Business Incubation and Community Benefits

Business Link – Vista Orientation

June 19, 2008

Presented by Dar Schwanbeck, CMC

NABI Managing Director

www.nabi.ca Phone 780 460 1000

Menu• Background on Incubation• NABI Goals and Structure• Plans• Marketing Elements• Budget• Impact and Benefits• Customer characteristics• Admission / Graduation criteria

Definition of IncubationA business incubator is a place where entrepreneurs and small busi-

nesses can receive business counseling, coaching and mentoring, as well as build skills and make connections. Incubators typically pro-vide affordable commercial spaces, administrative support services and a range of seminars and workshops designed to foster and ac-celerate small business growth. They may be located on college campuses or take advantage of existing buildings that are re-pur-posed for incubation use. Critical to the definition of an incubator is the provision of management guidance, technical assistance and consulting tailored to growing small businesses.

Incubation Primer

“The level playing field for entrepreneurs is a myth. A new company is an offshoot of a newly identified niche in the market. Business In-cubators just accelerate value flow to market. For start-up en-trepreneurs, steep challenges pave the way for greater achieve-ments and competencies. Business Incubators provide opportuni-ties for start-ups to focus on core competencies and leverage per-formance based growth…

Innovation to market, equal opportunities for young entrepreneurs, institutionalizing better entrepreneurial practices, better resource management, reduced business mortality, etc. are some of the other features.” (Source: R. M. Jawahar, Director, TREC-STEP, India)

Attributes• Incubators help new businesses emerge, survive and become viable. They offer space, shared

equipment, management support, technical assistance and inspiration. As Anatole France says, “To accomplish great things, we must not only act, but also dream; not only plan, but also be-lieve."

• Business incubation is a business support process that accelerates the successful development of start-up and fledgling companies by providing entrepreneurs with an array of targeted re-sources and services. These services are usually developed or orchestrated by incubator man-agement and offered both in the business incubator and through its network of contacts.

• A business incubator’s main goal is to produce successful firms that will leave the program finan-cially viable and freestanding. These incubator graduates have the potential to create jobs, revi-talize neighborhoods, commercialize new technologies, and strengthen local and national economies.

•  Incubators vary in the way they deliver their services, in their organizational structure and in the types of clients they serve. Highly adaptable, incubators have differing goals, including diversify-ing rural economies, providing employment for and increasing wealth of depressed inner cities, and transferring technology from universities and major corporations. Incubator clients are at the forefront of developing new and innovative technologies – creating products and services that improve the quality of our lives in communities around the world.

• The earliest incubation programs focused on a variety of technology companies or on a combina-tion of light industrial, technology and service firms – today referred to as mixed-use incubators. However, in more recent years, new incubators have emerged targeting industries such as food processing, medical technologies, space and ceramics technologies, arts and crafts, and soft-ware development. Incubator sponsors have also targeted programs to support micro enterprise creation, the needs of women and minorities, environmental endeavors and telecommunications.

Types of Incubators

Challenges in Rural Economic Development

• Presumption that the market is local (or there is no market). This can be a bad assumption. For example, there could be a tourism market in the Beaufort Region, but it will take a lot of coopera-tion among various stakeholders (e.g. government, airlines, guides, etc.).

• Weak or limited business skills• Often lots of good, practical ideas• Cautious investment climate• Looking outside for money, versus locally; investment can usually be found locally.• Lack of supply chain/services for small business (e.g. transportation, computer support, materi-

als, etc.)• Lack of whole systems thinking to support the entrepreneur as a “resource” to be developed, and

hence, the community does not work together to support the entrepreneur• Efforts to attract outside businesses in, usually don’t work (unless there is whole systems ap-

proach to overcoming all of the hurdles – finance, labour, people, training, etc.• Need for infrastructure to make it happen – and the primary, secondary job dilemma (e.g. industry

or manufacturing job versus new retail store) – the infrastructure and “cluster support” require-ments for basic jobs are usually much greater – but offer much greater economic impact

• Politicians don’t like funding capital projects with uncertain futures (e.g. buildings)• There are often many government initiatives (e.g. different government departments) at work in

rural areas – but they may not be aware of each others agendas.

