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Tyson Leavitt and wife Audrey of Charmed Playhouses.

Chris Bolin/The Globe and Mail

Charmed Playhouses Inc. is one of the five semi-finalists in The Globe and Mail's Small Business Challenge Contest. (Check out the other four here and vote for your favourite.) The 2016 contest drew more than 3,400 entries, and a panel of judges selected the semi-finalists. The winner of the $100,000 business grant – and a suite of secondary prizes – will be announced in September.

When Tyson Leavitt built a playhouse two years ago as a present for his daughter, he had no idea the fantastical structure would lead to a new business venture.

Mr. Leavitt, who owned a landscaping company, has plenty of experience building backyard structures such as outdoor ovens, pergolas and fireplaces. After building his daughter's playhouse, he fashioned another one for a local home and garden show.

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"It got a lot of attention, but I was so swamped in my landscape business that I couldn't follow up on the business opportunity," recalls Mr. Leavitt.

"Come the following year, a client I was building a playhouse for asked for a Rapunzel tower. I built it on spec, put in the same home and garden show from the year before, and the client ended up buying two playhouses."

This time, Mr. Leavitt was ready to get into the playhouse business. He and his wife started Lethbridge, Alta.-based Charmed Playhouses Inc. in April of 2015, and within months they had sold the landscaping business and hired workers for the new company.

Click here to vote for your favourite Small Business Challenge semi-finalist in this year's contest

In its first year, Charmed Playhouses generated close to $700,000 in revenue, Mr. Leavitt says. The price tag for his custom-made playhouses, which are designed by an architect, start at $7,500 and can go as high as $100,000-plus.

"Right now in the market you'll find other luxury playhouses but they don't have the same type of interior finishes that you would find in an actual, beautiful home," Mr. Leavitt says. "With our playhouses, every part is beautiful and amazing so kids will want to be there."

Charmed Playhouses clients include the likes of NBA player Stephen Curry, who has two young daughters. Mr. Leavitt says he sent the basketball player a sketch of a playhouse based on San Francisco's Golden Gate Bridge (Mr. Curry plays for the Golden State Warriors). While Mr. Curry didn't go for that design, he did ask Mr. Leavitt to build his kids a playhouse.

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In addition to building outdoor homes that are comfortable enough to live in, Charmed Playhouses is also working on licensing deals and developing a lower-priced, modular design based on a shed-like structure with interchangeable facades. The company has also started a playhouse furniture line.

Mr. Leavitt predicts about $5-million in sales this coming year. To meet this anticipated jump in demand, Charmed Playhouses will need to buy new equipment, invest in significantly more inventory, and hire more carpenters and office staff.

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