Ok, it’s time for an update, and SO much has happened.
After reading through my last post to begin this one, let us start with an update on our Children’s face shields. The good news is we did make them, and they turned out fantastic. The unfortunate part of that was we had to have them shipped twice from our supplier overseas. An oversight with our application caused the Canadian border office to refuse entry of our order of 100,000 face shields and other cargo. We had to bite the bullet and chalk it up as part of our learning curve. Also, there were way too many other things going right for our team to worry about the setback. So before I get too far ahead of myself, let me back up a bit.
As we continued into November, we had some significant developments. We were now in discussion with our now colleague Chris on assisting him with his operation of Children’s masks. Chris had organized some local media support and tried his best to raise awareness for his PPE business.
However, suddenly something came up that got all of our attention. The federal government had issued an RFP (quote request) on order for 10 million masks. The demand was steep, and the expectation impossible at this point
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After some deliberation on a strategy and discussions on the timing of machines arriving and the logistics and cost associated with us getting our manufacturing established …could we do it all in time? The opportunity was too great not to try, and this bid could be a massive boost to establishing ourselves. So, we said. Let’s do it.
And we began work on the government bid application.
The requirements for qualifying were beyond intense and lengthy; if you are not as experienced in such bureaucracy as our colleague Ray you might even be intimidated, but we dove in and got to work. And to make it work, we had to identify and comply with several factors, including a complete facility overview and our standard operating procedures. We also needed to explain our supply chain and raw materials, specification and certification on our equipment, product lines, expansion plans and finally, our financial protections. It was a steep hill to climb indeed!
Working on this document was our focus for the next few weeks, and it was a great exercise in taking stock of our operation and putting pen to paper with a lot of critical details.
At this time, we recruited another professional into the fold; Daniel Song. Daniel is CSA by trade and made a pivot into the PPE industry. Alex and Dan were already friends and almost bumped into each other when they discovered they had common business goals. Daniel was a natural fit for our organization and a godsend, for that matter, in helping us round out our application qualifications.
With Daniel’s contribution, we could secure professional footing to compete as an honest start-up company. He already had a contract with Home Depot in the US and could help with the masks we would need to fulfill the bid order if we fell short on our own with the machines and manufacturing capacity. It was game on for the RFQ; if we were to win the federal bid, we could follow through without issue.
Also, it ultimately allowed us to buy some precious time that we used to begin the importing of our next shipment of equipment for Breath Medical Group. All the while looking further down the line to the reality of opening up our very own PPE shop.
As we began the plan to put our best foot forward and compete for the bid, it was time to put some serious thought and consideration into the next level of detail. On the list was committing to a few things such as branding, marketing, and our messaging.
We finalized our style guide and logo treatment; after deciding on the perfect crown symbol, we would eventually put on boxes and masks. Our choice of colour pallet is reflective of institution health care or, as some call it, ‘hospital green.’
Defining the company business model was a critical part of the pre-planning of the website and other digital assets. We had to consider the multifaceted approach to business our pivot led us into frankly. Combined with our growing knowledge of the machines we were importing, we have certification and compliance processes. It was clear that we could adopt a top-down approach to servicing the PPE industry. Our policy was to become agnostic and become a resource for financing and leasing equipment and consulting on manufacturing and supply chain support.
After we were happy with this next phase of our branding, we started to target customers and build a database. We adopted an attitude to planning for our success regardless of the outcome.
From this point on, we began researching all things PPE and exploring multiple avenues of those needing PPE and how we could get it to them. We recruited a list builder’s help and began identifying and tracking private hospitals and clinics across the United States as potential leads and sales targets.
Soon the machines we had ordered for Breath Medical Group had arrived in our local port. After the goods cleared customs days later, Alex and his team delivered the machines to Kelowna. They spent the next couple of days installing the equipment into Breath Medical Group’s facility. This installation would prove to be a valuable exercise in developing hands-on experience with calibrating the machinery. With knowledge comes power, and setting the equipment up to run at optimal performance for our client was a significant milestone for us in gaining some understanding. Breath Medical Group now had the adequate resources to fulfil the government order they had won months ago and continue to operate.