Incubators can support rural economic development

• Provide a focal point to get things done (e.g. connect government agencies, guides and support resources to foster business start up)

• Provide long term economic stability and diversification• Preserve local jobs – stem traditional migration from rural/remote to urban• Serve remote resource communities needs• Offer “rural” as an alternative to urban in which people move from urban to rural• Rural incubators can now thrive through technology enablers – wired communities

and regions; and now wireless communities• Incubators and incubation (properly done) can enhance the potential and reduce risk

to investors and lenders.• Incubators and incubation can provide an alternative source of job creation (can’t find

a job, create one).• Incubators and incubation can complement other economic development initiatives

(e.g. training and apprenticeship programs)• Local start-ups (aided by Incubators) can provide part-time or seasonal employment

opportunities• Incubators can drag home-based businesses out of the house and enhance their

chances for success.

Requirements for incubator success in a rural setting

• Tap into the local pool of entrepreneurs (e.g. farmers, fishers and other small businesses)

• Operate independently – can jump over bureaucratic and geographic hur-dles

• Train / educate local resources• Give access to resources and networks• Foster a new way of thinking about entrepreneurs in a whole system context• Work to adapt the local system to meet the needs of the entrepreneur, ver-

sus the other way around• A small community should be more flexible to adapt the system to the en-

trepreneur• Try to understand the entrepreneurs' strengths and work with them• Assist small businesses to appreciate certain realities (e.g. the need to do a

business plan to access financing.)

Attributes of the rural incubator garden

• Proactive identification of candidates, supply chain members, partners and local investors

• Matchmaking• Seeking entrepreneurs with ideas, passion and a willingness to learn• Proactive mentoring and coaching• Identification of products and services not dependent on local markets• Finding local facilities and resources that can be catalysts• Not ignoring low technology or service-based businesses• Taking a whole system approach, creating holistic environment that offers

the right conditions for business success.• Often, providing the situational leadership necessary to establish the disci-

pline and hold small business owners accountable to their business plans.

10 Incubation Best Practices

Literature from the NBIA suggests 10 key success factors to incubation success. These success factors apply, regard-less of incubator mission or specific focus. 

• 1. Effective business incubation programs are based on legitimate feasibility studies and business plans. These essential documents must identify the market an incubator will serve and prove its financial viability.

•  2. Business incubators are fundamentally service programs, not buildings. No building can grow companies, pro-vide mentoring and assist emerging companies in meeting benchmarks necessary for growth. It has been many years since any knowledgeable person thought a building was the key innovation in business incubation. If your stakeholders aren't aware that they need to invest in people and knowledge more than in bricks and mortar, you need to work with them to open their eyes.

•  3. Top incubation programs are well managed, which means their sponsoring organizations provide appropriate salaries and benefits to individuals who have the skills to help companies grow and to transform communities. If local authorities pay for a concierge, they will get a multi-tenant building with a receptionist, not a vibrant business incubator that can grow the local economy.

•  4. Flexibility and commitment to service are keys to effective incubation. Incubator staff themselves must be en-trepreneurial and nonbureaucratic and recognize that they're in a service industry. Not only do they have to help companies develop management teams, they also have to get the mail out on time. They must maintain a special relationship with their clients – both leader and servant – and only those types of personalities are appropriate for incubator staff.

• 5. Effective incubator managers proactively provide business development services. They screen clients, analyze their strengths and weaknesses, help set benchmarks for growth, and bring in mentors and business service providers to provide customized assistance. Effective incubator executives also monitor these activities, garnering enough feedback from the entrepreneurs and the mentors to determine what is and isn't working. Effective man-agers don't make a referral and walk away, confident that they've done their job.

Best Practices Continued

• 6. A top-of-class incubation program knows its mission, and management, board and staff clearly understand and work to support that mission. Regular evaluation of all aspects of the program ensures that the incubator meets its goals, evolves with the market, and incorporates new tools and technologies to better serve its clients.

•  7. The best business incubation programs are well integrated into their community networks, resources, and economic development plans and strategies. Gone are the days of stand-alone programs lacking support from economic developers, academics and the business community. More and more, we see incubation programs at the nexus of significant angel equity investing networks, publicly sponsored seed funds, technology infrastructure development and commercialization programs, entrepreneurial campuses, or youth entrepreneurship programs.

• 8. Top incubators adhere to the principles and best practices of the National Business Incubation Association (N-BIA). These best practices include ensuring that management time is focused primarily on serving companies, rather than managing buildings, raising money or holding politicians' hands. In fact, NBIA research has shown that incubators that adhere to best-practice standards have better outcomes and are more self-sufficient and sustain -able. Public investors in these incubators get more return for their investment.

