On Tuesday, April 16, about 60 business incubation professionals came together to learn about making their programs self-sustaining. The three-person team presenting the conference session represented nearly 80 years of expertise in the industry.
“It was an honor to be invited to present with Jim Greenwood and Mark Long at this year’s International Conference on Business Incubation,” said Program Manager Anthony Durante of Allentown Economic Development Corporation. “I learned so many best practices from both of them over the years of attending conferences and training sessions. Bridgeworks wouldn’t be in the place it is if it weren’t for the lessons they shared with me. To have been on the same stage with them had me feeling a bit humbled.”
Held in Minneapolis, the 33rdannual conference is put on by the International Business Innovation Association (InBIA). This year over 400 professionals representing incubators, accelerators, coworking spaces, and economic development organizations attended the conference to sharpen their skills and network with their peers.
“The conference is my favorite event to attend each year,” said Durante. “Because what we do is so regionally focused, none of us are competitors. That results in an extremely open atmosphere where people are willing to share what their initiatives are, what’s working, and what’s not. I learn so much just from chatting with incubator professionals in between sessions or over dinner.”
The late morning session that Greenwood, Long, and Durante presented was entitled “Strategies for Increasing Self-Sustainability Potential for Your Entrepreneurship Center” and focused on teaching methods for centers to become less reliant on outside funding. Greenwood and Long presented on applying best practices to privately funded and university-funded incubator models; then Durante presented AEDC’s Bridgeworks Enterprise Center as a case study on how to apply these lessons in a real-world environment. Several themes carried across the material the three presenters laid out.
Maximizing the amount of leasable space available in a facility and pricing it in a way that allows the program to run breakeven with some vacancy was a key lesson all three presenters shared. Durante explained that at least 65 to 70 percent of a center needs to be leasable space. From there, the pricing model needs to work so that if that leasable space is only two-thirds occupied, the center still runs at breakeven.
“If your center needs to be 100 percent occupied in order to keep the lights on,” explained Durante, “or if you allow the architect to design your center as his or her swan song with grandiose lobbies and common areas, your business model is going to hit major roadblocks before it ever gets going.”
Another common theme during the session focused on reducing the dependency on outside funding to keep the center running day-to-day.
“Jim, Mark, and I all emphasized the fact that a center’s day-to-day operational budget can’t be tied to an outside funding source,” said Durante. “Too many state budgets are running at a deficit where funding of key programs is getting cut. Also, administrations change, whether it’s at the state or university, and a program can suddenly go from being the favorite child to being the unwanted dinner guest almost overnight. If you have a self-sustaining program, those kinds of changes have a far less severe impact on the center.”
The session was very well received by the crowd with several attendees engaging the presenters after it was complete. Ultimately, the presenting team had one message for the crowd:
“A center needs to be run as a profitable nonprofit,” concluded Durante. “You can reinvest that surplus into the program to continually make it better. We’re trying to teach businesses to focus on growth and to become profitable – we need to lead by example. In the end, if there’s no money, there’s no mission because there is no organization left.”