Manure Systems Inc. - A Case Study

The past few months Point Nexus has been doing much more business management consulting. This is immensely gratifying, as it allows us to use skills developed over the years to help solve business problems and devise new or different methods that can help business clients move forward.

Manure Systems Inc.

One such business is an agriculture based consulting and equipment manufacturer from Abbotsford BC that sells specialized systems for managing waste sludge that is a natural part of agricultural processes. His customers are agri-equipment dealers as well as direct customers such as livestock farmers and food processing plants.

In 2012, we completed a full Strategic Business Plan that was developed to clearly see and state the strategic direction the business needed to go to meet its desired business goals and objectives. Although the business was cash flow positive, the business plan provided a clarity around what financing would be needed to accomplish the strategic goals. We developed presentations that led to meetings with various financing agencies and a successful debt finance round from an agriculture related bank.

The strategic business plan also helped to open up discussions for trade opportunities including a trip to China to commission the first 3 of potentially 30 organic sludge management systems to one of the largest diary groups in China. This lead to introductions to four other large dairy operators in China that also have a global presence in the diary industry including Nestle Foods, Fonterra Foods and the Shanghai Bright Food Company.

In 2013, we are continuing to help the company with business development priorities including better government relations positioning with the Canadian Trade Commissioner Service and the National Research Council - Industrial Research Assistance Program. We helped develop the strategy for acquiring funding from NRC-IRAP for a research and development project in 2013 and are leveraging that into the potential for additional public and private funding for technology development and commensurate product line development for the company's Trident line of equipment.

KPD Consulting Ltd.

We are also helping open business development opportunities designed to help the company cross over from strictly organic-based sectors such as agriculture to mineral-based sectors such as mining and oil and gas as well as food processing companies. KPD Consulting is a new business entity that will approach the mineral based business because many of the customers in those sectors will not speak the same language as the agricultural and organics based industry. Also, even though organics associated with food processing facilities is technically closely related to the organics encountered in the agriculture manure industry, the optics for a food processing company is somewhat negative towards working with a company that works with manure. Consequently, KPD Consulting will be a better conduit for introducing the sludge management technologies and information to the food processing industry.

Let us help you.

If your company is interested in engaging us to help you develop business and management strategies that will help you develop and achieve you business and growth goals, please contact us to discuss our process and our fee structures. It is often simply a function of looking at things through a fresh set of eyes and then developing the focal point of the lens to see how to best achieve what is seen.

Depreciation Reports - The Aftermath

The Cry for Help from a Strata Resident

Richard Shatto, May 2, 2013

Yesterday, I got a call from the owner of a Vancouver Island condominium who had some questions and concerns over the "next-step" actions his strata council was proposing in the aftermath of his strata building assessment and depreciation report. He was heading that evening into the all-important strata meeting where they would vote regarding decisions about what repairs either did or did not need to be done.

(NOTE: Not the building talked about in this article)

While he didn't know the exact details of the proposal, this was the first meeting he'd been able to attend, word was out that council wanted to assess each resident the full amounts to fix everything the report had suggested, and to do them all immediately. This would mean an estimated cost (it usually goes higher) of roughly $20,000 per unit, or they could opt for $21,400 paid over 2 years, presumably with financing. Obviously, for this call, he was not displaying any distinct gratitude towards the government's mandated depreciation reports. 

His main question was, is the strata obligated to do everything immediately? I first explained that not being a lawyer, what I was about to opine would a legal one too. I went on to suggest I did not believe the depreciation report, in and of itself, obligated the strata to do the work it suggested and certainly not in an immediate or strict timeline. In fact, the strata may not be required to make any repairs if they chose not to, though, I strongly suggested, that was probably not the best strategy. My advice was that he and other concerned owners discuss creating operational and fiscal options for re-mediating the problems, perhaps on an iterative basis, say, doing one building one year, anther the next and so on. 

An interesting take-away on this story is that depreciation reports and their strategic aftermaths can be a mixed bag of good and bad, and much of that depends on the scope of the depreciation report itself. In this case, the strata had opted for doing an intensive building inspection to get a full read on the condition of their building and making the depreciation report itself more expensive (NOTE: as I've pointed out in previous blogs, doing an extensive inspection is not required).  In this case, an inspection was done and it turned up some bad news, envelope issues, that would cost some money to repair. And, while that leaves owners with some work to do and money to be spent, it brings the building up to the condition it should be. 

So, what if the depreciation report had chosen to NOT pay for the the inspection? The strata would have fulfilled its obligation to do the report, but it would not have known (or at least documented) the "gremlin" lurking within its building's walls. Incoming buyers of units would have been unaware of the potential costs and invested in a sub-standard property without knowledge of it.

