 |
Victor M. Hernández-Gantes
Robert P. Sorensen
Alejandro H. Nieri
Center on Education and Work
University of Wisconsin-Madison
National Center for Research in Vocational Education
Graduate School of Education
University of California at Berkeley
2030 Addison Street, Suite 500
Berkeley, CA 94720-1674
Supported by
The Office of Vocational and Adult Education
U.S. Department of Education
August, 1996
FUNDING INFORMATION
| Project Title: | National Center for Research in Vocational Education |
|---|---|
| Grant Number: | V051A30003-96A/V051A30004-96A |
| Act under which Funds Administered: | Carl D. Perkins Vocational Education Act P.L. 98-524 |
| Source of Grant: | Office of Vocational and Adult Education U.S. Department of Education Washington, DC 20202 |
| Grantee: | The Regents of the University of California c/o National Center for Research in Vocational Education 2150 Shattuck Avenue, Suite 1250 Berkeley, CA 94704 |
| Director: | David Stern |
| Percent of Total Grant Financed by Federal Money: | 100% |
| Dollar Amount of Federal Funds for Grant: | $6,000,000 |
| Disclaimer: | This publication was prepared pursuant to a grant with the Office of Vocational and Adult Education, U.S. Department of Education. Grantees undertaking such projects under government sponsorship are encouraged to express freely their judgement in professional and technical matters. Points of view or opinions do not, therefore, necessarily represent official U.S. Department of Education position or policy. |
| Discrimination: | Title VI of the Civil Rights Act of 1964 states: "No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance." Title IX of the Education Amendments of 1972 states: "No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving federal financial assistance." Therefore, the National Center for Research in Vocational Education project, like every program or activity receiving financial assistance from the U.S. Department of Education, must be operated in compliance with these laws. |
This is the third in a series of three reports on the role and prospects of two-year colleges in promoting community development through business incubation and related services. This report presents a summary of opportunities to expand the contribution of community colleges in economic development through business incubation and related services. The research base for this guidebook derived from a national survey of entrepreneurs and managers in business incubators operating under different sponsorship arrangements, including support from two-year colleges (see Report 1, Hernández-Gantes, Sorensen, & Nieri, 1996a), and from case studies featuring business incubators operating under contrasting settings and organization schemes (see Report 2, Hernández-Gantes et al., 1996b).
We would like to acknowledge the cooperation of Dinah Adkins, Executive Director of the National Business Incubation Association; Gregg Lichtenstein, Philadelphia; and Peter Bearse, Gloucester, Massachusetts. All three of these individuals were extremely helpful in identifying critical issues, focusing for us the research already completed, as well as identifying a cross section of incubator candidates for the case studies. They also critiqued the survey instruments that went to all incubator managers and selected clients within those incubators. Their input helped us develop a vision for designing this guidebook which we thought would be helpful for two-year college administrators and instructors interested in economic development through business incubation.
Our many thanks to all the people in the field that we visited around the country, including incubator managers, clients, support staff, administrators and faculty of those institutions, agencies, and business incubators. Their insights were critical and very useful in completing this project. The contribution of L. Allen Phelps, Director of the Center on Education and Work, is also recognized. We appreciate his advice, guidance, and his detailed review of project materials.
This guidebook summarizes a number of opportunities for two-year colleges to foster community development in the context of business incubation and entrepreneurship education and training programs. These include strategies to develop human resources with a focus on entrepreneurship, partnerships with business and industry, and facilitation of school-to-work-to-business ownership as an alternative career path. Five areas are addressed in this guidebook:
During 1993-1994, a national survey of business incubator managers and entrepreneurs in and out of business incubation was conducted to gain a shared understanding of entrepreneurship and of the extent of support for business incubation and entrepreneurship at the national level (see Report 1, Hernández-Gantes, Sorensen, & Nieri, 1996a). Concurrently, nine case studies were conducted to gain in-depth insights on the extent of the involvement of postsecondary technical institutions in economic and entrepreneurship development through business incubation and educational opportunities in the community. Participant sites represented urban, suburban, and rural locations distributed across the nation and serving diverse populations (see Report 2, Hernández-Gantes et al., 1996b).
Several opportunities to foster community economic development were identified in terms of strategies to develop human capital resources with a focus on entrepreneurship, participation with business- and industry-related services, and facilitation of transitional experiences from school-to-work-to-business ownership as an alternative career path. This guidebook summarizes these opportunities from a practical standpoint to assist and inform administrators, instructors, and students with an interest in entrepreneurship and community development. In a time of intensive educational reforms, the main objective of this guidebook is to bring research results closer to a working understanding of practical applications and considerations for sound program implementation.
This guidebook describes opportunities for the participation of postsecondary technical institutions in the economic and entrepreneurship development of urban, suburban, and rural communities, and is organized into six major sections to facilitate the identification and presentation of strategies, a description of examples, and a list of the resources available.
The purpose of this organization is to help administrators
The format of the guidebook is designed to provide the reader with easy-to-use information enriched with brief, yet comprehensive descriptions of working strategies for each of the major areas identified in the guidebook. Each major section is briefly introduced to provide a framework for the inclusion and description of a particular set of opportunities for participation in community and entrepreneurship development in the community. On the same page, an index of key strategies for implementation are identified for subsequent reference.
Each strategy for implementation is outlined step-by-step and characterized with descriptions based on the personal insights of business incubator managers, entrepreneurs in and out of business incubation, college administrators, instructors, and students. All in all, these strategies are based on a series of comprehensive "real world" experiences leading to practical applications and an understanding of practices throughout the United States.
At the end of each section, a list of resources, which includes a description of services, contact people, reference materials, and agencies, is provided. Given this format, the reader can use this guidebook following a sequential examination to build an overall understanding of the potential possibilities and limitations or go directly to individual strategies and review them without losing any coherence in the content.
Business incubation offers one of the most comprehensive strategies to foster entrepreneurship in the community, help create jobs by supporting new business ventures, stimulate growth by promoting a diversification of business opportunities, act as an agent to revitalize rural areas or depressed neighborhoods, and facilitate the transition to business ownership for students and workers seeking a new career path.
Business incubators may focus on commercial space at a low cost and a variety of business services to assist entrepreneurs in the earlier stages of business development (NBIA, 1991). Business incubators can also provide opportunities to integrate education and training with a focus on entrepreneurship, business, management, new competencies demanded in the workplace, and the training of employees from small firms operating in business incubation or in the community (Campbell, 1987). Further, business incubation serves as a vehicle to provide consulting services and stimulate business alliances in the community.
Although the benefits of this participation are many, the contribution of community technical colleges is actually rather modest. In 1991, out of 500 members in the National Business Incubation Association (NBIA), the total number of incubators primarily sponsored by these institutions was only 25. Thus, the question is how can community technical colleges get involved in business incubation? Seven strategies have been identified and presented here for that purpose.
Several organizational formats can be found in business incubation. The reason for an incubator's existence varies from case to case. A number of economic factors (e.g., plant closings, companies moving to other countries, global competition, high unemployment rates, and inflation) motivate local private and public agencies to offer opportunities to develop new jobs through the creation of small business enterprises. With this in mind, partnerships among local governments, social agencies, economic development groups, and other groups and individuals come together to alleviate these problems affecting communities by creating small business incubators, also known as "change agents" (Campbell, 1987).
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Usually, the justification and leadership to create a business
incubator come from key leaders in the college or community who lobby and
champion the idea. This leadership--especially within the college--is essential
to support and set in motion the necessary steps to start a business incubator.
