Life is good at The Development Corporation (TDC). We’re blessed with a high occupancy rate, and the Board of Directors is considering when and where to construct a new building.
Additionally, we hope to resurrect creating a partnership to build and operate a small-business incubator.
Small-business incubators began in the United Kingdom in the early 1970s, often located in historic buildings. The concept caught on in the U.S. in the mid-1980s but waned when the dot-com bubble burst.
Today, incubators are back, and they’re back with a vengeance. The National Business Incubation Association (NBIA) reports that there are “41,000 startups using 1,200 incubators” in the U.S.
A business incubator nurtures the development of an entrepreneurial company and helps them avoid critical mistakes during the start-up period when they are most vulnerable, and the results are impressive.
According to NBIA, “the survival rate after five years for a business using an incubator is 87 percent compared to 44 percent for businesses that didn’t use an incubator.”
To be successful, an incubator program needs three inter-related elements.
First is a physical location, a building dedicated as a business incubator. The space commonly has a rent subsidy. A not-for-profit organization, a government agency or a college or university operates most incubators.
Successful business incubators, however, are more than buildings. The second element is a program designed to support the development of entrepreneurial companies through a variety of business-support resources and services. A comprehensively designed program accelerates the development of a start-up business from its conceptual stage to a viable enterprise.
Program components often include:
▶ Mentoring from business advisers and the SBA’s Small Business Development Center;
▶ Business resources including access to legal, marketing and public-relations professionals, as well as a host of shared services to lower operating costs; and
▶ Networking with industry experts, potential customers and early stage capital providers.
The third element needed for a successful business incubator is a community of entrepreneurs.
The North Country Regional Economic Development Council recognized the value of entrepreneurs when it adopted a strategy to “attract and nurture entrepreneurial pioneers to cultivate innovative clusters in our rural communities and catalyze the highest per-capita rate of small business start-ups in the state.”
But what exactly is an “entrepreneur”?
I once heard a friend in San Diego define entrepreneur as “French for crazy person.” He might be right, but I’m not sure it’s a complete definition.
Most people think that anyone who starts a small business is an entrepreneur. I’m not sure that’s accurate either.
The SBA reports that Americans start 627,000 businesses each year. However, I’m not sure that every new business represents entrepreneurship. Anyone starting a small business is certainly a risk taker, but I think true entrepreneurship goes well beyond risk taking.
Consider the person who opens a dry cleaner after being an employee in that industry for several years. The new business would use the same technology and compete for the same customers as other dry cleaners in the community. While the dry cleaner may be a new business, the startup isn’t “entrepreneurial” by the definition above, which is not to minimize the business’s importance to the local economy or the service that it provides the community.
I would define an entrepreneur as someone who has the vision to see opportunities, the ability to solve problems and the drive to make a difference.
Entrepreneurs, on the other hand, create something new, something different, or they transform an existing product and use it in a new way, thereby increasing its value.
Entrepreneurs see possibilities that others don’t see. More importantly, they act on opportunities when others might hesitate.
Business incubators work. They have been helping entrepreneurs turn their ideas into viable companies, promoting innovation and creating jobs by providing companies with business support services and resources tailored to start-ups thereby increasing their chances of success.
Actively promoting and supporting business incubators is an increasingly successful strategy to stimulate local economies and to create jobs in rural communities. We would be wise to create and support one in Clinton County.
Paul A. Grasso Jr. is president and CEO of The Development Corporation, 190 Banker Road, Suite 500, Plattsburgh.