In a situation where an inspection isn't done, and a problem is subsequently found, a legal question emerges its ugly head, who is liable? Should the authors of the depreciation report be liable for not finding the issues? Not because they investigated and didn't find it, which is always possible, but because they didn't look; chose to turn a blind eye. Or, should the strata be liable because they didn't require (read: pay for) a legitimate inspection that would have/should have found it? 

For this owner, now lamenting the nefarious report and especially the inspection that had found the problem, I advised that it was better for all stakeholders to know what the real condition of the building is. It's now a matter of working together with everyone to create a proper, workable plan and timeline to deal with it. The best possible outcome in my opinion, is a strategic property maintenance plan put together by a reputable property maintenance (not management, maintenance) company to take care of the long term needs of the buildings. 

It is hard to imagine this as a unique situation. There will be literally hundreds or thousands of stories like these over the next few years. Let's hope the government, property managers and strata councils have wisdom and prudence in knowing how to manage them. 

Does your strata need an inspection or a depreciation report? Contact Point Nexus Consulting for a discussion. To learn more visit our website: www.pointnexus.ca

Construction Variables for Renovating vs. New

13 Reasons Your Renovator Has To Think Differently

Richard Shatto May 1, 2013

This post is to help home owners who are considering remodeling think about what your renovations contractor needs to know that even new home builders may not when costing for a remodeling project.  Estimating costs for repair or remodeling is different from new building costs due to these following factors which may be present in any given repair and renovations project.

1. Equipment usage curtailment due to the physical limitations of the project, with only hand-operated equipment being used.

2. Increased requirement for shoring and bracing to hold up the building while structural changes are being made and to allow for temporary storage of construction materials on above-grade floors.

3. Material handling becomes more costly due to having to move within the confines of an enclosed building. For multi-story construction, low capacity elevators and stairwells may be the only access to the upper floors.

4. Large amount of cutting and patching and attempting to match the existing construction is required. It is often more economical to remove entire walls rather than create many new door and window openings. This sort of trade-off has to be carefully analyzed.

5.Cost of protection of completed work is increased since the usual sequence of construction usually cannot be accomplished.

6. Economies of scale usually associated with new construction may not be present. If small quantities of components must be custom fabricated due to job requirements, unit costs will naturally increase. Also, if only small work areas are available at a given time, job scheduling between trades becomes difficult and subcontractor quotations may reflect the excessive start-up and shut-down phases of the job.

7. Work may have to be done on other than normal shifts and may have to be done around an existing production facility which has to stay in production during the course of the repair and remodeling.

8. Dust and noise protection of adjoining non-construction areas can involve substantial special protection and alter usual construction methods.

9. Job may be delayed due to unexpected conditions discovered during demolition or removal. These delays ultimately increase construction costs.

10. Piping and ductwork runs may not be as simple as for new construction. Wiring may have to be snaked through walls and floors.

11. Matching ‘‘existing construction’’ may be impossible because materials may no longer be manufactured. Substitutions may be expensive.

12. Weather protection of existing structure requires additional temporary structures to protect building at openings.

13. On small projects, because of local conditions, it may be necessary to pay a tradesman for a minimum of four hours for a task that is completed in one hour.

All of the above areas can contribute to increased costs for a repair and remodeling project. Each of the above factors should be considered in the planning, bidding and construction stage in order to minimize the increased costs associated with repair and remodeling jobs.

For more information about Point Nexus for Home Building or Renovating go to pointnexus.ca

Quality of Depreciation Reports

Not all Depreciation Reports are created equal

By Richard Shatto April 2013

At this year's 2013 Vancouver BuildEX Conference I had a chance to talk to a number of firms who were offering Depreciation Reports. After a few conversations it became clear each was attracted to the business for different reasons. Some had been in the strata business for some time, understood the nature of buildings and believed in the need for the reports. They seemed serious about offering a service that would stand the test of time. Others, unfortunately, were obviously in it because they had seen an opportunity to make some quick profits and had decided to jump on it.

Understandably, with all BC strata's required to have a depreciation report by December 2013, the clock is quickly ticking. Such deadlines are like blood in the water and inevitably sharks begin to circle. One group I spoke to, founded by a group of lawyers, had obviously seen the business opportunity. They had hired some junior engineers and had developed their "marketing machine". Their business plan was to quickly pump out as many depreciation reports as they possibly could at the lowest possible price. Clearly, though they talked quality, they were selling price.

But, like virtually all things in business and life, we tend to get what we pay for – and consulting is no exception.