• 9. Top incubator managers engage in continual learning. After all, this field is not like accounting, which has been around for more than 500 years. The business incubation industry is only about 25 years old, and not a day passes when someone doesn't develop a new tool or technique or uncover a key piece of information that can help grow companies. Top incubator managers engage in professional development activities, ongoing learning and networking to improve their skills.

• 10. Effective incubator managers are committed, idealistic and hard-headedly realistic at the same time. They take a hard and honest look at their communities, roll up their sleeves and get to work. They recognize that our successes are limited primarily by the size of our dreams.

See NBIA, Principles and Best Practices of Business Incubation.

Notes on Incubator FeasibilityIn trying to determine the probability of success of any given business incubator, feasibility studies often examine as many as 30 to 60 different variables. These studies can take months to complete and costs can range to hundreds of thousands of dollars. This is not surprising; investments in incubators are often in the millions of dollars.

When boiled down, there are a few critical success factors for a small, mixed use incubator. These include:•Adequate market demand•The incubator provides support services, business coaching & mentoring•The incubator has financial stability and is not dependent on a single source of funding, and •The incubator charges market pricing and operates as a business.

The best feasibility studies are a team effort

•A committed local team, and•Outside help and ideas

There are no “magic bullets” in determining incubator feasibility. Each project should:•Avoid benchmarking (i.e. don’t assume because it worked (or didn’t) in another community, that it may or may not in yours•Be customized to fit to the community.

Realities in business incubation

•Two-thirds of incubators are not self-sustaining; they must depend on one or more sources of public funding for their capital and operating needs •Their payback to the community is through business and job creation, taxes and circulation of money in the economy. Collectively this might be called “economic activity or impact.”•The economic impact of incubators is often poorly understood. Economic impact may be measured by the number of jobs created, payroll values, total company sales, and multiples applied to these numbers.•Proving the financial viability of incubators can be very difficult. Incubators operate in dynamic markets, funding support can vary and local business conditions can greatly impact the success of incubator tenants. These variables are exacerbated in locations where costs are high, labor is transient and industry uncertainties prevail.

NABI’s Mission

• NABI is a guide and inspiration to small business• NABI provides customer focused resource

centers offering incubator services, counseling and education, networking opportunities and identification of sources of funding.

• NABI is self-sustaining and has a strong partnership base that results in positive economic impact through the creation of jobs, business development, retention and expansion.

NABI’s Vision (BIG GOAL)

By the close of 2010 NABI has 100 businesses under incubation (approximately 50 in-house and 50 region-based)

By 2018 we create 1000 new jobs in the region

Current Status

At June1, 2009 NABI has:

42 in-house clients

10 region-based clients

That support a total of 154 jobs (3.3 per business)

NABI’s Intermediate Goals

• Maintain self-sufficiency as stand-alone incubator (>85% of annual revenue from operations)

• Have 60 businesses under incubation by the close of 2009 (40 in-house, 20 virtual);100 by the close of 2010 (50 in-house, 50 virtual)

• (at November 1, 2008: 37 in-house, 10 virtual, 154 jobs)

• Graduate 10 businesses per year• Support 150 jobs per year• Counsel 100 prospects per year

Strategy

• Aggressively lease space to promising tenants

• Then, concentrate on incubation programs and implementation

Business Plan

Viable & Sustainable Business Incubator

NABI is entrepreneur developer of choice

NABI graduates perform at higher level

Service & Distribution Strategy

HR Strategy

IT Strategy

Marketing strategy to deliver full pipeline of opportunity

Real Competitive Advantage for each Business Unit

Meaningful measures & KPI's and scope within NABI's Leadership to steward them

Adequate, suitable space & lease terms for client & prospect needs.

Adequate, suitable support services for client & prospect needs.

Adequate, suitable training and coaching programs for client & prospect needs.

Adequate counselling for walk-ins contemplating business start-up.

Maintain 13 Mission Avenue as NABI headquarters

Sufficient operating budget for buildings

Maintain 200 Carnegie as NABI professional centre

Plans for or an existing or new 40,000 ft. facility

Building & technology maintenance program to ensure operations at 13 Mission for 2 years.

