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Fri October 28, 2011
Your Story: can grassroots small business support work?
Business incubators are a trumpeted, but yet unproven way to give entrepreneurs and their projects a higher chance of success. Foundations and governments are lining up dollars to support incubators in their communities.
Some of the larger incubators around the region were profiled by Niala Boodhoo earlier this week. But there are also more grassroots efforts springing up, incubators that seem themselves to be small enough to be supported.
Marcy Kates lives and works in Holt, Michigan. Two months ago she left her job as a program officer for the state’s AmeriCorps program and opened IncuBake, an incubator kitchen and commercial kitchen space. Kates used her savings and her credit cards to open the kitchen, inspired by being unable to find low-cost commercial space for her own catering.
“I started this project to be a job creator, " said Kates.
Even so, she intentionally stayed away from a nonprofit model, wanting more flexibility and not really wanting to fundraise. That meant using her savings and her credit card to start the business, which is now about 15 percent full but, Kates says, growing steadily.
Kates is providing many of the services larger incubators advertise, like counseling.
“I meet with every new person when they come in and we go over their business plan," she said.
She calls it “brainstorming,” but it’s a meeting to discuss marketing strategy, pricing, and retailing.
“I spend more time on that than anything, other than mopping the kitchen floor,” Kates said.
After these conversations she and some potential clients have found they just aren’t yet likely to become successful, and she discourages them from renting.
For four years, the Can Do Kitchen has been running a nonprofit version of the same project in Kalamazoo. The kitchen is a project of the nonprofit Fair Food Matters.
“We want to increase the amount of locally produced food in the marketplace,” said Lucy Bland, who runs the kitchen.
And they hope to support local businesses in the process. The kitchen costs between $15 and $35 an hour to rent, more, on average, than Kates’ kitchen. The Can do Kitchen provides marketing support for its clients, and business counseling. They have 12 regular users right now, and have graduated two businesses so far, companies that were doing well enough to move on to storefronts or their own commercial kitchens.
There is no data on how many of these smaller incubators exist around the region, or whether nonprofit or business models may make them more successful. What research continues to show is that running a successful business is very difficult. The rule of thumb that 50 percent of businesses fail to survive for five years is consistently borne out by United States Small Business Association Statistics. The risk factors to small-business success are almost too numerous to count, and even the most well-resourced incubator would be hard pressed to control for them all. Even so, smaller entrepreneurs, like Kates, are trying their luck and hoping other small businesses can share in their success.
This story was informed by the Public Insight Network
Inform our coverage: What support do you think small businesses need to be successful?