Things were looking up for CMG, and we were feeling good as we coasted into December. We focused on selling the inventory of face shields we had in storage inside Ray’s home garage.
With the Christmas season well upon us, we wanted to connect with retailers and distributors and the public on our product. So, we built a website for this called buyfaceshieldsonline.com
(Which incidentally we couldn’t believe was even available.) We set up some social media and attempted to place some ads. I can tell you this was the first rub with trying to get any ads established on Facebook. The system was not allowing us to do much by way of ads, which was tricky to navigate.
It was around now we also recruited the help of Russ Serion, Ray’s younger sibling. Russ is a resourceful businessman with previous sales experience, and we were happy he was involved. With his help, we were able to pull together a database of suppliers and distributors nationally that would potentially be interested in our face shields and other PPE, for that matter.
I created new sales sheets to speak to buyers, and we worked on this list for the next several days. Initially, we had a lot of interest in our shields due to the larger size and the shield’s dual fog component. However, mostly we had an interest in the Children’s face shields we had designed and were also promoting. These are the same designs mentioned in our previous post, the cute Piggy, Bear, Duck and Dino! As we had hoped, our original designs’ reaction was resonating, and we had a few orders pending their arrival. We thought they would be arriving at the port of Vancouver any day.
That’s when we had an issue with the Canadian Border Authority. (CBA) Because CMG had hit the ground running with so many details along the way, we had overlooked the fact that we had a different variation of our company name on our official documentation. Since we had committed to the order, we had registered ourselves as “Crown Mutual Medical Group,” and our shipping manifest read “Crown Mutual.” Unfortunately, they could not help, and the shipment was sent back to China and reprocessed under the correct information.
Of course, this was a setback for us in that it took the wind out of any pending face shield deals we had struck and left us in a lurk with a lot of inventory we needed to move. In the end, the website did trickle through a few local sales, and we tried to make the best of it with the other custom-themed shields we had in our possession.
We also made some time for a show of goodwill, and we connected with the Vancouver Autism Network with a donation of masks. It was a tremendous feeling of gratitude to be able to give back in even the slightest way.
The next priority we tackled was to ensure we could sell our PPE to the United States. To do so, a company must register and meet the strict requirements of the Federal Drug Authority (FDA). At this heightened alert, the FDA had issued a EUA that stands for Emergency Use Authorization to fast track the application process. We had no trouble qualifying under these terms, and we paid the very handsome licence fee to make it official; Crown Mutual Medial Group was now registered with the FDA to sell our mask to the USA. It was a new level of potential.
Our database and list-building of hospitals continued to grow, and we were ready to start servicing some sales calls, which brought us to the new reality of having to make sales calls!
We would be calling more so into the states, and we started to work on our approach, tone, and overall strategy for success. We wrote up scripts and talking points. Ray, Russ and I put our best foot forward in making calls based on our connections.
We all understood the undertaking needed to be structured and adequately supported with a sales team and a marketing budget. Neither of these was an option, and we had to make the most of our efforts internally.
As the days continued, our research began to uncover the market, and it was soon apparent how many people across the country had felt the winds of change and jumped into the PPE space. We discovered everything from T-shirt companies to camping good stores to tax accountants who had applied for an MDEL licence and were authorized to sell PPE. This intel led us to outreach to these companies and compared pricing, and we were successful in making some great relationships that would also lead to future sales.
Alex was intensely going back and forth with his manufacturing contacts on the machines we were having custom-made for CMG. He would send us videos of the team on the ground working on the devices and testing them before arriving in Canada. Into the last part of December, the machines came in port, and these bad boys were going into our operation. We just had one issue; we were still looking for a suitable location to comply with the Health Canada guidelines.
After much deliberation and networking, we landed in a couple of different spots and for a good reason. Our new machines were to be in an industrial zone in Delta, BC, called Annasiss island. The devices would be assembled in a state-of-the-art cleanroom environment also used for food manufacturing. Our surplus of the inventory we stored in a warehouse in Richmond would serve as our new depot for shipping our face masks.