Security systems & programs to guard against fire & burglary

Insurance programs (NABI & tenants)

Emergency proceduresAlarm systemEmergency equipment (fire)

Maintain 3 year rolling operating & capital budget

Goal: New building @90% occupancy (from start)

Multidimensional revenue streams

Goal: Long term annual operating surplus (building) is $25,000.Goal: Target occupancy is 95%

Open communications with City regarding unusual budget items (e.g. A/C units)Semi-annual updatesAnnual presentation to City Council

Pre-leasing packagePitch to target businesses for new facilityPitch to current tennants for new space

Office rentProgram and coaching sales (see below)(not included here)Admin support feesTechnology fees (copies, phone, internet)

City operating grant

Provincial operating grant

Market rates applied to gross leaseable space 20 dollars (2007)

Goal: 50,000 (2008)

Goal: 50,000 (2007)

CIP fundsAlberta Advanced Education - Innovation Goals: 2007 $100,000; 2008: $50,000

Goal 2007:(25,000)

St. Albert City Council support for capital funding

Confirmed Federal & Provincial Support

Update presentation to potential capital & program sponsors

Proforma budget that works for all parties

Compelling business case for NABI and new facility

Director letters to papers; City Administration Support; 1:1 Meetings with Councillors; Updated NABI operations budget

Letter to Feds re: funding extension; update to Province re NABI status Goal (WD):Business growth & competitiveness, econ. diversification & development

Pitch to capital sponsors (Landrex, Hodgson, City of Edmonton, Hind, ATB)

Agreement on supporting assumptions

Economic impact numbersCurrent construction costs

Agree on metrics & targets with stakeholders

Goal: 30,000 ft. leaseable Goals: Funding confirmed by March 31, 2008; Drawings by June 30, 2008; Tender complete August 31, 2008; Construction start September 1, 2008; complete June 30, 2009

Review / maintain service & support offering Examine other NBIA best practices (e.g. seed funds, video technology, accounting services etc.) Expand portfolio of professional services available (banking, angels, legal, accouting)

Training and coaching capabilities and technologies necessary to serve diverse and remote locations in Northern Alberta

Sufficient operating budget for programs

NABI can attract and retain high quality delivery personnel in small business training and coaching

Review / align programs with needs of 5 segments below

3 year rolling forecast of coaching capabilities updated quarterly against actuals and sales forecast

Reveiw/update coaching framework and model

Choose / implement distance delivery model

Formulate core strategy using TOC princliples delivered via story board methodProvide leadership, discipline and accountability using Situational Leadership ModelAddress gaps using Next Level business planning models

Address immediate pain

Address prevention needs

Internet delivery modelThird party model (e.g. Meyers Norris)

Promote program coaching and support services to clients & prospectsDevelop model for taking piece of customer business as compensation for value creation (e.g. 5% of sales)Grow corporate mail drop & reception businessGoal:Long term annual operating surplus (programs) is $25,000Goal: Deliver 2000 coaching hours in 2008 (100 clients on growth ramp)Maintain 3 year rolling budget (separate from building and capital)

Goal 2007: surplus 5,000

Thinking - Exploring

Starting - Basics, Micro or Youth

Sustain - Story Board, Basics, Micro, One-PageTurnaround - Story Board, One Page, Next Level, Goldsmith

Growth - Story Board, Next Level, Goldsmith

Fixed & variable cost staffing complement

Up-to-date policy & operating manualCustomer-centered culture

Requisite organization structure

PT Building Manager, PT Head Coach, FT Reception, FT Admin Support, J IT CoachingAnnual reviews, open communicationsDevelop inventory of front-line coachesDevelop accountability metrics for coaches (quality, customer satisfaction, business growth)

Goal: 3 available by close of 2007

Use City of St. Albert HR guidelines

Customer satisfaction policy

Right blend of finders, minders & grinders (may lack implementation level)

Customer choice for Internet & telephone servicesNABI 24/7, Next day Internet & phone, VPN for printingShaw Big Pipe, Nutec Phones & PBX, DownStream IP

4 Value Packages for Internet; Phone to suit

Product / Market Analysis, Bases for Segmentation (type of business, growth potential)

Target Market(s)

Strong positioning: "NABI is the support system to take your business to the next level"Integrated marketing strategy

Adequate resources to make business development investment

Strong, trust-based brand known for delivering value to customers

Review criteria (by segment) for selecting and accepting customers

"Thinking about it" Segment (low revenue, low development, wide scope)Start-up Segment (low revenue, low development, narrow scope)

Goal: Support 100 per yearGoal: 70 under incubation

Stabilize Segment (moderate revenue, mid development, wide scope) Goal: 20 under incubation

Turnaround Segment (high revenue, advanced development, intense scope) Goal: 5 under incubation

Growth & Diversification Segment (high revenue, advanced development, medium scope) Goal: 5 under incubation

Franchise & distribution operationsTrades (starts > growth)

Knowledge-based businesses

Goal: Blend of 50% Anchor Tenants, 50% Growth

Life Sciences

Emerging technology

Engineering

Professional services

Execute items per NABI marketing calendar (see TAB)Goal $25,000 per year

Easy to use logo & graphics

Sufficient number of customers who refer or re-purchase NABI services

Revisit logo themes and slogans

Sufficient number of customers satisfied

Maintain tenant contact

Maintain grad contact

Incubator business model that optimizes the Throughput of incubated businesses while ensuring minimal operating costs and long-term liabilities from investments in infrastructure and human resources.

