Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 19, 1995 TAG: 9502210006
SECTION: BUSINESS PAGE: F-6 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
DATELINE: LENGTH: Long
Nor did it feel right meeting with customers in the den of his home miles outside town, which until last March doubled as his office.
"I don't want to say, 'I'm Joe Blow. I work out of my house. Do $100,000 worth of business with me,''' Casper said.
At home, he said, "you limit yourself."
The Business Development Centre Inc. in Lynchburg is akin to a fraternity. Fourteen resident businesses share a 40,000-square-foot modern office and industrial building.
Each business is assigned an office or manufacturing area. Facilities, from the lunchroom microwave to the loading dock, are available to all.
For a $5 monthly fee, the businesses receive support services they could not necessarily afford alone, such as telephone answering and mail sorting. Rent goes in part to paying a janitor and equipping the center with business machines. A photocopy is a nickel, a fax 50 cents. A secretary's services cost $10 an hour.
While near market rate, the rent includes utilities and consulting on all aspects of running a business. When problems arise for which the business owners lack expertise, they turn to an on-site management consultant who functions as a fraternity house mother, offering practical suggestions and seeing that bills are paid on time.
"You get A, moral support; B, technical support," said Gary Sill, owner of American Innovative Technologies, a nearly three-year tenant.
There are about 530 incubators across the country, about half of them affiliated, like Lynchburg's, with a nonprofit group or government agency, or both.
Virginia's House of Delegates has included in its proposed budget $200,000 for an incubator in the Roanoke Valley, which has been in the talking stages for about eight years.
Local officials have visited the Lynchburg incubator and hope to emulate some aspects of its structure and repeat its success. Built with city funds and federal grants totaling $1.6million, it is self-sufficient, has assisted 28 companies and been expanded once.
Executive Director Catherine McFaden said tenants stay an average of three years, after which they are expected to make room for someone else. The center was 75 percent occupied until the January departure of a large company that used six offices and 11/2 production rooms. That lowered the occupancy rate to 54 percent, but a new business was due in this week. She said she can situate a qualified company within a week.
"This place is constantly changing," she said. "The phone rings, and things aren't the same as they were five minutes ago."
As the name implies, incubators seek to provide an environment in which fledgling firms can ride out the often-difficult early years.
The chemistry for success smelled like lunch around noon one day recently. This wasn't an ordinary office complex with corridors lined by closed doors. The doors were open, and the aroma of what one employee was eating wafted into the hall.
The owners develop a trust that incubator advocates say is impossible in a conventional commercial real estate building.
The owner of the now-departed company "had a key to our shop and would come in and help himself to the equipment," said Sill, one of the more senior tenants. "That's not something you would have anywhere else."
Two men from different businesses talked at a drinking fountain. One of them, Floyd Anderson, a contract-procurement consultant, called the process "cross-fertilization." It was during just such a meeting another day that he and a different tenant hatched a possible partnership, he said.
"It gives you a big-company atmosphere, instead of being on your own, where you have nobody around you. If you get tired of working on a certain project, you can go next door and chew the fat," said Anderson, who moved to the incubator in November 1993 to launch his company.
Anderson and the other tenants can turn to two retired business executives for help at any time. He meets at least quarterly with his mentors, Jack Eckert and Walt Vannoy, the former president and chairman of the board, respectively, at Babcock and Wilcox, a large energy services company with a Lynchburg operation.
Another bargain, Anderson said, is that the incubator's staff - which also includes two small-business development representatives - will, among other tasks, help a company file incorporation papers. A lawyer would charge $500 or more to do the same, Anderson said.
Because the incubator doubles as a small-business development center open to the public, a tenant can walk down the hall to request a loan at rates that reportedly are quite attractive. Sill said he borrowed money at two-thirds the market rate for a new building in Bedford County where he will move this year.
Admission to the Lynchburg incubator is open to new or emerging businesses that expect to hire employees, make goods not already produced in the area or bring in outside dollars by serving markets in other parts of the state or nation. Sill's business held the promise of jobs; he now employs seven people. Casper sells industrial control systems outside the area.
Perhaps the most unusual tenant is Armatics Inc., which designed a device that sprays rubber conditioner on tires of vehicles entering a car wash.
by CNB