Competition

There has been competition but it did not last. There is not enough business in town to support two moving companies. "There is enough work to keep busy, but if there was competition I wouldn’t be able to keep the guys on for a full year. I keep all my employees on, and if it is slack, they’re guaranteed seven hours a day in wages."
Fred advertises his services in community papers and in a southern airline magazine. Word gets around about the art gallery. Fred notes, "I get letters asking for a catalogue very regularly. But I try to explain that I can’t because the inventory changes all the time. Some pieces come in and go out within five minutes or an hour, or some stay a year."

Financial Information

Fred has financed the vast majority of his business himself. Any business expansion has been accomplished by reinvesting earnings. Several minor government grants were used to cover a small portion of expenses associated with in his interest in art.
Fred discusses his philosophy. "I worked my butt off but I never drew a salary for ten years. I just took some money when I needed to buy something or take a vacation. It has only been in the last five years that I have taken a salary. I never took grants because I know what I have is mine, and I earned it with sweat, tears, and blood. It wasn’t given to me and I can hold my head up and say that’s mine." Fred does shows in the United States to promote the art. He explains the extent of government grants he has received, "One year it cost me $29,000 to finance a tour and I got $2,200 from the government. Another year I received $1,500 when we took an artist down south for a whole week’s show. We paid for his airfare, accommodation, and meals for ten days and we sold a few carvings."
Fred’s brother and the office manager are in the process of putting the accounting onto computer. Fred generally knows the financial picture and does not look at monthly statements. He says, "I trust my brother to keep me above the water. He keeps a very close eye on all our expenses."

Towing the day's catch on a sled.

Reasons for Success

The factors that have contributed to the success enjoyed by Coman Arctic Ltd. include using common sense to develop a reputation for good service, a reasonable pricing strategy, relying on personal experience, and taking pride in delivering high-quality service. Fred has made the policies of his company a reflection of his personal attitude about the way he would like to be treated. He also has a long history of supporting the community through charity events and by holding a political office.
Fred has capitalized on his past work experience in developing his current business practices. He feels strongly that he received a lot of opportunities because he decided to work in the North. "I don’t think that a southern company would have given me a chance without the education that they always ask for. I think education is very necessary in today’s world and both my kids will go to university, but there are exceptions, too. I think that a lot of bright people in this world do not have a formal education. Their education is on the road."
One important philosophy he follows is reflected in his pricing strategy. For example, he prices his art to sell quickly. He feels that he can turn over twice as much products as his competition. He is also willing to bargain. Since he pays cash for his inventory, he is able to generate good returns on his investment through the higher volume of business that he does. With regards to the moving business, he uses the rates set by United Van Lines as the guide. He does offer advice to those people who have to pay for the move themselves and are not having the move paid for by the government, which is the usual case. "We’ve helped a lot of people that have had to pay their own way out. We cut prices and give them information about airfreight and how to cut corners. I may even suggest that they don’t use the moving company in the south because it is cheaper to rent a truck. I’m talking against myself because I’m losing that money."
Fred delivers good service and ensures that his staff follows this policy with the customers.
"You have to give your customers good service. I tell the fellows to pack the customer’s goods like they’re packing their own things. You would want to receive it well packed and in one piece."
We train our employees. We have our own way, which is much better than the United Van Line’s way, which I have mentioned to the head office."

