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Turning incubation into an art: Creative use of resources helps the Entergy Arts Business Center provide tailor-made services to fledgling arts businesses

by Jennifer Agoston

August 1999

The story is now local lore in New Orleans. In 1992, the New Orleans Symphony was facing some hard times and on the verge of bankruptcy. A few dedicated musicians from the group were struggling to find a way to keep from disbanding and leaving the city without a major symphony orchestra. They decided to approach the Arts Council of New Orleans for help.

The timing couldn't have been better. The Council was conducting research on the feasibility of starting a special focus business incubator for local artists and nonprofit arts organizations, and the musical group was the perfect example of an arts group that could benefit from such a program.

The orchestra became the first tenant of the Entergy Arts Business Center (EABC), a facility that would help arts organizations and individual artists and performers who needed guidance on how to turn their talents into money-making ventures. The orchestra members were not initially enthusiastic about developing a business plan, but they soon realized its worth. With the help of EABC, the symphony underwent a complete facelift and renamed itself the Louisiana Philharmonic Orchestra (LPO). The musicians became the owners of the organization and even agreed to forego being paid until the orchestra could become financially stable. The players eventually hired their own staff and a music director, a radical move for a symphony, and soon they found themselves back on stage.

Today, thanks to the services and guidance of EABC, LPO is making music for New Orleans-area residents while operating on a $3 million budget. It was named an NBIA Client of the Year in 1995 and has since graduated from the program and occupies an entire floor in a building adjacent to the incubator.

LPO is just one of the success stories to come out of the Entergy Arts Business Center. By leveraging community resources and partnering with local arts and business professionals the incubator has helped hundreds of fledgling arts entrepreneurs develop into successful businesspeople, and in the community in the New Orleans area. EABC's innovative approach to helping entrepreneurs with a special focus and unique needs has earned it the distinction of the 1999 Randall M. Whaley Incubator of the Year award, NBIA's highest honor.

Development

The New Orleans symphony wasn't the first arts organization to experience financial difficulty earlier this decade. Several other arts groups had been facing similar problems. The arts just didn't seem to be thriving in the New Orleans area. Groups were going into debt as funding sources were disappearing. Even infusions of cash from organizations such as the Arts Council of New Orleans, a group with a history of funding arts projects for nonprofit groups and social services organizations, didn't seem to help the symphonies, theater groups and visual artists that were scraping bottom to survive. "Money wasn't always the solution. [The arts groups] didn't use it to their advantage," says Mary Kahn, director of the EABC and associate director of the Arts Council.

The council received a grant from the National Endowment for the Arts to provide technical assistance to local artists in need. The organization realized, however, that it would need more than a one-time grant to grow arts-related businesses in the area. Instead, the council wanted to focus on providing continual support to area artists and organizations.

Using a grant from the state of Louisiana, the council conducted a feasibility study for the development of a special focus incubator devoted to helping arts organizations grow into successful businesses. "We were looking for something that would be there and address this on an ongoing level," Kahn says. The study focused on job creation, job training and the economic impact of an arts incubator in the community. To measure the potential economic impacts, the council went to local economists and university researchers for an economic analysis. "We did it like any other incubator would," Kahn says. Although the program is focused on the arts community, "it still has to stand on its feet as a business project," she points out.

Results of the study showed that an arts incubator would be just what the community needed to revitalize its lagging arts community, create jobs and generate econincubation model fit our community and our needs," Kahn says. "We discovered nonprofit arts organizations are much like other businesses. They hit cycles, hit challenges, they could grow or die," Kahn says. "To be there and help them through those cycles, we thought business incubation would really work."

The Entergy Corp., a mid-south utility company, provided most of the initial funding for the incubator. The Arts Council asked for a multi-year commitment of support and got it – $50,000 for each of the first three years. Kahn believes the commitment from Entergy helped leverage additional funding from the city of New Orleans to round out the total amount needed to launch the incubation program. "We gained credibility because we started with a corporation," Kahn says.

Pointing artists in the right direction

Arts Council opened the incubator in a 6,000-square-foot section of a facility in the city. Nine nonprofit arts organizations are housed in the incubator and take advantage of low-cost office space, a shared receptionist, a library and resource center, access to conference rooms and other on-site benefits. Individual artists can also join EABC without renting space. These "members," which today total about 300, receive discounts on EABC workshops and consultant fees and have access to the Arts Line, an information hotline, and other business assistance services. Membership is $50 a year, although individual artists in the low- to mid-income – bracket which account for about 85 percent of the membership – can join for free.