A first natural step, once the leadership has been identified and used to
promote further action, is to set up a task force to study in greater detail
the opportunities and implications for setting up a business incubator. Task
force members should include college administrators at various levels, bankers,
faculty representatives, and other key stakeholders from the college and the
community. Derived from the work of the task force, a committee can be formed
to then take action on the organizational set up of the business incubator.
One of the first steps of the organizational committee is to hire a
manager for the incubator. It is advisable to hire this person at an early
stage to have him or her fully participating in the conceptual organization of
the incubator. This way, the manager grows with the incubator in tune with the
resources and circumstances appropriate to the community and the college. At
this point, the work of the committee may be terminated and delegated to the
manager with the help of an ad hoc steering committee or a board of directors.
However, in some instances, other informal arrangements without steering
committees may work.
One way to gather organizational ideas is to tour business incubators
established in the area or in other states--if possible--to assess the
differences in organization and operation. Every community is different,
however, even though physical and social descriptors may be similar. The
objective is to develop the best organizational set up possible, based on the
resources and commitment available.
In large cities, the best organizational arrangement appears to be a
comprehensive approach to business incubation, including commercial space at
low rates; clerical and office support; consulting services directly related to
business management; and services needed for expansion, growth, product
development and innovation, and even getting into international trade. In small
communities, a more basic approach is usually found. The focus is to provide
commercial space complemented by office and clerical support and management
consulting services. The provision of educational and training activities is
found in both comprehensive and basic approaches to business incubation under
various formats. For instance, the Institute for Economic Development, which is
located in a large metropolitan city in the South, offers an array of services
which are available to both the clients at their business incubator and the
general public or private corporations. The director of the institute explained
that,
Among the various services that our college district has housed under the roof of the Business Institute, we have the Small Business Administration funded Small Business Development Center which provides help to anybody who wants to start a business [all the way from] getting the business name to helping him or her set up a partnership. We also have the Center for Government Contracting, the International Business Center, the Job Training Center, the Business and Professional Institute, and the Business and Technology Center, all of which are designed to support economic development in our district, from assisting small business development to providing support services to corporations around here.At another site, the manager of a small business incubator located in a large Native American reservation in the Northwest added his experience on the organization of services:
The first phase of this program was to offer business training in what we call the 14-week Greenhouse Class. And it's really a small business management course . . . where we basically discuss all the issues that somebody wanting to start and operate a small business would face--everything from how to keep your books, tax compliance, budgeting, money management, you know, everything right. We bring various instructors, but typically we try to find someone who knows something about Indian culture or someone who has worked in some capacity with the tribe.
In terms of staffing, it is
clear that the best organizational arrangement is to have the managers fulfill
coordinating responsibilities to provide quality services to incubator firms.
In many instances, due to limited resources or commitment, the managers are
forced to spend most of their time in building maintenance rather than in
developing an entrepreneurial environment for incubator clients. The best
arrangement may be to have a lean staff organization to provide for permanent
and ongoing basic services (e.g., clerical support; troubleshooting, including
building maintenance) and rely on external consulting services (e.g.,
professional, volunteer sources) to provide specialized consulting services and
education and training opportunities.No matter what organization and structure is developed, it should focus on what fits the situation. An incubator that proposes to reach out to a minority community will vary greatly from one with an emphasis geared toward technology, as described in the examples discussed previously.
The availability of funds also varies from incubator to incubator.
Only in rare instances is there a 100% commitment from one source. For example,
a Small Business Development Center (SBDC) in the Northwest is financed by
tribal funds, and the financing for an expansion project will follow the same
pattern. In some cases, local funds are committed by the local government in
conjunction with community colleges, universities, local economic development
agencies, and other ad hoc partnerships. On occasion, these partnerships obtain
funds through economic development and capital fundraisers, and in the case of
for-profit incubators, from rent revenues or consulting services to firms in
business incubation. Incubators thus funded must make an effort to increase
revenues to continue in operation. The drawback is that managers are distracted
from consulting services as they pay more attention to fundraising and public
relations activities. The following cases illustrate various funding
arrangements:
Another issue identified by Lavelle and Bearse is the excessive financial burden that may arise due to high acquisition and renovation costs. This problem may be further complicated by a high overhead or high salaries, resulting in an undercapacity to reach a break-even point. These problems can originate from poor management and accounting practices--for example, if staff and administrative costs are allocated over different programs, creating a financial burden on the few funding sources. Obviously, maintaining healthy management of finances is as important as assuring adequate funding to preserve the chances for the continuing funding and credit worthiness of the incubator.
The requirements to become a client in an incubator vary according to the type of incubator, entrepreneurial climate, sponsoring agency regulations, and other factors which depend on specific circumstances. Usually, the operational rules include enrollment, duration of stay, and exit policies.
The adequate financing of a small business is fundamental to its
success. However, adequate financing is difficult to obtain, especially for new
entrepreneurs. Further, it appears that during the earlier stages of business
development, entrepreneurs do not have a realistic view of their capitalization
and/or the operational needs for their business. Here is where incubators are
key in assisting their clients in making an adequate assessment of their
financial needs. Needless to say, the completion of a realistic business plan
becomes the first step in obtaining adequate financial support, and funding
schemes implemented by some incubators are instrumental in assisting small
businesses.
Some business incubators have established in-house business loan and
grant programs to complement available bank and/or government-guaranteed bank
loans. For instance, in the case of an incubator in the Northwest, the
incubator manager, with the help of the tribal council, set up an in-house
program to facilitate capital to new entrepreneurs in the form of loans and
grants. The innovation of this program is based on the fact that it was
designed and set up with the same requirements and paperwork as the SBA.
A different approach was utilized by an incubator in the South where the local branch of the SBA trained bankers on the SBA requirements and related paperwork at their facilities. The bankers welcomed this approach, since SBA traditionally requires extensive paperwork from banks and customers. Another business incubator, located in a rural area of the Midwest, created a loan program to assist entrepreneurs with start-up costs once they qualified for the incubation process. This program is called SELF--Self-Employment Loan Program--and provides up to $5,000. Even though this is a small amount, the center manager explained that it is a "program to help them get started, and we try to work with them as much as we can in terms of giving them some space at the center for meetings."
Consulting services to firms in business incubation are provided as a
complement to commercial space and office and clerical support. These services
may be delivered by incubator staff, volunteers, and/or outside consulting
firms. The prevailing limitations of incubator management arrangements, such as
staff involvement in fundraising activities to support the incubator, seem to
detour the incubator's mission to provide entrepreneurship opportunities. This
situation reduces, in many instances, the provision of adequate consulting and
training activities to incubator clients. Thus, other alternatives have to be
considered, including the utilization of volunteer services from nonprofit
organizations, staff from government agencies (e.g., SBA, IRS), bank
representatives, successful entrepreneurs, and private consultants.
Experts in the field of business and entrepreneurial development in
business incubators are sometimes contracted to provide managerial support
services to both incubator staff and clients. For incubator clients, these
contracted services are usually provided as part of the lease agreement or for
a fee. In other cases--such as with an incubator in a large metropolitan city
in the Southwest--incubators have a pool of experts who are willing to serve as
presenters in their seminars, workshops, and other training activities for
free. This participation of external consultants appears to attract more people
into the center for help in how to start a successful small business in their
community.
