When Kara Hachey was an MBA student at the University of New Brunswick, she was assigned to prepare a business plan as a classroom exercise. As a gymnast and certified coach, she figured she’d propose a traditional gymnastics facility.
But her professors dismissed the idea, calling that a dying business model, and saying there was nothing new about her proposal to be entered in a competition for innovative business plans.
“A bricks-and-mortar approach won’t work. Just putting up another building won’t fly,” she remembers being told.
Rather than have the people come to the business, one of the professors encouraged her to “take the business to the people instead.”
Ms. Hachey took that advice to heart, not only for the assignment but also for the start of her entrepreneurial career.
The founder and owner of Fredericton-based Go-Go Gymnastics Inc. operates a mobile gymnastics company.
It now has three mobile units in operation from New Brunswick’s main urban centres – Saint John, Moncton and Fredericton – that cover the towns and cities within driving distance, 16 places in total.
Go-Go has about 80 employees (full- and part-time) who teach recreational gymnastics to youth that might not otherwise get the opportunity.
Ms. Hachey, who founded the company in 2006, likens Go-Go to a travelling circus.
She and her team roll into towns with more than 2,000 kilograms of equipment packed into a trailer hauled by a truck – a value of about $130,000.
That includes everything in a standard gymnastics setup (balance beams, mats, bars, rings and vaults), which they put up in school and university gymnasiums and community centres, teach, pack up and depart at the end of the day.
As Go-Go has found, an unconventional approach to a conventional business can be the key to the successful launch of a startup, or renewed growth and prosperity for an established firm.
Ms. Hachey’s business has scored outside the classroom because she went against the established business model for a gymnastics centre.
Taking a new approach to an old way of doing things proved the right choice for Go-Go for a couple of reasons, says Martin Wielemaker, an associate professor of strategic management and entrepreneurship in the MBA program at UNB, who taught Ms. Hachey.
For one, says the father of two, parents in small towns don’t want to drive their kids to faraway cities to take gymnastics, no matter how good the facility or program is; they’ll pay for the convenience of the gym coming to them instead, he says.
As well, this model saves schools from having to invest scarce resources in a sport that is still part of the physical education curriculum.
“Most of the communities can’t afford to sustain their own gyms, but they can each support it for a day a week,” says Ms. Hachey, who ended up winning a $1,000 prize for best business plan in the class, then took it to further competitions, including winning the CIBC business plan competition for best pitch and the New Brunswick Innovation Foundation (NBIF) student entrepreneur awards, where it won first prize. The $20,000 that came with that award was used to help launch Go-Go.
Dr. Wielemaker teaches business students to discover their customers’ “pain,” or need, and then address it in a way that differentiates their businesses from the competition. In this case, he thought the “need of a parent” was obvious.
He says it’s hard for an established business to go against industry norms, even when it’s a necessary step to growing the company.
“They are often locked in by capital investments or lease agreements and it becomes very hard for them to change, even when they must,” he says.
But while it may be difficult, it’s not impossible for older companies to adopt approaches contrary to industry norms.
Malley Industries Inc., based in Dieppe, N.B., is a manufacturer of customized vehicles, including ambulances, vans for people with physical challenges, and vehicles for rescue and law enforcement organizations.
In business since 1979, it’s been on a steady growth trajectory despite taking an unconventional approach to managing its work force.
Its plant operates one daytime shift. The owners have resisted the urge to add a night shift to increase the plant’s output. This is good for both morale and business, says owner and vice-president Kathy Malley.
She says the firm has a skilled work force that doesn’t perform many routine tasks that would suit a production-line approach to plant operations. Overnight shifts are ill-suited to employees who must think on the job, she says. “People are not creative at 4 a.m.,” Ms. Malley says.
Nonetheless, the company is committed to growth. It began with three employees and now has about 75. It has added new product lines over the decades and expanded its markets to new continents. Last year, the company built a new facility, three times the size of the old one, to accommodate growing demand for its products.
Ms. Malley says the company could have increased business instead by adding a night shift at the old facility, but that didn’t suit the company’s human resources philosophy.
Elspeth Murray, a business professor at Queen’s University, says that many successful manufacturers depend on skilled workers who can’t be treated like cogs in a machine. Malley’s approach is noteworthy for its break from traditional production methods.
“It’s an innovative way to think about structuring the work,” says Dr. Murray, whose research focus is strategy and entrepreneurship. “They’re not bound by any conventional thinking about manufacturing. They’ve tailored their HR processes to match with the nature of the work and the nature of the work force.”
Malley has also grown, in part, because of its ability to source new opportunities to customize vehicles. Ms. Hachey has a similar eye for the opportunities that make life easier for parents and schools.
In 2010, she started a second division, Go-Go Gymrichment, an after-school care program that takes place at the schools themselves. This saves working parents from worrying about transporting their children to care programs off school grounds.
“The guiding principle, ‘we will come to you,’ is still there,” she says.
It is also an education-based program that teaches students about subjects such as leadership and science, as opposed to the play-based programs at other care centres in the province. “I didn’t want to create just another daycare,” she says.
Ms. Hachey’s newest program is currently offered at four schools in the Fredericton area. She says she’s going against the grain of the traditional play-based model, but insists the children are having fun, too, as they enjoy themselves while getting fit in Go-Go’s gymnastics classes.
“In the leadership activities, we often do fun skits,” she says. “They often have no idea they’re learning something.”
The new program will expand to four schools in Saint John in the fall. In two years, it plans to open in Moncton-area schools.
Ms. Hachey also has plans to expand Go-Go Gymnastics to other provinces, and possibly Maine, by granting franchises. It could happen as soon as 2015, or sooner if the right opportunity presents itself.
“Based on my research, no other province has anything like Go-Go Gymnastics,” says Ms. Hachey, whose company generated just under $1-million in revenues last year.
“Even our national suppliers who supply top-of-the-line equipment abroad have never heard of something like we are doing.”