Small Businesses and West Broadway, VancouverPear Tree Education
Pear Tree Education
6th Jun, 2015

Small Businesses and West Broadway, Vancouver

Small Businesses vs Vancouver

Small Businesses and West Broadway, Vancouver

Vancouver’s West Broadway is a place which I consider to be ‘Death Alley’ for small businesses. Look down West Broadway and you’ll see building after building of empty commercial properties for lease. You’ll also see business after business destined to go out of business not too long from now. Let’s take a look at why this is and the problems facing small businesses in Vancouver.

Vancouver isn’t like most major cities, like New York, London, Rome, etc. While small businesses in any big city face exorbitant property prices, the problem is only compounded by the limited number of commercial streets in Vancouver. In a city like New York, you can find a small business on pretty much any street in the city! The city is overflowing with locations for starting a business, not just on the main roads, but on side streets, back streets… everywhere in fact! Not so in Vancouver. Vancouver is so strictly zoned that you can pretty much count the number of commercial streets on two hands:

  1. West Broadway
  2. Granville Street
  3. Robson Street
  4. Commercial Drive
  5. Main Street
  6. Davie Street
  7. Burrard Street
  8. 4th Avenue
  9. 41st Avenue

I use the names of these streets loosely, because large stretches of these streets are residential areas with no businesses at all. And, yes, there are many other streets with small businesses, but the number of blocks allocated to commercial zoning is just a fraction of the entire street, e.g. 10th Ave, Arbutus St; you can even add Granville St to this list! City planning here makes no sense, as it is founded on the original concept of the city, i.e. that Downtown Vancouver and West Broadway are the shopping areas and the rest is pretty much just for residential use. Streets like Macdonald St. should be small commercial streets connected to the main shopping streets, but instead they are residential streets.

Market forces of supply & demand naturally dictate that limited commercial areas equal high property prices. For a retail space on West Broadway cost about $50 per square foot, you’re looking at between $10,000 – $25,000 per month. What kind of business can afford such high rents? Answer: Chain stores / large franchises, banks, insurance companies, medical practices (doctors, dentists), government businesses (liquor stores, school board), charity stores, and gas stations – all practical but, let’s be honest, not the most electrifying businesses. What does West Broadway have lots of? All of the above. Consequently, shopping on West Broadway is kind of… ‘meh’. Bland. You’ll have no problems finding a doctor or dentist, though.

Yes, it also has small businesses. However, when you look at many of these businesses, you can’t help but notice that:

  1. They are selling things that can’t possibly cover their rent prices, let alone make them a profit! As such, they seem to lack any real entrepreneurial savvy.
  2. They don’t invest any money on their interior/exterior look, either because they can’t afford to or they don’t realise the importance of image. A dirty facade and awning over a restaurant’s front door don’t inspire confidence in the cleanliness of the interior. What’s wrong with getting a bucket of paint?!

The lack of investment in property image seems to scream, “We didn’t have much money to start with, and we’re not planning to be here very long.” And, in fact, they generally aren’t around for very long. Year after year, we walk down West Broadway pointing out new small businesses that we immediately know will not be around 12-24 months from now. They might move around doing some kind of dance with lower-cost, short-term leases, but they ultimately close down.

Creating a long-lasting, successful business in Vancouver, especially on a street like West Broadway, is not an easy thing. It’s a hostile environment. However much much it costs for your rent, times that by 12-24 to calculate the amount of money you’ll need before you open your doors to cover your costs and earn your money back. You can’t experiment with a fanciful business idea and a limited investment and expect to be in business 12 months later. The rent alone will put you out of business.

Currently, West Broadway is undergoing tremendous wave of development work. Like 4th Ave, West Broadway was traditionally a commercial-only zone. I’m not sure what was going through the heads of the folks in City Hall or property developers back then, but creating one-floor businesses is an incredible waste of land! Finally, building owners are realizing that by demolishing their existing one-floor building and building 4-floor multi-purpose blocks with ground floor retail and residential apartments above they can make a lot more money! We could consider this not only densification, but also gentrification, as the original buildings were extremely old and poorly built to begin with.

The new buildings being constructed along West Broadway are pretty nice, indeed! This is fantastic for the street’s image; and, it’s great for families that can’t afford to own a house, but don’t want to be forced to move out of Vancouver. The only issue for entrepreneurs is that they are never going to be able to afford to start a small business in any of these new buildings, as the property prices are even higher than they previously were. Additionally, most of these buildings lack 2nd floor office space. Where do non-retail business owners go?!

Again, supply and demand play a defining role. Why would any property owner be content having a one-floor building with a small business in the retail space, when they can build a new four-storey building and have a chain store take over the retail space? There’s really no incentive for property owners to provide affordable retail or office space for small businesses.

While there are parts of Vancouver that do have some nice small business areas (4th Ave, Commercial Drive), these streets will eventually face the same kind of development work as West Broadway. The result to residents in Vancouver will be the homogenization of businesses. Unless the City of Vancouver creates many more commercial streets, you’ll end up with the same old chain stores. You won’t find the kind of unique boutiques that you’d find in New York or London, which is a real shame, because Vancouver has a lot of business potential.

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