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Our Towns: Sparking a Small-Town Business Ecosystem

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The national-level response to the coronavirus pandemic descends from tragedy into catastrophe. The black granite slabs of the Vietnam Veterans Memorial in Washington display the names of more than 58,000 Americans who died in that war. Those deaths occurred over more than 15 years of conflict. At current rates, a larger number of Americans will have died from this pandemic within less than two months. Unemployment rates are already reaching levels that no American born after the Great Depression of the 1930s had witnessed or experienced.

So the rest of the American system is left to pick up the slack. Mayors and governors, health workers and grocery employees, business people and religious leaders, teachers and parents. In recent installments Deb Fallows and I have described some of these responses: innovations from libraries; plans to protect the small businesses that have been crucial to local economic revival; changes in a statewide program in California; responses from a nationwide nonprofit network; and how recent military veterans are converting a service ethic to civilian pursuits.

Today’s report is the first of two on relatively new tech companies, each based in a non-coastal, “left behind” part of the country, that have been bringing economic, educational, and life-prospect opportunities to their regions, and how they are now trying to cope with the current disaster. Today’s concerns the Innovation Collective, based in Coeur d’Alene, Idaho. Later we’ll revisit Bitwise Industries, based in Fresno, California, which we have followed over the years.


Innovation Collective: Nick Smoot, who is now in his late 30s, grew up in Coeur d’Alene. He moved away after high school and spent the next dozen years as a tech entrepreneur. He founded, built, and sold three internet-based companies (mainly involving test-prep and marketing—details here), and he became a speaker and commentator in the tech world.

Courtesy of Innovation Collective

Then at around age 30 he returned to Idaho. He told me that he came back to his home town for a reason that is related to fundamental debates about the American economy in recent years. Namely: how to share the opportunities and benefits of a tech-based economy more broadly—across regions, among races, for people of different backgrounds and economic groups—so that they create a broader-based, inclusive, fairer economy. In the immediate aftermath of the 2016 election, and as an uneven recovery spread across the country in the next few years, the challenge of “inclusive growth” was discussed in countless reports and conferences, in political speeches and in newspaper articles. Like most of the other people we have been chronicling, Smoot believed that he could help these ideals and action plans into effect, back in his smallish (population 50,000) home town.

“I think capitalism is great,” he told me, when we spoke on the phone last month. “But my goal is to reframe the word ‘capitalism,’ because a system that drives the production of too much, for the consumption of too few, has reached its limits.” He said that his goal was to use market incentives to create a tech-based business system “that is more stable and equitable—and to repair gashes in communities, rather than deepen them. We want to unlock potential in all people and especially those who feel they have been left behind.”

The taming and repair of capitalism is, to put it mildly, a long-standing and complex issue. (Here are two big Atlantic stories I have done on just this topic, from 2015, based on a new project by Al Gore, and from 1993, about an obscure German economist named Friedrich List.)

In practice, what this has meant in Smoot’s case is trying to foster, assemble, and connect the ingredients of a business-startup ecosystem in parts of the country that have felt cut off from the Bay Area-Seattle-New York technology boom. A few years ago he made a Vimeo statement summing up the ambitions, which you can see here. His “Innovation Collective” offers training sessions, mentor relationships, public and private events, supply-chain relationships, studies of regional economic possibilities, training in work-preparedness and other “life skills,” and other forms of “soft” infrastructure. Measures like these could seem airy or trivial—until you remember how central a role such informal ties have played in the rise of tech-economic centers in San Francisco, Boston, or Seattle, and how the absence of this soft infrastructure has hindered much of smaller-town, inland America.

“I look on every citizen in town as a frustrated creator,” Smoot told me last month. “Because they are not creating, they are not happy—and the ones who are happiest are the ones who are able to create. We build communities around this idea of human potential.” Talent, ambition, and creative potential are very widely dispersed, he said. Opportunity has not been. That is the gap he has hoped his Innovation Collective could help close.

In Coeur d’Alene, his organization developed a partnership that restored a long-vacant Elks building in the center of downtown. It became the “Innovation Den”—and now the site of over 60 offices, a barber shop, a coffee shop, a robotics and computer-science program, and a civic site, for events like the one you see in the photo above. The Innovation Collective has launched a low-cost tech-training program called Inspire. The IC offers different tiers of membership, from free to about $800 per year. It has started a venture fund, directed at new businesses in Coeur d’Alene and similar communities across the country.

