Business incubator push hits Ozarks

When Claire Faucett left her job as public relations manager of the Springfield Area Chamber of Commerce a year ago to start her own company, she knew she would need some help.

Faucett said Allen Kunkel, Missouri State University associate vice president of economic development and director of the Jordan Valley Innovation Center, reached out to her about joining the business incubator MSU had in the works.

“They were just beginning renovations then, but I knew I was already ready to sign up,” she said.

One of the first tenants to move into MSU’s downtown business incubator known as The eFactory, located inside the school’s Robert W. Plaster Center for Free Enterprise and Business Development, Faucett said her social media marketing service and public relations agency, Engage5w, is a perfect fit for the incubator.

“The most appealing part is the support network that’s built in,” she said of the office space, complete with business amenaties offerd by the incubator. “You don’t know you need something until you see it here and then you wonder how your business could have ever made it without it.”

With five employees on contract, Faucett rents 200 square feet from MSU for about $3,000 a year, with access to resources such as a confernce room, technology support and business counseling. The eFactory has space ranging from 150 square foot office spaces to more than 2,500 square feet in lab space. MSU Business Incubator Coordinator Brian Kincaid said the The eFactory currently has seven tenants and can hold up to 32.

The only project of its kind in Springfield, Kincaid said the idea of fostering new business through an incubator is universal and growing in popularity.

“The idea of business incubators has been international for a long time,” he said. “They have had good success in St. Louis and Kansas City, but Springfield was the largest metropolitan statistical area in the state without an incubation program, until now. We are not the first, but The eFactory is by far the largest in scale and scope the city has seen.”

According to the National Business Incubator Association, business incubators are on the rise. As of October 2012, there were more than 1,250 incubators in the United States, up from only 12 in 1980.

“There is a lot of excitement and energy surrounding incubator projects right now,” Kincaid said. “There has been a shift toward the entrepreneurial spirit and these incubators go well with the idea of nurturing a small business when its vulnerable.”

The NBIA estimates that in 2011 alone, North American incubators assisted about 49,000 startup companies, provided full-time employment for nearly 200,000 workers and generated annual revenue of almost $15 billion among its tenants.

Around the Ozarks
While Springfield may have the newest incubator project in the Ozarks, other area cities have already begun tackling their own business goals. Launched in 2001, the Joplin-based Joseph Newman Innovation Center has 11 current tenants, with as many as 26 in past years, including a few notable success stories.

“One company, Touches of Splendor, was a small cleaning service working out of their garage. They had eight employees and found it difficult to do business out of a home garage,” said Director Steve Russell. “Not a typical goal of the center, we did lease them space and provide them some business structure and financial suggestions. After 14 months in the center, they graduated to their own office with 114 employees and annual sales of more than $2 million.”

Russell said the NBIA recommends tenents stay in an incubator three years, but he’s found that time period had recently increased.

“The economy was in great shape then and the churn was more expected,” he said. “Today, change comes much slower and it is harder for small startups to get the types of service they can get on their own. We still have a goal of three years for a tenant, but many have been in the facility longer.”

Queen City neighbors to the east, West Plains, is in the middle of a year-old project known as the Ozarks Small Business Incubator.

Starting out as a lofty goal in 2006, the southeast Missouri town opened the nonprofit OzSBI – pronounced “ah-z-bee” – in 2012. Part of a rehabilitation project downtown, OzSBI Director Toney Aid said the city took a chance on the building.

“Downtown was being revitalized, but there was always this building – which is about a city block long – that was too big for any one person to tackle,” he said. “A group of concerned citizens got together and started making a plan. The city made the down payment on the property, and we got to work filling this building.”

Aid said the 2005 U.S. Small Business Administration jobs count survey ranked Howell County as No. 1 in the state at creating new business and No. 42 in the nation. Aid said the building’s mission was clear after that.

Today, OzSBI has four tenants and 10 affiliate clients, whose businesses don’t reside in the building and utilize services on an ala carte basis.

OzSBI Coordinator Heather Fisher said the incubator also offers a 12-week small-business training program called Operation Jump Start in conjunction with Southeast Missouri State University. About 50 people have completed the program, 12 of which went on to start a new business, and Fisher said there is currently a waiting list for the next class. Fisher said the center also offers 1,400 square feet of “co-worker space,” called the Idea Center, where home-based business owners can utilize resources and generate new ideas. OzSBI currently has six co-workers, but Fisher said the center plans to have as many as 20 by the end of the year.

“The Idea Center is filling up, and we are meeting with people every day who want to join the incubator,” she said. “We hope to have 10 to 12 incubator tenants in place by 2014.”

Fisher said during OzSBI’s first year, the incubator helped create 34 jobs, including 21 for the previously unemployed.

Unconventional incubators
Unlike traditional business incubators, which offer client companies business support services and resources tailored to young firms in a collabrative atmosphere, the Ozarks is also home to a few unconventional incubators.

According to the NABI, the incubation model has been adapted to meet a variety of needs, from fostering commercialization of university technologies to increasing employment in economically distressed communities to serving as an investment vehicle.

In Purdy, nonprofit Project Genesis is a business incubator centered around revitalizing the roughly  1,000-resident town.

Funded by Ed and Julia Mareth – co-founders of 3D Corporate Solutions LLC, a Monett-based pet food ingredient supplier – the 2010 startup offers graduating college students room and board in furshished apartments above the offices and a place to grow their business ideas. In return, companies give 30 percent of profits to a Project Genesis fund dedicated to supporting the town through infasructure improvements, community events and helping with needs at Purdy schools.

“The Mareth family grew up in Purdy and they wanted to give back and see the town thrive again,” said Chelsea Egan, Project Genesis office manager. “We have had three companies in the incubator so far and two have graduated.”

Video game developer Pixelscopic LLC is currently the only Project Genesis tenant. The company’s two owners live in Springfield.

Egan said Project Genesis’ goal is to allow the business owners to focus on making their company succeed and become self-sufficient, which in turn benefits the local community by providing additional economic resources and by attracting further successful businesses and innovative individuals to the area.

“The more business, the more construction we can get in Purdy, the better our town will become,” she said. “Project Genesis gives these companies the help they need, but it also gives Purdy the help it needs.”

Another unconventional business incubator in the area, the Communtiy Foundation of the Ozarks is now taking applications for a $20,000 grant, dubbed the Glenstone Square Big Idea Program, awarded to a nonprofit agency partner of the CFO in need of business space.

The selected nonprofit will recieve a 1,000-square-foot office unit in the Glenstone Square Office Complex, including utilities and some furniture for one year beginning July 1.

“We were approached by a donor who had the extra office space and developed the business incubator idea,” said Bridget Dierks, CFO director of nonprofit services, noting the application deadline is June 1. “This year is a test program, but if there is significant interest, we would hopefully like to work with the donor to make the project permanent.”