EABC's business assistance for individual artists revolves around the belief that the artist needs to "caretake his artwork," according to Kahn. Clients are taught to think of their talents as a product with a niche market just waiting to be tapped. The nonprofit organizations housed in the incubator are treated very much like traditional businesses as well.

"Without a doubt, the incubator has helped to enhance my business, from a professional standpoint," says Jacquelyn Mooney, an Entergy client who creates unique, storytelling quilts. "People have a perception of artists that's more romantic than reality, and unfortunately artists often have that misconception, too, and don't take care of the business end. Entergy gives you a practical advantage by showing you how to view your art as business without losing the legitimacy of the art."

Both members and tenants have access to services that resemble those offered in most other types of incubators – business plan advice, workshops and forums, networking opportunities, legal clinics, to name a few – but they're tailored to the needs of arts-related businesses. "We try to help [artists] discover the tools they need for strategically pricing their work, developing a competitive resume and portfolio, identifying marketplaces, organizing for success," Kahn says. "We talk about developing a career plan, not a business plan."

The tools came at exactly the right time for Mooney, who recently signed a contract with Johnson & Johnson to create a series of quilts that the firm plans to donate to neo-natal hospital units around the country. "Ironically, before I sat down at the table with Johnson & Johnson I had attended three very important workshops at Entergy," Mooney recalls. She's certain the workshops on the art of negotiating, strategic planning and pricing work helped her cinch the deal. "[Johnson & Johnson] told me that had I not been able to articulate my confidence and ability to fulfill the responsibility they were giving me, they would not have chosen me for the project," Mooney says. "And the incubator gave me that."

Entergy's strategies and tools have been extremely effective for other clients, too. Take the example of Frances Swigart, who makes hand-colored prints with an antique printing press. The incubator helped her develop an e-commerce plan that took her to a whole new level. "She's really built a career," says Kahn. Jocelyn Burell is now working as a full-time jewelry maker, thanks to a shift in strategy the incubator helped her make, one that led her to utilize craft fairs more effectively.

Three full-time staff equivalents, all with arts and business backgrounds, provide the core support to tenants and members. Kahn splits her time equally between assisting clients at EABC and working within the Arts Council.

The uniqueness of this special focus incubator lies in how it draws on resources from arts entrepreneurs and other business experts in the community. "We try to identify relevant models for people to follow," Kahn says. "It's not that staff knows everything, but we know how to network to the key person who knows."

EABC pointed the New Orleans Film and Video Society, an Entergy Arts tenant for the last four years, to a strategic planning consultant who helped the organization develop a long-term plan for its growth. "EABC staff has been more than helpful in brainstorming ideas, giving me contacts, additional feedback, or pointing me to another person who can help," says Carol Gniady, executive director of the Film and Video Society. "That's really invaluable."

The society also has taken advantage of the regular workshops EABC offers. Hosted by experienced professionals in the business of art, these workshops provide information on the basics of running a business, marketing products and services, managing finances and other related topics. "They cover things that are important to nonprofit organizations but that we wouldn't normally go out and seek out on our own, or if we did it would take a lot more resources," Gniady says. Workshop fees vary from $5 to $40 for members, although anyone in the community can attend at a higher rate.

Kahn and her staff aren't afraid to direct tenants and members to outside programs that may be available to them, such as the local FastTrac program; EABC even has awarded scholarships to some artists for the course. Kahn says it's part of the incubator's strategy of offering maximum services in the most cost-efficient way without replicating services that are offered elsewhere in the community.

EABC's business assistance program also draws on the Arts Council, the incubator's parent organization. Council staff knows the needs and challenges of arts businesses and can provide tailor-made advice and guidance. For instance, the council's full-time certified public accountant not only minds the books for the organization but also helps EABC clients deal with tax issues such as how to file taxes as a self-employed artist.

But EABC's services do more than teach and provide hands-on training. Another benefit of being a member or tenant is the opportunity for networking with other members and tenants and with businesses and organizations throughout the community. EABC keeps a database of members and tenants and their specialties, and Kahn actively pursues businesses in the area that may be seeking services that one of her tenants or artist members can provide. "We're very aggressive in seeking business to come to us," Kahn says. "If an opportunity comes along we can call our member or send out notice to them. That's why we strongly encourage individuals to join and be counted."

