The Best Kept Secret in Economic Development
True Business Incubation – I have been involved in economic development, in one manner or another, most of my adult working life and the last many years in the arena of business incubation. It has surprised me, as well as frustrated me, that more state and federal support has not been invested in “true” business incubation. Let me use my current incubator as a case in point to illustrate my premise.
WESST has been serving and guiding entrepreneurs for over a quarter century — taking their client’s ideas / dreams from embryonic concept to flourishing enterprises. Somewhat virtually incubating business endeavors before the official start of the WESST Enterprise Center Business Incubator. WESST comprises one of the most intense and thorough teams of subject matter experts in New Mexico. We also have 5 satellite locations: Farmington, Santa Fe, Rio Rancho, Las Cruces, and Roswell. As WESST grew it was more and more evident that there was an opportunity to assist entrepreneurs from a business incubation perspective. An initiative that began in 2003 came to fruition in 2009 – the WESST Enterprise Center. Now there are five categories of business incubators: manufacturing, arts, technology, kitchen, and mixed use. The enterprise center is a mixed use incubator. We comprise companies from software design to bio-medical, from cyber security to home care for the disabled. Statistically, if a business is desiring to gear up and starts without the help of a formal or regimented program, such as a business incubator or technical assistance program like WESST presents, has an average success rate of 27-34 percent. Yet with business incubation assistance the average is 84-87 percent.
As stated, the enterprise center is a best practices mixed use incubator and as such we follow the National Business Incubation Associations guidelines of process meaning: 1. intake qualifying, 2. resident program protocols and 3. graduation. During intake, analytic tools are used to assist the entrepreneur determine if this is a risk and an endeavor he or she is truly ready for. Also, do they have the tenacity it takes to see a business startup through to success? Once admitted into the incubator the entrepreneur participates in a rigorous program designed to assist he or she during the growth stages. This includes mentoring, quarterly reviews of financials, administrative growth analytics and human capital assistance, just to mention a few of the pieces put in play during residency. This is all designed to lead to the end result, the return on investment for the community, graduation. Graduation is the end process that the owner will go through leading to the entrepreneur’s company leaving the incubator. Thus launching into the local landscape as an established and growing company.
This incubation process can take up to four or five years to accomplish. There in, is the proverbial “rub”. This is why business incubation is the best kept secret in economic development. It takes time to grow a business correctly. It takes time in a society that desires results immediately. Let me reiterate a statistic once more, 34% chance of success without a structured assistance like the business incubation methodology and 84% chance of success with it. As expected, I am a strong advocate of two key requests. All entrepreneurs should use this methodology of entrepreneurial assistance if they are going to commence a business endeavor. Secondly, for those that invest in entrepreneurial development, forbear the insatiable need for instant gratification. Short cut entrepreneurial flash usually results in a high percentage of flameouts. Invest in solid high percentage returns on investment, i.e. business incubation with entrepreneurial technical assistance included.