magazine or newspaper ads spring to mind right away. With a moment’s consideration you’ll likely throw in the flyers in the newspapers or your mailbox, spam in your e-mail box and billboards at the side of the highway. What about the signs in your grocery cart, the boards alongside the rink in a sporting arena or even our modern habit of naming institutions for sponsors like GM Place, Prospera Place and too many others to mention?

Most of us don’t think about it if our child sells chocolates for a fundraiser or use a pen with a logo on it, but they are all considered by marketers.

Total advertising revenues in this country for 2008 stood at $14.6 billion. Total spending by American companies for all media in 2008 was US $191.7 billion, which, discounting the dollar differential, still puts American spending on advertising 13.1 times higher. That is about US $60 billion more than you would expect, given our population difference of 1:9.

The problem is that more dollars don’t always translate to more commercial messages.

Consider the cost of a 30 second TV commercial

during the last Superbowl: US $2.4-3 million. The most expensive advertising half minute in Canadian sporting history happened this year at the Olympics during the Canada-U.S. hockey final, when prices hit a record breaking $365,000.

Ten spots at the Olympics would only add up to one advertisement at the Superbowl.

As the world’s biggest market, U.S. television and media attracts international spending that we simply don’t get here, which is to say more people and more companies are eager to get their message to America’s buying population than ours. So the nine-to-one ratio of population doesn’t reveal the whole picture.

Internally, the banking sector provides a relevant example. In Canada there are 16 commercial banks and around 440 credit unions, but the United States boasts 8,300 banks and California alone has 438 credit unions. Similarly, on a per capita basis, many other commercial sectors are overweighted in the U.S. compared to Canada.

Television advertising, the most expensive form of advertising, gets more attention in the U.S. In 2008 the United States television networks took in US $55.7 billion from advertising or approximately 29.0% of the total while Canadians spent C $3.4 billion, which is 23.3% of advertising revenue.

Americans watch one-third more (28 hours per person per week) than Canadians (21 hours) do on our 146 television stations. Contrast that with 8,839 TV stations in the 50 states and territories broadcasting in all formats.

Sometimes the big numbers can distort how things really work. Gary Belgrave, president of the Radio Marketing Bureau in Toronto, says there is a similar imbalance between the number of radio stations in Canada and the U.S. Radio, unlike television and discounting the CBC, has relatively little content aimed at a national audience. He says the reason that there was not a single closure of a radio station in Canada during the recession last year is because they are dependent on local markets and local advertising.

Belgrave believes the much larger number of radio stations in the U.S. over saturates the market. He argues there are only so many


What is advertising and marketing? Two years ago when I interviewed some marketing specialists they impressed upon me that there is a distinct difference between advertising (buying ads in one medium or another) and putting together a marketing campaign in which one has a strategy and various advertising components come together to form a cohesive whole that not only sells widgets or services, but works to promote the company. An advertisement sells something, marketing promotes your brand. Most of us who are not advertising specialists don’t see it that way, and this survey received one criticism that indeed, the distinction is so small for most people it isn’t worth discussing.

Among those that responded to this survey half indicated that they either don’t advertise, or there are times when they haven’t advertised. Cost was not the biggest factor, but a lack of return, which suggests that those companies weren’t reaching the right people with the right product or were in the wrong place.

Nearly half rely on word of mouth exclusively, and a whopping 90% rely on it exclusively or mostly. Some 40% have no marketing campaign to speak of and yet, despite what would appear to be a largely negative experience for many from previous advertising attempts a majority (60%) still believe a good advertising campaign would raise their income.

Perhaps the most important result from this survey is that it appears local marketing firms aren’t communicating well enough to business people what they should expect from a good campaign.

1. how much do you spend on marketing (including advertising) annually?$0 - 500 10.8%$501 - 1,000 7.7%$1,001 - 5,000 27.7%$5,001 - 10,000 10.8%$10,001 - 25,000 18.5%$25,001 or more 24.6%

2. how much you spend on advertising (not including marketing) annually?$0 - 500 12.3%$501 - 1,000 18.5%$1,001 - 5,000 26.2%$5,001 - 10,000 16.9%$10,001 - 25,000 10.8%$25,001 or more 15.4%

3. if you are not advertising is that because:It’s too expensive 12.1%I don’t see a worthwhile return 39.4%I’m so busy I don’t see a need for it 6.1%

It’s too difficult to create and manage an effective program 3.0%The business will benefit from spending that money elsewhere 9.1%Other 30.3%

4. if you answered ‘other’ to the last question please explain.