Smoot described to me some of its operations in Utica, New York; Brooksville, Florida; and Spokane, Washington. In each of the cities, the emphasis has been on economic niches that match the geographical, cultural, and business-history particularities of that town. Coeur d’Alene, for instance, has a strong robotics sector. Utica, like many other cities in the Northeast (for instance, Erie), has a long manufacturing heritage, in recent decline, and a diverse population including many immigrants and refugees. You can read about those and other projects here.


On the territory of the Coeur d’Alene tribe in Idaho, Danamarie McNicholl of KREM interviews Megan Smith, former U.S. Chief Technology Officer, during a statewide tour to launch the Inspire program of the Innovation Collective. (Courtesy of Innovation Collective)

All that was in the seven years before the crisis. And now? Last month, as the lockdowns were beginning, Smoot produced a six-minute LinkedIn video addressed to small companies like those he had been working with, in small communities across the country. “You need this, we need this, I need this,” he said, about trying to connect small firms with others facing similar problems. (You will see this about three and a half minutes into the LinkedIn clip.)

We all have more to give …. When a good chunk of our country is isolated in their homes, more isolated than they were before, we have a choice. We can become worse, or we can become better. We can become less, or we can become greater.


Choose to become greater. Choose to become more.

Again, in isolation it could sound just like a motivational speech, but it’s connected to the “left behind America” work that Smoot and his organization have been doing for years.

When I asked Smoot how his emphasis had shifted, he said it was primarily on the physical, mental, and emotional health of people in his extended community, and the creation of locally based, self-sustaining networks, rather than sending online “content” from headquarters. As he put it in an email:

It’s very important to note, we are creating “Local Digital Interactive Communities,” not streaming pre recorded content or creating communities of non local people. VERY important.


These types of communities are made up of 100’s of local experiences per month that feature local faces facilitating experiences that add value to three crucial areas for stability and recovery; economic, mental, and physical health. Through community, these focuses help you become the kind of person who can go get the future you want.

He went on to explain how this approach differed from simple Zoom-meeting connectedness, including “large and small group experiences to avoid hiding online” and a series of regular accountability and goal-setting stages.

“Stand tall today,” Smoot says in the introduction to his LinkedIn video. “Shoulders back, chin up … Together, as a big community, we choose to build a tomorrow we want, through community today.”

As I ask at the end of each of these updates: Is an approach like this “the” answer to the current public health and economic crisis? Of course not. And I am sure that the IC model has limitations and weak points as well as strengths.

But is it part of “an” answer? Yes, I believe it can be, as well as an example of the creativity with which Americans across the country are responding to our emergency. The history of these times should include the people and organizations that are trying to solve the moment’s problems, as well as the institutions that have failed.

Next up: the latest news from Bitwise.

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What it’s like to pull the plug on your business during the pandemic

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The numbers are still coming about how many businesses have been shuttered as a result of COVID-19, and considering the financial pain many firms are experiencing, a true tally won’t be known for quite a while. 

But evidence of the tens of thousands of businesses that have closed can be found in shopping malls and on main streets across Canada. 

Behind the figures and bordered-up businesses is the human toll the closures had on the entrepreneurs who saw their passions, dreams and financial lifeblood disappear.

These are the stories of three entrepreneurs from different industries who faced that arduous reality and agreed to share details about their businesses’ downfall, the emotions they’ve felt and how they’re trying to keep their chin up through the heartbreak.

‘I knew we couldn’t weather that storm’

It only took a few days after the Alberta government forced Scott McDermott to close down his fitness gym that he realized the ultimate fate of his business.

Leading up to the coronavirus lockdown in March, he had already cancelled group workouts and child-minding services as fears grew about the coronavirus pandemic. He and his staff were busy preparing online workouts, meal plans and programs for members.

Two days after Best Body Fitness in Sylvan Lake, a resort town in central Alberta, was told to close its doors, McDermott had his weekly meeting with his bookkeeper. 

As they looked over the numbers, it hit him. No matter how successful the online offerings were, there was no financial path to overcoming how deep of a hit COVID-19 was going to have on his gym.

