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 One year after starting as executive director of the
Lincoln & Logan County Development Partnership, Joel Smiley brought
the Logan County Board up to date on the progress of a significant
project that he wanted to see happen here when he took the job.
Smiley said that the business incubator is a project that the
partnership has been working on since the day he began. This is a
project that creates new jobs, increases the likelihood of success
for a startup business and provides opportunities to keep youth in
Logan County.
Smiley was joined by Patrick Doolin and Sonnie
Alexander, two committee members for the business incubator, during
the Logan County board-of-the-whole meeting in February.
Smiley read the following description of the
project:
A
Business Incubator is a mechanism to create jobs by providing a
subsidized environment for business start-ups. With unemployment up
close to 3% over last year, new jobs in Logan County are crucial.
The Business Incubator will not only provide this environment, but
will help us compete with neighboring counties who already have
incubators in place.
With
small business start-ups failing at a 70% rate within the first 5
years, a business incubator can reduce start-up costs thus freeing
up revenue for other needed business expenses including marketing.
Participants can stay in an incubator for up to three years. The
rent is on a sliding scale with a major escalation each year until
100% of market rate is reached.
Our
original Business Incubator Concept was based upon finding a single
donated facility in Logan County and creating a program to allow
business start-ups to begin their process in the incubator for up to
three years. By having a central location, it would be easier to
manage, although there would be liability for the site.
Incubators target primary sector positions with an emphasis in
manufacturing, assembly, hi-tech, warehouse distribution, and
business services. Retail has not been a primary focus for the
incubator and would only be considered on a limited basis generally
as part of a manufacturing component.
A
target wage of $12-$15 per hour has been a focus regarding the types
of jobs we would like to attract. This program is capable of
creating at least 100 new jobs.
The
idea of creating an incubator portfolio may be an option to add
diversity of locations and variety of spaces. A portfolio concept
would allow multiple locations throughout Logan County to specialize
in various fields. Examples might be: a warehouse facility in
Lincoln with 25,000 square feet for a start-up manufacturer, or a
hi-tech firm in Atlanta donating 500 feet of a larger building. The
Partnership could accept the space as a donation and the donated
space may be considered an eligible deduction as a donation to a 501
c3. The rent collected could then go back to property owners after
an administrative fee is paid.
All
applicants for the incubator will need to go through the Business
Incubator steering committee. Before this can occur, applicants will
be required to go through a SCORE program with professional experts
assisting the applicants to set-up a business plan and budget.
Once
this process is completed, we will provide the applicants with the
contacts for the four major banks in Lincoln along with the local
bank of the community they are considering if outside of Lincoln.
The
Business Incubator Committee consisting of Rick Hamm, Richard
Sumrall, Keith Snyder, Sonnie Alexander, Patrick Doolin, Tom Akers,
Nathan Turner and myself have been meeting over the past six months
to put together a theme, business plan, and target market. We even
toured the Business Incubator in Decatur. We will be unveiling the
entire plan over the next few months and hopefully kicking off this
program this summer. The theme of the plan will be "Where
entrepreneurs come to start their businesses."
As
part of the federal stimulus package, business incubators have
become eligible for federal funds. We have formally submitted a
request for $250,000. If this is approved, it will increase our
options. If it is not approved, we will still target our plan for
this summer.
(End of prepared statement)
Smiley and the committee members then entertained
questions from board members.
Jan Schumacher asked about the screening process for
applicants to the program and how the candidates would be found.
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Smiley responded that it would be similar to an application for a
loan. All the applicants would have to participate in the SCORE
program. SCORE would work with the applicants to put together a
business plan that includes a budget. The incubator panel would
carefully look at those. "We want to make sure these are businesses
that will succeed," he said.
Smiley said he is already getting about two leads a
month from local interests. He refers them to start work with the
SCORE program that is established in Springfield.
Smiley cited a recently established business as an
example of who might be chosen and how the incubator would work.
David Doolin, brother of Patrick Doolin of Integrity Data, recently
won a business plan competition hosted by Bradley University.
Patrick has offered to host his brother's business rent-free during
its startup.
"So, we've got folks like that, all ready to go. All
we need to do is get this thing available," Smiley said.
Pat O'Neill, vice chairman of the board, asked about
how the program helps keep a small startup business from failing.
Smiley explained that it starts by providing a
place. That right away reduces starting costs, and you're giving
them a greater chance to succeed. The SCORE process helps set the
vision, budget and business plan. SCORE also provides counseling.
Patrick Doolin added a practical example, saying
that most entrepreneurs have a really good idea for what they want
to do for a business, but they don't really know how to bring that
business to reality. Someone who knows how to fix computers doesn't
necessarily know how to run a business. Professional business people
are able to coach them through running that business. This would get
them started on the right foot, he said.
The provision of a facility is another advantage to
get them going. Doolin is doing this right now for his brother, and
as his brother's business succeeds in a few years, his brother will
start paying rent.
The program is a great way to keep, attract and
bring back our educated youth to Logan County. It allows young
people to stay here, closer to family. The Doolin family is an
example of that.
Smiley added that it also gives college grads
opportunities for quality jobs.
The development partnership is looking for
facilities for the program. Business owners who might want to allow
use of their property would have a charitable tax advantage, as the
partnership is a 501(c)(3).
[By
JAN YOUNGQUIST]
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Contact information
Lincoln and Logan County Development Partnership
Joel A. Smiley, executive director
217-732-8739
1555 Fifth St.
Lincoln, IL 62656-2210
EconDev@LincolnLogan.com
http://www.lincolnlogan.com/
About SCORE
SCORE
harnesses the knowledge of retired professionals from the fields of
business, accounting, marketing, banking, engineering, law or other
related fields that help local business owners.
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