• My marketing strategy doesn’t cost money...just time.

• In the past I was too busy, but now I need to look at doing something.

• Ours is a captive market.• It is a combination of the cost versus the

verifiable return on investment.• Advertising & marketing are the same to me.

And I am spending the money, but really have no handle on it’s worth.

5. what is your preferred medium for advertising?Television 1.6%Radio 1.6%Newspapers 15.6%Magazines 9.4%Direct Marketing 10.9%Internet Marketing 10.9%Social Media 0.0%

Some combination of the above 37.5%None work particularly well for me 12.5%

6. Do you rely on word of mouth?Yes 48.4%Mostly, but not exclusively 42.2%No 9.4%

7. Do you have a marketing strategy rather than just an advertising campaign?Yes 58.5%No 30.8%I’m not sure 10.8%

8. are you using social media?Yes 52.4%No 47.6%

9. Do you create your own ads?Yes 50.8%No 23.1%Sometimes 26.2%

10. Do you believe that a good advertising campaign could substantially increase your revenue?Yes 60.0%No 18.5%Not sure 21.5%

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Advertising Survey – 65 respondents


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C3 Training, which offers a host of personal development courses under the Context banner, has hired Andrew Middleton as a marketing director. Courses are geared both for personal growth and to make people more effective in any part of their life, including business, sport or hobby. Middleton has a BA in psychology and 20 years experience in marketing and business working for others and for his own company, Absolute Classics Marine. Middleton describes the courses offered by Tim Sullivan’s company, C3 Training as a mix of philosophy and practicality. Middleton says, “Each of us is blessed with a plethora of talents and attributes and we are granted an unlimited menu of opportunity and experiences to meet our gaping appetite.” Unleashing the potential is harder than we realize. Middleton adds, “Some partake fully and truly enjoy the abundance they see before them. Others remain in their comfort zone and live a life of

mediocrity.” C3’s training programs are eligible for subsidy under the government’s workplace training program.

andrew Middleton

DyiNG to helP out

Funeral businesses are rarely thought of simply because of the emotional trauma associated with their clientele, but like any business they have many challenges. Click Tributes is a young Penticton-based company that designs software and web solutions for the funeral industry. It recently moved into new offices in the ORIC high-tech incubator in Penticton, to take the company to the next level.

real estate’s slowDowN

It’s no real surprise to anyone in the business, but statistics from the Okanagan Mainline Real Estate Board confirm the real estate sector has slowed since last year. In the central Okanagan listings were up slightly by 2.5%, but units sold were down by 48.9% and the value of the sales was off nearly as much at 41.9%. Units sold to the end of July this year declined from 468 over the same period in 2009 to 239 this year. Sales volumes for the same time periods fell from $183.6 million last year to $106.6 million in 2010. In the north Okanagan declines were similar. Units sold dropped by 50% from 206 to 103 while the value went from $68.8 million to $37.9 million (a 44.9% decline).

forestry slowDowN

easiNG?

After a month-long shutdown Tolko Industries reopened its Armstrong plywood operation at the beginning of August. The recall affects around 140 employees, but company

manager Pat Donnelly says they are uncertain how strong the demand is for the specialty products that allowed the plant to reopen. She told The Vernon MorningStar the plant would operate on a week-by-week basis as they assess the situation.

PMG coNtiNues steaDy

exPaNsioN iNto real estate

The Prosper Media Group, owned by Craig and Chytra Brown and partner Noll Derriksan, publishers of the Okanagan Business Examiner, announced the start of two more publications, both aimed at the real estate market. One, called the Okanagan Collection, is a high-end realty


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publication done in conjunction with Sotheby’s International Realty. The quarterly publication has a print run of 17,000 and offers “a selection of some of the finest homes, estates and vineyard properties available for purchase in the Okanagan Valley.”

PMG’s other new offering is Niche, another quarterly with a print run of 15,000. This publication, says publisher Craig Brown, “Provides readers a unique blend of beautiful artwork and insightful articles that make the connection between the physical homes people live in and their lifestyle.”

oric aND ostec JoiN forces

Last month ORIC (Okanagan Research & Innovation Centre) and OSTEC (Okanagan Science and Technology Council) announced they were merging to create a single organization to promote the high technology industry in the Okanagan. ORIC has three incubators under its care, one at the Dominion Radio & Observatory near Okanagan Falls, one in Kelowna and the latest in Penticton. OSTEC has a long history of providing networking and educational opportunities for the sector as well as an advocate for the hi-tech industry. OSTEC’s office is in Kelowna. Mark Payne has been appointed the Merger Director to oversee the process.

