GLOBALXONE TECHNOLOGY INCUBATOR HUB
EXECUTIVE SUMMARY
Introduction
This business plan addresses creating and operating a technology business incubator hub in Miami-Dade County, Florida.
Purpose
The proposed mission of the incubator Hub is to stimulate the establishment and growth of technology-based start -up companies and other compatible businesses. By fulfilling this mission, the incubator Hub would contribute to job creation, and provide for enhanced economic health to the area.
Description
The technology business incubator would provide new and emerging technology and compatible businesses with an environment that would support their start-up phase and increase their likelihood of success. The proposed incubator includes facility space, flexible leases, shared use of common office equipment, direct business assistance and guidance, mentoring, networking to capital, and other technical resources. A network of existing resources in the community would be developed to support incubator client needs.
Approximately six to ten clients at a time would be served within the incubator. The facility, proposed at 2,675 square feet, would include a mix of office and lab space.
Proposed Organizational Structure
This business plan recommends the incubator be structured as a 501 (c)(3). This form seems best suited to the proposed mission and positions the incubator to accept grants and charitable donations. The incubator would be governed by a board of approximately 3-5 members comprised of individuals with a mixture of entrepreneurial and technology experience, representatives of key economic development organizations, and representatives of area higher education institutions. The proposed incubator would be staffed by an Executive Director whose responsibilities would be to provide and/or facilitate access to value-added services needed by incubator clients, recruit and screen potential new incubator clients, and manage the overall operations of the incubator.
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Part-time administrative support is the only other incubator staff proposed in this plan during the initial years.
Alternative organizational structures are also considered in this business plan.
Proposed Facility and Site
The proposed incubator facility would be 12,50 total square feet with a mix of office and lab space. This business plan recommends the incubator be sited within the developing facility that recently received funding support and is slated for the area. This would allow the incubator’s facility and staffing to be creatively structured to take maximum advantage of its location.
Alternative sites are also considered in this business plan.
Budget and Financial Estimates
As proposed, the incubator involves development of a new facility estimated at $1,200,000; and an estimated annual operating budget of $250,000.
To make the project viable, funding must be sought. The most promising sources for funding include the Knight Foundation, Miami Foundation, SBA, investors, grants, etc.
Evaluation Factors
This business plan sees the proposed incubator as an important tool in the economic development toolkit of the area that would be a means to create new job opportunities for area residents, create higher wage jobs, better leverage intellectual property from the University and other research institutes, contribute to the growth and success of emerging technology businesses, and as a source to generate new tax revenue for Dade County. These factors would provide the long-term metrics against which to measure the success of the incubator.
Next Steps
Once this business plan is published, Phase I – the planning phase, will be complete. Interested parties will need to determine whether or not to proceed into Phase II – project implementation and resource development. An implementation outline is included in this document.
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4.0 SERVICE OFFERINGS
Incubator services and programs are designed to increase a client’s likelihood of successful development and growth beyond what the client company could achieve on its own. Offering value-added services is key to the incubator’s ability to successfully spinout graduates into the community and generate jobs and wealth in the region. Without these services, the incubator is little more than a benevolent landlord.
Incubator offerings are divided into four categories:
Direct business development assistance
Professional network and relationship support
Educational programs
Facility-based services
Incubator clients would have access to all core programs and services as part of their monthly lease agreement. Per unit service fees would be required for additional office services and special programs that may require client support fees.
It is important to underscore that the proposed incubator should work to develop cooperative agreements and referral relationships with existing resource partners throughout Dade County who provide services that support the growth of early stage technology businesses. These resource partners include, but are not limited to, LCC’s BDC, area chambers of commerce, Dade Metro Partnership, Dade Workforce Partnership, cities, county, and state economic development, and business resources, etc. Such cooperation will avoid redundancy and redirect valuable time/resources toward services that address specialized and unmet needs of incubator clients.
Brief descriptions of proposed offerings are described in the section that follows. These offerings are based on a review of incubator literature and reflect perspectives gleaned from interviews with Dade County stakeholders and from interviews with representatives from three young or emerging technology businesses.
4.1 Direct Business Development Assistance
Business development assistance is the direct support provided to clients from the time of acceptance through graduation. The incubator’s Executive Director would provide oversight and facilitate access to resources that meet client needs as those needs arise over the course of their incubation.
