Tennessee Incubators Breed New Businesses
Published Apr 07, 2003
According to Jim Anderson, general manager of the Holston Business Development Center, even the best ideas can be helped by a business incubator.
You’ve got a great idea, one that you think could spell entrepreneurial success. But you don’t know the first thing about getting a business started, much less running your own company.
“Intentions are often good, but without a plan and some direction, you’re going to take your savings and probably your parents’ savings and throw them into the wind,” says Jim Anderson, general manager of the Holston Business Development Center in Kingsport. “A business incubator can make all the difference.”
An incubator is a place or program where start-up companies can thrive under the guidance and hands-on assistance of professionals. It provides a safety net to grow ideas, commercialize products and learn the ins and outs of running a business.
According to the Small Business Administration, 80 percent of small businesses fail. However, the Impact of Incubator Investment Study of 1997 showed that 87 percent of incubator graduates remain in business.
There are many types of incubators across the state. They provide a range of services during a standard 24- to 36-month incubation period.
“Sometimes we’re the interim CEO, CFO, COO, but most of the time it’s E-I-E-I-O – pretty much anything they need is what we do,” says Bob Wilson, director of the Center for Entrepreneurial Growth in Oak Ridge.
In its first three years, the center, which is a division of Oak Ridge National Laboratory’s Tech 2020 program, has worked with or has developed 30 separate companies out of the lab. It focuses on high-tech companies, the commercialization of intellectual property and development of entrepreneurial management teams.
Physical facilities include sites in Oak Ridge, in Hamilton County and at the University of Tennessee-Knoxville. Clients include companies in biotechnology, homeland security, software and instrumentation.
“We transition raw talent and good products from a project mentality to a product mentality,” Wilson says. “Our coaching and counseling comes from years of experience in the entrepreneurial process.”
The Holston Business Development Center is the first business incubator in the Tri-Cities area. Its 6,000-acre site is the result of a public/private partnership located on a reservation owned by the U.S. Army. It offers five miles of road frontage for incubator graduates to locate their permanent offices.
“We can help newly formed non-retail companies or entrepreneurs with ideas, or help a company in Europe or Asia set up a sales office to test the market before building a manufacturing or service center,” Anderson says. “One of our tenants is Lingus Plus, based in the United Kingdom, which is setting up its North American headquarters for foreign language translation and interpretation services.”
A mixed-use incubator is making a name for itself in Hamilton County. The Chattanooga Business Development Center was established in 1988 and its 86 percent success rate has helped it become the largest business incubator in the Southeast.
Open to any type of business other than retail or nonprofit, the center has helped everyone from machine-shop manufacturers to visual artists get started.
“These people find their own niche, their own market, and they work it,” says Angela Glover, the center’s interim director. “Having so many different types of businesses makes a great variety, a great atmosphere to work in.”
A different twist to the traditional incubator is the Regional Business Technology Incubator, operated by the Business Media Center at Tennessee Technological University in Cookeville. Serving the upper Cumberland region, it is the nation’s first virtual business incubator, according to Kevin Liska, director.
“We have a lot of communities that could not take advantage of an incubator if they had to drive a long distance, because it wasn’t practical,” he says. “So we started an incubator where we set up satellites throughout Middle Tennessee.”
It offers computer program training such as design and production of CD-ROMs, Web marketing campaigns, and building entire businesses around the Internet.
Thanks to the Regional Business Technology Incubator, emerging business technology is reaching into rural communities. According to Andrea Burckhard, executive director of the Byrdstown/Pickett County Chamber of Commerce, the Chamber now offers equipment and software to its members as tenants of the incubator.
“The program has meant a lot to economic development efforts in our rural community, where tourism is our No. 1 revenue source,” Burckhard says. “The chamber also uses the technology for its Web site and expanded marketing efforts.”
Statewide, the life sciences industry finds support from the Tennessee Biotechnology Association, according to Caroline Jones, executive director. It supports the efforts of the Memphis Biotech Foundation, Cool Springs Life Sciences Center, Cumberland Emerging Technologies Incubator and East Tennessee State University Innovation Incubator.
“Incubators are a very important tool for growing this industry,” Young says. “We’re interested in seeing biotech incubator development in all parts of the state.”
On the horizon is the Cool Springs Life Sciences Center, set to open Phase I in 2004. Vanderbilt University will lease 8,000 square feet with options for more space, according to Peter Rousos, consultant.
“Vanderbilt has tremendous intellectual property assets in life sciences,” Rousos says. “The incubator run by Vanderbilt will be a great benefit for the industry and economic development in Middle Tennessee.”
Story by Sharyn Matthews
Photo by Murray Lee
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