Over this extensive period, the government issued no less than three extensions to the deadline for the government bid application, which was a golden opportunity for us to get our camp set up and further-more to hone the application. We spent a lot of time going over the paperwork to ensure we could be competitive. We were highly confident we had the best machine making the best product in Canada, and the projections all said we had a shot at this federal bid if anyone does!
Now that our machines had arrived, we were in a prime position to set up the factory and begin producing our masks. It was a great feeling to see the machines and start to realize the pieces were falling into place for our factory. Alex and his crew, with their newfound experience, had the machines set up succinctly and outputting masks in a matter of days.
With the operation now tangible, we could fill orders and any products manufactured by Crown Mutual Group. We didn’t need to worry about sitting on our surplus because now we had more than enough inventory, and it was time to think about how we can start selling masks.
Once we finally submitted our bid application, it was a feeling of great relief to have pulled all those very involved details to a fine point and ultimately helping us formulate our clearer vision moving forward. We were very confident in our approach, and sure we were competitive in our pricing.
Now we wait.
And wait, we did because the days turned into weeks and weeks into weekends. (Stolen from happy feet) the one thing you can count on when working with a federal government agency is items take time. After we applied, we tried our best to forget it even happened and not determine our success. We were already deep into market research; we had built out targeted databases, and we were busy chasing active leads.
And we were not alone; as mentioned previously, we had another client in from the Special event industry. The owner, Chris, was in a similar boat in that he had also put forth a quote to the government that would make the difference between a struggle to survive or the only client your business would need to succeed.
That said, we felt it was a case of being proactive and although the quote to manufacture masks for the government was our top priority, it was not the only facet of our business model. We were also in business to work with clients like the former event company from a financial leasing standpoint.
Companies that endeavour into uncharted territory or appear to have a risk factor and traditional banking institutions tend to shy away. PPE fell into this high-risk category. This category is why companies depend on lenders like ourselves to see these investment endeavours through.
Be assured we have our processes too, and unfortunately, the issues against his debt position continued to stack up against him. We worked on several different ways we might be able to support him outside of receiving a portion of the government bid. Without getting into the finer details of the business, they didn’t have a lot to offer guarantees on a return. Their main channel for success was in the same game we were also playing. It would come down to do or die situation for Chris.
Then the news hit. We didn’t win. And no one we knew had won ether. That included Chris, and it wasn’t soon after our discussions with him would end on a sad note. Another one bites the dust is the saying.
I won’t tell you we weren’t disappointed to have not received the bid; it’s hard not to try and settle on the fact that we could it made if we only would have won the government support. But the truth is, it was a relief to get out of the holding pattern and move forward with new leads already accumulating.
Things intensified within our group. We had to revaluate how to move 10 million units in our warehouse. Not to mention Alex had already pulled the trigger on more two more machines. To use the term “we were in it “ is to say we were very engaged in how to turn this opportunity into success, and it was all hands on deck as we collected ourselves and prepared for the coming weeks ahead.
We were determined to set ourselves apart from others in the space by learning the PPE business inside out. We friended a company from Toronto called Kinectrics. They are a testing facility for certifying almost anything. They now had a heightened mandate for face masks, and we’re the go-to experts for testing the raw materials used to manufacture them.
We formed a repour with a gentleman named Elan Thomas. Kinectrics were a great sounding board for speaking to others in the PPE world. This encounter was the first of many new alliances we would form as we discovered our PPE network.
Post the decision by the government to overlook several new PPE companies who applied for this federal bid, there were rumblings of a collective movement among others in the space to form an organization that could represent this newly re-imagined industry and lobby for the support needed.
As we continued to build a strategy for other sectors we could service, we also began drilling into a marketing plan that could speak to our target audience. At this time, our primary targets were procurement managers and supply chain managers for hospitals and clinics.
Our plan to reach out to the masses would include, among other things, the social media website LinkedIn and some of the added reaches they offer through tools like ‘Sales Navigator.
