Original Date: 04/22/1996
Revision Date: 01/18/2007
Best Practice : Business Development/Business Incubator
When 3M moved out of Chattanooga in the early 1980s, the company left a 125,000 square foot building in deteriorating north Chattanooga. The local economic development agency restored the building in 1988 and developed it into a small business incubator to provide space and support services for new businesses. The funding for the facility is provided by the Economic Development Administration and City/county matching funds.
The facility now contains 50 offices and 30 manufacturing spaces, with office spaces between 130 and 1,300 square feet and manufacturing spaces between 400 and 8,000 square feet. Spaces are rented at the low end of market value, and the rental rate increases by $0.50 per square foot per year during the three-year incubation period. Companies qualify as tenants if they are in their first year of existence demonstrating good business planning sense, demonstrating the ability to outgrow and move from the center after three years, and are designated a for-profit company.
Support services provided to the tenants at no charge include janitorial services, business planning assistance, loan packaging assistance, use of conference rooms and overhead projectors, on-site postal boxes, notary public, security, parking, volunteer counseling, and pick-up of mixed paper for recycling. The companies are charged for utilities, garbage disposal, business property tax, clerical support, copier charges, faxing capabilities, and on-site bookkeeping services. A library, video center, and computer center are also available for use at no charge. In addition, over 100 professional volunteers provide assistance to the companies as needed.
There are 65 companies currently located in the facility, 55 of which are service related, and 10 manufacturing related. Total employment for all companies currently in the facility is 424, and 223 companies have graduated out of the incubator with 1,520 employees. The cumulative sales of these start-up companies has amounted to $200M. Of the 344 companies that started business in the incubator facility, 288 are still in business a success rate of 84%.
For more information see the
Point of Contact for this survey.