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Arizona Basic Economic Development Course

Entrepreneurial and

Small Business DevelopmentPresented by Russ Yelton, President/CEO

Yelton and Associates, LLC

Foundational Benefits

• Employers

• Tax Generators

• Economic Supporters (buy local)

• Property Owners and Renters

• Provide Economic Stability

Arizona Basic Economic Development Course

Entrepreneurial Development

• Technical Assistance

• Networks

• Financing

• Economic Gardening

Arizona Basic Economic Development Course

Three Stages of Growth

• Start-up companies

• Second stage companies

• “Gazelles” (aka high-growth or high-impact

companies)

Arizona Basic Economic Development Course

Entrepreneurial Financing

• Equity

– Does not require repayment

– May lose some control in the business

• Debt

– Based on ability to repay

– Retains ownership of the business

Arizona Basic Economic Development Course

Small Business Development

• Small business benefits

– Usually more closely tied to community (likely

to stay)

– Innovators and job creators

• Small business risks

– High general failure rate*

– Lower average wage**These risks can be reduced with proper assistance

Arizona Basic Economic Development Course

Business Development Stages

• Creating the Business Idea

• Formalizing the Business Plan

• Opening the Business

• Expanding Operations

Arizona Basic Economic Development Course

Business Incubators

• Traditionally were real estate opportunities

• Some have shared support services

• Should offer business support services

• Networking is essential

• Good incubators reflect the communities

they support

• May offer assistance in accessing capital

Arizona Basic Economic Development Course

Role of the EDO

• Be Strategic

• Develop a Strategy

• Work the Strategy

Arizona Basic Economic Development Course

Incubation Works

500,000 jobs created by incubator

companies since 1980

50 incubator graduate jobs = 25

more community jobs

500,000 jobs created by incubator

companies since 1980

The Incubation Difference

=

+ +

1959: First U.S. incubator founded in

Batavia, N.Y.

1985: National Business Incubation

Association founded with 40 members

2015: 25,000 incubators worldwide;

1,500 NBIA members

History of Incubation

What Incubators Offer

Help with financing

Help with business basics

Networking activities

Shared equipment & services

Marketing assistance

Incubator StaffAn incubator manager may have experience…

In business consulting or development

In marketing and sales

As an entrepreneur

An Incubator Clientmight be…

a scientist with a new technology

a home-based business owner

ready to expand

a serial entrepreneur launching

a new start-up company

Mixed Use

(47%)Technology

(37%)

Manufacturing

(7%)

Service (6%) Specialty (3%)

Types of Incubators

Source: 2002 State of the Business Incubation Industry, Sally Linder/NBIA.

Incubator Sponsors

Educational Institutions

Government Entities

Economic Development Organizations

Source: 2002 State of the Business Incubation Industry, Sally Linder/NBIA.

A Good Investment$1 public investment in incubator = $30 in local tax revenue

84% of graduates stay in community

Public incubator jobs @ $1,100Other public jobs created @ $4,570

Source: Business Incubation Works, University of Michigan, NBIA, Ohio University and Southern Technology Council, 1997; "Cost Per Job Associated with EDA Investments in Urban and Rural Areas," Amy K. Glasmeier, The Pennsylvania State University, 2002.

Incubation ProgramsMentor Groups

Revolving Loan Funds

Lunch and Learn

Quarterly and Monthly check ins

Open book accounting

When are you leaving?

Incubation ProgramsStudent Programs

Shared Core Laboratories

Student Research Teams

Monthly group meetings

Participate or leave

About InBIAAnnual conference draws 600+

incubation professionals worldwide

Quantifying incubation successes

and compiling best practices

World’s leading incubation publisher

Advises governments and corporations

on business incubation strategies

Center for Entrepreneurial Innovation

✓Phoenix, AZ

✓Hosted at Gateway Community College

✓Medical Device Focus

✓Financed: City of Phoenix $2m, EDA $2m

✓College provided acreage

Northern Arizona Center for Entrepreneurship and

Technology

✓Located in Flagstaff, AZ

✓10,000 sq ft original facility

✓$2m EDA, $2m City of Flagstaff

✓New 28,000 sq ft accelerator

✓$4m EDA, $1m ACA/NAU, $2.2 City

✓Mixed Use Focus

Native American Business Incubation Network

✓Northern Arizona

✓Virtual Program

✓Original funding: USDA

✓Provides services to Native

Americans

Technology Commercialization Center

• Access to Cyber Warfare Range

• 3d Printing

• Robotics

• Film

• Coding

• Virtual Reality

• Augmented Reality

Create a Program

What would you recommend doing for this

region?

Who would it serve?

What would the program look like?

How would you fund startup costs for the

program?

How would you fund ongoing operational costs?

What would success look like?