VerNoN leaDs the way to PlatiNuM

Kelowna architect Hugh Bitz announced the opening of the first home in the Okanagan, located in Vernon, to achieve a Platinum Certification, the highest possible, under the LEED designation. Bitz, who was involved in the project from conception right through to finishing details, says this is only the second house in the province of British Columbia to reach this, the highest level of energy conscious and resource-efficient building standards. As well as an architect, Bitz has his professional civil engineering degree. The house was built by Okanagan Sustain Homes, a company owned jointly by Bitz and Carl St Jean.

the riDe of his life

Daryl Robert recently started up his Inside Out Home & Property Cleaning Services in Penticton with the help of Community Futures Okanagan Similkameen. Community Futures assists many companies get a start with loans and education on how to run a business, but Robert, who has some visual impairment issues, needed their ingenuity as well. Robert is not blind, but his visual impairment prevents him from driving, so Community Futures helped him find alternative transportation for his business. Robert uses a bicycle with a custom-designed cart to transport his equipment and supplies, hence he will not only clean your home, but may be able to claim the title of the Okanagan’s greenest cleaner. Robert is itching to make his business work. He’s been living off disability income until now, a habit he’s eager to break. Robert proclaims, “I want to be a constructive and active member of the community.”

GoiNG Viral is touGher thaN you

thiNK

If you’re on the Internet, chances are that you’ve seen a “viral” video, either by going to a site like YouTube, or by having it sent to you by e-mail. It is a video, very often a commercial, that is passed on from person to person, and a commercial that tickles the public’s fancy so much that it is sought out for viewing by millions of people is every marketer’s dream. YouTube’s success is built on that idea, that a video, home made or commercial, piques people’s interest enough that it goes viral.

A study by New Age Media and Rubber Republic (British companies) tracked 200 videos over 20 weeks to see how many succeeded. They used mentions on Facebook and Twitter as the measure of longevity and success. The average video received 199,181 hits, and was recommended 681 times on Facebook and 159 times on Twitter. While 200,000 hits sounds great, Rubber Republic says only 17 clips made it into the top 10, which means that only about 8.5% register for any kind of longevity. In essence the majority are gone almost as quickly as they surface.

stewart PhilliP MaKes biD at the

uNioN of bc iNDiaN chiefs

Grand Chief Stewart Phillip of the Penticton Indian Band is trying to become the president of the Union of BC Indian Chiefs. The election will take place on September 16, 2010.Penticton’s current chief, Jonathan Kruger says his band is united behind Phillip’s bid. He adds, “Stewart has over 30 years of knowledge and experience in aboriginal politics. Most importantly, Stewart listens to and takes direction from the Chiefs within the organization.”

weNiNGer coNstructioN & DesiGN

turNs 21

Free, 21 and able to do what it wants to, Weninger Construction celebrated its twenty-first year in business in 2010. The company was one of the first to build luxury condominiums at Big White, something it is continuing to do. Recently the company, founded by Ron and Elfrieda Weninger along with their son Marlin and his wife Pauline, finished the Six Degrees Bistro and is actively involved in the Feathertop development at Big White.


You can go to the grocery store and buy either regular or organic produce. You can also go to a city near you and buy either regular or “green” building construction. The organic produce of today is in demand and customers pay a premium for it. The questions are whether the same can be said for “green” homes and commercial buildings in the Okanagan and whether homeowners really care.

The allure of a green building is the demonstrated energy efficiency and reduced carbon footprint they provide. While more expensive to build it is the long term energy savings payback and the prestige of ownership that brings out buyers.

It could also be argued that the home or office will be much more comfortable and healthy to live in, and these benefits alone are worth the higher construction costs.

Just as organic produce has industry standards for being called organic, green buildings have industry standards that must be met before they can be called green. For simplicity green building means either of two accepted designations: Built Green or Leadership in Energy and

Environmental Design (LEED). Both designations were developed to ensure buildings are more energy efficient, have better indoor air quality and use materials and building practices that reduce environmental impact. Both designations have various levels of green.

There are 13 Built Green registered builders in the Okanagan, who have registered 88 residences in the program, of which 66 are accounted for by the Mission Group in Kelowna. Compare that to only one LEED Platinum certified residence in Vernon designed by the architect Hugh Bitz, and built by Okanagan Sustain Homes. According to the Canada Mortgage & Housing Corporation there were 1,059 single family housing starts in the Okanagan in 2009. Among the total number of homes on the market in the Okanagan today, there are only a handful of green homes to choose from.

