Business Incubators
Expecting growth in downturn

By Kimberly Genné

Business incubators are a great place for start-up, expanding and small- to medium-sized businesses to be located in tumultuous economic times. In fact, many incubators will most likely see an increase in applications as those who have been laid off or have been placed in less-than-desirable job situations try their hand at the entrepreneurial arena.
“When people can’t find a job, they make one for themselves,” says Richard Brown, facility director, Genesis Enterprise Center (GEC).

The basics
Business incubators are facilities that provide small- to medium-sized businesses with affordable space, business development services and support. “All businesses, new or expanding, must have a business plan, produce a product or
provide a service and have potential for future job creation,” says Sarah Hole, facility director, Madison Enterprise Center
(MEC) and Main Street Industries (MSI), Common Wealth Development.
Incubators come in a variety of formats with different goals and objectives. There are public or not-for-profit incubators, sponsored by government and nonprofit organizations, whose primary purpose is to promote economic development. There are also academic- related incubators that have objectives in faculty development and creating business spin-offs from faculty research. Depending on the type and structure of the incubator, they may offer their tenants a range of shared services, as well as access to financial and professional assistance. Some incubators have an entry and a tenant graduation policy. MEC is a first-stage incubator and businesses may stay there three to five years.
MSI is a second-stage incubator offering tenants permanent space. “Many of the MEC tenants choose to locate within MSI after they graduate,” says Hole.

Advantages
In addition to lower overhead costs and professional business counseling and support, business incubators host an array of advantages to businesses and the community.“Small businesses are good for the economy,” says Hole. “They stimulate the local economy by creating jobs. As businesses grow, they are able to create more jobs in the community.”
Businesses located within incubators often are able to do business with one another and network professionally.
“The Madison Times has been at GEC for three years. The location is great, we can get anywhere fairly quickly,” says
David Dahmer, editor, The Madison Times. “It’s nicer than being isolated. We often get story ideas from the businesses
here. It’s a great networking opportunity.” The MGE Innovation Center at University Research Park offers tenants laboratory
suites outfitted for biotechnology and life science companies.
“You don’t find lab suites like this in a traditional rental,” says Mark Bugher, director, University Research Park. “We understand what it takes to provide customized structure for life science companies. We try to understand the challenges they face and assist in whatever ways we can.”

Success
Madison-area business incubators are weathering the uncertain economic times quite well.
The GEC is currently at 80-percent capacity and has over 30 business tenants.“Our goal is to be at 90-percent,” says
Brown. “We’re doing everything we can to maximize our tenants’ potential for survival, retention and success.”
MEC businesses have created 350 new jobs during their stay in the incubator and the majority of MEC graduates have remained in the Madison area. MSI has served a total of 30 companies and currently houses 16 businesses. The MGE Innovation Center has helped more than 70 early-stage companies grow.“We are currently at full capacity. Our quality
of tenants is good and they are doing well,” says Bugher. “We’re also building an accelerator building which will be the next
generation of lab suites so we’ll be able to accommodate growing businesses that need larger facilities.”
“Successes are also failures for us,” says Brown. “Businesses start here and then outgrow the space and move on, which leaves us with vacancies. But the important thing to note is we [GEC] had a hand in helping them grow into a successful and financially stable business that’s benefited the community and the local economy.”