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Business incubator

Business incubator. The Case for Business Incubation In NW Georgia. NW Georgia Economy. Employment 16,240 jobs lost from 2008-2012 Population 14,282 new residents added in the same period Unemployment Rate

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Business incubator

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  1. Business incubator The Case for Business Incubation In NW Georgia

  2. NW Georgia Economy • Employment • 16,240 jobs lost from 2008-2012 • Population • 14,282 new residents added in the same period • Unemployment Rate • Recent gains do not account for existing residents that dropped out of labor market or new residents yet to join in

  3. NW Georgia UnemploymentMay jobless rate jumps up

  4. 2010 Unemployment

  5. 2008 Unemployment

  6. Job Losses

  7. Population Growth

  8. % Job Growth, 2008-2010

  9. Economic Rankings • Dalton and Rome ranked 12th and 13th, respectively, of 14 GA MSAs in Total Job Growth – YourEconomy.org • Rome and Dalton rank 352 and 364, respectively, out of 380 MSAs for Economic and Job Growth – Area Development Magazine

  10. Incubation FAQS • The average five-year survival rate for incubation graduates is 75%, compared to the national average of 50-60% • Incubation programs produce on average four graduates per year • An average incubator after five years of operation has 17 resident clients, 32 affiliates, and 55 graduates • 73% of incubation graduates stay in the area • Communities hosting successful incubators range in size from 4,149 people to 22 million

  11. Business Incubator Defined • Key Distinction • A Business Incubator Program IS NOT A Business Incubator • One must exist for the other to thrive

  12. Business Incubation Program: • A program designed to accelerate the development of entrepreneurial firms though an array of business support resources and services, developed and/or orchestrated by incubator management, delivered both by incubator staff and through its networks of outside service providers. • Business incubation programs usually provide client firms access to shared basic services and equipment, improved access to capital and business management training. • Source: Incubating Success. EDA. 2011

  13. Business Incubator: • A multitenant facility with on-site management that directs the business incubation program. • An incubator facility provides client firms appropriate rental space and flexible leases. • Co-locating entrepreneurial firms in a business incubator facility creates more opportunities for clients to network, share experiences and operate in a supportive atmosphere conducive to creating successful firm outcomes. • Source: Incubating Success. EDA. 2011

  14. Success factors • Targeted business assistance aimed at meeting the needs of early stage businesses • Program goals • Management practices • Services provided • Operational structure • Advisory board composition • Other factors

  15. Program Goals • Primary Goals: • Job Creation • Fostering entrepreneurial climate in the community • Others: • Industrial diversification • Targeted industries • Neighborhood improvement • Targeted groups: Women, minorities, disabled

  16. Management Practices • Written mission statement • Written marketing plan • Plan for financial sustainability • Review of client needs at entry • Effective entry and exit criteria • Select clients based on cultural fit and potential for success • Introduce clients to community and funders • Provide pre- and post-incubation services • Track outcomes and budgets

  17. Services Provided • Business basics • Presentation and business etiquette • Managing a new enterprise • Investment capital • Accounting and legal services • E-commerce assistance • Networking and marketing assistance • Strong mentoring program • Strong support from local higher education • Administrative services • Broadband Internet • Production assistance and product development

  18. Operational structure • Nonprofit models predominate • Budgets and finances • Robust payment plan for rent and service fees • Majority of revenue from client rents and service fees • Some level of subsidy to be expected • Larger budgets allow provision of more services • Staffing • Smaller staff-to-client ratios • Competent staff with dedicated resources –and time- to service the incubator

  19. Advisory Board Composition • 8 to 20 individuals • Incubator graduate firm • Technology transfer specialist • Experienced entrepreneur • Accountant (preferably CPA) • Legal and Intellectual Property assistance • Government representation • Financial institution representative • University official • Chamber of Commerce • FIRE

  20. Key Findings: EDA/NBIA • No one service is silver bullet, synergy is key • Most incubators are not for profit • Public sector investment is important • Incubator program outcomes are not tied to the growth or size of the host region’s economy • Measures of a host region’s capacity to support entrepreneurship have a limited effect on outcomes • Business incubation best practices are highly correlated to incubator success

  21. Key Findings:ARC/NBIA • Best practices for rural and urban incubation programs do not differ. • There are unique challenges to operating a rural incubation program • The most successful incubation programs have developed regional networks. • Location in a rural or urban area does not determine the potential for incubator success. Rather, program policies and procedures influence program success the most.

  22. Burson Center, Carrollton • Owned and Operated by Carroll Tomorrow • 24,454 SF Facility houses 23 offices and 5,000 SF warehouse space, 2,000 SF conference room • Serves six counties • 103 graduates, 392 jobs since 2006 opening • Business clients have 88% success rate • Funding:

  23. The Timing for Funding

  24. Questions?

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