We now had a list of hospitals and clinics that covered the entire USA, and it included emails; it was just a matter of servicing this database. We used Klavico to set up a mailer campaign and blasted out our introduction to the masses. This campaign triggered a variety of responses, and it was time to work the phones.
We plotted to do the work one call at a time. It was here that we recruited a little extra help from a junior sales associate, Ron Guthrie. Ron is young and eager to get into the new PPE business with us. We quickly trained him on our masks and everything he would need, then threw him into the fire. If anyone reading has done anything close to this work, you know it comes with a fair share of rejections. The man did his best!
We plotted ahead for days without any significant results. Ron was a natural at picking up our dialogue and came across just fine to the people he did manage to reach. It wasn’t going to be easy for us. We soon tapped into CAGE applications for qualifying with different state governments south of the border, and things were much easier said than done.
We also realized we needed to ensure we could get our PPE across the border without issue. So, we stepped back and decided to set up a shipment of masks to Nevada and the office of OWVI. We needed to see how involved the process would be. Low and behold, it wasn’t easy at all and took weeks to arrive. We required specific export licenses and few other official documents to see it through. Still, we eventually got a pallet of masks into Nevada and now officially serves as a US depot to distribute our face masks regionally in the states.
As we actively sought business in the states, we contacted an agent of the Canadian government that assists companies in connecting with US counterparts. However, even with these substantial resources at our disposal, it was tough. After a couple of solid weeks of working the list of leads both into the US and Canada, we discovered there was no clear path to working directly with hospitals, simply due to the vast layers of bureaucracy. We soon found an alternate network of dentists that we could supply with face masks. Or so we thought.
We quickly built up a database of dentists in important centres across western Canada and started reaching out. This outreach also coordinated with Alex introducing an introductory promotion to a friend’s dental chat group on WeChat. (If you are not familiar with WeChat, it is the Chinese Facebook on steroids connected to a billion people on a slow day.) We suddenly had a flurry of activity from the local dental sector and started moving cases of masks out the door. It would prove to be a way for us to break into the market and get the word around that we were open for business.
COVID 19 advisors were now telling people to wear two masks if they were unsure of the mask they were wearing. It was clear to us the mask phenomena would not end soon.
Although we prepared a multitude of creative messaging, it became apparent how restricted we were in what we could say. All of our first attempts to run ads failed miserably, and we soon learnt how sensitive the Facebook and LinkedIn algorithm was in accepting any advertising around PPE. Anything that resembled medical or made any medical claim was forbidden. In the spirit of creativity, we ended up trying to use an image of metaphors like a Life Preserver and a Light House to try and convey we had tools to help save you …Made in Canada. Although we had a limited budget, we did receive a hand full of leads to the best of our ability.
Because we had now seen some success with servicing dentists, we ran advertisements with a slogan of ‘3-Ply Protection for Professionals’, which seemed to generate traffic and produced some phone calls. This effort was not in vain, as while we were getting the word out on the product, it brought some other local payers in the PPE distribution space to our attention.
Although we intended to sell face masks by the truckload, we knew we couldn’t do it alone. Understanding our position as a manufacture and not a sales force was an essential part of that. First off, we couldn’t afford to fund a sales team; we had Ron and Russel, sure, but we needed to be realistic. Ultimately, we want to make the masks and have other people, namely distributors and suppliers, service their existing client base. We were interested in moving a lot of units and needed to think outside the box.
Where we stood, we needed to be both sales and manufacture and the efforts intensified as we progressed.
The phone was ringing at our office, and the networking was paying off, in that we sold masks over the following weeks to a variety of companies, including HBO MAX, PDG and the Physiotherapy Association of British Columbia.
We soon connected with a significant distributor out of Saskatchewan called Apollo Management Solutions. Apollo would buy our most significant order to date to fill a contract servicing the province’s corrections facilities. Apollo would buy several pallets of masks from us and line us up with other arrangements they were actively pursuing. These were the types of relationships we were trying to make.