“I just had to stop and go, ‘You know what, this isn’t gonna work.'”

Photos before and after Best Body Fitness closed. Instead of a place for physical improvement, it’s now for spiritual devotion since a church is leasing the building. (Submitted by Scott McDermott)

Even if gyms would reopen quickly, there would be restrictions, and he knew some members wouldn’t feel comfortable returning for quite a while, regardless of the health and safety protocols introduced.

“I knew we couldn’t weather that storm,” he said.

“It was crystal clear. There was not a cell in my body that didn’t know that was the right decision.” 

That March night he wept at his desk until 2 a.m. After 18 years in business, it was over.

“We put so much into it, and we helped so many lives, and we made such a difference, and it was just gone.”

WATCH | How this fitness gym owner realized his business would have to close:

During a meeting with his accountant, Scott McDermott knew instantly he had to shutdown his fitness gym for good. 3:43

After he informed the staff, customers who had prepaid memberships were invited back to take some of the fitness equipment as a trade.

Now, months later, McDermott is trying to stay positive. Instead of working upwards of 100 hours a week as an entrepreneur, his stress levels are noticeably down.

Part of the reason is because the gym was open 24 hours a day, so he always felt like he was working. In addition, the last five years were difficult financially with a struggling Alberta economy and rising business costs.

We stole from our RRSP, and we took from our savings account, and we borrowed money from our parents because you kept believing it’s going to get better. It’s going to turn the corner. When COVID hit, it’s like, no. That’s it.– Scott McDermott

“We stole from our RRSP, and we took from our savings account, and we borrowed money from our parents because you kept believing it’s going to get better. It’s going to turn the corner. When COVID hit, it’s like, no. That’s it.”

As painful as it was to shutter his business, he’s trying to enjoy this transition in life. He’s active with public speaking, online fitness coaching and writing two books. He’s also promoting a documentary about his recovery from a horrific cycling crash in 2015 during an ultra-endurance race.

He isn’t sure if any of these ventures will flourish enough to pay the bills, but he’s excited to find out.

“It’s like a blank slate,” he said. “I’m just trying to be creative and find a way.”

Scott McDermott is spending some of his time promoting a documentary about his recovery from a cycling crash in 2015 during an ultra-endurance race in Hawaii. (Living the Warrior Code)

‘Telling the team was really, really hard’

Unlike McDermott, Brianna Hallet was able to reopen her hair salon after the lockdown began in March. However, as the summer wore on, it became clear SwizzleSticks Salon Spa in Calgary was no longer viable.

Adhering to health restrictions meant operating at less than half capacity with up to seven stylists working at one time, even though there are 16 chairs.

The spa side of her business never did reopen to offer massages, facials and other services.

Meanwhile, she said her landlord wouldn’t budge on providing any relief, and the business struggled to pay the rent that was still owed for the spring months when the shop was closed.

Hallet also didn’t qualify for the federal government’s Canada Emergency Business Account, which provides small businesses with interest-free loans of up to $40,000.

“It just seemed like there were too many blockades, and we really didn’t know what the rest of the year would also hold. So even if we got through the next month, what would the next month bring? Would we have to be closed again?”

When the decision was made to permanently close, Hallet had her accountant in the room to help explain the situation to staff and help with the transition.

“Oh my gosh, telling the team was really, really hard. I had the PricewaterhouseCoopers team with me. So that was really nice to have some support on site, but that was an emotional day. Lots of tears.”

WATCH | It wasn’t just one financial obstacle to overcome:

Brianna Hallet was able to re-open SwizzleSticks after the lockdown measures, but it proved to be difficult. 2:25

The end of SwizzleSticks is still a painful reality for Hallet who worked there 14 years and was the owner for the last six years.

“It’s been hard. It’s been a really tough identity thing. I didn’t realize how much of my identity I placed within SwizzleSticks. Even last night, I was journaling some thoughts, and it’s still — it’s the identity,” she said, along with grief and mourning. 

Hallet is thankful she kept up her skills behind the chair after becoming the salon owner, as she’s been able to find work at a different salon.

While her first experience as a business owner didn’t end the way she would have liked, it hasn’t diminished her entrepreneurial spirit.

“Absolutely, it’s just a part of me. There are too many opportunities not to do it again.”

