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Local Industry

Searching for Value in a Small Business Incubator

March 2014

Let’s say it’s been five years since college and things aren’t going the way you’d hoped. The  big corporate job went away faster than an Oldsmobile Rocket ’88. You latched onto something that paid less but you still have a dream of starting your own business.

If this is you, or the kid living in your basement, you might want to check in with any one of North Carolina’s 58 Community College based Small Business Centers. They’re an integral part of every Community College and offer services ranging from free consultation to full-blown low-rent business incubators. 

They’ll help with anything from business ideas to business plans, production, marketing and even dealing with the government. Their job is to help young businesses get started.


[dropcap]B[/dropcap]ut do they work as advertised? Can they help you hatch your dream? It depends on who you ask and where you look. A disturbing recent study by Alejandro S. Amezcua, Ph.D., Assistant Professor of Entrepreneurship at the Whitman School of Management at Syracuse University, found that of 20,000 incubated businesses studied the failure rate was “much higher than that for a control group that had not been incubated.”

There was no data available on the causes of these failures. They just failed. Another strange factor is that Amezcua’s study matched the control group of both incubator and non-incubator businesses by “comparable size, industry, age, location and ethnic and gender identity of the owner.” Gender identity, apparently, is a new benchmark for data comparison. His data also paired each incubator company with three comparable non-incubator companies. The deck, possibly, was stacked by the larger sample of non-incubated companies.

Regardless of being incubated or not, data collected by Entrepreneur Weekly, the Small Business Development Center, Bradley University, and the University of Tennessee shows that 46 percent of all small business failures are caused by “incompetence.” The leading variety of incompetence is “emotional pricing.” If that is the case then perhaps the incubator businesses that failed didn’t listen to their mentors. Too many may have been started by people who automatically turned to the government for support, didn’t understand that profit is good and didn’t build up necessary cash reserves during the critical start-up months when they received taxpayer subsidized below market rent.

Whatever the causes of these alleged problems, our time with participants in incubator programs has led us to absolutely believe they can be instrumental in getting new ideas into the market and imparting the skills necessary for survival. The key to success, however, is a deep, ingrained understanding by the entrepreneur of how business works, and especially how paper profits do not equate to the cash flow necessary to pay salaries, expenses and taxes.

In searching for candidates for this article we focused on the readily available participants at A-B Tech in Asheville. A-B Tech, however, isn’t the only choice.

Blue Ridge Community College in Henderson and Transylvania Counties offers SBC programs in both Hendersonville (Flat Rock) and Brevard. Isothermal Community College in Spindale and Rutherfordton; Haywood Community College in Clyde and 54 other locations around the state bring the training, facilities and camaraderie of the business incubator to nearly every North Carolina community.

Asheville’s A-B Tech has the largest program in the Western North Carolina area. Thanks to the gift of land and office buildings at the old BASF facility in Enka, the college provides space for up to 15 clients at a time according to Jill Sparks, executive director.

“First, we offer free confidential counseling to anyone and everyone,” Sparks says. “It doesn’t cost anything to talk to us, and we aren’t going to tell anyone you came in. Second, we offer about 100 small business oriented seminars a year. Many of these are free, three hour seminars. For example, it could be a seminar on Google Analytics. In February there was a luncheon seminar on making cell phones and tablet computers work for your business. We have a series of seminars offered by the Small Business Administration, and much more. Anyone who wishes to learn about small business can find something they need.”

For more information go to the website, www.abtech.edu/sbc.

Sparks then put us in touch with three current small business owners who are tenants (or “Founders” as they are called) in the A-B Tech incubator program. Here are their stories.

(article continues on page 2 and more photographs are at the end)

Searching for Value in a Small Business Incubator was last modified: April 1st, 2014 by Hanna Trussler

Pages: 1 2 3

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