A Dozen Business Incubators Hatching Entrepreneurial Success in NJ

BYLINE: Venturella, Krysta

The best kept secret in New Jersey is not a food service, lifesciences business or technology provider, but a combination of all of them, and many more, brought together by the New Jersey Business incubation Network (NJBIN).

Business incubators are more than real estate. Michel Bitritto, president of NJBIN and part of the leadership team for the incubator in Newark, describes them as support services, mentors, facilitators, and key networkers who help accelerate the commercialization of new businesses. Business incubators are places to put up-and-coming businesses into a supportive network that helps them move forward by helping review business plans and connecting with service providers (marketing experts, attorneys, etc.).

"For New Jersey, incubators are giving people a place in which to operate their business," says Bitritto. "It is more than office suites ... It becomes a place to center your business outside of your house." Bitritto adds, however, that incubators are not life-long homes for businesses, just a place to startup until a company is able to support itself on its own.

Not only do the incubators provide businesses with a business address, but a professional presence with use of conference rooms in which to bring clients.

Most incubators' clients have some industry background, which helps them understand market needs. Bitritto says, "Many of these business owners had a good idea for a specific market, but the company they previously worked for was not interested, so they decided to pursue their idea alone. But by joining NJBIN, these businesses are not alone."

Incubators provide businesses with great networking opportunities that enable clients to trade experiences with one another. "All incubators have networking events on a regular basis to exchange information and talk informally with one another on issues that are important to them," says Bitritto.

Services are also rendered among co-incubator businesses, "A minority-owned project management firm, for example, in the Newark-incubator needed some sophisticated databases built," says Bitritto. "We have an IT company here that develops software right in the building that provided those services."

Each business is an independent, privately-held company with the only costs being rent and, in some cases, a charge for phone or Internet access. Businesses do not have to share their revenues or patents with NJBIN, but if successful, some other incubators have success fees. If a business is doing well after "graduation," which is normally in three to five years, the incubator will look for remuneration. That money is used as a seed to help another start-up business.

More than 900 businesses are incubated in the 12 New Jersey locations, composed of 240 resident businesses, which rent space, and 675 non-resident businesses, mostly in the food industries.

Not only do business incubators benefit New Jersey by producing high-paying jobs (1,100 were created by the incubators in 2006), but 84 percent of incubator graduate businesses remain in the local area, continuing to produce benefits for New Jersey into the future. Bitritto says companies that "grow up" in this structure have a higher chance for success than a business starting on its own; 87 percent of incubator graduate businesses remain in business after three years.

All but one of the 12 New Jersey business incubators are associated with a college or university; the North Brunswick location is backed by the Economic Develop-ment Authority. Three incubators are currently in some phase of construction in New Jersey: Burlington Community College, life-sciences; Rowan University, diversified; and Garden State Cancer Center, drug-related development.

The host does not just provide the rent space for the incubators, but in some cases, also provides financial help, or help with maintenance and paying for utilities. When a state gives funding for the incubators, it goes through the college/university or host.

The incubators are minimally funded through the state, as designated by The NJ Commission on Science and Technology. In 2006, $1.45 million was designated for the incubators. In 2007, $1.56 million is expected to go toward incubator funding, which equates to $130,000 per incubator and a $1,400 investment for each of the 1,100 direct jobs created, or a $625 investment, when both direct and indirect jobs are considered.