Help for Manufacturing Startups

IndustryWeek (Minter) - Resources such as business incubators and economic development agencies are available around the country to help entrepreneurs with a good idea pursue the dream of opening their own manufacturing companies.

There are more than 1,100 incubators in North America, predominantly in the United States, according to the National Business Incubation Association (NBIA). These incubators are overwhelmingly nonprofit organizations that provide entrepreneurs with a variety of business support services, including rental office space, management guidance, technology support and assistance in obtaining financing. In a 2006 report, NBIA estimated that North American incubators in 2005 assisted more than 27,000 startup companies, provided full-time employment for more than 100,000 workers and generated more than $17 billion in annual revenue.

Tracy Kitts, NBIA's vice president and chief operating officer, says five characteristics define business incubation programs: 1) they have a selection process; 2) they work primarily with new companies, either startups or very young companies; 3) they offer comprehensive business assistance; 4) there is on-site management that coordinates and facilitates the delivery of those services; and 5) there is a graduation policy.

About 3% of business incubators focus on manufacturing but 54% serve a variety of businesses that include aspiring manufacturers. That's the case with the Business Incubator Center in Grand Junction, Colo. The center is housed in a compound that was part of an old Department of Energy site and currently has 45 companies in the incubation program. About 15% of the companies are manufacturers.

Reddin says good candidates for the incubation program are people with "strong technical expertise and a really good understanding of the product or service they want to provide." The center can then provide them with a variety of mentoring and other services, such as financial management, marketing or production expertise. "We are looking for folks where some support is really going to make a difference," says Reddin.

At the Georgia Center of Innovation for Manufacturing, director John Zegers works with both entrepreneurs and existing manufacturers to help them develop innovative products, progress to commercialization and expand or locate facilities to Georgia. Recently, the center helped Moto America, a small private company, redesign its three-wheeled vehicle, the Gashopper. Originally designed in the early 1980s during the gas crunch, the project had been shelved for years. Zegers put company managers in touch with Georgia Tech and projects were provided to four classes of senior students. The result was a redesigned interior and exterior, a lightweight composite material for the main body parts, a new suspension design and a subframe design for a potential battery-powered model.

Zegers said one of the main benefits his organization provides is connection to resources such as Georgia Tech and other educational institutions. "That is one thing we do a lot of," says Zegers, "help manufacturers find other resources in the state working on similar issues and get them working together."