Shoals area incubator program a model in federal study

May 15, 2013

Shoals Area Incubator

Chequetta Shaw said she thought she knew about cooking before she trained at the Shoals Culinary Center.

“But I didn’t,” Shaw said, while chatting Tuesday with an Appalachian Regional Commission official. “There’s a whole lot of knowledge provided by this program.

She said the center gave her more than a jump on life. “Y’all gave me a good leap.”

Fellow student Rashard Campbell echoed Shaw’s comments.

“I did culinary studies in high school, but coming here improved all my skills,” Campbell said.

The comments brought a smile to Earl Gohl, federal co-chairman for the commission.

“When anyone asks, ‘Why do federal funds matter?,’ this is why federal funds matter,” Gohl said. “It changes people’s lives.”

Federal funds helped create programs such as the culinary center and its parent program, the Shoals Entrepreneurial Center. Today, 20 percent of the center’s annual $500,000 budget comes from various sources such as grants and 80 percent is self-generated through rent and service fees.

The entrepreneurial center is one of the models used in a book from the National Business Incubation Association that discusses the importance such entities have on a community when they properly are planned and operated.

The 177-page book, “Best Practices in Rural Business Incubation; Successful Programs in Small Communities,” was the topic of a news conference at the culinary center Tuesday.

The book is based on a study by the business incubation association, with assistance from the Appalachian Regional Commission and Tennessee Valley Authority.

Gohl said business incubators traditionally produce businesses that have long-term lives in the community where the incubator operates.

He said the Shoals Entrepreneurial Center has produced more than 1,500 jobs since its creation in 1992.

The study says the center’s clients and graduates have generated $67 million in annual revenues and more than $10.2 million in annual state and local taxes, which involve product sales and taxes on employee salaries.

The Shoals area center in Florence traditionally is mentioned in national discussions about successful incubator programs, particularly in rural areas, the book states.

The Shoals program includes the Northington Court Complex, Jerry W. Davis Complex for Manufacturing, culinary center and Digital Arts Studio in Sheffield.

Tracy Kitts, senior adviser for the National Business Incubation Association, said incubators traditionally create and retain businesses. He said 87 percent of companies that graduate from incubators and start a business outside the center enjoy a long-term existence, and 84 percent remain in the service area of the program.

“It reduces risks,” Kitts said. “Most entrepreneurs really know their product and know their market but have a difficult time wrapping a business around that.”

He said business incubators nationwide produced 49,000 companies, 200,000 workers and $15 billion in revenue in 2012.

A good business incubator selects clients, works with businesses rather than simply housing them, are well managed and graduate their clients, officials said.

“Like a university, the graduates leave and open room for new clients,” Kitts said.

Incubators help new companies in rural communities compete against larger markets. Kitts said the Shoals facility does all of that.

He said the study revealed it is important for incubators to have regional networks so they can “cast a net out there” for companies to find clients and information. In addition, he said the community must back the incubator and its clients.

Kitts hopes the publication assists communities in providing and enhancing incubators.

“Those that really get the community to buy in and focus on best business practices succeed,” he said. “This is really a how-to guide on a successful business incubator program.”

Article courtesy of Bernie Delinski at the Times Daily.

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