Volunteer services from nonprofit organizations are also used to
provide consulting services. Consulting services from the Service Corps of
Retired Executives (SCORE) is one of the most popular because it provides free
access to experienced consultants on a wide range of topics related to
entrepreneurship and business management. Just keep in mind that these services
may not be available at times (e.g., when consultants vacation), but this may
be worked out with some creative scheduling with the local SCORE office.
This strategy of using the services of retired executives to provide free business advice to small business was begun by a member of the DuPont family in 1950. SCORE officially began operations as part of the SBA agency thirty years ago. This cadre of well-intentioned executives has mushroomed to a group of 13,000 executives who provide services in 300 U.S. chapters. In 1993, SCORE assisted 300,000 small business firms. It offers workshops, seminars, and one-on-one business consultations free of charge. Advice given may vary from bookkeeping and how to write business plans, to marketing new products in the global economy.
Other volunteer consulting services may be accessible through working
partnerships with local banks, government offices (e.g., IRS, SBA), chambers of
commerce, industry, and entrepreneurs in the community. Staff and individuals
from these sources provide valuable expertise on timely and relevant topics in
business development at little or no cost. Sometimes paying travel expenses is
sufficient to keep these connections in place.
Using private consultants to deliver consulting services--and in some
instances manage the incubator operation--is another alternative. When college
staffing is not possible, or when the available expertise is limited, this
option appears to work well, especially if private consultants are in the
business of incubation themselves. The following examples illustrate this case:
In general,
basic consulting services must cover all aspects of managing a business from
keeping accounting books to the management of financial resources. Assistance
in expansion and/or growth is an area that deserves special consideration given
the fact that entrepreneurs may overlook this stage of the operation. Incubator
staff should be aware of this situation to help entrepreneurs meet their needs
and solve problems. For instance, two incubator managers shared their
experiences:
Let's say that you're Company X, and you need legal advice. We'll give you the first hour free of charge, sort of a taster . . . the rest is provided by lawyers who have been with the [management] firm for ten years. the charge then is below market rates. And we'll give you efficient legal advice in terms of your small business needs.In terms of growth, one of the areas the clients need the most help is in hiring personnel. I have right now four start-ups . . . they're all just business owners, but for the last two months, they are at the growth level where they've had ten contracts, and they're ready to go out and hire additional employees, but they don't know what to do. So that's where we have stepped in and provided the technical assistance . . . We have set them up with our personnel director and the college district so they can learn the thousands of tax questions on their business.
A
complementary alternative to individualized consulting services may be the
provision of low-cost training alternatives such as self-paced instructional
programs or materials, computer interactive programs, and free or low-cost
college- or university-sponsored business training seminars and/or workshops.
Exposure to opportunities for entrepreneurial development is one form
of integrating the work of preparing entrepreneurs for the setting up of a
successful business. This experience can be facilitated by establishing either
formal or informal connections with key players and institutions in the
community. This process requires a more proactive participation in strategic
planning, the development of broad-based community partnerships, and supporting
networking activities. Participation in networking activities is a natural role
for business incubators because it connects entrepreneurs in and out of
business incubation with key stakeholders in the community. Networking is an
activity that must be developed and not necessarily assumed to take place
within an incubator setting. Every entrepreneur has extensive and demanding
activities to attend to each day in the operation of his or her enterprise;
therefore, the leadership of the incubator must spend time fostering and
promoting the development of networking activities within the incubator. Once a
networking structure has been developed, it will more than likely take on a
life of its own; that is, members will refine it and come to the conclusion
that networking is probably one of the most important services provided by the
incubator.
A successful practice in promoting networking is to set up regular
meetings where entrepreneurs in business incubation have the opportunity to
discuss formally and informally the topics of common interest. Through these
meetings, networking relations develop, and profitable interactions are
established. In a way, entrepreneurs serve as consultants to one another about
problems they have previously experienced. Further, business alliances can be
created, and information is exchanged for immediate applications. Concurrently,
the benefits of these in-house networking activities are informally extended to
the daily interactions entrepreneurs have in the common areas of the
incubator.
Networking opportunities with external parties are commonly
established by incubators through periodic meetings with representatives of the
local business and industry and agencies supporting economic development.
Breakfast and/or lunch meetings are promoted and scheduled to discuss current,
relevant topics of interest for entrepreneurs and, in general, serve as a forum
where the voice of those interested in economic development is heard.
Formal and informal partnerships as a means to connect one or
more players with an incubator facility offer an opportunity to access the
consulting services and networking opportunities previously discussed.
Developing partnerships with educational institutions is an example of these
connecting activities. Integration of entrepreneurship in secondary school
curriculum, for instance, may facilitate these educational connecting
activities needed to expose youth to the concept of business development and
business opportunities. This can be accomplished while integrating academic
curriculum within a vocational context.
As emphasized above, it is important for managers to develop key
partnerships in fostering and promoting the development of networks. In 1993,
Lipnack and Stamps offered a set of suggestions for successful teamwork,
partnerships, and networks. First, they suggested that without a constantly
visited, clear purpose, teams, partnerships, and networks can collapse. A sense
of mission unifies the group. Second, no group can function well without
individual members who demonstrate the voluntary commitment and capacity to
work interdependently. Above all, they must want to do it. Third, frequent and
timely communication between members is critical. If face-to-face meetings are
too few, or communications systems (voice-mail, e-mail, FedEx) are inadequate,
the synergy will not materialize. Ongoing, voluntary interaction between
members sustains the partnership. Fourth, networks are deliberate
acknowledgments that no one person can (or needs to) do it all. Teams succeed
when they rely on more than one person to play a leadership role. Leadership
development must be nurtured in successful enterprises. Leadership is a
function, not a job title, and may be demonstrated by individuals who assume
specific roles in the group or assume them when the situation requires it.
Finally, it is essential to manage the flow of information. When teams do not
keep their constituents informed, they run the risk of losing touch with the
organization as a whole. The multiple connections to different people and
levels within the participating organizations must be sustained.
In fostering and developing networking/connecting activities,
Lichtenstein (1992) suggested several variables that can be used by an
incubator manager. These variables include the types of businesses, the
personal characteristics of entrepreneurs, the stage of their firms'
development, space or social distance, the existence and design of forums, the
presence of a critical mass of firms, norms and attitudes, the actions of key
individuals within a network (in this case, the incubator manager), and time.
According to the findings from a national survey of business incubators (Hernández-Gantes et al., 1996a), the majority of managers spend their time in building maintenance and fundraising activities and have little time left for activities leading to fostering entrepreneurship (e.g., individual counseling).
Entrepreneurs in business incubation report that the major incentive to join an incubator is to gain access to commercial space at low rates. A second consideration is the availability of clerical support and basic office equipment. Consulting services are ranked in third place, while education and training is usually the least important consideration. However, once entrepreneurs realize the complexity of running a business, the value of and need for consulting, education, and training opportunities increases greatly.
Some of the best education and training components in business incubation make these activities an integral part of the screening process. A key element is developing a business plan as an ongoing process to provide for a true entrepreneurial environment rather than just space at a low cost.
Seven elements of education and training are identified and described in this guidebook--from the early assessment of the psychological preparation of individuals interested in getting into business opportunities to outreach activities in the community. Course design and delivery considerations are also highlighted here.
Jon Goodman (1994) defines an entrepreneur as "someone who gathers
together resources for creative and innovative purposes to meet needs or solve
problems" (p. 36). To accomplish this, entrepreneurs must develop effective and
creative ways to acquire knowledge about their products, markets, and
competitors. Concurrently, the personal dimension involved in this process
includes a value system where hard work, understanding of how others work, the
capacity to motivate others, and the ability to weight risks and work under
pressure come together to shape that intangible thing called entrepreneurship.
