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Sustainable Business Excellence

No two incubator client companies develop in quite the same way. Each has different needs that an incubation program must address in order to help the company reach its full potential. The challenge is creating a program of business assistance that identifies and fulfills those needs, sets goals, and tracks clients’ progress over time. Howard County Economic Development Authority (HCEDA), which operates the NeoTech Incubator in Columbia, Md., designed its Sustainable Business Excellence (SBE) process with exactly that purpose in mind.

SBE links a business’s development to a series of major milestones in areas such as funding, marketing and product development. The process enables incubator staff to customize assistance to each client company based on the management team’s skills and experience. By tracking clients’ progress based on specific benchmarks, SBE also provides incubator staff, clients and investors with an objective perspective regarding the business’s development.

Almut von Biedermann, HCEDA business strategist, developed SBE specifically for use in business incubators. "The program is a management tool to help small- and medium-sized companies focus on their core values and understand their major deficiencies," she says. "Many entrepreneurs know little about their strengths and weaknesses and how to adjust their businesses to accommodate them. SBE helps resolve these problems."

Von Biedermann designed SBE as a way to streamline incubation processes at the NeoTech Incubator, which assists start-up firms in the areas of computer hardware, software development, telecommunications, the Internet and Web development. Originally, the incubator’s approach was more time-driven. Clients signed a series of six-month leases and graduated when they completed the incubator’s program of services, generally in two to three years, says Carol Morrison, NeoTech manager.

However, Von Biedermann noticed that not all of NeoTech’s clients matured at the same rate. "We decided time needed to be taken out of the equation," she says. "So we opted for a process driven by events." By developing a process based on milestones, she hoped to enable NeoTech to incubate each company at a rate relative to its abilities and resources.

Von Biedermann’s first task was to identify the events in a company’s lifespan that mark distinct stages of development. For instance, she knew that marketing was integral to a company’s success, but how could marketing efforts be measured objectively? What events would define a client’s progress in this and other critical areas?

Through discussions with Maryland business incubation professionals and local business leaders, von Biedermann identified two or more events in each of the following categories to help track a company’s development: marketing, sales, public relations, product development, business plan, financial excellence, funding, strategy and tactics, human resources, governance excellence, and intellectual assets. She created a grid of these categories and events, which has enabled Morrison to help NeoTech clients set goals and identify accomplishments.

When NeoTech accepts a client company, one of the first things Morrison does is determine which SBE events the company has already completed. For example, the SBE "funding" category contains four funding events, each representing different thresholds of dollars invested. Some companies begin the program having reached the third event, while others may not yet have reached the first. "In addition to SBE being a management process, it is also a blueprint for the company," Morrison says. Companies entering the incubator can see right away where they stand on the incubator’s expected path for development.

NeoTech clients generally meet with Morrison monthly to provide updates on important decisions and goals. Morrison plots any accomplishments on the SBE grid and strategizes with the client about working toward the next event. Based on this visual representation of a company’s development, both Morrison and the client can clearly see the company’s progress toward graduation.

Morrison believes the SBE process makes her a more efficient incubator manager. "When there are a couple companies at the same SBE level, I can organize a presentation for just that group, targeting their particular needs," she says.

In the coming months, HCEDA plans to share the SBE process with other Maryland incubation programs. Von Biedermann believes that the process would add value to any incubation program by providing quantitative measures of business development, which, in turn, give incubator managers a clear direction for administering business assistance. "I used to teach school and have to do lesson plans," she says. "SBE is, in many ways, an incubator manager’s lesson plan for working with client companies."

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