Allentown Economic Development Corporation
610.435.8890

Monthly Archives: June 2017

Former Allentown Metal Works Site Rehabilitation Project Receives Private Funding

BB&T Economic Growth Fund provides funding boost to advance project

On Thursday afternoon, the Allentown Economic Development Corporation received a $250,000 check from the BB&T Economic Growth Fund that will allow the redevelopment of the former Allentown Metal Works to make some key advancements.

“This grant will allow AEDC to complete the critical engineering design work for the site’s first building,” explained AEDC Executive Director Scott Unger. “When combined with other financial programs that have been awarded to the project, this building will become the first on this site to be placed back into use.”

When BB&T Corp. announced that it would purchase Allentown’s National Penn Bancshares Inc. last year, that news came with a pledge to create a $5 million fund to support economic development in the Lehigh Valley and Berks County. The purpose of the BB&T Economic Growth Fund is to improve the standard of living and economic health of the region through business attraction and incubation, industrial growth, and the creation of sustainable/thriving wage jobs. The Lehigh Valley Community Foundation and Berks County Community Foundation on April 1, 2016, each received $2.5 million from the BB&T Economic Growth Fund to disseminate for these projects.

The BB&T funds will be combined with the $2.0 million Pennsylvania Business in Our Sites loan previously awarded to the project to get the first building on the site ready for occupancy. Designated as “Building A’ in project plans, this 42,000-square-foot building sits along South 10th Street at the entrance to the site. Once design and rehabilitation work is completed, the building will have a code-compliant shell and will be ready for tenant fit-out and occupancy. It is expected that the building can be occupied by one to three companies which could potentially create 25 to 45 jobs.

“Getting Building A into productive use is the first step in bringing our overall vision for the site into reality,” explained Unger. “It will be an excellent milestone to reach and will add significant momentum to a critical brownfield project within the City of Allentown.”

The former Allentown Metal Works site is a 17-acre industrial brownfield on the south side of Allentown. The former steel fabrication site has been vacant since 2008 and had fallen into disrepair. AEDC purchased the site in 2012 and has been steadily working towards rehabilitating the site. To-date, the U.S. Environmental Protection Agency and the City of Allentown have provided $730,000 in grant and loan funds to AEDC that have allowed it to get the site Act 2 compliant through various cleanup and remediation activities.

“In addition to the BB&T Economic Growth Fund and the Lehigh Valley Community Foundation, AEDC would like to thank our partners on this project without whom the remediation of this 268,000 square feet worth of buildings on this brownfield site would not have been possible,” Unger said in closing. “Special thanks to the City of Allentown, Lehigh County, and Lehigh Valley Economic Development Corporation’s Lehigh Valley Land Recycling Initiative. Additional thanks go out to the EPA, PADEP, EarthRes Group, BrightFields, Inc., and HDR.”

About the Allentown Economic Development Corporation

The Allentown Economic Development Corporation is an independent nonprofit organization whose mission is to improve vacant and underutilized properties within the City of Allentown in order to create an environment where manufacturers and other companies can flourish throughout their lifecycle, from launch to rapid growth, and onto long-term success and profitability. By doing so, AEDC can advance the economic vitality of Allentown and the Lehigh Valley through job creation and business growth.

For more information, please visit our website: http://allentownedc.com/

Business Incubation 101 – Stage 1: Pre-incubation: Business Evaluation

Maybe the idea for your manufacturing company has been rattling around inside your brain for awhile now, or maybe you’ve taken the leap and already started it.

But before your company can really take off, these are the things you will need to consider and make happen if you want to compete and succeed.

  • Business plans are NOT dead – Evaluating the market, competition, etc. takes time and energy, and you may not like what you discover. But doing so will make you that much more prepared for taking your idea to market and being ready to tackle the challenges that lay ahead.
  • Talk to your customers early on – Many great ideas fall apart the first time it makes contact with the customer. It’s the scariest thing to do, but you will learn volumes by taking early iterations of your product or service to your intended customer for feedback.
  • Despite what you may think, you DO have competition – You’re either making something better, faster, or cheaper than someone else, or you do have some novel technology and you’re looking to displace an existing product or service. All of those similar companies are your competition, and they’re not just going to let you come in and take their business away. So be prepared to differentiate yourself in order to compete.
  • Be ready to market and sell you product or service sooner rather than later. The “build it and they will come” strategy is practically guaranteed to fail. Yes, social media marketing is cheap (or even free), but without an audience and strategy, you’re basically shouting into an empty void. Or worse, you’re just the crazy person on the street corner preaching about the coming end of the world that people ignore as they walk by. You need to know who the customer is, who is making the buying decision, and what is important to each of those people.
  • Know how to pitch your company – Whether it’s 1-minute, 10-minutes, 30-minutes, or an hour, you need to craft your story for the audience and have a goal. Are you trying to get into an incubation program? Or looking for someone to invest in your business? Or simply trying to get to the next meeting? Practice, edit, practice some more… rinse and repeat. And again, know your audience and what’s important to them.
  • Be ready to carry the company financially – Just like building a new house, a new venture is always going to take more money to start than you think it is, and the launch process is always going to take longer than you planned for. Plus, you WILL NOT have sales the day you open the doors. Be prepared for this because it’s going to eat into the finances that you have set aside to start the venture.
  • There are NO grants to start your average company – Unless you are working on some novel technology (probably in the life sciences, energy, or defense industries), grants to assist with starting companies are nearly nonexistent. There are a lot of loan programs out there, but you need to be ready to back those loans with collateral and personal guarantees. Plus most loan programs will not cover 100 percent of your startup costs. Be ready to put your own money into the venture so you will have skin in the game.
  • Pick your cofounders wisely – So many partnerships fall apart in the early days of a startup. Whether someone gets cold feet or has been less than honest in their business dealings, there is always something that pops up that stresses the relationship between partners. Make sure corporate formation agreements cover every possible scenario, including sickness and death of a partner. It’s not something that anyone wants to think about, but life has a funny way of throwing curveballs at the least opportune times.

