The Case for Business Incubation In NW Georgia

 Employment  16,240 jobs lost from  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

Jobless rateJuneTrendline Floyd9.3%Up from April's 8.5%; 4,446 looking for work Bartow8.6%Vs. 7.7% in April; 4,225 sought work. Gordon9.6%Down from May 2012; 2,518 unemployed. Polk8.2%Lowest rate in the region; 1,688 unemployed. Chattooga10.3%Highest jobless rate in region; 1,068 idle

Area NW GA (27,632) 6, ,693 GA (250,887) (48,101) 53,395 76,495

MSATotalNon-residentResident Gainesville Athens-Clarke Augusta-Richmond DALTON ROME Atl-Sandy Spgs-Marietta Chattanooga, TN Gadsden, AL GEORGIA UNITED STATES

 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

 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

 Key Distinction  A Business Incubator Program IS NOT A Business Incubator  One must exist for the other to thrive

 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

 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

 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

 Primary Goals:  Job Creation  Fostering entrepreneurial climate in the community  Others:  Industrial diversification  Targeted industries  Neighborhood improvement  Targeted groups: Women, minorities, disabled

 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

 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

 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

 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

 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

 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.

 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: EDAARCOneGeorgiaLocalTOTAL Project $648,000$250,000$500,000$1.02 mill.$2.4 mill.

Appalachian Regional CommissionAugust 15 – annually Economic Development AdministrationSeptember 14 – quarterly USDA Rural DevelopmentYear round – October 1 starts FY 2014 OneGeorgia AuthorityYear round – July 1 starts FY 2014 GA Dept of Community AffairsYear round – July 1 starts FY 2014