by Mary Jo Milillo
In 1999, the city of Port Adelaide Enfield in South Australia opened the Todd Street Business Chambers in the port’s historic inner harbor, an area suffering from more than 50 years of neglect and economic decline. Its mission: “to rejuvenate the region’s small business economy by attracting new businesses,” says Lynette Hay, Todd Street’s general manager. While successfully carrying out its mission, Todd Street has become self-sustaining by expanding its menu of services.
To recognize Todd Street’s contribution to the region’s economic growth, NBIA presented the 2009 Dinah Adkins Incubator of the Year Award in the Nontechnology Category to the Todd Street Business Chambers during NBIA’s 23rd International Conference on Business Incubation in Kansas City, Mo., in April 2009.
Read on to learn how the program helped to revive a once-thriving seaport and assist small businesses growth.
By the late 1990s, many residents and businesses had moved from the Port Adelaide inner harbor district to the suburbs, leaving empty buildings boarded up and often vandalized. Those conditions didn’t stop the city of Port Adelaide from purchasing an 1880s-vintage warehouse with start-up funds from the federal government to open a business incubator. In March 1999, the city hired Hay to get the operation off the ground.
“In the beginning, it was me, 300 pigeons and nothing else,” Hay says. Her role was to refurbish the old building and fit it out with about 30 spaces. After completing that task nine months later, Hay turned her attention to finding clients.
“It was very challenging,” she says. “We had no operating funds and only a small window of time — we almost immediately needed to become self-sustaining.”
But for that to happen, Todd Street had to generate income from client rent and services. To attract clients, Hay relied on business contacts she developed from years of training, guiding and advising small business owners. Through referrals and word-of-mouth, clients began to trickle in within the first year.
Later on [and with some government funding], Hay introduced fee-for-service workshops, coaching programs and advanced-level leadership training to generate additional operating revenue for the program.
During Todd Street’s first five years, two-thirds of its clients were over age 40 — and half were women. Younger people sought employment outside the region where more opportunities existed. But by 2006, construction started on a multibillion dollar, government-funded urban development project to create a recreation and tourist destination in the area surrounding the incubator. Hay says more young people have entered the incubator since 2006 because of Port Adelaide’s economic rejuvenation plan and Todd Street’s business growth programs. Now clients under age 35 represent 28 percent of incubator clients and the numbers are growing. And as before, 50 percent are women.
Hay says the large number of women clients initially “was not by design but by default.” More recently, though, to serve this client base, Todd Street has offered programs specifically aimed at women entrepreneurs. Two years ago, Todd Street and the Port Adelaide Enfield Chamber of Commerce created a women’s business network that evolved into a chapter within the Chamber. Members can promote their businesses as well as test ideas, products and services in a supportive environment.
The chapter also helped identify the types of programs women entrepreneurs want by surveying those who had expressed an interest in business development training. Based on survey results, Todd Street introduced an eight-week series of professional and personal development programs on topics such as goal setting, time management, work/life balance.
Hay says that after completing the series, some women choose to enroll in more targeted programs, such as training on how to grow businesses online or an executive management program. Still others enter the incubator or continue to work at home and join Todd Street’s affiliate program. In all cases, clients are required to participate in the incubator’s business development programs — workshops, consultations on company-specific issues, mentoring and coaching.
In 2008, Todd Street’s governing board added two divisions — the Business Development Centre and the Business Enterprise Centre — and named the parent company the North West Business Development Centre. Combined, the three divisions offer comprehensive business development services to existing and prospective incubator clients.
The Business Enterprise Centre, which formed to comply with specific requirements of state and federal governments via three- and four-year grants, provides free and low-cost workshops, network opportunities, mentoring and consulting support to small business owners.
The federal government also has awarded 12-month contracts to the Business Development Centre to deliver more advanced leadership and management development programs to help business owners develop leadership skills, management techniques and business growth strategies.
Hay says the decision to add other divisions was based on plans to extend NWBDC services beyond the walls of the Todd Street incubator. Adding space was not an option — there was no place to go — and with a consistent 95 percent occupancy rate, growth was necessary for the financial health of the organization. As Hay says, “It’s not about the facilities. It’s about accelerating businesses; that’s what we do.”
Client rent provides 40 percent of Todd Street’s annual budget, and an additional 30 percent comes from business-related client services, such as photocopying, printing, storage, telephone and furniture rental. For most of the remaining budget needs, the incubator has competed for — and been awarded — federal government funds to design and implement business development programs.
Rent subsidy also helps the bottom line. Todd Street pays the city of Port Adelaide Enfield $100 annually for rent, and its lease was recently extended for another 10 years.
Because of fee-for-service training programs, Hay says the operating revenue for Todd Street has increased by 8 percent to 10 percent each year for the past five years and has produced annual surpluses of $20,000.
Todd Street has assisted more than 68 successful businesses with annual combined revenue of nearly $150 million, and created 170 new full-time positions in its first 10 years. One successful graduate directly contributed to change the face of the inner harbor. In Todd Street’s early days, clients had no where to go when they graduated. Hay says, “The lack of space created a challenge to retain incubator graduates and their employees within the area.”
But Alan Thorpe, owner of Alfresco Pergolas & Design, NBIA’s 2009 Outstanding Incubator Graduate in the Nontechnology Category, purchased an empty block near the incubator to build 21 adjacent business units: one for his business and 20 to sell to other small business owners. Since then, Todd Street graduates Marcus Lodge and Philllipe Gravier each purchased one of Thorpe’s business condominiums. In all, eight graduates have built, bought, refurbished and/or leased 21 local properties, adding to the region’s economic growth, Hay says.
“An incubator is quite a unique experience. You’re never very far removed from the entrepreneur and that’s exciting,” Hay says. “We accelerate the realization of people’s dreams — this is a dream factory and we make a difference to the aspirations and goals of our clients.”
6 Todd Street
Year established: 1999
Incubator size: 9,967 square feet
Incubator clients: 23
Incubator graduates: 52
Organizational structure: Todd Street Business Chambers operates as an independent, nonprofit incubator reporting to the Board of Management of the incubator’s parent organization, the North West Business Development Centre.
Mission: Todd Street Business Chambers works with new-start businesses to accelerate and sustain growth and to rejuvenate the small business economy of Port Adelaide, South Australia.
Keywords: best practices, client services – general, coaching clients, economic impact of incubation, entrepreneurial pool, financial management – incubator, funding sources/fundraising – incubator
Phone: (740) 593-4331
Fax: (740) 593-1996
340 West State Street, Unit 25
Athens, OH 45701-1565