Although there is no right or wrong psychological profile--for example, some
entrepreneurs are team oriented, while others prefer to control and delegate
responsibilities--an awareness of personality traits adds to the knowledge
entrepreneurs need to have for "creative and innovative purposes to meet needs
or solve problems." In short, it is helpful for the client to know whether he
or she can stand the heat of being an entrepreneur or whether he or she needs
to get out of the kitchen. Successful entrepreneurs use this information to
build upon their strengths and "gather together resources . . . to meet needs
or solve problems" that may arise due to identified personal limitations in
order to perform the art of entrepreneurship at its best.
Evaluating the psychological aspect of the person (personality
profile) is a requirement at one incubator located in the West. The purpose is
to identify strengths and limitations in the light of the line of business in
which the entrepreneurs are anticipating being involved. A number of personal
attributes inventories are available ranging from very basic tests to determine
candidacy for self-employment (Sutliff & Spears, 1994), specialized
inventories (e.g., leader attributes from Moss & Johansen, 1991), to more
sophisticated tests where feedback is provided based on inventory scores. To
determine which personal inventory to use, a brief search can be conducted at
the library to identify sources and request samples.
The value of assessing the personality profile is illustrated by the
following case: Incubator clients at one incubator in a Native American
reservation in the Northwest are provided with a 14-week small business
management course called the "Greenhouse Program" as an action to support
economic development efforts among the tribe members. Prospective entrepreneurs
are given a personality profile test to identify strengths and/or weaknesses of
these potential small business owners in relation to the kind of business for
which they are best suited. This type of analysis has been well-received by the
participants, including a Native American couple who went into business
together who commented,
What the personality profile showed us was that I'm really precise, and I want things done right and quick, while [my partner] just jumps right in there without consideration of the whole field. . . . The profile indicated that we were very compatible--complementary to each other--to be able to work in a business together.
The understanding and application
of personal psychological traits are also useful in working with others, that
is, by identifying the leadership abilities needed to motivate and convince
people to see and do things the way one wants things done. Thus, leadership may
need some special attention in its own right. It has been found that to
persuade family, bankers, customers, as well as employees, a person needs
leadership skills in convincing people to move on an idea for a new venture.
The primary components of education and training in business incubation must encompass a knowledge of the entire business operation--from start-up procedures to expansion and growth. Obviously, the technical skills to produce the goods and services of interest are usually the foundation of any business. This is followed by two other major components: business skills and opportunities to develop an entrepreneurial vision.
Entrepreneurs are usually interested in solving problems as problems emerge. Thus, the timing and relevance of the topics included in the three major components of the education and training design must be customized to fit the needs of the clients as much as possible. The first step is to identify the content of education and training activities. The second step is to identify real-life examples to make the education and training opportunities relevant and contemporary to entrepreneurs.
They're all heading in different directions. They all have different schedules and their noses to the grindstone. They don't like to take time off to go to seminars. We know they need the information. We know that it's pertinent information for them. The trick is convincing them that they should take the time off.
The delivery of education and training opportunities is perhaps the most critical aspect of successful programs. The most relevant and timely topics will fail to make an impact on the entrepreneurs if the delivery is not engaging and stimulating.
Across business incubators, the use of a business plan appears to be
common practice both for management and educational purposes. Developing a
business plan is a useful educational and training tool which can be
manipulated to weave a series of connecting topics based on a real business
idea. This is perhaps the ultimate, authentic learning experience, since all
aspects involved in developing a business plan are relevant and meaningful,
serve to identify the strengths and weaknesses of a business idea, and provide
a comprehensive understanding of all aspects of the business. Most incubators
require a business plan as a prerequisite for enrollment, but in some
instances, developing this plan is part of a suggested course required to be
taken prior to enrollment in business incubation. On occasion, incubators only
require a business idea for enrollment and request the development of a
business plan as part of an education and training program incubator clients
can take once they are enrolled. When and how to use the concept of a business
plan depends on the organizational operation of the incubator.
The advantages of requiring the creation of a business plan as part
of a course prior to enrollment in business incubation include (1) a chance for
entrepreneurs to study the feasibility of their business idea, (2)
opportunities to assess the strengths and weaknesses in terms of personal
preparation in all aspects of the business, (3) an understanding of steps and
consulting services needed to start up and operate a business, and (4) the
development of a rapport with business incubator staff. All in all,
entrepreneurs seem to appreciate this early experience and value the business
incubation concept in terms of the opportunities provided to develop an
entrepreneurial vision rather than just a source of low-cost commercial
space.
When the business plan is used as an educational and training tool
after entrepreneurs are already enrolled in business incubators, the purpose is
to refine the original business plan or idea and provide customized consulting
services to meet individual needs. Thus, education and training usually work as
part of a package of consulting services where the business plan is central to
the business incubation experience which is complemented with traditional
educational and training activities.
There are a number of resources describing the necessary elements in
a business plan. A quick search can provide a list of references. Materials and
ideas from other incubators are also useful. There is no need to develop
materials on business plans from scratch. These are already available, and all
the entrepreneur has to do is select the one she or he feels is best for her or
his needs. Some references and resources are suggested at the end of this
guidebook. For instance, the following is an example of a business plan created
by a private consulting firm, which can be further developed in a business
incubation course. It stresses the need to include a number of decision points,
by month, as indicated below (Williams, 1992):
Month 1
An important function of the educational and training activities generated by business incubators is to reach out not only to in-house entrepreneurs but also to the business community at large. Thus, the marketing of these services and other strategies to include all groups in the population is necessary to extend the benefits of education and training and to promote entrepreneurship.
Marketing strategies include promotional advertising via radio,
newspapers, and fliers which are more critical when the incubator is at an
earlier stage of operation. Once the incubator begins to develop a networking
system and a reputation, education and training services are spontaneously
disseminated by word of mouth and by referrals by presenters, entrepreneurs,
government agencies, and other individuals. Even though this informal
dissemination process may work, it is always a good idea to maintain
traditional marketing strategies (e.g., radio, newspapers ads) within the
budgetary lines.
Conducting outreach activities is particularly important in
interesting minority and female entrepreneurs, who have been traditionally
under-represented in small business ownership, in learning about business
opportunities. These efforts have to be emphasized and followed up with
enrollment practices targeting these groups if progress is to be made in this
regard. Incubators are often pressed by the need to fill their vacant space to
meet financing needs, and although there may be an interest in recruiting
minority and female clients, the bottom line is to fill space available as
quickly as possible, regardless of the applicant's background. Hence, special
funding and management commitment may be required to offset waiting periods
before space is taken by target entrepreneurs. Again, once the incubator
develops a reputation of service to diverse groups, these outreach activities
are facilitated by in-house clients and individuals in contact with the
incubator. Further, to assure continuous support for diversity and the
inclusion of minority and female entrepreneurs, outreach activities may include
the use of mentors who provide invaluable assistance and guidance to these
entrepreneurs.
Another strategy to reach outside the incubator is to offer
educational and training opportunities at facilities which are more accessible
to entrepreneurs in the community and the general public. Facilities such as
meeting rooms may be provided by the chambers of commerce, local banks,
government agencies, and private industry. This strategy is useful when the
incubator is located in areas that are perceived as "unsafe" by area
residents.
