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Barron County revises development strategy
Photo: BCEDC Executive Director Dave Armstrong believes internal growth will work better than an attraction policy for his rural communities.
A Barron County “gardening” effort aims not to grow produce, but rather, business revenues.
Focusing on Stage 2 companies (defined locally as those generating $750,000 to $50 million in annual revenue and employing six to 99 persons), the program’s goal is to help local firms reach the next level of their development.
The approach is called “Economic Gardening,” and it began about three years ago in Littleton, Colo. Unlike traditional economic development efforts, which often focus on attracting outside firms, it puts a focus on helping existing companies grow larger.
Florida was among the first states to test the concept, and it has adopted economic gardening as its primary strategy, as has Michigan.
“Usually in economic development, the cost is $30,000, $40,000 or even $50,000” to create each job, said Dave Armstrong, executive director of the Barron County Economic Development Corp. (BCEDC), which launched an economic gardening program in November. He’s not exaggerating. Last month, the Iron Range Resources and Rehabilitation Board provided Delta Airlines a $5.9 million forgivable loan to create 107 jobs at its Chisholm reservation center – more than $55,000 per job. “With economic gardening, the numbers are unbelievably low (about $3,000) considering what is put into it,” Armstrong said.
His hope is to achieve job creation success similar to the track record in Florida, which named its program “Grow FL.”
“It's all designed around the entrepreneur approach to economic prosperity. It revolves around revenue growth and job creation,” said Armstrong, who has been certified as a program manager by the Edward Lowe Foundation, which established the National Center for Economic Gardening program.
Economic development, like many other endeavors, can be pursued in a variety of ways to find the best path to success. For Barron County, where manufacturing is the largest industry, Armstrong believes the gardening approach has the most to offer. The group hasn’t turned its back on tourism, a past staple, but Armstrong said the time was right for BCEDC to evaluate its track record and redefine its future direction.
“I see a lot of economic developers run to trade shows and voice a message like 'move to Barron County.' I have yet to find that pool of companies waiting to move to Barron County,” he said. “We’re not turning our back on the attraction model, but I'm not going to spend thousands of dollars running to trade shows when I can put those thousands into helping existing companies grow here.”
Speaking from experience
Armstrong is not a life-long economic developer. During a previous career, he attended numerous trade events while founding and growing two firms in the healthcare industry.
American Medical Transport, a medical courier, was his first. The second, originally called Medworks Inc., was an on-site drug testing firm.
“I had grown the business about as much as I could by myself. I needed a partner or a large cash infusion,” Armstrong said, so he sold to a larger company. He stayed on and, during the next six years, led a merger/acquisition effort that brought 14 additional firms into the company. Subsequently, he directed the purchase of four mobile medical operations. In 2004, the entire conglomerate was sold. Armstrong then went to work for a competitor, but he had one stipulation: He wanted to work near family in Barron.
His involvement with BCEDC began when, as a Rice Lake city councilor, he was appointed to the group’s board. It came in the midst of the recession. Barron County decided to defund economic development. Soon thereafter, frac sand emerged as a new regional industry, and Barron County didn’t want to let the opportunity slip by. Retired banker Bob Missling was retained to work with industrial sand companies, and investment exploded. He also helped establish the BizStart program to help entrepreneurs launch new firms.
“It's gone over like I never thought it would. This year, 57 companies have enrolled in the program. So we got the start-up piece cooking,” Armstrong said.
About the same time, Armstrong learned about economic gardening during a conference at Rogers State University in Oklahoma. The concept of growing revenue to create jobs “caught fire” with him, he said.
Meanwhile, after two successful years at the helm of BCEDC, Missling was anxious to resume his retirement. The timing was excellent for Armstrong, who credits Missling for doing “a fantastic job.” He became Missling’s successor on Dec. 1, 2012, allowing him to introduce the economic gardening program to Barron County.
Tools for entrepreneurs
Big companies can afford to get expert help in many complicated areas that enhance top line growth. The same can’t always be said for Stage 2 firms.
“A 30-person company just doesn’t have access to the databases, market research and similar services that are needed for that,” Armstrong said.
The National Economic Gardening Team has developed a program called High Fidelity that bridges the gap. The closest branch is located in the Twin Cities. It offers assistance including web site design, search engine optimization, sales and marketing studies, client studies, developing new markets, optimizing web sites and redefining strategy. Clients can access its services on the Internet.
“Our program can put them on par with the big boys,” Armstrong said. “We’ve got everything covered from the start-up phase…to helping companies reach the next level.”
For established larger firms, BCEDC will launch a business retention/expansion program during 2014, likely working with Blane Canada Ltd. of Wheaton, IL.
“It’s a great program. Like economic gardening, it has received glowing praise from those who have used it,” he said.
BCEDC is committed to put six companies through the economic gardening program by the end of next year. The cost is $4,500 each. Participants are encouraged, but not required, to repay the sum.
“I’d like to double that for 2014-2015 based on a positive outcome. If the vast majority of them see a value and pay the $4,500 back, that would pay for another company to participate. It eventually could be self-sustaining,” Armstrong said.
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