Business Assessment – This is the ongoing process of evaluating client business plans, identifying areas of need, developing a work plan to address those needs including identifying expertise and services needed to move the business plan
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Capital and Financing Network – The incubator would establish and maintain relationships with a network of banks, angel investors, venture capitalists, and corporate equity investors through capital networks, brokers, and personal contacts. The incubator would provide introductions between incubator clients and appropriate investment resources.
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with licensing technologies, and area resources available to support those technology commercialization efforts. The seminars would bring technologists and entrepreneurs together and could be a tool for marketing the incubator to potential clients. A small panel of area experts would be invited to speak, such as the University’s Director of Technology Transfer.
5.2 Evaluation Criteria
The criteria used to evaluate prospective clients throughout the application process should be based on the mission and objectives of the incubator and be compatible with the broad mix of technologies supported by the incubator.
Suggested basic evaluation criteria include:
The business should be a technology-related firm producing offerings that can be commercialized within three years. Compatible manufacturing firms that meet these criteria would also be eligible to apply, provided their space needs were compatible with the incubator facility.
The business must be in early stages of development. Early stage usually means within the first two years of business operations, but small companies involved in a significant change in direction or launching a new business product may also apply.
The applicant must show ability to pay incubator rents while they develop positive cash flow.
The applicant must have a management team that the Executive Director feels can handle the technical aspects of the business. The management team should have entrepreneurial business acumen or be willing to accept advice from an incubator established advisory board.
The applicant must want to take advantage of and be able to benefit from the value-added services and guidance of the incubator. The applicant business must be willing to take advice from the professional network and/or the Executive Director.
The applicant business must have the capacity for growth and provide economic benefits to the area including creating new jobs and opportunities for area suppliers and vendors.
The applicant must not be in direct competition with existing incubator businesses.
5.3 Graduation Policies
Graduation policies should be written into tenant lease agreements. Those policies should address time limits, value exchange, and resource commitments.
Time Limits – A maximum amount of time for a client to receive services should be set. A fairly common standard is a maximum of three years, on a month-to-
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month lease. This can be customized by type of business and extended on a month-to-month basis for an additional year if indicated. In particular, bioscience companies generally require a longer time to get products approved and ready for market, and often require incubator services for five to seven years. Regardless of the specific time limits established, it is important to underscore that in discussions during the business planning process stakeholders strongly recommended a rigorous application of this policy. They see it as critical for achieving “early wins” and fostering ongoing support for the incubator.
6.0 FACILITY
The market feasibility study concluded that a technology incubator facility should be 2,500 to 5,000 square feet, located near the on CRA , designed to meet the needs of new and emerging businesses that represent a mix of technologies, and sited to allow for expansion to accommodate expected overall growth in the region’s technology sector. These factors provided the initial parameters for more in-depth development of potential facility features during the business planning process. Incubator industry literature was also reviewed and indicated that the primary feature of incubator design should be flexibility. Flexibility is necessary to provide modest sized spaces for new incubator clients but allow for internal expansion and contraction as client business needs change during tenure in the incubator.
Site alternatives are summarized below, followed by a site recommendation, preliminary recommendations for facility size, and approximate space allocation.
6.1 Site Alternatives
There are three basic site options for an incubator facility in Dade County with some variation on each one. Basic options include: 1) expansion at the Innovation Center site located, 2) lease/purchase of an existing building located near campus, and 3) incorporating the incubator into the proposed new
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| TABLE 8.3 FIVE YEAR OPERATING BUDGET | |||||
| Revenue | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Incubator client rents | 18,060 | 50,400 | 88,536 | 96,768 | 105,336 |
