William M. Factory would be proud of the accomplishments of the Tacoma, Wash., incubation program that bears his name. Factory, a community activist who helped expand employment opportunities for economically disadvantaged entrepreneurs in East Tacoma, co-founded and directed the Tacoma-Pierce County Small Business Incubator (as the program was originally called) from its opening in 1986 until 1996. The mixed-use incubator was renamed in his honor after his death.

The program assists carefully selected businesses – many of which are owned by women, minorities or low-income entrepreneurs – as a way to revitalize the local economy, promote job growth and expand the tax base in its East Tacoma neighborhood. The incubator has graduated more than 200 companies; approximately 80 percent of those firms remain in business or have successfully merged. The William M. Factory incubator serves a number of specialty trades companies, including electrical, painting and construction contracting firms.

During the last year, clients at the William M. Factory Small Business Incubator have created nearly 300 jobs. Most of those jobs benefit residents of Tacoma’s eastside – one of the area’s poorest neighborhoods. “We haven’t lost sight of our constituency,” says Tim Strege, executive director. “The vast majority of our firms are managed by entrepreneurs who would otherwise be unemployed.”

As part of their leases, all client companies sign first-source hiring agreements in which they agree to consider unemployed neighborhood residents for available job openings. These agreements create beneficial relationships between the businesses’ growth and the residents’ well-being, says Colleen Barta, business development manager at the William M. Factory incubator. “The employment clause helps incubator companies feel ownership of the eastside because their businesses and their employees are here,” she says. “They want to increase the quality of life in the neighborhood, even after they graduate.” Several incubator graduates continue to operate their businesses in East Tacoma.

Kevin Moss, a recent incubator graduate, is one entrepreneur who has made a difference in the community. Northwest Landworks, Moss’ construction site preparation firm, joined the William M. Factory incubator in 1999 with two employees. With the incubator’s assistance, Moss developed the business skills he needed to compete on large projects. In 2003, the company won a $12.5 million contract on a city water supply pipeline project, and the company’s full-time employment grew to 14 workers – most of whom were minorities and/or women. One worker, a formerly unemployed eastside resident, earned more than $50,000 annually for the first time in his life, thanks to this job.

Factory and other Tacoma community leaders started the incubator in a vacant restaurant a few blocks from its current facility. Over the years, the program moved several times into other leased space, most of which was not conducive to client networking, Strege says. Still, each move helped the program reach more disadvantaged entrepreneurs. “Every move was an upgrade,” Strege says. “And with every upgrade, our clients stepped up and performed even better, both because people outside the incubator gave the companies more respect and because the companies held themselves to higher standards.”

In 2003, the incubator moved into its own $3.2 million building designed specifically for incubation, with 30 client offices, more than 100 workstations and four conference rooms. The 20,000-square-foot facility – which also features a fiber-optic communications system, an interior parking garage, and balconies overlooking Mt. Rainier and Commencement Bay – is one of the most technologically advanced office buildings in the Puget Sound region. Less than three months after it opened, the new building was full.

That’s not to say admission into the incubation program comes easily. All prospective incubator clients must pass a stringent selection process to ensure that the entrepreneurs’ backgrounds match the products or services they hope to offer and that their business models are viable. “We have a very strict selection process,” Barta says. “Otherwise, our 78 percent success rate could easily be a 78 percent failure rate.”

Incubator clients pay above market-rate rents, which include fees for all incubator services. These services include specialized assistance in accounting, human resources, engineering and other business functions. Consultants and instructors from two local colleges (Bates Technical College and Clover Park Technical College) and volunteer professionals share their expertise with incubator clients to complement the experience of incubator staff and to help keep overhead costs down, Barta says.

The incubator’s exceptional facility, state-of-the-art technology, and highly capable staff and volunteers have contributed to the incubator’s success, but clients most frequently cite the opportunity to network with other entrepreneurs and to interact with visiting contracting agencies and corporations as the most beneficial aspect of their incubator experience, Strege says.

In coming years, the William M. Factory program plans to develop an incubator campus with additional facilities to house start-up businesses in various industries. The incubator now is seeking funds and developing plans for an adjacent facility to house technical and scientific services start-ups.

“We are opening the door of the economy to a lot of new entrants, and in the process, we’re enlarging the overall economy,” Strege says. “Our current facility employs over 250 workers; an incubator campus could provide jobs for 1,000 workers or more.”