Breakfast and lunch meetings represent another strategy for outreach
activities. These opportunities can be combined to build a networking system
within the business community (see networking section, p. 14). Since key
players in the business community come together during these meetings to
discuss current events and topics influencing the economy and local businesses,
breakfast and luncheon meetings are an excellent forum to reach entrepreneurs
and the general public and fulfill, indirectly, an educational function.
Reaching out to high school and postsecondary students is perhaps an
activity with a great deal of potential for educational purposes. Students can
be exposed to entrepreneurial activities and even participate in internship
programs to explore entrepreneurship as another career path. Cooperative
programs and partnerships can be established with business incubators to
support this activity. Further, in the case of postsecondary institutions that
support business incubators, these opportunities can be promoted and extended
to students other than those from the business department. For instance,
students from technical fields may be able to identify entrepreneurial
opportunities where they can use their technical expertise. It has been
indicated previously that entrepreneurs in business incubation can be a
valuable educational resource even through daily informal interactions.
Assuming a leadership role in community development requires a proactive participation in strategic planning and involvement in broad-based community partnerships. Because of the close ties with key community stakeholders, this appears to be a natural role for postsecondary technical institutions.
A number of community and technical colleges have already demonstrated the benefits of participating in community development by providing technical assistance to small business in the community. In 1991, for instance, 144 community colleges provided assistance through Small Business Development Centers (Carmichael, 1991). This contribution can be integrated into established partnerships with local industry to deliver workers' and specialized training; and to facilitate technology transfer and development by supporting and making available databases of resources on markets, products, and other business-related information to the general public.
Other opportunities to participate in community development efforts include the provision of business services on international trade, including international relations, trading operations, information on foreign markets, import/export procedures, and the creation of local networks of professionals to support these services. Similarly, two-year technical colleges can provide business services to assist in product development, patenting procedures, production, marketing, and management operations to local companies. Further, training and demonstration centers focusing on computer applications to business and manufacturing represent effective strategies for community development.
Even though consulting services can be offered by making faculty available to the business community, this practice may lead to unconnected and ineffective efforts. Perhaps the best way to organize the services on a systematic basis is through two institutional formats: Small Business Development Centers and Business/Management Institutes.
Faculty members provide a
diversity of backgrounds and expertise. Through consulting activities, faculty
benefit from direct contact with clients and keep abreast of contemporary
issues in their field. Consulting may serve as an opportunity to identify guest
speakers from entrepreneurs who can offer fresh points of view to college
students. This is in addition to extra income derived from consulting fees. For
the SBDC or Business Institute, faculty members represent a pool of experts who
can be available on campus most of the time. However, one of the problems of
working with faculty is that they may not be available to clients when clients
most need it. Faculty are usually time restricted due to their academic and
other responsibilities. In addition to scheduling problems, depending on
faculty may present other limitations such as having to pay them higher fees
due to college formulas for benefits and compensations.
Bringing in professional help from the community to provide
consulting services and/or even to manage the whole operation is another
alternative that has proven to be effective. External consultants bring a
focused commitment, are fully in tune with the demands and needs of
entrepreneurs, and understand the business community. The cost of this
arrangement is balanced by the savings that can be derived from a less
bureaucratic operation and by the bringing in of consultants on a per-need
basis. The limitations may materialize in the form of loose contacts with the
sponsoring college and deviations from the original goals (e.g., increasing the
presence of the college in the community).
These strategies can be combined with volunteer services to
increase the pool of expertise at low cost, work in partnership with local
agencies, increase and improve the visibility of the college, and reduce the
cost of the operation. SCORE, SBA, and the IRS are just a few examples of
volunteer services that can be used. The limitation with this approach is that
careful logistical support must be in place to coordinate volunteer efforts.
Further, some volunteers may not be available year-round (e.g., SCORE members)
or may be too specialized to be used in various areas (e.g., IRS officers).
Two opportunities to expand the education and training services traditionally provided by two-year technical institutions are represented by (1) contract and specialized training and (2) job and basic literacy training. This is in response to the needs of business and industry and is based on the current population and economic trends which shape the nature of the workplace and demands for new competencies. These two opportunities appear to be best facilitated by developing partnerships with business and industry, large and small, and with government agencies supporting training programs for various purposes.
Chances are that an international component is housed either in the college's foreign language or business departments. With few exceptions, these resources will be found to be underutilized or functioning in isolation both in terms of integration within the college and in its connections with the community at large. In these times of increased global competition, each state is fighting for a piece of the foreign market to survive within the framework of an international economy, and postsecondary technical institutions can play a major role in facilitating education and training and related services in the community. Three strategies that fit this scheme were identified:
The first strategy is to asses the resources available in the
college and the community to integrate a multidisciplinary approach tailored to
the needs of potential trade. For example, it would be helpful to know if there
is interest from foreign language and business faculty, professionals in the
community with expertise in international trade, support from the college
administration, local business and industry, and government agencies supporting
international trade. Further, it would be advisable to identify the potential
goods and services with possibilities for trading in foreign markets to bring
in the appropriate technical expertise to inform the trading operation. In
short, the best option would be to put together a team of players based on the
available resources in the community and objects of trade. As the program
grows, the scope increases gradually to include a comprehensive plan to meet
the needs of those entrepreneurs interested in trading in goods and services
not originally produced in the area.
The second strategy involves a clear definition of the
education and training component, including print and audiovisual materials for
instructional and dissemination purposes. To create awareness and ongoing
visibility in the community, a series of workshops and seminars should be part
of this strategy. Within this strategy, the role of the interdisciplinary team
should be to determine cooperatively the development of a coherent structure of
participation for the common good. For instance, a course or seminar on
international public relations can be team taught by bringing together foreign
language and business faculty with professionals in the community who have
international experience to blend practical experiences into a meaningful
format for entrepreneurs. In short, the point is to have education and training
opportunities with a practical focus on international relations, trading
procedures, import/export regulations, and other related topics available to
the public. This is a strategy which can be used in addition to the print and
audiovisual materials for personal consultation or self-paced instruction.
The third strategy requires addressing the nuts and bolts of
international trade by offering counseling services in key areas of
international trade, and research on markets, products, services, and/or
procedures. These services are a natural progression of strategy number two,
and at this point the establishment of an assistance center with an
international focus should be considered if there is sufficient demand for its
services. The strategies suggested to establish a SBDC and a Business Institute
apply in this case in terms of setting up a center with defined goals and
services and working with faculty and professionals in the community (please
see "Supporting the Business Community: Business Consulting Services," p. 10).
The aim--as in establishing SBDCs, Business Institutes, and/or business
incubators--is to develop partnerships, alliances, and networks in the
community to assure continuous political and financial support.
Facilitating technology transfer and development is another opportunity for productive participation in economic development. Colleges across the country are already offering programs in leading technologies and can enhance their participation by assisting companies in the development and application of new technologies. This contribution can be channeled through the establishment of Technology Centers with the following goals:
The steps in establishing an
Advanced Technology Center (ATC) are similar to those outlined previously for
business incubators and SBDCs. It would be helpful to assess the local needs,
commitments, and resources when planning and designing an ATC; however, to
establish an ATC is very expensive and needs a strong commitment from the
college administration (Ernst & Johnson, 1991). Thus, it is recommended
that visits to other institutions sponsoring ATCs are arranged once approval
has been granted by the college board. The National Coalition of Advanced
Technology Centers can assist in efforts to plan and design the facility,
identify additional sources of funding, assist in the acquisition and
retraining of staff, network with other institutions, and help in maintaining
the operation in an up-to-date manner.
