Canadian Manufacturing

Small Ontario company makes big gains

When Great Circle Works President Mark Cahsens first told his parents about his new business idea, plenty of doubts flew around the dinner table.

Cahsens wanted to make and sell a colorful plastic snow sled.

“I had complete confidence in the product but my mom especially was very concerned,” he says.

The question that kept coming up throughout the evening was “are you going to make money?”

Cahsens’ parents didn’t have to wait long to get their answer. In 2009, just two years after starting, the company’s revenue grew from $50,000 to more than $1 million in revenues — a growth rate of 2,277 per cent.

That rapid expansion recently earned Great Circle Works top spot on PROFIT magazine’s ranking of Canadian emerging growth companies.

The Oakville, Ont. company has sold more than 350,000 of its Zipfy sleds in Canada, the US, Europe, and Asia.

Cahsens says a great deal of its success has come from running “a very lean operation” in a prime Ontario location.

Although the company does have some manufacturers in the US and China, it also outsources production to facilities across the Greater Toronto Area.

“Because we’re nearby, we can respond very quickly to surges in demand,” Cahsens says, adding, “effectively, we can ship right off of the machines.”

In turn, the payback from Canadian retailers has been good for cash flow.

The company also works closely with developers on new products.

“We can visit with engineers at the factories within literally an hour and make modifications in a short time,” Cahsens says.

Since launching the Zipfy sled in 2007, Great Circle Works has expanded its line to include toys such as puzzles, bicycles, and watches.

“We’ll also be launching a backpack, a leash and a helmet soon,” Cahsens says.

All the products have a running theme, which he calls “back to basics.”

He drew inspiration for the Zipfy sled from his own childhood in Montreal.

“We’d always go tobogganing a block away at the neighborhood park. That was what we did as kids. The winters are brutal, it gets pretty cold but you put on a good snowsuit, round up your friends and it’s a great experience,” he says.

That throwback to an era when children’s toys were about more than video games or the internet could explain the company’s success.

“Parents are looking for products that are fun, but at the same time smart — toys that bring children outdoors or get them engaged in something tactile,” he says.

It could also be why the company posted such rapid growth when many manufacturers saw profits fall.

Paul Ferley, assistant chief economist with RBC Economics, says other suppliers of toys, games and hobbies didn’t fare as well.

Sales growth for the sector was 17 per cent in 2007.

“In 2008, it dropped to 7.5 per cent and through the recession, it declined to 4.2 per cent,” Ferley says.

Especially in that context, he says the toy-maker’s 2,277 per cent growth rate is “impressive.”

“It’s a very large increase, essentially 20 times larger,” he points out.

Impressive, but not impossible.

“Even in an environment where you’re seeing falling demand for most products, there’s a possibility you can hit upon a product that captures the imagination of a child or individual or whomever and manages to really take off,” Ferley says.

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