I have refused to deal with some United Van Line agents because they don’t pack properly. Packing for shipment by air is different than if the move is from house to house. In the North, we pack for shipment by jet to a Twin Otter, and into a small settlement where furniture and the boxes are likely thrown around. We also separate our shipments into freight and personal effects. We use heavy cardboard, blankets, bubble paper, and shredded paper to wrap furniture and other goods."
The reasonable prices and high standard of service have made it difficult for other competitors to gain a share of the moving business. Fred states, "We’re hard to compete with once we show our customers our storage facilities and explain our packing methods. Our building is heated and has smoke detection. If the air gets too warm or if it gets too cold the alarm goes off. I have a motion detector that sets off an alarm if someone tries to pry open a window or enter the building. It’s connected to the fire hall; a call goes to the RCMP immediately and then to me. We also have insurance on the facilities."
The art business is competitive because of his pricing strategy and the types of products that he purchases. Fred relies on personal experience built up over the last sixteen years to select the pieces that he thinks will sell. He notes, "There are people who like abstract carvings but the big money is in realism and nice pieces."
Fred has also established himself as an active community member. He has sat on town council for four terms. He says, "I create a lot of shit sometimes and some people are scared of me but it’s usually when someone is trying to pull the wool over the eyes of the community. I want to see development here but it has to be fair." He is a member of the Chamber of Commerce, has assisted the RCMP, and helps with local projects. Fred received awards recognizing his help in improving police-community relations, his work with a sports camp, and his financial assistance in making possible a parish hall renovation.
"I’ve had undercover agents work for me busting people with drugs. I sometimes give them apartments or vehicles to use to help keep drugs out of the community. The sports camp is for local kids. In 1990, ten university students were brought in to put on sports programs in baseball, soccer, and other sports. I helped organize that with the RCMP."
When asked why customers use his services, Fred replies modestly, "Because they like me. I smile. I don’t know."

Areas for Improvement

Fred would like to train more of his staff in the proper techniques of packing and he would like to spend more time developing the art gallery. He notes, "Right now I rely on only two men who are fully trained in packing. If they got sick, then I would be slowed right down, but it takes time to teach. I’d also like to go into art more since I really enjoy that. I would need a couple of million dollars to do it properly but I think I could make it pay."

Environmental Friendliness

Fred is active in minimizing the impact his businesses have on the environment. "We try to recycle everything we can and we’ll burn what we can’t. We try not to burn anything that’s going to be toxic and usually it’s just cardboard paper. We pick up the cardboard deposited by the sealift operations and try to recycle it. Finally, we supply garbage bags and pick up shredded paper from any office who calls us, and we reuse it."
His interest in Inuit art supports the community and their way of life through his art gallery. Further, he sees opportunities for growth in this market through increased tourism in the North. The increase in tourism will only work, though, if proper environmental protection measures are taken right from the very beginning. A big attraction of the North is its natural unspoiled beauty.

Sustainability of the Business

An economic slowdown, Fred feels, would affect his businesses. "We would feel it, but we don’t have everything in one basket and most are essential services. Some would slow down but others wouldn’t. The janitorial business is steady because it has to be done every day and generates the same revenue winter or spring. The moving business might drop if program budgets were cut. The art gallery is definitely susceptible, but lawyers and doctors do continue to buy. If things were bad, all our guys would do anything to keep going, including digging ditches or washing windows."

Advice to new Business

It takes a great commitment to get a business off the ground in the North. People who want to start a new business should look at what role, if any, government subsidies will play in their businesses. Fair pricing over the long term is important to the business and its reputation in the community.

 

Successful business people enjoy what they are doing. Finally, Fred sees a role for government in business, which should include controls on the number of competing businesses starting up in a small market.
Fred believes that there are many obstacles to overcome for new businesses in the North. "It takes a lot of guts to make it in the North. You have to work much harder than business people do in the south. The costs are higher, competition is tough, few skilled people are available to work, and markets are small. If you’re in a community of 600 to 900 people, then that’s pretty much your market. If you start a small store on the outskirts of a town down south, then you’ve got 20,000 people. You have to try and get local people coming in and coming back."
Once the business is established in the community, then it is important to maintain a fair pricing strategy in order to have a good business reputation. "We always get the new businesses that give a good price. They say, ‘We’re going to give everybody a break and we’re going to charge $30 or $35 dollars an hour.’ Then two years later their prices are up to $50 dollars an hour, which is what the other guy they kicked out was charging. So it’s a vicious circle when greed sets in."
Fred’s personal convictions would not allow him to use government subsidies to any great extent in his businesses. He comments on the problems that subsidies can cause for inexperienced business people.
"The big question today is whether or not you can start a business without subsidies from the government. A fellow gets $20,000 from the government to start a little business. Next he orders $20,000 worth of goods and sells them and has $25,000. He’s doing well so he decides to buy himself a nice new skidoo for $7,000 and a few other things. He has $14,000 left but that’s not bad. Then he starts ordering more goods and before you know it he notices that he doesn’t have much on his shelves and no money in the bank."
A new business can’t make it like that because you have to keep your shelves stocked and only spend a little of the profit on yourself. A lot of people spends their working capital and their profit and are bankrupt in six months or a year. You have to work hard, limit personal spending, and put most of the money back into business. It seems that if the money comes too easily then a person does not appreciate it and looks for more from the government when the money dries up."
Fred is very committed to his businesses. He has fun just coming to work.