| Anchor tenant rents | 81,600 | 84,150 | 86,700 | 89,250 | 91,800 |
| Service fees | 1,500 | 2,500 | 3,000 | 3,250 | 3,500 |
| Grants | – | – | – | – | – |
| Donations | – | – | – | – | – |
| Donations in kind | – | – | – | – | – |
| Total Revenue | 101,160 | 137,050 | 178,236 | 189,268 | 200,636 |
| Expenses | |||||
| Salaries | |||||
| Director | 60,000 | 82,400 | 84,872 | 87,418 | 90,041 |
| Receptionist .5 FTE | 12,000 | 12,360 | 12,731 | 13,113 | 13,506 |
| Benefits 40% | 36,800 | 37,904 | 39,041 | 40,212 | 41,419 |
| Payroll Expense | 128,800 | 132,664 | 136,644 | 140,743 | 144,966 |
| Books/subscriptions | 2,000 | 1,000 | 1,000 | 1,100 | 1,100 |
| Business assistance offerings | 1,200 | 2,400 | 3,000 | 3,100 | 3,200 |
| Dues/fees | 1,000 | 1,000 | 1,100 | 1,100 | 1,100 |
| Insurance | 4,000 | 4,100 | 4,200 | 4,400 | 4,500 |
| Janitorial service | 6,800 | 11,100 | 11,500 | 11,900 | 12,200 |
| Landscape maintenance | 4,800 | 4,900 | 5,100 | 5,200 | 5,400 |
| Maintenance/repairs | 2,000 | 2,100 | 2,100 | 2,200 | 2,300 |
| Marketing/PR | 6,000 | 2,400 | 2,500 | 2,500 | 2,600 |
| Office equipment maintenance | 700 | 720 | 740 | 760 | 790 |
| Office supplies/printing | 4,000 | 2,400 | 2,500 | 2,500 | 2,600 |
| Postage/shipping | 1,000 | 1,000 | 1,100 | 1,100 | 1,100 |
| Professional/contract services | 2,400 | 2,470 | 2,550 | 2,625 | 2,700 |
| Property tax | 5,600 | 22,200 | 22,900 | 23,600 | 24,300 |
| Telephone/fax/internet | 3,800 | 3,900 | 4,000 | 4,200 | 4,300 |
| Tenant improvements | 6,000 | 10,500 | 13,500 | 15,000 | 15,000 |
| Trash removal | 400 | 410 | 425 | 440 | 450 |
| Travel/training | 3,900 | 4,000 | 4,100 | 4,300 | 4,400 |
| Utilities | 6,600 | 22,200 | 22,900 | 23,600 | 24,300 |
| Other Expenses | 27,200 | 98,800 | 105,215 | 109,625 | 112,340 |
| Contingency reserve 5% on | 11,300 | 11,573 | 12,093 | 12,518 | 12,865 |
| Payroll and Other Expenses | |||||
| Total Expenses | 237,300 | 243,037 | 253,952 | 262,886 | 270,171 |
| Net Income/Loss | (136,140) | (105,987) | (75,716) | (73,618) | (69,535) |
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Operating Budget Assumptions
Dade County Economic Development Strategic Investment Program
This fund distributes video lottery dollars and supports public-private partnership projects that will make a measurable difference in the economic growth and stability of Dade County. The Oregon State Lottery Commission transfers a minimum of 50% of the new video lottery revenue received each year to counties to use in economic development activities. The Dade County Board of Commissioners approves allocation of funds to applicants based upon advice of the Economic Development Standing Committee after review by the Dade Economic Committee.
Any Dade County economic development project is eligible for funds. Public-private partnerships are relatively more attractive candidates. Total funds of $780,185 were available in . However, the amount of available funds varies from year to year, and they have declined over the past biennium. Individual allocations vary, with no maximum specified. In one year, funded projects ranged from $10,000 to $120,000 dollars.
Applications are submitted annually in late spring and are reviewed in June with grants awarded in July. Multi-year projects may be funded. Higher priority is given to proposals that have the greatest potential short-term economic impact leading to specific and measurable job creation or retention. Applications should describe links to State of Oregon strategic plan benchmarks for economic development.
This source would be pursued to subsidize early operations of the incubator and/or to fund specific service develop initiatives that would lead to job creation with incubator client businesses.
University of
The VP for Research actively promotes developing a knowledge-based economy in through the creation, dissemination, and commercialization of ideas.
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10.0 SUCCESS CRITERIA
The incubator’s suggested mission and objectives provide a touchstone for desired outcomes – job creation, real growth of new technology businesses in Dade County, and contributions to the economic health of the area.
We recommend that a formal progress evaluation be completed every six months and reports be provided to the Board and all stakeholders. Suggested performance indicators for the project include:
The number of tenant clients within the incubator Evaluation of services by incubator clients Growth in the number of applicants
The number of companies that successfully graduate
The percentage of incubator clients that successfully graduate as measured against the target established by the Board
The number of jobs created on an annual basis within the incubator The percentage of incubator graduates that stay in the community
The calculation of incremental tax revenues generated by technology incubator clients and graduates
The level of community support for technology businesses
The number of patents applied for and received by incubator clients The
revenue of companies being served
The capital raised by companies being served The grants received by companies being served
Performance measures can be modified as the business incubation program evolves and matures over time.
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