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Diversification key to family business’ success

Malcolm Fisher, owner of Compact Appliances Limited in Sackville, New Brunswick

Compact Appliances Ltd.

THE CHALLENGE

As a fourth-generation entrepreneur, Malcolm Fisher was a natural businessman. But that didn't mean that success for the Sackville native would come easily.

In 1982, after their foundry business went bankrupt due to an adverse business climate, Mr. Fisher and his father saw an opportunity to set up Compact Appliances, a distribution company to provide alternate heating options for home and commercial use.

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But as the company grew, he soon realized that expansion would be limited by the size of the accessible market: primarily the Atlantic region. Since he did not want to relocate, he had to come up with an alternate way to expand the family business while keeping true to his Maritime roots.

THE BACKGROUND

Mr. Fisher's great-great grandfather laid the foundation of the family business by establishing a hardware business, Emerson & Fisher in Saint John, New Brunswick, in the late 1800s. The family then bought the Enterprise Foundry in Sackville, and moved there in the 1870s. As the business grew in the 1970s, over 400 people were hired to make all variations of cooking and heating products.

Mr. Fisher joined Enterprise Foundry in the 1970s, but a drastic downturn in their business in the 80s, due to the oil crisis, rising interest rates and fuel prices, resulted in bankruptcy of the company in 1982.

From there, the family picked up the pieces and started exploring niche areas in which they could use their expertise. In 1983, he and his father saw an opportunity to supply the Atlantic Canadian Market with alternative choices for heating homes and businesses and so they started Compact Appliances.

Over the years, the distribution business prospered and became one of the major distributors for heating and accessories in the Atlantic region. They now operate out of a 40,000 square foot facility which houses their inventory.

THE SOLUTION

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To grow the business without re-locating, Mr. Fisher realized that instead of selling more units of the same item to a small market, he could diversify his product offerings. The strategy worked well as the company added more heating and related products to its portfolio.

In 2001, he added another business venture in Exeter, New Hampshire, U.S.A., to replicate his distribution business model to address the Northeastern market in the U.S., which is home to more than 30 million consumers. The U.S. business is now bigger than the Canadian operations and continues to expand.

He also began other types of businesses including a prosperous, full-time blueberry farm, which started as a hobby of farming blueberries and he also embarked on a venture in the biomass energy sector.

THE RESULT

Mr. Fisher attributes his success to the company's business model, which stresses offering a diversified portfolio of products, hiring good people and then empowering them to excel and grow. This has led to a very small turnover and a team of loyal employees.

Another ingredient to his success has been constant reinvestment in his businesses, community and the next generation of Fisher family members – though currently of his four children, only one is directly involved in the business.

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Mr. Fisher stresses that he is building the business not with an exit strategy to sell the enterprise, but to hand it over to the next generation and for them to take it to the next level. Moving forward, he anticipates the transition from his generation to the next as one of the important challenges facing the venture.

Special to The Globe and Mail

Nauman Farooqi is a professor and head of the department of commerce in the Ron Joyce Centre for Business Studies of Mount Allison University .

This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.

Join The Globe's Small Business LinkedIn group to network with other entrepreneurs and to discuss topical issues: http://linkd.in/jWWdzT

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