July 2008

Waterloo Explores Business Incubator

By Dawn Zanto, M.S., Municipal Services, Mead & Hunt
Is your community interested in attracting new businesses and creating new jobs?  Has your community exhausted the traditional approaches to economic development to no avail?  The City of Waterloo’s answer involved a non–traditional economic development approach: creating a business incubator in their community.

Business incubators began in the U.S. in 1970s, formalizing in 1987.  Their mission is to accelerate the development of successful entrepreneurial companies by providing hands–on assistance to a variety of business and technical support during the vulnerable years of a start–up business.  An incubator’s main purpose is to produce successful graduates (businesses that are financially viable) within two to three years that then relocate to a self–sufficient building within the community.  Typically, incubators provide space to a number of businesses under one roof sharing overhead costs such as heat, water, electricity, leased space, and janitorial services.  A business incubator may also offer an on–site manager to assist with business plans, accounting, networking, office services, and equipment.

The City of Waterloo requested Mead & Hunt’s assistance to conduct a study to explore whether a business incubator would be a good fit for Waterloo and if so, where it should be located.  Mead & Hunt researched the City of Waterloo’s population, income, employment trends, and forecasts and compared them to national, state and local trends and forecasts.  The study also looked at the business market for the area, identified educational, financial and building resources, and conducted interviews with established business incubators.

There are a number of factors that play into the success of a business incubator; the first is educating and gaining support from public and local leaders on the concept and how to foster entrepreneurial activity in their community.  Second, is to identify a champion.  This individual or group would require the necessary levels of networking skills, political connections, and financial resources to help drive the concept to reality.  Third, is to have technical support readily available for the businesses and entrepreneurs such as the local Small Business Development Center, the County Economic Development Consortium, the local technical college, and other local non-profit organizations dedicated to entrepreneur and small business mentoring.  Finally, a successful business incubator will have an experienced and knowledgeable manager, a strong business and entrepreneurial recruitment program and a cost effective building operation and maintenance plan.

Mead & Hunt, in concert with City of Waterloo staff and interested citizens, conducted physical tours of four identified properties. Subsequent research was then conducted by Mead & Hunt to determine what structural changes would need to be completed in each building to create an incubator facility.  After an extensive assessment, a building for the business incubator was identified.  The Waterloo’s Business Incubator Feasibility Study was formally presented by Mead & Hunt to the City Council in May.

If you are interested in learning if a business incubator is right for your community contact Dawn Zanto, at (608) 273–6380 or e–mail at .