Business Incubation 101 – Stage 2: Incubation: Expectations of day-to-day life

Your manufacturing company is up and running and you’ve been accepted into a local business incubation program, like Bridgeworks Enterprise Center in Allentown. That means the work is just beginning!

Here is what you need to know about what day-to-day life during the first few years of your new business will be like and what you need to do.

  • Incubation programs are not spaces with cheap rent – They should provide programming, resources, and connections that are driving your company to grow and become successful. Each one is different, therefore you cannot compare the rent rates dollar for dollar.
  • Take advantage of the resources – Most incubators offer mentors for its client companies, so utilize those connections for both advice and to expand your network. And since there’s going to be a big learning curve ahead, definitely plan to attend the education sessions since you can learn something new. Get a coach or mentor, whether it’s through the program or on your own. The most successful company CEOs have a coach or mentor that they rely upon for advice or to simply talk through challenges.
  • Sell, sell, and sell some more – Now that you’re paying rent, insurance, utilities, etc. you need to start the revenue engine because the money is draining out of the bank account at a rapid rate. The only thing that keeps your company afloat is by generating sales. Don’t be afraid to set aggressive targets. Sales growth of 10 or 20 percent is good for a mid- or large-sized company, but for a startup expect to aim for 50 to 100 percent sales growth or more for the first few years.
  • Go all in – It’s a scary thing to commit fully to launching a company. But if you’re trying to keep your full-time day job while starting your company, the startup is just going to tread water without making any big waves. When the founders are 100 percent focused on growing the company, big things happen because it’s a matter of life and death for the company.
  • Guard your cash with your life, but invest big – Operate as lean as you can to conserve cash. Be sure to reinvest at least some of your profits into the company. Set yourself up to be able to make a big investment into the company in order to take advantage of an opportunity that could have an exponential impact on sales. Start building relationships with banks and economic development lenders long before you need them.
  • Beware of the big deal – That six- or seven-figure deal with the big-box retailer may sound tempting on the surface, but pay attention to what’s really buried in the fine print of that agreement. Can you meet their delivery expectations? Who carries that inventory? What are the payment terms? What happens if there are problems with the product or service? Be sure to negotiate a fair deal for your company or you may just be setting yourself up for failure.

Business Incubation 101: Stage 3 – Graduation: What comes next

Your new manufacturing business is off to a strong start thanks in part to the business incubation program you joined. But you can’t stay there forever, so you need to start thinking and planning ahead NOW for your company’s eventual departure from the program and move to a new home.

  • The incubator is not your permanent home – All incubator programs should tell companies this on the way in, so don’t be surprised when they tell you it’s time to graduate and move on. The program’s mission is to help new businesses start, grow them, and graduate them so that they can do it again with another company.
  • Start thinking about what’s next sooner rather than later – It takes a lot of capital, time, and coordination to move a company, especially a manufacturing company, so it’s best to start planning for it in advance. Think about the space needs that are going to carry you through the next 7-10 years of the company’s life. What do you need in a new location? Is there an opportunity to create efficiencies in your current processes as you move? Is now the time to buy more or different equipment for your new space?
  • Act like a big company – If the company is close to or exceeding $2 million in revenues by the time graduation comes, it’s  time to start automating processes. Think about using a formal CRM or ERP system to standardize and streamline business processes. Using spreadsheets and word processing documents to manage your business won’t cut it anymore.
  • Work with the incubator as you graduate – They are committed to keeping you in the region, utilize their connections and resources as you prepare for graduation. Graduation is just another stage in the life of the company, but it should not mean the end of the relationship between the company and the incubator.
This site is maintained as a generous donation by