BUSINESSES REALLY COOK WITH INCUBATORS

More than two years ago, Tom Wetzel and Al Wright moved their manufacturing business into a small business incubator in Southeast Missouri.

"We've outgrown our facility at the incubator and we're looking at outside facilities now," said Wetzel. "We need a building of about 15,000 to 20,000 square feet."

Wetzel and Wright, owners of Tadd Manufacturing Corp., which started operations in the Ozark Foothills Regional Planning Commission and Economic Development Association Business Incubator in 1990, employs eight persons in the manufacture of plastic boats and portable spas.

"We manufacture the boats and spas under our company name," said Wetzel. "We also produce a number of other items for other companies."

Wetzel praises the operation of the business incubator.

"Incubators have been extremely popular among high-tech firms," said Wetzel. "But, when we came into the incubator at Poplar Bluff, we were one of the first light manufacturing companies to move into an incubator."

Wetzel said the incubator provided assistance in a number of ways providing entrepreneurial advice, secretarial service, fax service and reasonable rent.

Business incubators are experiencing phenomenal growth in areas throughout the U.S. Two decades ago, the number of business incubators could be counted on one hand and still have some fingers left.

Today, there are more than 500 incubators in 40 states, and the National Business Incubation Association (NBIA), headquartered at Athens, Ohio, estimates that by 1995 there will be 1,000 such facilities.

The sole purpose of most incubators is to create jobs and boost the economy for a community.

Regionally, incubator programs have met with success at Carbondale, Ill., and Poplar Bluff. A 1991 feasibility survey conducted by the Southeast Missouri State University Office of Economic Development has also pointed out a need for an incubator in the Cape Girardeau area.

"We've never been empty here," said Don Bell, manager of the incubator at Poplar Bluff, and director of the Ozarks Foothills Regional Planning Commission and Economic Development Association. "We filled up soon after opening, and have been full since.

"We're pleased with our facility," added Bell. "We feel that the incubator has helped create new businesses and jobs in the area."

The Poplar Bluff incubator was founded in 1988 with 25,000 square feet. "We have space from about 2,300 square feet up," said Bell.

The Southern Illinois Small Business Incubator (SISBI) at Carbondale is in its third year of operation, and is currently home to a number of small businesses, including a printing company and graphic design company; a computer design, repair and manufacturing firm; an economic development consulting and market research firm; a sports marketing company and others. A recent count showed eight service companies, three light manufacturing firms, and three research and training companies.

The SISBI is a program of the Southern Illinois University-Carbondale Office of Economic and Regional Development headed by executive director Rhonda J. Vinson, and provides business training, planning and counseling among its many services.

The incubator, located at the Northeast corner of Pleasant Hill Road and Route 51 South in Carbondale, provides office space ranging from 150 to 600 square feet and light manufacturing space of up to 1,800 square feet.

The idea for a business incubator in Cape Girardeau has been discussed for a number of years, and in 1992, a special research team at Southeast Missouri State University recommended that the Chamber of Commerce pursue plans to develop an incubator, following a feasibility study.

"We'd like to get an incubator here," said Ray Duffey recently. Duffey heads the incubator subcommittee for the Small Business Committee of the Chamber. "There is a lot of interest in incubators in Cape Girardeau, and there are a lot of people who would like to try a new business in such a program.

"A determination has been made that we need a business incubator," added Duffey. "We've had to place the plans on the back burner because of funding at this time. But, we will be reviewing the possibility of establishing an incubator regularly."

Start-up costs for a facility here could be as much as $800,000, depending on building costs, according to the feasibility study. The research team recommended one of three buildings in Cape Girardeau for the facility the Bunny Bread building at 310 Christine, 44,000 square feet; Paramount Liquor building at 2333 Rusmar, 30,000 square feet; and the Mid America Distributing building at 2101 Highway 74 South, 45,000 square feet. All of these buildings are still available.

Sixty-five percent of all incubators in the country are less than four years old, and a NBIA spokesperson says new incubators are opening at the rate of more than one per week. A recent NBIA survey found that 37 percent of incubator tenants spend one year or less in the facility. Thirty-two percent are in and out within two years. The average stay in a facility is 2.2 years.

An incubator is a shelter for small businesses. As few as five, or as many as 80 small firms share the lower-cost space of the incubator building, which may be a renovated former warehouse or factory.

The tenant firms also share resources such as office machines, supplies, support staff and inspiration.

To a new, or home-based firm that can not afford its own building, an incubator address can lend legitimacy and help its image as a "real" business, right down to having a live voice answer the telephone.

Statistics show that small-business survival rates are slim about 20 percent nationally. Those odds improve, however, where there are "business incubators."

"Research shows that the trend is almost reverse when companies are nurtured in incubators," say NBIA spokesmen. "Statistics point out that 80 percent of new businesses that have been through incubators survive."

Incubators' most important advantage, however, may be the entrepreneurial intensive care that tenant firms get from incubator managers and business development experts who guide tenant companies to maturity and help them finally move out, or "graduate."

Incubators have been popular among high-technology firms, light manufacturing and services. Statistics show that 36 percent of incubator tenants nationwide are for services industries. Another 20 percent are light manufacturing, and 15.9 percent technology products.

Incubator officials are interested in companies in their early stages, In fact, most incubator tenants move their firms into incubators from their homes.

Entrance criteria differ among incubators. While some incubator managers want to see a firm's business plan before they consider the company as a prospect tenant, some don't ask for it.

Some incubators require that a company operate out of a house before accepting the firm as a tenant. Incubators typically want to know how many prospective jobs a tenant expects its company to create in three years.