Brianna Hallet is thankful she kept up her skills behind the chair as she’s been able to find work at Josef Saliba Salon in Calgary. (Kyle Bakx/CBC)

‘It feels like a huge loss of yourself’

At the beginning of the year, business was actually pretty good at Enzo Energy Services. The oilpatch has had many struggles since the severe price crash began in 2014, but in the early months of 2020, Casey Johnson’s shop in Red Deer, Alta., was pretty active, and crews were busy.

The trucking company hauled chemicals and other fluids for the oil and gas industry.

Still, he clearly remembers March 9. Saudi Arabia and Russia had begun flooding the market with oil as part of a price war and — coupled with growing coronavirus fears beginning to hurt demand for fuel — sent crude prices spiralling to their lowest levels in several years.

Enzo qualified for multiple government aid programs, but it didn’t make an impact.

“For the size of company we were, it was like firing a paintball gun at a tank. It just wasn’t enough,” he said. “The core issue was such a drop in demand for our services.”

Casey Johnson with his two sons in 2010 when he started his business, left, and pictured again this year before the final truck left the yard. Johnson says they wanted to recreate the photo because his boys were always part of the business, and it ‘gave me pause for reflection about what we’ve been able to do over the last decade.’ (Submitted by Casey Johnson)

In August, the business shutdown, and two auction companies were called to sell off everything from large trucks to office desks and chairs. Johnson always thought his business would eventually be sold or merged with a larger company.

“It was excruciating,” he said. “It was probably the hardest decision I’ve ever made in my life.”

At its height, the firm had 25 employees.

“To tell them and their families that their paycheque will not be coming from the business any longer was really hard.”

WATCH | The tough transition after closing your business:

After shuttering his business, Casey Johnson was fortunate to get a new job and in a way, create a new identity for himself 1:12

Johnson himself has been able to find work at an environmental company, which he described as a relief to keep him busy while this part of his life winds down. There’s still more work ahead to be done with creditors, and finding a new tenant for the building won’t be easy.

Still, he’s optimistic about the future. When he does reflect on the business, he tries to focus on the many high points of the 10-year journey.

“When a business closes down, it feels like a huge loss of yourself,” he said. “[But] we’re more than the job we do or the business that we own. And there’s more value to life than the business, even though when you’re in the middle of it, it can be hard to make that distinction.”

Enzo Energy Services operated for 10 years in the oilfield services sector. (Kyle Bakx/CBC)

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How women-owned small businesses are adapting their business to stay profitable during pandemic | Custom-Content | More

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As small businesses across Nova Scotia change to accommodate the requirements of a pandemic-era economy, the programs services that support them have also had to adapt their methods.

At the Centre for Women in Business, their Greater Heights of Growth program facilitated by Laurie Sinclair — which was originally aimed at helping to grow women-owned Atlantic Canadian businesses with at least one million dollars in annual revenue — quickly readapted into a recovery program to help these local businesses remain operational while navigating a tumultuous economy.

“We pivoted to become a recovery program to help the participants build a Covid-responsive business model, taking all the resources that the business currently has — people, money, brand, customer groups — and being able to use all of those resources to generate a new revenue stream,” explains Sinclair. “We’ve done a lot of work identifying the resource, their value and how to use them differently.”

Patty Howard is one of the business owners benefiting from the support of the recovery program. When the lockdown was enforced and group gatherings were restricted, the core income generator of her 13-year-old company, Kitchen Door Catering, was forced to a halt.

So she joined 17 other women business owners to take part in the recovery program — meeting weekly to share their collective wisdom, learn from a variety of speakers and engage in Sinclair’s lessons on how to pivot and survive.

Back in the spring when Nova Scotians were locked down and group gatherings were restricted, Patty Howard (right) lost the core income generator of her 13-year-old company, Kitchen Door Catering. - Photo Contributed.
Back in the spring when Nova Scotians were locked down and group gatherings were restricted, Patty Howard (right) lost the core income generator of her 13-year-old company, Kitchen Door Catering. – Photo Contributed.

 

For Howard and many other business owners, that meant taking things online. She quickly built a website where customers could preorder a selection of fresh and frozen foods to take home, but anticipating a possible two-to-five year restriction on large events — and having just recently moved into a new 11,000 sq. ft. facility — she still needed to find an additional source of income.