There are at least 10 LEED certified commercial buildings in the Okanagan. Most notable of these is the Centre for Learning at UBCO, which was completed in July 2009 at a cost of $28 m. Out of all the commercial buildings in the Okanagan then, the number of LEED certified

buildings is also very small.

There are several reasons why. Firstly, the certification process and the standards for building green are just now becoming more accepted. The Built Green program only came to B.C. in 2006 and is only available in B.C. and Alberta at this time. The LEEDS certification, while more accepted in the U.S., has only been available in Canada since 2004. It is pretty hard to have green certified buildings if the certification agencies themselves are relatively new and not accepted by builders and homeowners.

Another factor is the lack of appropriate technology and construction materials. For example, the ICF (insulating concrete form) system of building walls is just now becoming a more accepted construction method. Green construction materials are also very hard to come by and expensive. Again, pretty hard to have a green building if you can’t get the right materials or the building systems aren’t practical.

Perhaps the largest factor to green homes not becoming more available is that homeowners

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do not even know that this is an option. A few builders have taken a lead in educating homeowners and building green homes, but the majority of builders are content with building homes quickly, inexpensively and the way they always have.

Until builders and developers promote to customers the benefits of a green home there won’t be many buyers.

At this point most home and business building owners don’t really care whether a building is “green” or not. Maybe they want a blue one instead! Seriously though, the facts are that most buildings today are not built to either a LEED or even to the less stringent Build Green standard and people aren’t asking for them.

Given a choice I would rather eat organic produce than the other stuff and similarly, I would rather live or work in a green building than a regular one.

The time will come though when most homes and commercial buildings will be built green and that will be a good thing.

Greg Kalyniuk is a Vernon realtor working for RE/MAX. You can reach him at 250-503-3758 or by e-mail at [email protected]. Views expressed in this article are the opinions of Greg Kalyniuk and do not necessarily reflect the views or positions of RE/MAX Vernon.

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formats and so many listeners in an area. At the same time, many stations force lower prices thereby providing more advertising for less money. Overall Americans spend a little less than 12 times as much on radio advertising as we do, but as a proportion of total ad revenue in 2008, radio commanded 10.6% of ad revenue here, but slightly less (9.3%) in the U.S.

According to Belgrave those percentages changed in 2009 with the big recession. The United States radio industry took a bigger hit than the 5% drop Canadian radio stations suffered. He reports that last year, “In Canada radio represents about 14% of advertising whereas it’s about 7% in the U.S.” U.S. ad spending fell from $191.7 billion in ’08 to $162.3 in ’09 and the Americans don’t project it will return to 2008 levels until after 2015.

Back in 2008 online advertising received 11.0% share of revenues in Canada and 12.5% in the U.S. while newspapers garnered 17.1% here, but 18.1% south of the border and magazines took in 4.7% in Canada and 10.0% in the U.S.

On a percentage basis, the biggest difference is magazines, which is most susceptible to what Magazines Canada refers to as “circulation spill”. Circulation-spill magazines must contain

at least 30% content that was not written for Canadians, but was written for an American or international audience. National Geographic is a good example, but there are many others like People, Cosmopolitan, Forbes, etc.

Many of these productions attract Canadian advertising dollars, which pumps up American volumes (fairly minuscule on the U.S. ledger books), but draws down the Canadian balance sheet.

According to Magazines Canada, U.S. circulation spill into this country is in long term decline because more Canadians want stories about them. All American publications sold in Canada in 1983 had a total circulation of 10,705,000. That was down to 8,160,000 by 2000 and to 7,322,000 by 2008 while Canadian magazine circulation increased every year from 62.8 million in 2004 to 73.1 million in 2008. Revenue growth in Canada also outpaced that in the U.S.

The number of publications and the pages being read here are also growing. In 1997 Canada produced 818 consumer magazines, a number that increased to 1,282 by 2008 while U.S. publications declined from 7,712 to 7,383. Those trends suggest that more dollars should flow into Canadian magazines, and less will go across the border.

Ironically, among the largest advertisers in Canadian publications in 2008, five were American, one was Canadian that has been since bought up by an American company and one was Swiss, leaving only three Canadian companies in the top 10.

