by Carol James
Developers of an Australian incubator that opened in the late 1980s had dreams of jump-starting their region's declining steel-industry economy with new manufacturing businesses. With that goal in mind, they renovated a former factory into an incubator with bays.
Indeed, potential clients came knocking. But the entrepreneurs were looking for office space in which they could start service businesses. "This then cost hundreds of thousands [of dollars to convert] the factory to offices," says Julian Webb, CEO of Australia's Capital Region Enterprise and Employment Development Association (CREEDA), a nonprofit agency that focuses on creating jobs through small business development. "After about 10 years, the incubator closed. It was never in the right location for office businesses."
Why were project developers so off the mark? Their development process apparently failed to accurately identify a target market or ideal location. A well-researched feasibility study likely would have demonstrated a need for office – not manufacturing – space. It also likely would have suggested a location in a city commercial district, not an outlying industrial area.
Providing detailed answers to critical questions, a feasibility study helps incubator developers decide whether an incubator will prove effective in a particular setting by determining if the proposed project has a solid market, sound financial base, strong community support and true champions.
Readers take note: Some issues discussed in this story will impact only incubation programs aimed at community or economic development. Other factors, however, will impact the feasibility of any incubation program – including those that are private, for-profit businesses.
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Keywords: consultant, entrepreneurial pool, facility selection/construction/renovation, feasibility study, market research -- incubator, stakeholder development
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