BC Business
These days we mostly hear about how to scale up so as to create growth or join it or ride it. But for a small business whose market isn’t really growing that much, diversifying and polishing your identity as a service provider with an intimate knowledge of the local market may be the only strategy available when a new competitor enters it.
ProblemWhistler Real Estate Company Ltd. is a typical small business that recently faced this problem.
The 25-year-old company, which has about 40 agents and employees and did in the neighbourhood of $12 million in gross commissions in 2003, is the largest of a handful of real-estate companies that service the Whistler-Pemberton area.
One would think this would be a slam-dunk business; after all, Whistler’s been booming for some time and should be in hyper-drive as the resort runs up to the 2010 Olympics. Most of us believe that, in this kind of climate, a real-estate agency can just sit back and take orders from all those people banging on the door hoping to get in on the action.
In fact, that’s a myth. Whistler did experience a building boom and certainly isn’t in danger of going bust as the Olympics near. But that’s all resort development, made up of the many hotel rooms, time-shares and other businesses that service the hordes of vacationers who visit every year. Underneath that star-studded veneer is a small community with a total population of about 10,000 part-time residents and workers.
Sure, housing prices have been escalating, as they have been all over B.C., and the appeal of a resort has added to that escalation – a house in Whistler now averages $1.6 million, and condominiums run in the $500,000 range. But this isn’t a seller’s market like Vancouver, with ever-increasing buyer numbers. The reality is that the real-estate industry in Whistler, though often about resort living, is about as steady as in most other small towns. A further problem is that Whistler isn’t expanding much more. The municipality, fearing the kind of urban sprawl that would negate many of the community’s charms, has put a cap on land development.
So the housing supply is finite, with a steady number of houses trading annually and a clutch of real-estate agencies divvying up the market among themselves. When Re/Max, the national real-estate chain, moved into the town looking to cash in on the perceived economic boom, the industry’s long-time cozy relationship was shattered.
Solution“Suddenly, there were more people fighting for the same dollar, so we had to figure out how to maintain our position,” says Whistler Real Estate owner Pat Kelly. “Sometimes the best strategy is not to shrink.”
To accomplish this, Whistler Real Estate decided to diversify. It bought the Royal LePage Black Tusk Realty franchise in Squamish to serve workers who couldn’t afford property in Whistler and to cash in on that town’s growing status as a Vancouver suburb.
Then it took a deep look at how it could capitalize on its biggest strength – long experience with the area – in order to serve the typical buyer, usually a sophisticated family from Vancouver that has visited Whistler and decided it wants a second home there. “We positioned ourselves as local and the most knowledgeable about the area,” Kelly explains. “The customer today wants instant availability and accurate information above everything. We changed all our marketing materials to show this and upgrade our software regularly so we can always have the best information.” Is it working? Kelly thinks so. He’s been able to maintain his gross commission level, even though many around him are shrinking.
Lessons• Look outside your backyard for intelligence. When change came, Whistler Real Estate toured U.S. resort communities to see how business was done there. • Move fast. Don’t be paralyzed when events impact your business. • Refresh yourself regularly. Change comes faster today; to stay where you are, you’re going to have to change with it.
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