“We were approached by a P.E.I-based food company and they asked us if we would be interested in partnering with them to bring Yo-Yo cookies to Atlantic Canada, so we became federally inspected and are now in manufacturing,” says Howard.

At the beginning of the pandemic, she was forced to lay off 24 of 27 staff members, which she says was one of the hardest things she has ever had to do. But with this new revenue stream up and running and her entrepreneurial mindset kicked into full gear, Howard began to look for even more opportunities.

“We wanted to include our ‘foodies friends’ — local businesses without an outlet to sell, especially with farmers markets being non-operational.”

So Howard partnered with some local market favourites, hired a developer and expanded their website to provide a sales platform to these struggling small businesses. She also began to offer virtual cooking classes — and this injection of ingenuity allowed her to re-hire 14 of her former staff members. She’s optimistic that, post-COVID, her company will be leaner, meaner and more profitable.

Back at the Centre for Women in Business, Sinclair says this digitization of businesses has proven to be “incredibly cost-effective” across industries and will be “the way of the future.” She points out that Harvard University says businesses have essentially accelerated technology and digital deliveries more in the previous six months than what would have happened over the next decade had a global pandemic not occurred.

“It has increased the scope for our small economies in Atlantic Canada,” says Sinclair. “We can access other markets, or even speakers if we’re offering a learning experience. There are some great things that come out of this that have accelerated us significantly.”

She says one of the biggest challenges business owners have faced has been uncertainty and how to make decisions going forward. Thanks to having built the capacity and resources to help owners like Howard make decisions on whether to go left or right, the program has received outstanding reviews from participants.

“This is a four-year, federally funded program that the CWB will continue to offer in different cohorts as we move through Covid over the next few years,” says Sinclair. “We are very, very dedicated to helping females start, grow and advance their businesses to create their own security and independence.”

“If you help a woman, you help a family, you help a child, you help a community.”

The Centre for Women in Business is dedicated to helping women across the province succeed as entrepreneurs through exposure, connection and learning. To learn more or apply for membership, visit centreforwomeninbusiness.ca.



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Transat AT temporarily lays off 128 flight attendants – Business News

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More than half the current workforce of Air Transat flight attendants were notified last week that they will be temporarily laid off, says the Canadian Union of Public Employees.

In addition to furloughing 128 Air Transat cabin crew, the airline told workers its Vancouver base will be closed as a stopgap measure.

CUPE says last week’s layoffs leave only 117 flight attendants working for the month of November, down from 245 in October, 355 in August and 2,000 before the COVID-19 pandemic.

While no flight attendants have been permanently let go, the company is processing “a number of temporary layoffs,” Christophe Hennebelle, Transat AT’s vice-president of human resources and corporate affairs, said on Monday.

Hennebelle says the company cannot confirm total numbers before everyone has been informed, but that 128 flight attendants were told of the change last week.

In total, the airline said it now has about 1,700 active employees, down from 5,100 before the pandemic.

The airline attributed the decision to a lack of improving prospects for the industry amid Canada’s border closures and a dearth of support programs for airlines.

Transat is not the only company struggling. Air Canada and WestJet airlines combined have laid off or furloughed more than 30,000 employees since March as ridership has plummeted.

For Transat, the latest wave of temporary layoffs comes after all flight attendants were furloughed between April 1 and July 23, dropping the overall head count across the company to a low of 800 workers in May. Some employees have been receiving government wage subsidies while out of the active workforce, and some have been recalled only to be furloughed again.

“Since the beginning of the pandemic, we have been adjusting our staff levels to our forecasted capacity, sometimes calling employees back to work and sometimes unfortunately putting them on temporary layoff,” said Hennebelle.

The union says aviation workers will be holding a protest at Parliament at noon on Tuesday, demanding government support, including rapid COVID-19 screening at Canadian airports.

‘All of our information indicates that Air Transat’s resumption of activities in the summer and fall of 2020 was totally safe for passengers and staff. A rapid screening system that provides pre-boarding results would be a crucial addition for reviving the airline industry,” says Julie Roberts, the president of CUPE’s Air Transat component, in a statement.

“What we need is an efficient federal screening program.”

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