Kurt Bauerly: "We have these niche buyers, and we want to find the 'watering holes' where these buyers are going."
"Economic Gardening" offers a fresh approach to regional economic development.
By Gene Rebeck | Photography by John Linn
A couple of years ago, Kurt Bauerly realized his company, e-ride Industries, had reached a plateau. The Princeton-based manufacturer of electric utility and passenger vehicles serves mostly niche markets in the United States, including military bases, national and state parks, city fleets, colleges, universities and airports—all of which operate maintenance- or utility-vehicle fleets.
Bauerly and his team at e-ride Industries knew these markets presented myriad opportunities. The trick was in discovering their market entry points. “We wanted to look at some strategic ways of finding growth, and we weren’t sure how to do that,” Bauerly said. His company also wasn’t in a position to spend a lot of money on consultants. “So when this (program) came up, it was a good opportunity.”
The program is Economic Gardening®, a trademarked term for a concept developed by the Michigan-based Edward Lowe Foundation. Implemented locally by GPS 45:93, a regional economic development organization representing five member counties north of the Twin Cities metropolitan area, the Economic Gardening effort provides small but established businesses with consultants who can help with strategy and customized market research.
GPS’s program, which launched last year with five regional businesses, received seed funding from the Initiative Foundation. Both the Foundation and GPS 45:93 see the program as a way to stimulate regional economic growth in already fertile soil.
The idea behind Economic Gardening “is about planting additional seeds in businesses that are already located within your community or region,” said Jeff Wig, vice president for economic and organizational development at the Initiative Foundation. “It’s about helping communities grow what they already have.”
The Initiative Foundation provided a $12,000 grant to GPS 45:93 for an Economic Gardening effort involving manufacturing companies. “Central Minnesota has a lot of small- to medium-sized manufacturers,” Wig said. “And they typically offer very good jobs for a rural area.”
Those manufacturers also can add solid economic development value. Wig contrasted that approach with trying to attract a large employer to a community, a strategy he compared to a “hail-Mary pass.”
“The ground game that moves you forward in a more consistent way is to develop the companies that you already have, and that are already there supporting your community,” he said.
The upside can be substantial, according to the Edward Lowe Foundation. Whereas spending 10 hours with a startup company might lead to the creation of one new job and a $50,000 loan, the same amount of time with a second-stage company could add another $1 million to their sales and result in five new jobs within a few months.
What’s more, “those areas that had Economic Gardening seemed to fare significantly better than areas that didn’t during the recession, for one,” said Richard Baker, 2016 president for GPS 45:93. “And two, because we are a rural area, 80 percent of our growth in employment comes from existing businesses.” So it makes sense to “support second-stage businesses that have an opportunity to grow.”
Rebecca Perrotti, this year’s GPS president, said the program’s CEO roundtables provided a confidential environment for Economic Gardening participants to share challenges and ideas.
And with more experience, there will be improvements. Most of the first-round companies say they’ll serve as mentors to the next round, “which will add a lot of value,” Perrotti said. Their insights also will help GPS refine the program in the second round.
For Bauerly, the program helped him uncover potential customers. “We looked at markets that we were having success in, and tried to find out who in those organizations were buying our vehicles,” Bauerly said. The consultant put together a list of contacts for decision makers in those organizations, as well as leads of potential dealers that might be interested in handling the company’s vehicles.
What’s more, the Economic Gardening consultant helped beef up the company’s website so that it appears higher in search-engine results. He also encouraged e-ride to establish a presence on LinkedIn. “We have these niche buyers, and we wanted to find the ‘watering holes’ where these buyers are going,” Bauerly said. LinkedIn includes interest groups in areas such as electric vehicles and sustainability; e-ride joined some of these organizations and groups, and now provides occasional and strategically positioned educational pieces. That way, potential buyers “will think of us as a source of information for our industry,” Bauerly said.
In addition to e-ride, the businesses that participated in the Economic Gardening program were Aurelius Manufacturing in Braham, Mora-based Northpost, Inc., Pine City-based Atscott Manufacturing and Stacy-based Wyoming Machine, Inc. Like e-ride, Wyoming Machine wanted to grow, enter new markets and diversify its business, said Lori Tapani, co-president of the precision metal fabricator and a member of the Foundation’s business finance committee.
The consultant provided about 1,000 contacts for businesses that are similar to the types Wyoming Machine works in now, as well as “industries that, based on what we do, we think we can be successful in,” Tapani said. One possibility is electro-medical equipment used in imaging, a growing market with a lot of potential clients for her company, which specializes in highly engineered products. Another consultant advised Wyoming Machine to update its website so that it could be accessed on smartphones and tablets.
Wyoming Machine paid $1,000 to participate in the program, a fee Tapani considers a bargain. “I’m sure that if we had been hiring individual consultants, we would have paid $15,000 or $20,000,” she said. It will take time for Wyoming Machine to develop the new leads into customers, but it has been in contact with several of them, and has bid on new projects.
As for e-ride, Bauerly said he’s seeing results, including the addition of a new dealer to carry his company’s products. Sales cycles typically take at least a year, since clients are mostly government entities, so it’s a bit early to measure success. But he did report that e-ride has made promising contacts and has gained suppliers.
Meanwhile, GPS is putting together a list of participants for the next round of its Economic Gardening program, which the Initiative Foundation will once again support. GPS should have the list assembled by late spring—prime time for gardening season.
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