Fragile and new, they often need incubation to hatch properly and grow.
And though Delaware is known for its poultry, we're not talking eggs this time, we're talking business.
And today, the First State is leading the way. Delaware was recently ranked first in the nation for business incubation by the Beacon Hill Institute, a think tank based at Suffolk University in Boston.
Business incubation involves providing entrepreneurs with the funding and resources they need to nurture their startups through the failure-ridden early stages of business, said Ken Anderson, director of entrepreneurial and small business development at the Delaware Economic Development Office (DEDO).
A new business is a lot like a baby, Anderson said, and it takes time and plenty of tender, loving care to prepare it for success in the open market. Many startups fail because their owners did not raise enough capital or did not know where to turn for help, he said.
But Delaware works hard to ensure the success of its entrepreneurs, Anderson said.
DEDO operates a virtual incubator Web site called the Emerging Technology Center where fledgling technology companies can seek advice or free services from firms that have partnered with the state, he said.
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Delaware Businesses Small Businesses: 73,400 |
Delaware also has special funding available to entrepreneurs, Anderson said, like $100,000 grants from the Emerging Technology Seed Fund, which can go a long way toward starting a business in the right direction.
But funding and advice are only two of the components necessary to start a business – entrepreneurs also need ideas.
Luckily, DEDO has a whole portfolio of ideas, said Anderson.
DuPont and Hercules have donated 258 underutilized patents to the state which DEDO makes available to entrepreneurs, he said. The patents cover dozens of industrial applications, from soil fumigation to lacquering techniques, that business owners can use to found their companies, he said.
DuPont also opened its own $80 million business incubator at the Experimental Station in Wilmington in October.
Legacy companies like DuPont and Hercules have a lot to do with Delaware’s healthy small business climate, Anderson said, because the scientists and engineers who work there tend to have strong entrepreneurial spirit.
With a little incubation, those entrepreneurships can provide a plethora of benefits to the state economy, he said, including high-wage jobs, tax dollars and huge potential for growth.
The New Castle County Chamber of Commerce has taken business incubation a step further -- into the world of bricks and mortar. The chamber operates a 12,000 square foot business incubator, called the Emerging Enterprise Center, in its New Castle headquarters that provides low-rent office space and resources for young businesses.
“The Emerging Enterprise Center allows entrepreneurs to focus on their core business and not have to worry about the rent, the building maintenance or the copier,” said Mark Kleinschmidt, president of the chamber.
The chamber charges incubator tenants $13 a square foot for their offices, but they have free access to high-speed Internet, phone lines, a copy machine, mailing machine and conference room, he said.
But the Emerging Enterprise Center, which opened in May, is much more than a low-rent zone for its five tenants, said Kleinschmidt: business owners also receive support and advice from chamber members and each business is assigned a mentor who helps guide the fledgling company forward, he said.
Entrepreneurship is scary, Kleinschmidt said, and new business owners typically leave steady jobs and healthy paychecks for a world with 80-hour work weeks, daily frustrations and an uncertain future. It’s no wonder so many of them fail, he said.
Business owners must apply for admission to the incubator, he said, and only businesses that have a business plan are accepted, he said. Businesses are allowed to stay in the incubator for 24 months before they graduate to find an office of their own, he said.
Having a support group of people who know their way around a business can go a long way toward getting an entrepreneur on their feet, he said.
The chamber’s support has been vital to the success of Kerwin Gaines’ company, Blue Assurance, which has been an incubator tenant since June.
In 2004, Gaines started the company, which monitors the effectiveness of government IT systems that handle classified information, and worked out of his basement before moving into the incubator.
Starting a business is no easy task, he said, and raising capital and finding new clients are the hardest parts of owning a business.
“There’s nothing you find in Business 101 textbooks about how to survive, but we try to give it 100 percent everyday and hopefully that will come back to us in some way,” he said.
While his company has not expanded its manpower or contracts since moving into the incubator, Gaines said he has made great strides building a better business plan and a stronger company.
Business incubation keeps young businesses from slipping through the cracks and gives them the strength to succeed, he said.