Educational and training programs under the auspices of an ATC must
offer a flexible schedule to meet the training needs of industry (e.g., night
sessions, customized training). Brient (1991) reported some of the
opportunities for education and training in the following areas:
The work on technology transfer can be
designed around linkages with universities and laboratories to make information
accessible to industry. The strategy here is to facilitate opportunities for
local businesses to learn and become aware of technological developments which
can have an impact on manufacturing processes. These opportunities can be
designed to accomplish the following:
The most expensive component of an ATC is the
demonstration services, including new equipment and processes, which may have
an impact on local businesses. One strategy is to develop linkages with
manufacturers to receive donations of equipment and computer hardware and
software. Staff expertise can grow within this cutting-edge environment and
provide customized services to actually work on the development of new
products, equipment, and processes. The benefits of this operation are extended
to students who can use computer-integrated manufacturing processes for
instructional purposes. Vendors can use the ATC to expose their products and
evaluate their performance and applications. Clients, on the other hand, have
an opportunity to observe the potential applications of the new technology to
make informed decisions when upgrading their operations.The opportunities outlined here represent ways for two-year colleges to participate in economic development by assisting local industry in recognizing and considering alternative forms to increase its productivity. In context, an important function is to help companies assess their technological needs and develop a vision to improve the effectiveness of their operations. While some companies can use the more sophisticated services of an ATC, others only need an opportunity to select the appropriate hardware and software to upgrade existing equipment and processes. Further, an ATC can serve as an agent to facilitate technology development either through active participation as described above or by assisting small firms in their own technological development efforts.
The debate on whether entrepreneurship can be taught continues. Everybody agrees, however, on the fact that entrepreneurship programs can teach and provide emerging entrepreneurs with the technical tools to minimize the risks of creating, running, and expanding a business. One may not get the personal characteristics and visionary business talent found in college programs, but anybody can learn the basic techniques to effectively perform basic business operations--that is, to complement their own creativity, motivation, technical preparation, and business ideas.
An assessment of the personal drive and psychological preparation to start a business career path appears to be helpful for entrepreneurs. It helps to become aware of the personality traits and value-system around which people organize themselves to anticipate potential opportunities and limitations related to running a business. Newly established entrepreneurs need to know about financial analysis, accounting systems, and marketing, and must understand the practices for effective personnel management. Further, entrepreneurs must be aware of the role and opportunities brought about by global competition.
The challenge for postsecondary technical colleges is to design entrepreneurship courses in tune with the times both in terms of curriculum content and strategies to broaden their critical thinking skills. To this end, the use of business plans for instructional purposes appears to be a powerful tool in entrepreneurship development.
In visiting the various centers involved in the case studies of this research, it appears that the most successful approach to developing entrepreneurship skills is having a structured course, including real-life applications and experiences. Under this approach, the course of study can be structured into four major components, including start-up procedures, business and management skills, and marketing strategies. An additional component should include opportunities to learn about the intangible aspects of entrepreneurship in terms of preparation for expansion, growth, and evaluation of the personal value system.
The difference between a two-year college-based educational approach
and education and training opportunities in business incubation is the formal
structure of the curriculum. Usually, business departments already have courses
dealing with some of the components outlined above. Often, though, available
courses are not tailored to meet the short-term needs of entrepreneurs who
would like to have both the opportunity to take individual courses or a
coherent sequence which would help them start a business. When asked what would
be a sound structure of coursework on entrepreneurship at the two-year college
level, an entrepreneur indicated that
It would be about five different things. One, how to research whether you think you have a viable product or service. The second one would be if you think you know how to determine where and who your market is. The third one would just be basically how to set up books and keep accounting and government records. And the fourth one would be to develop the overall business plan which really encompasses the other three. And the fifth one would be a psychological one to really talk to [students] about reasonable expectations.
In most cases, short courses on how to
start a business are available in continuing education programs. However, tying
these initial courses into a series of continuing or more formally structured
courses with a focus on entrepreneurship may assist students in developing an
understanding of all aspects of business development, including how to start up
a small business.
The course component on business and management skills is usually
available through business departments, although the focus may not be on small
business development. Again, tying these existing courses into a coherent
sequence of opportunities for students and the general public interested in
small business opportunities has practical and immediate applications.
The component on marketing strategies may already be available
through the business departments. The emphasis, though, should be in marketing
strategies for products and services produced by small businesses, which can be
weaved with business and management courses, and exposition to entrepreneurial
opportunities (e.g., through case studies and tours of small companies).
A critical aspect of an entrepreneurship course is the focus on
real-life cases where the tools of the trade and the value system coalesce to
develop an entrepreneurial vision. The constant emphasis on the intangible
aspects of entrepreneurship addressed through a study of a wide array of cases
provides students with multiple experiences about businesses which have
survived through tough times, improbable ideas that have blossomed into success
stories, and how apparent successes have turned into failures. Developing a
business plan based on a real business idea and bringing successful
entrepreneurs to the college to share their experiences with students will add
to a comprehensive understanding of all aspects of business development; that
is, students should realize there are things they can learn at the college to
minimize business development failure, but that, ultimately, success will
depend upon their value system and business vision.
Unlike education and training opportunities in business incubation, the formal nature of college-based programs calls for a more structured approach to identify content. Two steps have to be taken here. One deals with the process of identifying content and the other with the relevance of the content to the business environment which exists in the area:
It is convenient to shop around for curriculum materials to identify
content and refine ideas for structuring a course of study on entrepreneurship.
Contact two-year colleges and universities which are offering entrepreneurship
courses and request information about the curriculum structure and content. As
indicated by business incubator managers and entrepreneurs, the basic
ingredients of entrepreneurship are standard across the board. Business,
management, and marketing skills are staple topics in any course on
entrepreneurship. Variations on content, sequence, and emphasis are then
adjusted to the conditions and context of the business environment of
interest.
The second step on identifying content is to further scrutinize the
content to make it relevant to the contextual environment where business
development is taking place. For instance, if the goal is to promote the
diversification of the economy in a predominantly agricultural area, topics
should address and explore ways to accomplish that--as opposed to choosing
content that fits all situations. Another example would be a curriculum
structured to serve inner-city business development or one that may serve
business development on a reservation. In whatever case, the cultural setting
must be taken into consideration when identifying the content.
The delivery of instruction must emphasize authentic examples so that students can relate to practical applications and understand the implications for their business ideas. For this purpose, reliance on a variety of instructional approaches for delivery is necessary. These include using case studies, having diverse speakers, having opportunities for exposition in entrepreneurial environments, and using business plans.
As it has been emphasized throughout this document, an important
element of successful programs is the capacity to bring relevant information
into education and training opportunities. Courses at the two-year college
level should provide an emphasis on real-world information and materials so
students can relate to practical applications. One strategy is to use case
studies extensively to describe business development at the various stages from
start-up to expansion and growth. See strategies for delivery of education and
training opportunities in business incubation for similar ideas. Furthermore,
different modes of teaching should be used within the courses and seminars. The
most successful approach to these practical courses is group discussions
focusing on practical issues and specific discussion sessions for small groups
about problems relating to the topic at hand.
Bringing the experiences of successful entrepreneurs into the
classroom is another opportunity to enhance the instructional delivery. Again,
similar strategies have already been mentioned for education and training
opportunities in business incubation. However, for students with little
experience in business opportunities, the sharing of these experiences may be
even more relevant and inspirational than for entrepreneurs in business
incubation who are already developing their own experiences. Thus, careful
selection of guest speakers is essential to make sure that speakers have good
communication skills in order to engage students in meaningful discussions of
entrepreneurial experiences while delivering the message of interest.
