This Alberta entrepreneur is building a stronger, faster growing business through diversification
Our client, Wade McLean, knows it takes ingenuity, planning and teamwork to build a business with the strength to grow even when times are tough
Every year, McLean sits down with his team at Strongfield Environmental Solutions to review how the past year has gone and brainstorm growth opportunities for the future.
Two years ago, one of his employees shared how he’d heard about drones being used for aerial vegetation spraying in Asia. After some research, McLean quickly realized drones could complement his Lacombe, Alberta company’s traditional business of land spraying to control weeds for clients.
Using drones to fly and spray in remote locations would not only save time and money, but also increase safety for employees. Just as importantly, adding drones to Strongfield’s line-up of services would further diversify the business, making it more resilient in the face of economic turbulence.
Always looking for new opportunities
“We’re always looking for new ways to grow and evolve,” McLean says. “It’s massively important for me to diversify the business. So, I’m always challenging the team to look for new sectors that could complement what we’re already doing.”
It was a collapse in oil prices in 2008 that convinced McLean his company was too exposed to the oil and gas industry. Successive downturns for the sector in 2014 and 2020 only served to make him more determined to diversify Strongfield in a variety of ways.
That’s smart business, according to a new survey of 500 business owners and decision-makers in Alberta and Saskatchewan conducted by our team at BDC. The survey found that diversified companies were twice as likely to have experienced high revenue growth (over 10%) during the previous year compared to non-diversified ones.
Overall, 16% of businesses that were diversified—by expanding into new markets, launching new products and services, or growing their customer base—achieved high growth, despite a difficult year in western Canada.
Market expansion fuels company’s growth
Strongfield is an example of a company whose diversification has helped fuel strong growth. McLean has worked not only to grow his client list and service offerings, but he’s also expanded geographically.
He’s opened offices in Medicine Hat, Alberta and Strongfield, Saskatchewan, the town near where he grew up on a farm and whose name he took for his company. Now, he’s looking to open a location in Regina and expand into the United States.
Market expansion is a key diversification strategy of growing businesses in Alberta and Saskatchewan, according to our survey. Among diversified businesses, those that pursued a market expansion strategy by selling outside of Canada or setting up operations in more than one Canadian city were three times more likely to experience high growth than their peers.
Got his first contract by cold calling a company
McLean, 38, took his training in plant science at the University of Saskatchewan and began his career as an agronomist before moving to Alberta to work for agri-food giant Cargill. In 2006, he went into business for himself, initially working alone with a truck and single sprayer.
He got his first spraying contract by cold calling a 1-800 number at Calgary’s Nova Chemicals, which remains an important customer. Soon, he was moving into environmental reclamation and erosion control after construction projects to complement his spraying operation.
“We kept getting more contracts because we were very focused on high quality work,” he says. “Our name got known for that and we were able to evolve from there.”
Today, Strongfield has 10 spraying rigs, two full fleets of equipment for reclamation and four UAV drones. The employee count varies depending on the season but averages around 10.
To further diversify his company, McLean is now exploring expanding into the U.S., where Strongfield could work during Canada’s winter months. The idea began during a trip to Texas, where he saw the possibilities of the market around Houston.
Eyeing to U.S. market
He turned to BDC Advisory Services for advice about international expansion. Rather than jumping into one region, his advisor recommended a market survey to see where the best opportunities would be south of the border. McLean agreed and is now hoping to begin getting contracts in the U.S. this winter.
However, he remains most excited about the drones, which he says will revolutionize the spraying business in Canada. While aerial herbicide spraying is legal in the U.S., it still has not been approved by Canadian regulators. McLean is working hard to change that, and he has won approval to spray from drones on a research basis.
While he waits for full approval, he’s using his drones for such purposes as inspecting installations and reclamation projects, and to do seeding.
Building a more sustainable business
In diversifying his business, McLean says he focuses on bringing more value for customers. In this way, he helps them while creating a more resilient business for himself and his employees.
“It helps limit our risk and makes us more sustainable. I’m always looking to be strategic with our operations for long-term sustainability.”
Among diversified businesses, those that pursued a market expansion strategy by selling outside of Canada or setting up operations in more than one Canadian city were three time more likely to experience high growth than their peers (23% vs 8%).
We also notice that a slightly larger proportion of businesses that diversified their offering were high growth. These businesses are characterized by that fact that they don’t depend on a single product or service for more than a fifth of their revenue and they serve more than one sector.
McLean says the COVID pandemic cost his company business, especially from companies in the oil patch that have been forced to reduce their budgets. However, Strongfield has still be able to grow by opening a new office and diversifying its product line.
“It’s affected us quite substantially, honestly,” he said. “But it’s also created some opportunities and we’re actually growing through all this, which is not all that common to hear.”