If you’re wondering where that leaves us overall, the answer is that no one knows for sure. Canadian advertisers definitely have different patterns for where they spend, but actual dollar-to-dollar comparisons are complicated by media buy in, cost, the breadth of competing sources for revenue and the ambiguity of what constitutes advertising. Overall more money does go through American advertising media on a per capita basis, but for how many ads, and from what sources is uncertain.

In the end, effective advertising will continue to draw in repeat customers, and business needs to spend as much time thinking about how they should market themselves as they do on fretting on how many dollars they will put into it. On either side of the border.


“Your crystal ball is as good as

mine. [Radio] will continue to grow

because it is the most relevant,

because it is local.”

– Gary Belgrave, President of the

Radio Marketing Bureau of Canada

Advertising

C a l e n d a rPursuit of excelleNce -

seP. 16-19 - PrestiGe iNN,

KelowNa

One of the longest running and most successful development courses to improve a person’s communication, conflict resolution and awareness of their own style. Offered by C3 Training, the course runs for five hours on Thursday and Friday evening and all day on Saturday and Sunday. $595 for the first person. Go to www.c3training.com or call 1-800-630-5575.

westbaNK chaMber Golf

tourNaMeNt - seP. 21 - two

eaGles Golf course, west

KelowNa

An 18-hole golf tournament starting at 2 pm. Call the Westbank & District Chamber of Commerce at 250-768-3378.

busiNess after 5 - seP. 21 -

oKaNaGaN colleGe, VerNoN

caMPus

The Greater Vernon Chamber of Commerce’ monthly networking event from 5 to 7 pm. $5 for members, $15 for non-members. Call 250-545-0771 for information.

Vwib luNcheoN - seP. 22 -

schubert ceNtre, VerNoN

Vernon Women in Business’ monthly luncheon, networking meeting. From 11:30 am to 1 pm. $14 for members, $20 for non-members. Contact information: [email protected].

Nrc/Drao oPeN house -

seP. 25 - DoMiNioN raDio

obserVatory, KaleDeN

The National Research Centre Dominion Radio Astrophysical

Observatory is having an open house to celebrate 50 years of radio astronomy at its facility next to the White Lake Basin in Kaleden. More information online at www.nrc-cnrc.gc.ca/eng/events/hia/2010/09/25/openhouse-penticton-2010.html. Gates are open from 10 am to 5 pm. Free.

shiftiNG DirectioNs

coNfereNce - seP. 27-28

- best westerN VerNoN

loDGe

This two day conference is focused on human resource needs and what business needs to think about moving forward in this economy. $249 Register online at www.shiftingdirections.ca/registration.php.

busiNess after busiNess -

seP. 30 - bc sPca, PeNtictoN

office

The Penticton & Wine Country Chamber of Commerce’ monthly networking event from 5 to 7 pm. Free for members, $20 for non-members. More information online

at www.penticton.org/chamber-events.aspx.

chaMber luNcheoN - oct. 6 -

best westerN iNN, KelowNa

Dr. Farid Novin, senior representative for B.C. and Yukon for the Bank of Canada will speak at the Chamber’s luncheon. Doors open at 11:45 am. $37.50 for members; $48 for non-members. Tickets must be bought by October 4. Call Allison at 250-469-7350.

coNflict resolutioN

strateGies - oct. 7 -

PeNtictoN chaMber of

coMMerce

This morning session from 8:45 to 11:30 am will help participants discover: an awareness of their own values and attitudes toward conflict, their conflict style, self-management techniques, communication skills and how to create a constructive tone for conflict conversations. $53 for Chamber members; $73 for non-members. Register by calling 250-492-4103.

To discuss Peace Hills Trust Financial Services, please contact: Scott Baldwin - Phone: 250-769-9081 [email protected] Sarain Lafond - Phone: 250-769-9081 [email protected]

Full Trust & CommercialFinancial Services

Here to meet your Commercial Real Estate and Business Financing needs.

Specializing in loans up to five million dollars. At Peace Hills Trust we work with our customers to provide added value and timely solutions that work for the customer.

If you have Commercial Financing needs, please contact the Kelowna office. For requests outside of British Colum-bia please visit our website for further contact information.

www.peacehills.com

N.C. Derriksan & Son

Enterpriseswww.ncderriksanandsonenterprises.com

CALL ED LUGOSSY LICENCED COMMERCIAL REAL ESTATE AGENT

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OPPORTUNITIES AVAILABLE FOR:• Auto Glass • Insurance • Mufflers

• Mechanical Svcs. • Transmission • Brake • Accessories • Tires • Upholstery • etc.

Okanagan Business Examiner

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