To help identify individuals to teach in the structured courses or seminars, a technique that is effective is to have a "volunteer night," wherein potential staff are invited in from different organizations to discuss their involvement. Not only are these volunteers potential presenters or teachers, they are also possible consultants to work with the clients of the centers.
A third strategy is to provide students with opportunities for
exposition to entrepreneurial environments where they can learn first-hand
about the problems and considerations of owning a small business. See the
section on "Facilitating School-to-Work-to-Business Ownership Transition" on
page 41 for an outline of strategies.
The development of a business plan can be used in some cases as the
common thread interweaving the sequence of courses on entrepreneurship. This
business plan can be used as the first course on how to start a small business
and can be further refined through formal and informal feedback from guest
speakers and two-year college staff. This development of a business plan would
serve two purposes: First, it would give students a complete business plan at
the completion of the course or sequence of courses. Second, it may serve as an
evaluation of a client's idea for the feasibility of a business. The object of
the course is to walk participants through the development of their small
business plans which will help them decide on the feasibility of their
ventures.
The major components of a business plan (see the example on education and training opportunities in business incubation, developing a business plan on p. 24) can be aligned with the course structure and content to make sure topics are covered in detail. Through this approach, students should be able to develop their own business plans on a step-by-step basis by building upon material covered within and across courses. A key consideration is to encourage students to identify a business idea of their own and begin developing a business plan following the material covered in the courses. This strategy has proven to be the most successful approach to developing a meaningful understanding of all aspects of business development.
Since small and large corporations are currently being affected by global competition, an awareness of both opportunities and implications should be promoted among entrepreneurs. This concept and rationale also holds true for students enrolled in business and entrepreneurship courses.
Usually, there is a program somewhere in the two-year college with an
interest in international affairs--trade or relations, for instance. The
international component can be either offered as a separate course or
integrated into the program components outlined in the previous sections.
The completion of a course with an international focus can lead to an
enhanced curriculum option--for example, Associate of Science degree
program--for those who want to build an understanding of the opportunities and
implications brought about by global competition in addition to the original
sequence of business/entrepreneurship courses. These courses or seminars would
also be open to the public in general and particularly to the small business
owners already operating in the community.
When developing a course on international trade, consideration should
be given to working with the U.S. Department of Commerce International Trade
Association. The course content or seminar offerings would be centered around
subject areas such as the following:
Various curriculum options can be offered to students interested in business and entrepreneurship courses. Depending upon the extent of their interest and willingness to develop an in-depth understanding of all aspects of business development, the following curriculum options should be available to them:
One approach is to offer courses which can be taken individually as
continuing educational opportunities, where students can come and be involved
in selected topics or courses while having no interest in earning diplomas or
certificates.
Another approach is to offer opportunities to pursue an associate's
degree in a business program area or a certification program through the
community/technical college. If the associate's degree program is followed in
one of the business areas, students can take their elective courses around
entrepreneurship topics that would develop an emphasis in small business.
Colleges that offer a selection of business associate's degree programs should
make available a number of courses that relate to business such as marketing,
business management, international marketing, business ethics, business
organizational structures, introduction to business, business law, managing
cultural differences, and entrepreneurship. The objective of the associate's
degree is to bring the academic and the technological together to make the
courses as practical as possible.
When an entrepreneurship course is offered in a college setting for
credit, it is recommended that it include a co-op or an internship component.
This co-op should have specific goals for the student. In addition, the
structure of such an offering must include a strong college component in the
form of site visitations and co-op student seminars to obtain interaction
between the students and active entrepreneurs.
If a certification program in entrepreneurship is offered by the
college, this should be for a specific time period or credits, usually the
equivalent of one semester in length and in specific areas such as sales,
marketing, business development, and management. An interesting approach to
this program would be an open-ended business planning course wherein students
could enter the course for as many times as they needed to develop a business
plan. In this format, the instructor is more of a consultant than a lecturer.
Credit hours could be assigned based on the number of projects students
complete within the class relative to their business plan. The classroom
setting would be flexible so students could come in at any time during the day
and work at their leisure in developing the business plan. This open-ended
approach, including an open lab concept, lends itself to the development of a
computer-based business plan.
. . . 80% of the folks who . . . knock on my office are looking for a new career path. They have been working for corporate America, and now they want to find a . . . new career path. And starting their own small business is the path they've chosen.The current educational reform movement is designed to face the challenges posed by high-tech/high-wage workplaces through connecting activities among high schools, postsecondary institutions, and local industry. This strategy is a form of investment in the development of human capital essential to support the demands of today's global economy. The educational vehicle is a form of emerging vocationalism which focuses on new competencies demanded in high-performance workplaces, the integration of vocational and academic education, linkages between secondary and postsecondary education, and a combination of school-based and work-based learning experiences. The goal is to better prepare students for the transition from school-to-work or to postsecondary education.Incubator Center Manager
Based on current economic and education trends, it is evident there is an enormous potential for two-year technical institutions to expand their role by participating in community economic development within the context of emerging vocationalism and support of business career paths. That is, community and technical colleges can revisit and implement an expanded role to prepare students for a productive school-to-work transition or help individuals ease the transition to business ownership by exposing students and workers to business environments and related experiences.
The opportunities identified through case studies involved working with two-year colleges and high schools to expose students to alternative career paths in entrepreneurial activities. The primary strategy is to use business incubators and partnerships with cooperative companies to establish tours of facilities and business environments. In this context, business incubators and incubator firms become a natural laboratory for students to explore alternative career paths by observing entrepreneurs and businesses in action.
The first step is to create awareness of these opportunities within
the college system or high school district. Program directors and instructors
should be contacted to explain the kinds of activities that can be arranged to
expose students to entrepreneurial operations as part of career guidance
programs or to complement current courses with potential implications for
business ownership. Two incubator managers shared their experiences:
Another management strategy was to establish good working relationships with each of the seven campuses of the county community college system, the business divisions, in particular. The business deans usually contact the center manager to refer groups of students who are interested in becoming entrepreneurs. Usually, the majority of the students who come to the incubator from the community colleges are enrolled in business programs.Another important component of this program involves the development of working relationships with area high schools. The purpose is to promote entrepreneurship education and interest students in pursuing opportunities in developing a small business.
The second step is to
facilitate organized tours of business incubators, advanced technology centers,
and incubator firms to expose students to business ownership opportunities. The
objective must be to make students aware of the resources available and the
opportunities and limitations they need to consider should they become
interested in starting a business. Two incubator managers provided the
following examples:
Groups of students from each of the campuses are invited to tour the program facilities and become aware of business services and entrepreneurship-related courses offered by the institute. The program is a pilot program at the postsecondary level serving the seven campuses included in the community college district.[P]articipants in the JTPA program housed in the facilities can take advantage of internship opportunities which may turn into a permanent job for many of the students. Under this format, owners hire and pay students who have completed their four- to six-month course.
Practical experiences to facilitate school-to-work-to-business ownership can be integrated into existing curriculum in business and technical areas at both the postsecondary and secondary level.
