
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, November 18, 1994                   TAG: 9411180071
SECTION: EDITORIAL                    PAGE: A-22   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

HATCHING JOBS IN ROANOKE

ABOUT AS many small businesses fail as start up each year in the Roanoke Valley. That's natural. But since small businesses are the leading creators of jobs, a little help might go a long way.

Such help doesn't have to come in the form of tax breaks (such as in so-called enterprise zones) or lavish government giveaways that can unfairly penalize existing businesses. Sometimes, all it takes is a little nurturing, organized sharing and friendly support.

That's the idea behind the city of Roanoke's proposed small-business incubator, and its request for $400,000 in state funds to get it started.

As city economic-development officials are right to notice, many entrepreneurs now operating very small businesses in Roanoke - from their basements, family rooms or garages - are capable of expanding, but can't afford to hire secretaries, bookkeepers and other helpers, or to buy fax machines, copiers, computers, etc.

The incubator would be a place where they could share support services with other fledgling business operators and also tap the professional know-how of, say, lawyers, CPAs and established small-business leaders in the community for a period of three to five years.

The hope is that by the end of that time they would graduate as established small businesses, moving out and making room for new classes of fledglings. More, the hope is that some would blossom into medium-size and even big businesses, growing jobs for Roanokers as the businesses grow.

It's an idea that has worked well in Lynchburg, in Charlotte, N.C., and elsewhere. All told, some 600 small-business incubators have sprouted across the the country. Their graduation rate is 28 percent, and their graduates have generated more than 7,000 jobs. Nationwide, on average, the survival rate for new small businesses nurtured in incubators is about 80 percent, while the failure rate for those that wing it alone is about 80 percent.

Roanoke may be the first locality in Virginia to propose such an incubator program as a state initiative - a demonstration project of sorts for the Allen administration. It could prove a good deal for the state as well as for Roanoke. The one-time investment of $400,000 could produce a steady stream of new jobs and businesses in this region for years to come.

Look at it this way. States and local governments spend millions of dollars in advertising, marketing and incentives to lure new jobs. Sparta, N.C., for instance, reportedly spent $15 million to coax Bristol Compressors Inc. to put a plant there, which will provide 700 jobs. That's more than $21,000 per job. Assume Roanoke could hatch 250 jobs in an incubator that might cost, all told, no more than $600,000. That would be an investment of $2,400 per job.

It might also get some cars in Roanoke off the streets and back into garages.

by CNB