At this time, we also realigned with our East coast colleague Tony Lawand and his PPE brokerage company Armorgen. Tony was having success utilizing his network and brokered several PPE deals through the pandemic. We continue to work with Tony and his Toronto network and have since shipped multiple pallets out to an east coast warehouse for distribution.
COVID 19 was now in the news as a mutated strain was suddenly rampant and creating second and third waves of infection in populations previously avoiding the virus.
I can tell you; it is a little strange to hear news like this and not be somewhat conflicted. This horrible thing going on around us is not stopping. Yes, we are trying to help, and yes, also we are a for-profit company. We are excited to offer a face mask that will protect everyone, and we hope to benefit commercially from it. It’s a paradox, I suppose.
Moving forward, however, I can safely say that the process we undertake to ensure our masks exceed ASTM standards and are comfortable to wear is entirely by design. And we stand beside a quality Canadian-made product. We stand behind all the compliance we have in place and are proud to take a position of authority with testing and product safety.
That said, we had a lot of products. More products than other resources, for that matter.
We took a step back and formulated a plan to use the inventory we have in excess to create some ‘earned media’ opportunities. We decided to donate ten pallets, equivalent to 600,000 masks, to under-served communities across the country.
We were full throttle with creating educational and ad content and trying to establish a presence online, forging ahead. We connected with a digital ad strategist to gain some traction with some online ads. We saw leads trickle in, and folks were all over our website.
As mentioned before, there were rumblings of an organization forming a collective voice for the PPE industry. The organization was called CAPPEM ( Canadian Association of PPE Manufactures ). Their mandate reads, “The Canadian Association of PPE Manufacturers dedicated to protecting Canadians with the best possible PPE manufactured in Canada by Canadian owned and operated companies.”
It was a no-brainer for us to form an alliance with CAPPEM and begin to share resources with an entire network of people in the PPE industry. This network of like-minded people with different professional backgrounds and circumstances now into the PPE space. Suddenly we were all connected under one roof, and we could see a new perspective of the industry as a whole.
One of the first things we took the initiative on was participating in supporting the island of St. Vincent. Spearheaded by CAPPEM member John Rawlins of the BigNANO company, CMG contributed to over a half-million masks deployed to the region. Due to volcanic ash and such, the territory needed PPE, among other things. We now participate in a CAPPEM weekly group discussion on advancing the industry and ensuring the government will support Canadian manufacturers.
Meanwhile, we were making strides with the inventory we had, and it was slowly but surely being sold. We met a company called uniPHARM who is a distributor to 400 plus drug stores across the country, including Rexal, Shoppers Drugmart and Pharmasave. As everyone we encounter, they were thrilled to work with a local company operating as we were.
As we were almost a year into the masking phenomenon, the reality was a lot of companies had come and went. uniPHARM revealed to us they were phoning companies to re-order to only get disconnected numbers of a clear sign there were out of business. We were in it for the long haul and more, so we wanted to be proactive in messaging; this messaging resonated with suppliers.
To prove we were in it for the long game, we invested in more machines. Our new folding earloop machine and the N95 folding cup machines would soon arrive. This addition to the factory would be a game-changer. We also cleared enough of our pallets to consolidate the operation into one location, and with that, we are now solely at 560 Ebury, Delta BC.
We just finished the new folding N95 box design, which incidentally, because we cannot indicate that NIOSH has done the certification, we call the new mask the CMG N95.
There is no one in the country with machinery we possess, except for the company in Kelowna that we sold it to and installed for them. It’s a great position to have this multifaceted business model support a different aspect of the sector.
That said, we have a long way to go!
As we work through May, our priorities remain on awareness. We launched a PPE podcast called LET’s FACE IT – PPE PODCAST to create a platform for long-form discussion on the industry.
We’re also working on a mainstream media campaign to introduce the business to a broader audience of potential buyers.
While we started with grand visions of success through the ambitious government bid process, we have since humbly reduced our expectations to accept all the small victories along the way and settle into the work ahead of us. As far as that work goes, I cannot personally think of anything else id rather be doing.
