How Grupo Avance found a niche in helping local companies tap markets south of the border
After moving from Mexico to the United States, Juan Ramirez received an MBA from the University of Minnesota and spent part of his career working in corporate America, including stints at IBM and General Electric. But an entrepreneur by nature, he eventually began to ponder other paths.
"I started looking at different potential opportunities [to start new companies] and didn't realize it was staring me right in the face," Ramirez says. "Someone told me to look at the trends, and I realized that the trend was that emerging markets were growing in Latin America, and in the United States within the Hispanic markets."
In 2003, he leveraged his experience and cultural knowledge to launch a consulting firm that helps companies expand business in the Mexican, Latin American, and U.S. Hispanic markets. Called Grupo Avance, today the Minneapolis firm includes a handful of executive consultants who on average have 15 to 20 years of international business experience.
The firm's expertise has proven particularly welcome in the Midwest, where smaller companies often lack Hispanic marketplace savvy. But the opportunities are hard to ignore: In the first quarter, the state's exports to Mexico alone were valued at more than $290 million, topping those to Japan or Germany and putting Mexico at No. 3 overall, according to the Minnesota Department of Employment and Economic Development.
While Grupo Avance works across many industries in the Hispanic marketplace, Ramirez says, most of its clients come from manufacturing. Companies that make unique products tend to do well in Hispanic markets, and "made in the USA" carries a lot of weight, too, he says.
Passport to growth
But Grupo Avance isn't the right fit for just any company looking to grow its business. "We are very selective about who we do business with," Ramirez explains. "Customers need to be ready to take this journey."
The firm starts by helping clients identify their market opportunity and figure out whether it makes sense to extend resources into the Hispanic marketplace. It does this by determining the competition, finding out where the market entries are, and providing a competitive analysis for that area. Should a client want to proceed, Grupo Avance helps it find business prospects, identify customers and business partners, and customize U.S. products for the Hispanic market. Throughout the process, it also helps clients overcome language barriers and cultural issues.
"Relationships are huge in this market, and building those takes a lot of time," says Ramirez. "We visit trade shows, call customers, and eventually the clients want to try the products."
Burnsville-based Northern Tool, which makes a wide selection of products — from consumer goods to industrial and construction equipment — enlisted the help of Grupo Avance when it decided to target Mexico. "Because Mexico is so close, it's a good target area that we wanted to see if we could find distributors that would take our product and bring it to their network," says Bill Perrizo, vice president of international sales at Northern Tool, which has 80-plus retail stores in the United States and a large catalogue and Internet business.
After their first meeting, Perrizo and Ryan Kotula, one of the company's owners, knew they wanted to tap into Grupo Avance's experience with the Hispanic marketplace and culture. Since starting work with Grupo Avance in 2010, Northern Tool has made a number of advancements in Mexico. It's found particular success in the agriculture and construction industries, selling sprayers, generators, pressure washers, air compressors, and water pumps.
While the process of reaching these new marketplaces is not a short one, Ramirez is committed to staying with his clients throughout each phase. "Doing business outside of the United States is always more of a challenge," he says,
Ramirez built Grupo Avance's business model around sales and business development, which he says has been working very well. He attributes much of the company's success to his small staff of seasoned executives, many of whom bring specific industry expertise to the table.
Today, Grupo Avance also helps companies market to the growing Hispanic population in the United States, and provides Spanish language translation for complex projects.
When Ramirez was in the initial stages of starting Grupo Avance, he took full advantage of whatever help was available. For instance, the nonprofit Metropolitan Economic Development Association, which provides consulting services to minority-owned small businesses, helped him early on in developing the new business. It also introduced him to the U.S. Small Business Administration, which provided an express loan that helped launch the firm. "That was a huge help in the beginning," he says.
An SBA loan also helped the firm finance a client's market research study. Financing programs for small exporters are available from the SBA's U.S. Export Assistance Center in Minneapolis (sba.gov/content/us-export-assistance-centers). "The whole idea behind these programs is to assist exporters with the necessary financing that they need to grow international sales and, in the process, spur job creation," says Carlos Sosa, regional trade finance manager for the Office of International Trade, of which the SBA is a part.
Ramirez has also relied on other institutions, such as his alma mater, the University of Minnesota. Grupo Avance has worked with MBA candidates from the U of M to provide services such as pricing strategy, giving the candidates hands-on experience while providing Grupo Avance with quality work at a reasonable price.