INCUBATORS HATCH SUCCESSFUL BUSINESSES

From 1992 to 1999, 1,654 businesses were started in Cape Girardeau. Almost half -- 806 -- are still in business.

This surpasses the national success rates that indicate small business start-ups have only a 20 percent chance of survival.

But with a "business incubator," the survival rate could have been even more. The national success rate of small businesses hatched in a business incubator reach more than 80 percent.

The idea for a business incubator has been kicked around Cape Girardeau for more than a decade.

"We're still talking about it," said John Mehner, president and chief executive officer of the Cape Girardeau Chamber of Commerce. "It's something we'd like to see and will continue to look into."

The chamber, Mehner said, would look into finding a suitable building and funding for an incubator.

"We believe it's something that would help start up new businesses in the area," he said.

Southeast study

A Southeast Missouri State University business administration student study supports the need for an incubation service.

The late 1998 report indicated that many new Cape Girardeau businesses fail within 15 months, pointing out a need for consultation and financial support.

Business incubators provide small, entrepreneurial businesses -- with the exception of retail stores -- affordable space, shared support services and business development services to help them survive and grow during the start-up period when they are most vulnerable.

The university study pointed out that there must be strong community support and reasonable financial expectations for an incubator here.

"It's a great concept," said Jack L. Sterrett, professor of marketing and chairman of the Department of Marketing in the Donald L. Harrison College of Business at Southeast.

The study suggested the university, the Small Business Development Center and private enterprise should provide consultation and training services.

The burden of financial support, however, would have to come from other sources, private contributions or foundations, the report said.

The incubator, however, could become self-supporting. Once the incubator becomes established as a viable operation, rental income from the small business members in the incubator could pay off its operations.

Incubator funding

The incubator could be eligible for some financial grants. Mentioned in the study were Community Development Block Grants, offered by both federal and state governments, for assisting for-profit business in special economic development activities, and the Rural Business Enterprise grants. Also mentioned were loans, through the Missouri First Linked Deposit program and the Business and Industry Loan program.

Although the study did not mention an incubator start-up cost, a 1992 university estimated starting costs as high as $800,000.

At that time, the research team reported that a business incubator for Cape Girardeau was feasible under certain conditions strong community support and reasonable financial expectations.

Success in Carbondale

The business incubator at Carbondale, Ill., opened in 1990 and continues to be a prosperous entity with 17 small business operations on a continuous basis.

The number of jobs created also figures into the incubator success rates, said the university study. The Carbondale office creates an average of 140 new jobs a year.

A St. Charles, Mo., incubator opened in 1993 and has expanded to twice its original size. Within its first four years of operation, the St. Charles center has graduated an average of 15 businesses a year, with 85 to 90 percent success rate. It has averaged 30 new start-ups a year.

An incubator program at Mexico, Mo., started this year in a small building and with one client.

"We've been looking into a business incubator program the past two years," said Tanna Parrish, public works director of Mexico, a city of about 12,000. "This spring we rehabbed a downtown building scheduled for demolition and launched an incubator for local start-up businesses."

The program, said Parrish, is for a new idea or an existing business that wants to grow.

"We'll help them and nurture them," Parrish said. Entrepreneurs who pass the city's application process get infrastructure, such as phone lines and access to the Internet at a reduced price.

One new business has already located in the incubator "Fresh Ideas," a food service contractor to colleges.

The Ozark Foothills Business Incubator in the Poplar Bluff, Mo., Industrial Park, has moved almost a dozen businesses into bigger quarters of their own. The incubator offers answering service, financial planning and marketing assistance, computer services, and secretarial services. The center now has three tenants occupying five of its six spaces. The Ozark incubator was the first incubator in Missouri.

The Farmington Industrial Development Incubator can take care of three to six tenants.

"We have three tenants now," said Stuart Landrum, president of the development group.