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Incubators give big hand to small businesses

By Timothy J. Gibbons
Published by Florida Times-Union on November 11, 2002.

The cubicles lining the small room are empty on a Tuesday afternoon, with just a few handwritten nameplates giving any hint of who usually sits at the desks.

The quiet is fine with Ken Coleman, manager of the Micro Business Incubator on North Myrtle Avenue: He's happier with his clients out on the streets, out building their businesses.

"We're here to give them the tools they need to succeed," Coleman said. "It's up to them to use them."

The First Coast is seeing increased interest in organizations providing small-business owners with the tools they need, as incubators slowly become part of the development landscape in the Jacksonville area: Two sites are under construction and another two, including Micro Business, have opened their doors.

Incubators are something like a mixture of an office park and a business school for entrepreneurs. Clients -- usually newly started businesses -- typically get cheap rent, but the more valuable part is the nontangible assistance, ranging from seminars on bookkeeping to help in devising a business plan to contact with venture capitalists.

"We're more like consultants than landlords," said Al Rossiter, president and chief executive officer of the Technology Enterprise Center, Jacksonville's oldest incubator, which opened in 2000. "It's easy looking at incubators to get focused on the physical facilities. We're like the physical plant for a university. It's what's inside that's important."

Nationally, incubators have been around for decades -- the first incubator opened in New York in 1959, according to the National Business Incubation Association -- but the incubation industry didn't take off until the end of the 1970s. The U.S. Small Business Administration heavily promoted the concept throughout the 1980s, and the number of incubators exploded during the tech boom of the 1990s.

There are now more than 800 incubators in the United States, the national association says, up from 12 two decades ago.

Two kinds of incubators can be found on the First Coast, demonstrating the range of approaches incubators use.

The Technology Enterprise Center on the Southside and the Business and Emerging Technology Accelerator on Amelia Island both strive to help technology-based companies succeed. FreshMinistries' Beaver Street Enterprise Center and UrbanCore Enterprises Inc.'s Micro Business Incubator on North Myrtle Avenue are focused on trying to revitalize their neighborhoods.

Selecting a niche is a good move for incubators, national experts said, because it lets them know what tools they need to have on hand.

"If you have a focus -- either on a certain type of company or a certain population, like women or minorities -- then you're working with people who have the same challenges, who are undergoing the same shared experiences," said Meredith Erlewine, director of publications for the national association.

Coleman's Micro Business Incubator, for instance, wants to help minority contractors, leading the center to offer courses in things such as blueprint reading and bidding on government contracts -- subjects much more important to the clients it's looking to attract than they would be to, say, a technology company that would fit in better at the Business and Emerging Technology Accelerator, known as BETA-1.

At BETA-1, a for-profit incubator on Amelia Island, the focus is on clients who do "lots of life science-type things," President and Chief Executive Officer Ray Chauncey said, leading him to build a facility that includes a wet lab and a small manufacturing area where clients can produce prototypes.

"It's unusual to have that type of focus here," Chauncey said. "There's a couple other places in the country, but I think there's a need for it here."

BETA-1 has four clients leasing space in the temporary quarters it's occupying: Two of them make medical devices, one does software and the fourth is in telecommunications.

North Florida is good for technology start-ups, Chauncey said, because of the wealth of experienced, retired executives in the area, giving a pool of people willing to serve as company officers or board members. BETA-1 also can tap that network for companies that have been around a while and are looking to grow, a category that many incubators don't work with.

"I just think there's a need," Chauncey said. "There's a lot of people we're talking with who can't quite take it to the next level. They just hit a wall. They need some people added to their board but don't know where to look. There are people here who are retired, but how much golf can you actually play? They have strong talents, and somebody helped them, so they're willing to lend a hand."

The Technology Enterprise Center is, as its name implies, looking for technology clients as well, although it's not as narrowly focused as BETA-1.

"What we're looking for are companies that can grow to a very significant size," said Rossiter, the president of TEC. "We're not looking for small businesses. We're looking for embryonic big businesses."

That focus dictates what type of facilities TEC offers: Its complex in the Liberty Business Park in Southpoint has fiber-optic cables running throughout the place and features moveable walls, making it easy to modify office layouts as client businesses grow.

Incubators are important, Rossiter said, because entrepreneurs and inventors usually are experts in their field but might not know anything about running a business.

"When we meet with potential clients, we try to get an idea of their business model, to identify their market," he said. "Most breakthrough products are just that -- breakthroughs. They're not something you already see out there. We have to figure out if they're potentially viable. We help them lay out a roadmap."

Although they're working with businesses of all sizes, that's that same type of help provided by Coleman at the Micro Business Incubator and by Michael Bryant at the Beaver Street Enterprise Center. The Beaver Street Center, run by Core City Business Incubators on behalf of FreshMinistries, is the city's newest incubator, with the 25,000-square-foot facility still under construction. The construction work should be finished by the end of the year, officials said, but Core City already has started trying to help local businesses.

FreshMinistries decided the incubator was needed in the area after a city-sponsored study it requested showed that Jacksonville's inner city had a lot of assets that would make it attractive to industry, especially if they could see other companies surviving there.

"The problems facing the inner city are economic," Bryant said. "There's not enough money there, and that's the root of a lot of other issues."

The Beaver Street area is a good place to set up shop, Bryant said, because of its proximity to the highways, airport and waterways, as well as large potential workforce and a large number of distribution companies.

"We needed a demonstration project to show that locating in that area will work," Bryant said. "The incubator is a way to show that businesses will work there while also giving community ownership."

About 100 companies have approached Bryant about signing up with the Beaver Street Center, he said. Most of the interest is coming from service companies, including marketing firms, staffing and human relations consultants, and financial service providers. Some companies that do assembly work also have expressed interest.

The facility, which should be finished by the end of the year, also will serve as an "incubator without walls" for companies that choose not to locate in the center, hosting seminars and other learning opportunities that business owners from around the area can attend.

"We're reaching out to the entire business community, trying to establish relationships," Bryant said.

That's the same thing Coleman, at Micro Business, is trying to do.

"We're focused on the little guy, the guy who's working out of the back of his truck or on the dining room table or in the spare bedroom," he said. "We're looking to help nurture growth, to let them see how to get to the next level."

Minorities in Jacksonville have had trouble breaking into subcontracting work, Coleman said, partially because they don't have the mentors and contacts that other tradesmen might have. Through the incubator, the small concrete workers, carpenters and other skilled laborers have had the chance to work with larger contractors, who provide both training and access to jobs.

"It's given them an opportunity while helping the community at large," Coleman said. "Developing small businesses is a key ingredient in seeing economic development in the area."



About

This is a showcase of the work done by Timothy J. Gibbons during a journalism career now stretching back more than a decade.

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