View Single Post
      07-26-2012, 09:26 PM   #1

Drives: 08 Mitsu Eclipse Spyder GTP
Join Date: Oct 2009
Location: Edmonton, AB

iTrader: (0)

Question starting a business in Alberta - any advice welcome !

Hi gents !
after 6 years of living in Edmonton and Fort McMurray, and realizing how Alberta is the place where just about anyone can start a business and be successful, the wife and I have decided to start something...
without going into too much details, a French company I know really really well (based in my hometown) exports their (somewhat high-end) products in North America through an official distributor.

Right now, he has no presence here, so here is my chance to get involved... he wants to start something here, and my connections to the French factory / manufacturer and being from the very place where these products are manufactured gives me (he & I think) an edge on someone who would just join the business with no background whatsoever.

I know that there are some very successful people on this forum, and i'm sure some of you could spare some advice...

first, from the business / paperwork aspect of things... registering a business is easy here (thinking of going as a corporation), but what else is involved with it that could come bite us in the a$$ later? I've started a list of things to do and various accounts to set up (GST, payroll, WCB possibly, insurance, etc). Any specifics to watch out for? Any recommendation on who to contact for that in Edmonton, i'm thinking as far as a good, reliable accountant for small business, possibly a lawyer (more on that later)?
We do have friends who run their own business (he as a contractor, she as a gas station owner), and have gotten some directions from them. I am also researching online through various websites, but anything more wouldn't hurt either.

now for the distributor <-> dealer relationship... so far our conversations have been limited to one phone call (albeit very encouraging), he's away for 1.5 months, which also works out well with the timeframe we had in mind, so i'm just trying to get as much info as possible to get educated before we start discussing again. He's the official distributor, which means (until i hear differently) that we would HAVE to go through him to import the goods to Canada. I will contact the French GM to confirm that.
Assuming so, I believe we have two options (please correct me if i'm wrong): either work for his business as employees and carry his brand name / logo / products. We take advantage of his knowledge, network, import capabilities, etc, but we are still employees, have to go by his rules and only get a small piece of the pie... which goes against the whole idea of starting a business to begin with...

Or, we become an independent dealer, no different than say a car dealership... buy the product from him and then run our own show locally. More independence, but also possibly more risk if things dont work out that well.
Has anyone dealt with something similar before? In this case, what kind of agreement is typically required between the distributor and the dealer? That's where the lawyer comes in... The distributor is obviously doing this to make money, and so are we... i dont want to end up with the sh*t end of the stick because of some fine prints in a 250-page contract...
say the distributor buys the goods for $100 (to his door) and market price is $150, how do the $50 get split? (I realize this is a very simplified way of looking at it)... in other words, what's the typical mark-up that a distributor (who also sells the product directly to the public in his area) would take on his costs when selling to his dealers?

My wife and I are not totally ignorant (Ph.D / P.Eng), but that doesnt us make us business-savvy either. Working in construction management for the last 6 years has given me the confidence and knowledge to approach all different kinds of people, from laborers to millionaire clients to engineers, and dealing with unpleasant situations at times, so i'm not overly worried about that part. But all the legal, financial and business aspects can get confusing and also take a business down very quickly if not handled properly... any advice from successful (or not) entrepreneurs here is welcome.

lastly, i'm not sure yet if we should go all out right off the bat, rent / lease a space for a showroom and set up a shop, or start off slow with a website, brochures, business cards and contacting potential buyers while maybe still keeping our current jobs to get a feel for the market...
Selling the product is more based on the experience than the mass consumption (think Bentley dealership vs. Honda), so being able to see, feel, experience the product might be more important for the potential buyer than the price itself (that's where a showroom would come in handy...)

anyway, i just realized i wrote a book here ! we're at a point where we think that it's "now or never"... 30, no kids, some substantial savings for the rainy days... I know that if we don't get involved, the distributor will set up a shop regardless within 6 months or less and be successful... so we might as well be part of it...
and if it doesnt work, well, we're in Alberta... i'm confident i could get a job back real' quick and get back on our feet within a year...

I'll welcome any advice you may offer, and if this turns out to be a successful venture, i might even offer a M3post discount one day

Thanks in advance,