Rural Business Incubators

Business incubators have been supporting the growth of new and young businesses since the 1970s. Managed by public, private and nonprofit organizations and academic institutions, incubators offer qualified businesses a range of products critical to business success, including space, shared office services, business development services, financial resources, and tenant networking.

Unlimited Future, Inc. (UFI) in Huntington, West Virginia, is an example of a successful incubator that has a predominantly rural service area. Established in 1991 by African-American community leaders to foster small business creation and retention in a distressed part of Huntington, in 1993 UFI partnered with Region II Planning and Development Council, an Economic Development Administration district, to create an incubator. This collaboration was one of the partnership projects funded in 1994 by the NADO Research Foundation with support from the Ford Foundation. UFI serves 15 counties in southern Ohio, eastern Kentucky and West Virginia by providing entrepreneurial training, access to credit, incubator space, and business consulting and mentoring.

Challenges Faced by Rural Incubators: Limited pool of entrepreneurs in service area Insufficient local market for goods and services Limited support from local businesses Limited supply of ready buildings for graduating businesses Limited business and technical resources Ways to Meet Challenges: Offer entrepreneurial training program Set up an incubator without walls (see March 2000 Digest) Include bankers and business people to build support Create niche incubators to support new industries Offer a revolving loan fund and tax incentives Initiate partnerships with business and technical resources Excerpted from A Comprehensive Guide to Business Incubation, National Business Incubation Association (NBIA), 1996.

According to Tom Bell, UFI Manager, the NADO Research Foundation grant was "very important for building the credibility of the incubator during the critical first year." These funds leveraged over $700,000 in funds to open a 4,000 square foot facility in 1995. Funding came from the city of Huntington’s Community Development Block Grant program, the Department of Housing and Urban Development Title 20 Health and Human Services Enterprise Community program, the state and private donors.

The building houses a management office, a conference room, a classroom, and 13 offices rented by five businesses. A free health clinic that serves the local community is also housed in the incubator. Bell says that UFI plans to develop a shared use commercial kitchen to support new and existing food companies.

Fee-for-service training is also provided by UFI. Incubator staff teach a 13-week program in entrepreneurship that includes classes in financing, marketing, accounting and forms of business. Since the inception of the incubator, 154 individuals have taken the entrepreneurial training course and 102 have graduated. From these graduates, 62 businesses have entered the incubator, employing 225 full-time and 22 part-time staff. The incubator’s consulting services are another resource for businesses. In the past year, 446 people received business advice and information.

UFI’s financial assistance program provides capital to needy businesses that are unable to obtain bank financing. The program includes a microloan fund from the state that is limited to the seven West Virginia counties served by UFI.

Bell says that UFI is now the organization the region’s press turns to for information about entrepreneurship. In 1999, Bell received the Small Business Administration’s Minority Advocate Award. The reputation of Region II has also been enhanced in the business community by its participation in the project and its work in pulling together resources to help create and sustain small businesses.

By William Amt, EDFS Project Manager

For more information about UFI, contact Tom Bell at (304) 697-3007 or www.unlimitedfuture.org. For more information about incubators, contact NBIA at (740) 593-4331 or visit their website at www.nbia.org.

October Index | Back Page | Next Page