There are three main variables that need to be considered when making any purchase: Price, Quality and Service and it's important to decide where you stand on the balance between the three. And, as noted above, not all consultants and consulting firms are the same, so keeping in mind the number of people depreciation reports affect and the long-term repercussions they have, you need to choose carefully for your strata's needs.

You may be in a strata that decides a report without all the bells and whistles is okay, though at a minimum, you should be looking for a study that provides quality building data and an analysis that will stand the test of time. Whatever your criteria, communicate these preferences and don’t be afraid to have a discussion on intelligent ways to get what you need.

Definitely be wary of companies promising you champagne on what is obviously a budget for beer. Price, Quality and Service are always related. If you are considering a company that has given you a low price, no matter what their qualifications, ask yourself what is being sacrificed? What factors are being limited? Is there a quantity of time? Is it type or quality of analysis? Is it inspection data? What are they limiting that could lower the quality of the service? Perhaps the building inspection be limited to a walk-about or the data analysis will be database look-up rather than a professional quantity surveyor's analysis. And, if you do go with the cheapest price you may even sacrifice both quality and service.

Point Nexus is committed to helping our clients find the right balance between Price, Quality and Service. And, to assure you of a truly professional report we don't cut costs on either the inspection process or the data analysis. It it sounds too good to be true, we encourage you to let your common sense be your guide. After all, it is your investment and your decision will affect a lot of people for a long time. 

Depreciation Report Certification

Wait, you're not engineers!?

A question we’re commonly asked about Depreciation Reports is whether they need to be completed by engineers.

The answer is no.

It is certainly true, a certified Engineer’s report will most likely be a part of your final report, but that is along with many other important certified technicians’ audits, inspections and reports. These all compile to make up a full depreciation report.

What about Liability issues?

For information that needs an official stamp and certification, we bring in the professionals. Our team uses engineers, quantity surveyors, as well as many more technical experts who provide their information. Teamwork is the key and that’s exactly the approach the BC Government which is responsible for mandating these reports, assumed would be happening.

The point of the Depreciation Reports is that owners have a clearly written document that properly and accurately communicates important information about your building. And, as building and communications experts, we do that exceptionally well. We’ll produce a factual, properly certified report that is clearly written, easy to understand and simple to navigate, as well as easily update-able in three years.

The bottom line is, you need a report that has all the certified information required to keep your building maintained and updated to protect your property investment. Please don’t hesitate to hire Point Nexus Consulting to get that. 

We understand buildings... and we'll help you understand yours. Hire us and we’ll make things perfectly clear.

Depreciation Report Obsolescence

Why many depreciation reports are immediately obsolete.

Richard Shatto April 2013

Inspection-Deficient Depreciation Reports:  Many depreciation reports are either completed now or in process. Unfortunately, many condo-owners may still be vulnerable to many unknown and possibly high-cost repairs. That's because depreciation report producers are not all recommending an actual "building inspection" to complete the reports. Instead, engineers and appraisers are doing a superficial  walk-around-the-property which is inadequate and then merely reporting on what they determine from review. To fill in gaps, they then go back to their offices and within minutes, can "look-up" and insert generic data from national building statistics databases which make "assumptions" about the building. These database insertions serve to merely "ball-park" the condition of your building.



Future Problems: Unfortunately, any specific building issues that are there and could have been found in an actual inspection will not be, but could (and probably will) eventually come home to roost and cost unsuspecting owners a bundles of money...far more than the few thousand dollar cost for a legitimate inspection.

Point Nexus does full building inspections for its depreciation reports. We can also do a building inspection as an add-on to existing depreciation reports, but that frankly is rather backwards. So, though an up-front building inspection will cost a little more, it could save tens or even hundreds of thousands of dollars in the future. We believe it's definitely worth it and it's what the depreciation reports were intended to do.



Point Nexus provides a combination specialized disciplines with professional partners to first inspect your building and then produce high quality, readable reports. You can have confidence because we are:

• Experienced Professionals: Providing management for building inspections and assessments using professional vendors such as engineers, real estate appraisers, mechanical technicians and quantity surveyors, each professionally certified for quality work. 
• Construction Experts: Providing construction, remodeling and remediation services for commercial and residential strata buildings. Our staff also provides high level committee leadership for business and political associations related to the Building, Planning, Development and Remediation.
• Professional Writers: We have years of strategic business management experience authoring professional project reports, strategic plans, presentations and proposals.

A Team Approach: We assemble a team of in-house and external professionals including: structural engineering firms, a quantity surveyor (for the number crunching), a team of technical service firms for the variety of building systems. We are also able to partner with a Canadian Acceptance firm to help finance strata owners.



If you would like to reduce your risk, control your future expenses and have that important piece of mind, contact us to arrange a no-obligation discussion.