The practical context of formal and informal education and training
opportunities can be enhanced by using real-life information and the
development of a business plan. As two education and training coordinators
explained,
In most cases, the emphasis of seminars and workshops is in describing examples of success stories which are similar to the type of businesses clients want to start up. Examples also include common mistakes made by businesspeople. Using a business plan as a reference to stress important points is an effective instructional strategy. This strategy provides for concrete examples and helps refine business plans.The course is a self-employment training program . . . and includes topics covering the typical areas needed to start a new business. Through these topics, the course goes over 45 decision points that need to be made in starting a small business. As students put these decision points in their workbook, a business plan begins to emerge as a feasible idea.
Existing programs and facilities can be upgraded to
provide for the practical application and exploration of all aspects of
business operations. Under this approach, students not only learn new
employability skills but management and entrepreneurial skills needed to start
and operate a business. An incubator manager characterized his experience as
follows:
[T]he Training Center is a vocational training facility designed to accommodate these new employment demands. [This] facility offers an IBM Information Sciences Center, a culinary instructional wing complete with a fully equipped kitchen, food preparation areas, servicing lines, food storage area, and a 1,500-seat dining room where lunch is served five days a week.
Cooperative and internship programs designed in
partnership with local industry and business incubator firm can provide a rich
source of practical experiences where students can learn about starting and
operating a business. These curriculum opportunities can function in a way
similar to supervised occupational experiences and could include other creative
arrangements such as those described below by two program coordinators:
Students enrolled in the program on entrepreneurship can also obtain credits through a co-op or internship program. . . . Co-op and intern students must set up four work-related goals for the co-op experience. As part of this program, students are required to write a comprehensive report on the four work-related goals. On-the-job visitations are made with the participant students by the college staff to supervise their progress and provide any necessary feedback.This is a cooperative program set up with the public schools to offer artist-in-residency status to high schoolers who want to become practicing artists. Through this residency period, high school students are exposed to programs that complement existing, established, quality teaching programs allowing the students to enhance their career opportunities while getting trained in the arts.
Hands-on experience can be
provided through part-time employment opportunities and by having students work
as part of consulting teams supervised by college instructors. Whenever an
incubator client requests assistance, students may be called to participate in
the consulting process. For instance, a program coordinator explained,
The college would assign a student or two to work with the business on the specific technical problem. This service provides an effective partnership between the community and the college. Students [also] benefit from temporary and part-time employment opportunities in addition to exposure to a variety of business environments and operations.
A number of individuals in the community--for example, students, laid-off workers, homemakers, and employees seeking a new career path--require assistance to succeed during the transitional period in exploring and establishing a small business. Of these, minority and female entrepreneurs may experience greater difficulties given the traditional lack of opportunities to recruit and support these groups interested in business opportunities. Assisting these individuals during these transitional stages represents a great opportunity for postsecondary technical education to participate in the development of the community.
The main purpose of this guidebook is to develop a better working understanding of practical applications and considerations for two-year colleges in promoting economic development through business incubation practices. The guidebook describes a number of opportunities to foster economic development in terms of strategies to develop human capital resources with a focus on entrepreneurship, provision of business-related services, and facilitation of transitional experiences to business ownership as an alternative career path through hands-on education and training. This guidebook summarizes these opportunities from a practical standpoint to assist and inform administrators, instructors, and students who have an interest in entrepreneurship and community development. A "Sources of Support" listing is provided for additional information on contact people and agencies involved in promoting the expanded role of two-year colleges in economic development and the concept of business incubation.
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Fifield, M. L., & Huhra, L. (1993). Strengthening America's competitiveness: Profiles of leading community college international trade centers. Washington, DC: American Association of Community Colleges.
Goodman, J. (1994, March). Myth of the gunslinger. Is entrepreneurship risky?: Not if you do it right. Success, 41(2), 34-39.
Hernández-Gantes, V. M., Sorensen, R. P., & Nieri, A. H. (1996a). Fostering entrepreneurship through business incubation: The role and prospects of postsecondary vocational-technical education. Report 1, Survey of business incubator clients and managers (MDS-893). Berkeley: National Center for Research in Vocational Education, University of California at Berkeley.
Hernández-Gantes, V. M., Sorensen, R. P., & Nieri, A. H. (1996b). Fostering entrepreneurship: The role of postsecondary technical education. Report 2, Case studies (MDS-895). Berkeley: National Center for Research in Vocational Education, University of California at Berkeley.
Lavelle, J., & Bearse, P. (1992, March). Incubator-as-enterprise: High risk and hard work/high return. (Available from Development Strategies Corporation, 47 Pleasant Street, Gloucester, MA 01930-5944.)
Lichtenstein, G. A. (1992). The significance of relationships in entrepreneurship: A case study of the ecology of enterprise in two business incubators. Philadelphia: University of Pennsylvania.
Lipnack, J., & Stamps, J. (1993). The Teamnet factor. Essex Junction, VT: Oliver Wright Publisher.
Moss, J., & Johansen, B.-C. (1991). Conceptualizing leadership and assessing leader attributes (MDS-187). Berkeley: National Center for Research in Vocational Education, University of California at Berkeley.
National Business Incubation Association (NBIA). (1991). The state of the business incubation industry. Athens, OH: Author.
National Council for Urban Economic Development. (1985). Creating jobs by creating new businesses: The role of business incubators. Washington, DC: Author.
Smilor, R. W., & Gill, M. D., Jr. (1986). The new business incubator: Linking talent, technology, capital, and know-how. Lexington, MA: D.C. Heath and Company.
Sutliff, J., & Spears, J. (1994, December 10). Students as entrepreneurs. Paper presented at the annual meeting of the American Vocational Association, Dallas, TX.
Williams, J. W. (1992). Skills training and business organization guide. Arlington Heights, IL: Creative Market Solutions.
Chambers of Commerce. Contact the local chamber of commerce for business information and data about the community.
Coopers & Lybrand. Various materials on business management can be obtained by contacting the Emerging Business Services at your nearest Coopers & Lybrand office.
National Business Incubation Association (NBIA). The Ohio University Innovation Center. One Resident Street, Athens, OH 45701. Executive Director: Dinah Adkins. Call (614) 593-4331 or fax (614) 593-1996.
National Coalition of Advanced Technology Centers. This is a consortium of colleges that support technology transfer and development by providing education, training, and assistance to public and private entities. Contact: Elizabeth Brient Smith at 601 Lake Air Drive, Waco, TX 76710 or call (817) 772-8756.
National Council for Urban Economic Development. You can contact the council at
1730
K Street, NW, Washington, DC 20006; call (202) 223-4735 for
information on business incubators and economic development.
Service Corps of Retired Executives (SCORE). Free business counseling can be available from a group of men and women who can be contacted through the nearest SBA office.
Small Business Development Centers (SBDCs). Contact SBDCs for training and counseling services to support small businesses. Offices are located throughout the United States.
Small Business Innovation Research (SBIR). For information and to be included on its mailing list, contact the SBA's Office of Innovation, Research, and Technology in Washington, DC.
Small Business/Management Institutes. Usually these institutes can be found at universities throughout the United States.
State Business Incubation Associations. Check your State Office for Economic Development or the local SBA office for information on your State Business Incubation Association.
State/Federal Agencies. These include state offices for economic development, the Department of Commerce, the International Trade Office, and the Internal Revenue Service, among others.
Trade and Industry Associations. A listing of or associations by industry can be found in The Encyclopedia of Associations.
U.S. Small Business Administration (SBA). Contact your local SBA office for information on assistance to small businesses at the various stages of business development. Office of Private Sector Initiatives, 1441 L Street, NW, Suite 720A, Washington, DC 20416.