He says, "I’m here from 8:30 in the morning until evening. When I was single, I used to work until 1:00 in the morning packing in the warehouse. I cleaned floors on Christmas Day. As long as I can pay my bills now and take a trip once in a while, I’m happy. I enjoy my art. I don’t have any art at home because then I would want to keep all the pieces and it would be difficult to sell them at the gallery."
Fred’s main advice to new businesses is to meet a need in the community that no one else is meeting. "See what the place needs and then go for it. Be prepared to work hard and try not to reap any financial awards right away. Put everything back into the business and realize it takes time to make a business work. Don’t give up."
Fred feels strongly that the new businesses should provide products or services that are not already available in the community. "There’s room for every little business, but I would like to see it controlled. We don’t need ten plumbing, carpentry, hauling, or contracting businesses in this community or any other small community. I think competition should be controlled in the North." The market plays a role in controlling the businesses that survive but the present cycle – new businesses being competitive for a few years and then charging the same high prices that the original businesses were charging – is frustrating because there seems to be no long-term benefit to the community.

Future Development

In the short term, Fred would like to market the janitorial service positions using a video. It would introduce prospective employees to the type of working conditions they could expect if they decided to work in Iqaluit. In the long term, Fred plans to retire and pass the business on to his daughter once he has taught her the business and she has received university training. He would concentrate on his art business and expand the facility to include workshops. He would like to bring artists in to learn from master carvers. His job would be to think of ways to make money to finance the project. He plans to stay in the North.
The future of Northern expansion, is through economic development, population growth, and tourism in Fred’s opinion. Tourism is the wave of the future, he believes. "I think it’s up to the people in the North in every hamlet, town and municipality to develop projects to bring tourists here. We have visitors from all over the world who come and visit our parks. They buy our arts and crafts. It is our responsibility to explain how these tourists are expected to behave in order to protect our environment, but we can all benefit."

Summary and Conclusions

Fred Coman is a self-made man who has made his businesses a success because he has followed his personal beliefs. His guiding philosophy is treat others the way he would like to be treated. Fred seized business opportunities that made sense to him. He lived frugally and reinvested the majority of revenues earned in his businesses. Until recently, he did not take a regular salary. This philosophy allowed him to avoid bank financing and government grants to any great extent. He recently took a loan to pay for 30% of the cost of a new building and he has received several small grants in support of marketing his artists’ work in the south.
His reputation in the community is excellent. Fred is seen as a friendly person who provides good service for reasonable prices. He is willing to negotiate prices for artwork or moving services. He is one of about four business people in the community who quietly stoke the fires of economic development with little government involvement.

 Fred loves his work and is very committed to it. His wife helps him balance the time spent at his businesses and with his family. He admits his habits have changed since he married. Fred plans to continue with his art project and develop it more fully, especially when he retires.
His staff numbers approximately twenty-three and there is very little turnover. Fred pays a competitive wage and is sensitive to the needs of those employees who still hunt and fish on the land. He encourages open communication and makes himself readily available to discuss problems. He passes his high standards of service on to his employees and encourages them to handle their customers’ good like their own. He inspires their loyalty and commitment through his own example and feels they could weather any economic downturn together.
Fred has a close relationship with his brother Mickey, who has worked with him for many years.
Mickey handles all the accounting matters and keeps a close eye on expenses. Projects are brought in on budget with Mickey’s constant monitoring of finances. Mickey assists Fred with some of the operations and in hiring janitorial staff. Concern for the environment is reflected in Fred’s policy of recycling paper and cardboard as much as possible. He asks businesses in the community to pass on their shredded paper for use in his moving business. Another aspect of his concern for the community is his support for local artists, which enables them to keep a part of their culture alive. He is a patron of several artists and finances their living expenses so that they can practice their craft. He takes an interest in local politics and sits on town council. Fred also supports local charity events, including summer sports camp for the local children. In these ways, Fred is making his own mark on the community of Iqaluit.