Incubators help businesses take root

Businesses, like flowers, flourish when they grow where they are planted. That's the premise behind business incubators, such as the business innovation center which opened July 1 at Southeast Missouri State University.

An incubator can help a fledgling business get on its feet by providing space at a low rent, and such amenities as copy machines, secretarial and cleaning services, fax machines, computers, a conference room and telephone service allowing the business to put most of its capital into development. Incubators connected to a research university also provide, especially for high technology startup businesses, the research and expertise of its faculty.

It's a situation where everyone wins: The new company gets its start and eventually moves into the community; the incubator and the university move forward with another company in its place; and the community benefits from the newly created jobs and the economic impact of having a new business that grew from within the community.

"When a business tries to start up, the odds of making it are about 20 percent," said Dennis Roedemeier, executive director of the innovation center at Southeast. "If they're in an incubator, the odds of making it are 80 percent. It's that big of an increase."

The new center at the university is one of about a dozen incubators in Missouri, said Dr. Jake Halliday, president and CEO of the Missouri Innovation Center in Columbia, Mo. Only recently, he said, has anyone tried to compile a list of Missouri incubators and attempt to build a network among them.

Incubators are divided into two categories, Halliday said. The growing trend, he said, includes incubators like the one at Southeast that will link technology and research with economic development. Other incubators can be specialized, such as one in St. Louis that concentrates on the arts. Ozark Foothills Business Incubator in Poplar Bluff, Mo., is not affiliated with a learning institution and focuses on helping general small businesses in a five-county area develop and grow.

Ozark Foothills has been in business since 1988. Assistant director Felicity Brady said there are six available spaces. Included with the rent, along with the other amenities, are business and financial planning assistance, marketing help, patent search assistance, training workshops, consulting services, and help with loan and grant applications. All six spaces are occupied, Brady said.

"It's rare that our space is empty for a very long period of time," Brady said. "We get calls every six weeks from interested individuals or businesses who would like to lease space."

Brady said Ozark Foothills does not track or follow up on businesses who have moved on. Currently, she said, the incubator is leasing space to an industrial medicine clinic, a stage lighting company using space there as a warehouse, a cabinet manufacturing company, a tool and die maker and Aramark Uniform Co., uses two of its spaces for storage.

Roedemeier said that one of the first tenants moving into the local incubator will be the Small Business Administration (SBA), on site to help small businesses get started. The SBA at that location will be only the third in the Midwest, Roedemeier said; the other two are in St. Louis and Kansas City. There is room in the center for 11 or 12 start-up businesses.

"A lot of our students have an interest in starting a business," he said. "The incubator provides them the space and telephone, computer and they will have the environment to try their business ideas they created while at the university."

These businesses, rather than ones recruited from elsewhere, have a better chance of success.

"Growing a home-grown company increases in its attractiveness these days," Halliday said. "All around the country, university research generates innovation that can become the nucleus of new companies. The national experience has been that better than 80 percent of the companies stay right where they were incubated. They put down roots and continue their growth. "

Incubators generally are not-for-profit, tax exempt entities with a public purpose, and are governed by an independent board of directors. They are initially funded from grants and economic development loans, along with the rents and fees they charge.

Other incubators in Missouri are located in Joplin, Columbia, Rolla, Kansas City, Springfield, Fort Leonard Wood and St. Louis.