The networking opportunities have been extremely valuable for the Film and Video Society. "We've had constant opportunities to partner with other tenants and outside organizations that seek help from the Arts Council," Gniady says. The society partnered with Junebug Productions, an incubator tenant that creates, produces and presents theater, dance and music performances, to present a film on environmental racism. "We do tons of collaborations in the community with all kinds of [groups]," Gniady says.

Whatever the direction EABC points its clients, it is careful never to lose focus of who exactly it is serving – arts entrepreneurs. "We have targeted a niche of what we have to offer, and we really stay very focused on what our particular niche is," Kahn says. Even though arts entrepreneurs have specific needs that differ from companies housed in a high-tech or manufacturing incubator, they still need advice like any other fledgling company, maybe even more. "Our clients view themselves as small businesses," Kahn says. "They need to understand financial dynamics of how a business works. They need to do research and figure out how to advance their product."

Costs for providing business assistance services are covered by tenant and member fees and corporate and local support. The EABC operates on what Kahn calls a "no-growth policy," which means they have had the same operating budget since they opened. "We didn't want to dedicate our staff to fundraising," Kahn says. The incubator does have some larger stakeholders, which have remained loyal. Entergy Corp. has continued its support beyond its initial three-year financial commitment, providing about 15 percent of the current budget. Entergy officials also have donated their time on the incubator's board of directors. The remainder of the budget is derived from city of New Orleans Community Development Block Grants (50 percent) and miscellaneous grants, tenant rent and program fees (35 percent).

A positive impact

Applying the concept of business incubation to special populations such as the nonprofit arts community in New Orleans is relatively new in the incubation industry, and EABC has forged the way for other organizations pursuing similar projects. "This is a new model that the nonprofit world is beginning to explore," Kahn says.

Even though incubating arts businesses poses unique challenges, the impact on the community can be the same as it would be for any other successful incubator. The 48 jobs the current tenants have created are only the tip of the iceberg. Hundreds of artist entrepreneurs EABC has helped are running stable businesses and have contributed to the revitalization of a thriving arts community in New Orleans.

Louisiana Artworks, the second phase of the incubator that will open in 2001, is expected to ramp up the impact many-fold. More than an incubator, it will be a major tourist destination attracting about 500,000 visitors each year and bringing in substantial tourist dollars. Part of its mission is to give artists the exposure they need to turn their crafts into moneymaking opportunities. "For most artist entrepreneurs, the biggest challenge they face isn't lack of a product or service. The problem is finding a marketplace that brings a critical mass of people together interested in what the artist entrepreneur can provide," Kahn says. Not surprisingly, Louisiana Artworks has the backing of city and state officials, local professionals and the arts community. The 78,000-square-foot facility includes a retail area where artists and craftsmen will showcase and sell their wares to a national market. Another area is being designed to offer studio space for tenants where visitors can actually watch artwork being created.

"We want to provide an educational component," Kahn says. "If you see an artist create you may understand why you would want to buy that handmade bowl or coffee mug."

Kahn credits the success of EABC and its continued growth to the guidance she has received through NBIA and other incubators, even those serving vastly different types of entrepreneurs. "Many important discoveries I've made about operating the incubator have been from technology and other incubators," Kahn says. "Some of the most exciting things are being done in unrelated areas, but they can be applied to [our focused] population."

Entergy Arts Business Center

225 Baronne St., Suite 1712
New Orleans, La.
(504) 523-1465;
(504) 529-2430 fax

Year Opened: 1992

Size: 6,000 square feet

On-Site Clients: 9

Member Artists: 300

Sponsorship: The Arts Council of New Orleans, The City of New Orleans, Entergy Corp.

Tax Status: 501(c)(3)

Rent Per Square Foot: $7 - $9

Cost of Business Assistance Service: varies

URL: www.louisiana-arts.com/entergy.html

Entergy Arts Business Center will be part of Louisiana Artworks, above, when it opens in 2001. More than just an incubator, Louisiana Artworks will be a major tourist destination.

Jacquelyn Mooney's Rhythm & Hues story quilt business has achieved a new level of professionalism — and profitability — with the help from the Entergy Arts Business Center.

Entergy Arts Business Center staff are, from left to right, Emily Slaughter, project specialist; Mary Kahn, director; and Saran Bynum, project specialist.

Actors Adella Gautier and John O'Neal of client company Junebug Productions organize for a national tour.

Keywords: arts incubator, best practices, partnerships -- organizational/corporate

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