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Vincenzo Guzzo’s tips for strengthening your business by branching out

As an only child, Vincenzo Guzzo said it would have been “awkward” to pass on getting into the family business. His father, who immigrated from Italy to Quebec in 1967, was one of the pioneers of independent multi-screen movie theatres in Canada and Guzzo has worked there as long as he can remember. One of his earliest memories is picking up popcorn from hard-to-reach spaces at his father’s theatre when he was four years old. When he grew up, Guzzo went to school to study law and business and was able to apply that knowledge to help run his father’s company when he returned.

But that didn’t mean Guzzo, now president and CEO of Cinemas Guzzo, the largest cinema operator in Quebec and the third-largest in Canada, couldn’t try his hand at other sectors. The family business has since branched out into construction, restaurants and medical research. Yet, these endeavours beyond the projector room and the snack counter are not just random personal interests — they all feed on and feed into the company’s key strengths.

“My number one piece of advice is that your diversification has to have synergies with your core business,” said one of the two new Dragons on this season of CBC’s Dragons’ Den. The trick, though, is understanding what makes for great synergy, and what only looks good on paper.

Guzzo’s first step outside the movie theatre business was construction. Bricks, mortar and interior design might seem far removed from movies, but multiplexes are, of course, buildings. By launching a construction arm, Guzzo was able to save money while building cinemas, offices and other commercial space that better met his company’s needs.

“With the same money, we could get a much better result and were better able to explain to architects why we needed things a certain way,” he said. “My competitors’ costs in building theatres is four times more expensive. One of the first things I did was get rid of the designer. It’s not hard to have taste. I’ve built enough and renovated enough to do it myself.”

Considering that half of the revenues at Guzzo’s theatres come from the hospitality side, restaurants were another natural extension. Both Giulietta Pizzeria, a concept the company started rolling out this summer, and Porchetta, a chain of Italian pork sandwich spots, keep the menu simple by leaning on core ingredients — much like a movie theatre snack bar leans on popcorn. “The question I ask myself: Can I take a product, standardize it, make it the best possible product and multiply that formula across the board?” 

Small-town Canada is small-town Canada

The synergies are not always about suppliers, skills and market knowledge. Geography, for example, can play a part. It’s no coincidence that Guzzo’s restaurants are located close to Guzzo’s cinemas — dining out and movie-going often go hand in hand. “Rather than renting out spaces where people put a pizzeria next to our theatres, we decided to do it ourselves,” he said.

If you go to small-town Quebec, it’s probably a microcosm of small-town Ontario or small-town Manitoba.

The cinema empire, which now has 10 locations, with three more openings planned for this year, flourished in suburban and small-town Quebec, which guides Guzzo’s plans for expanding into other parts of Canada. “If you go to small-town Quebec, it’s probably a microcosm of small-town Ontario or small-town Manitoba. Small-town Canada is small-town Canada,” he said. Urban markets, Guzzo admits, may be trickier. “We have to figure out how much will we have to adapt to the markets versus how many of those markets will just adopt our concept.”

Image of Vincenzo Guzzo sitting in a chair.

Constant market research gives you advantage

Expanding beyond Quebec will present Guzzo with new challenges: for example, learning the applicable legislation in other provinces and learning what might make non-Quebec consumers different. But that’s where Guzzo has another piece of advice: constant research can give you an advantage, even over “so-called” experts. With an economics degree from Western University, he’s able to do cost-benefit analyses on sectors he’s unfamiliar with. With his law degree from Université du Québec à Montréal, he’s able to negotiate the finer details of contracts by himself. So if he wants a design for a new restaurant, he’s prepared to put in the time himself to come up with one.
“The biggest problem with our society today is that everybody’s become highly specialized. They’re really good at what they know; the problem is they don’t know that much,” Guzzo said. “As an entrepreneur wanting to diversify, you’ve got to know everything or, if you don’t know everything, you’ve got to go get yourself educated, which has a cost.”

Since most entrepreneurs can’t be involved in every aspect of a diverse portfolio of businesses, they’ve got to be able to build structures and teams that will flourish even when the leader takes a step back. “After I’ve analyzed it, reanalyzed it and structured it to my image, then the people are trained to respect that vision and then it’s handed off to somebody to run,” Guzzo said.

Personal passions and personal talents do ultimately play a part. The Guzzo’s medical division flows out of the family’s philanthropic efforts. He will donate money to help research efforts in cancer, for example, but will also take options on the findings to bring medical treatments to market. Guzzo encourages his offspring — he’s got five children between seven and 20 years old — to bring him their ideas, whether or not they dovetail with the existing family businesses.

“If it makes sense, maybe they can start that part of the business and they can run it,” Guzzo said. And what kid could pass on that?

Paul Gallant is a Toronto-based journalist and editor who writes about Canadian small- and medium-sized enterprises, international business, urban development, travel, technology and social change. His work has appeared in The Globe and Mail, the Toronto Star, Canadian Business, The Walrus and many other publications. He is executive editor at BOLD, an international travel magazine for Canadians.