Jim Metcalf
Updated: September 2, 2024
Opinion
Viewpoint: Small towns as business incubators, parts 2&3
Small Towns as Business Incubators, part 2
There have been numerous studies showing that small businesses are the backbone of the economy and grow much faster than large corporate businesses. They also stay stronger in economic downturns. Small and home-based business must not be overlooked as they are the foundation of a community revival.
Small business development efforts have found that one of the most successful support structures for business growth and success have been business incubators. Small businesses have higher possibilities of survival, success and growth when incubator support is utilized. Incubator elements usually include the availability of good affordable physical space to allow the business to become established. Access to capital and financial assistance through planning and loan programs which reduce failures due to cash flow problems. Mentoring from SCORE, CDC and other small business support systems help apply the experience of success in business growth planning, marketing assistance along with networking with other small business entrepreneurs to reinforce success strategies.
If we know how to successfully grow small businesses through incubator support structures, could a small town apply those same tools to grow a business community, which could provide what is disappearing in terms of jobs, tax revenue and resident enjoyment of community life. The answer is yes.
How then could a small town provide an incubator structure?
First, the community has to develop a vision of success along with a project team of entrepreneurs and leaders to keep progress focused on achievement of the vision. Importantly, a traditional committee is not needed. Instead, a community incubator needs a project team following a timeline with specific deliverables.
Second, the strategy to achieve success must be accepted by all elements of influence. Town boards often focus on positions of protection and regulation. Small and home-based businesses have often received “you cannot do that” responses from boards of health, zoning, planning and others. To achieve success, boards need to respond with, “given our laws and regulations, how can we help your business succeed” This climate of success changes the focus from restriction to achievement of the vision.
Third, finance – Funds availability and financial management are critical for small business success. The community incubator can identify SBA lenders and other capital sources. The provision of financial education, accounting resources and tax management assist small businesses in managing finances.
Fourth, marketing – The focus of marketing is less on individual businesses and more on the total community. Coordinated activities such as social events and festivals are pleasant events for residents as well as sources of out-of-town customers for businesses. Every town has a historic site and famous residents which can form a foundation for tourism destination activities. Small town marketing is really business collaboration and total community involvement in social, educational and business growth.
Fifth, technology – Today’s businesses utilize developing technology to stay in the marketplace. Software mapping programs provide accurate promotional paths to small town business incubators. Through AI technology and personal service, small town businesses can outperform box stores and online markets.
Sixth, education - A small town incubator is a coordinated community activity which utilizes education as the cement that ties it all together. Sponsored education like How to start or grow a Business keeps the incubator full of startups. After school youth business education programs for the 10-year-old lemonade stand age children are very successful in building the entrepreneurial spirit, personal achievement and tomorrow’s business owners.
Small Towns as Business Incubators, part 3
The elements of incubator support unique to a small town can be identified and made available to existing and potential businesses. These include:
Mentoring – Successful community business leaders, SCORE and others are the best people to help small and new businesses plan, grow and succeed.
Business space – Often small and home businesses are limited in their work and sales space due to cost or availability. The inclusion of commercial space landlords in the incubator process can help develop opportunities like:
Open building tours – Schedule an event to promote the community vision at a luncheon along with a tour of available space. Assign experienced people to each space to explain the possibilities along with rental support programs. Some towns even charge an event fee to cover lunch and promotional costs.
Multiple users of one commercial space – Often a small business cannot fill a commercial space, but if 2-6 small businesses share the same space through open or compartmental configurations it promotes the image of a full-service mini shopping mall.
Businesses under wing – If existing businesses contribute space even as small as a card table, home based businesses can establish a presence and benefit from the mentoring of the host business.
Popup spaces – With seasonable or event driven businesses, temporary popup space can be made available. This can consist of empty store fronts, farm market tents or other temporary structures in empty lots. One town placed backyard shed structures throughout an empty lot creating a village marketplace. The structures were rented by home based and agricultural businesses throughout season then sold off to area home owners at season end.
Mobile businesses – Many small towns cannot support some standalone businesses like clothing, shoe stores or specialty shops. Since almost any business can be placed in a truck or trailer, small neighboring towns could support mobile business which spends a day or two in each of multiple locations. Mobile food or farm market businesses are welcomed at senior housing and residential areas with limited transportation. A group of women entrepreneurs formed a traveling clothing and accessory shop caravan in four trucks which scheduled visits to multiple town and business parking lots.
Maker space – Small craft, art and food businesses need room to make their products. Food production kitchens must be equipped with proper equipment and be compliant with health regulations as Industrial kitchens. One community incubator solution is to make church or organization kitchens compliant with health regulations and available for rent to food businesses when not being used for organization functions. The same idea could function with makers and available hall spaces.
Conclusions and visions
Small town business incubators are successful. They help a small town to look at its own local resources rather than waiting for that big external business to save them. The new Main Street is a social and educational process. The net result will transform small towns into growing vibrant living, social, economic and working spaces with citizens no longer just sleeping in town while social and shopping needs were met elsewhere. Small towns following a business incubator model are much more rewarding communities in which to live.
Jim Metcalf is a SCORE Mentor in Central and Western Massachusetts. His work with the Worcester County Chapter of SCORE for the past 18 years has focused on small and home-based businesses in small and rural communities.
EDITOR’S NOTE: This column is part of a three-column series by Jim Metcalf on small towns. To read the first part, click here.
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