indicatorGrowth Management

Growing beyond Alberta with Rocky Mountain Soap Company

By Dina O’Meara 11 December 2019 3 min read

When Karina Birch and Cam Baty decided to go into business in their hometown of Canmore, they had no idea their natural bath products would become such a well-known brand in Western Canada. As two self-professed naïve entrepreneurs, they had everything to gain when it came to building up Rocky Mountain Soap Company.

Almost 20 years later, the company has expanded from a single shop to multiple locations across Canada, manufacturing their 10 ingredients or less bath, skin and hair products from two industrial buildings in Canmore all while maintaining a commitment to transparency and quality to their customers. Their partnerships have grown, as well, from the days of getting financing for their business start to more complex deals and business advice on their growth strategies.


Growing pains meet strategic partnership

Like most owner-operators, the duo initially did everything in the business, from making executive decisions to helping pack inventory. At different phases, they would meet with their ATB relationship manager and go over their plans for the upcoming year, discuss where there might be some challenges from a financing perspective, and come up with win-win solutions on how they could get through those challenges to achieve forward projections.

At a certain point, the company needed to expand its manufacturing site and reinvest in product development to expand their line. Utilizing ATB’s owner-occupied program, they acquired additional bays for the needed capacity to grow, as well as acquired retail mall locations.

The program allows the person to come in at 20% loan-to-value, so the business owner puts down cash in but not as much as typically would be needed for an industrial real estate deal. The program also provides a longer amortization period, keeping more working capital for items focused on the business itself.

Rocky Mountain Soap Company used that funding to kick start their initial stages of growth until they started getting the critical mass of overall sales and profitability needed to see sustained cash flow on an on-going basis. It allowed the company to create a strong foundation on their balance sheet, where they had good retained earnings and predictable cash flow from a number of different, successful stores.

From there, they could rely on the successful businesses they had in Alberta to grow beyond our borders and finance additional locations in British Columbia and Manitoba at a reasonable value, allowing them to grow their brand further. The company also hired a dedicated controller, CFO, to evolve their plans to the next level, with more sophisticated projections and details.

And ATB was right next to them, offering more sophisticated cash management products and solutions, as well as the tools needed to support them where they reach out to larger partners. For example, when the company landed a partnership with a Canadian-based airline offering all-natural hand soaps on flights.

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Collaborating on a holistic growth strategy

Sometimes with growth, come growing pains. As the brand expanded beyond borders, challenges came up which required a fresh perspective and a new growth strategy. The company hired consultants to negotiate lease space in malls they wanted to be in after completing an analysis of traffic flow within a potential location and gather in-depth demographic information to make sure they are always setting themselves up for success. To help build brand recognition, ATB and Rocky Mountain Soap Company collaborated on the idea to invest in lower-cost pop-up stores rather than committing to long leases at high-cost locations.

It is easier to grow within a region where you have brand recognition and often less costly than when breaking into new markets. By ensuring you have a strong balance sheet at home before you expand outside of your traditional base, you can rely on that strong foundation.

Rocky Mountain Soap Company also have invested in digital marketing, not just in growing online sales but also collecting key customer data, such as where those sales are taking place and what led their clients to the online shop. The analytics have allowed the company to direct their marketing to a greater degree and build up brand recognition in new locations before actually setting up a brick and mortar store.

As they have grown, Rocky Mountain Soap Company has worked to create and implement strategies that mitigate their risk while leaving room to capitalize on opportunity. Having a partner who can match products and solutions along that growth curve helps the company measure their risks and avoid overextending themselves.

Naturally, there have been bumps in the road over the years. But Rocky Mountain Soap Company aligned themselves with partners who are invested in their success and remain committed to helping them recalibrate and adjust as the company continues to grow.

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