Sufficient number of prospects who try NABI services

Satisfaction surveys (early, mid term, final)Tenant & client selection criteria to identify high potential customers suited to coach-based learningCriteria to measure customer progress against their goals and plans.Assemble angel network & connectionsAdopt CMC Canada guidelines for assignment engagement, approximate fees, etc. (See CMC on-line)Goal: 50 customers who will recommend NABI at program completion

Sufficient number of suspects & prospects aware of NABI programs

Develop & execute sales strategy that is aligned with marketing

Goal: Long term 500 prospects completing consultationGoal: Balance 2007 - 30 prospects completing consultation

Execute items per NABI marketing calendar (see TAB)

Maintain up-to-date contact database

Direct mail / spam / fax blast > point to website

Up-to-date website (news, blog)

Newspaper articles

Radio advertising

Poster Campaign

Delivery of introductory seminars

Direct letters to new businesses: Alberta Registry, Chambers of Commerce in RegionSpam to database re:eventsVenture Prize alliance

NABI Trade show participation

Monthly BBQs, Moose on the Table sessionsMonthly free webinarsFollow-up with contacts madeUpdated master brochure

Career TV, Big Breakfast slotGoal: 5,000 prospects in sales funnel (ACT)

Testimonial video(s)Move to DotNetNuke PlatformNews updatesGoal: 500,000 web hits

Goal: Complete Sept. 30Goal: Complete September 30

Goal: Bi-weekly

Per article schedule for next year Assign, f/u with writers

K-ROCK program (3 - 5 x prime time)K-Rock remote Oct. 13 w/Diesel

Seminar focus starting October 15

Goal: 100 prospects

Align with radio themes

Presentations to military base support groups (target with right aptitude, trade skills)Presentations to growth audiences (CIPS, Alberta Council for Technologies)NAIT, TEC Edmonton role in seminarsNABI in-house events

Goal November Joint sessionGoal: Per calendar (audience permitting)

Goal: MonthlyGoal: NABI open house Sept. 30; reminder Oct. 10

Goal: F/U with applicantsGoal: NAIT, U of A, Job & Career Fairs,Moonlight in the MeadowsSt. Albert Farmer's Market

Annually - ready for Mid-August

Goal: 50,000 exposures to suspects Goal: 5 million exposures to market region

Ask customers / prospects for referralsEffective elevator pitch: NABI helps people…(see TAB)Targeted direct prospecting for growth companies

Free consultations and assessments of business idea (60 minutes)

Sell NABI memberships, add contacts to database

Customer inquiry follow-up by qualified coach

Semi-structured session to explore personal goals, business viability, passion to grow and willingness to learn

NABI membership brochureGoal:500 membership sales annually

Look at ebsuite software to help with CRM & time tracking

Maintain up-to-date contact databaseGoal: 4 times per yearGoal: Formal annual performance reviews

Maintain up-to-date contact databaseGoal: 4 times per year

Incubator model design accomodates diverse customer base.NABI facilities model aligns to Community and economic social growth

NABI creates and delivers a customer-centered, needs based service model

Research to confirm what really matters to customersSpecific measures to illustrate that NABI delivers on promise to customersConfirm stakeholder goals (WD, Province, City, tenants/clients)

Brag about NABI's measures everywhere, all the time to everybody

Goal: Average incubation period is 5 yearsGoal: 80% or more of tenants & clients have potential to grow & create "basic jobs"Goal: NABI growth rate of 20% year over year after 2008.

Goal: 100 clients in coaching by close of 200840 in-house clients, 60 virtualAverage coaching revenue $2,000. 2008 total coaching revenue $200,000.

Goal: Annual turnover of 20 grads per year 10 in-house grads, 10 virtual

Meaningful measures & KPI's and scope within NABI's Leadership to steward them

Google Analytics, Customer Tracking (ACT) Goal: 66% of grads remain in St. Albert

Goal: By 2020 (10 yrs. from opening of new facility) 100 new in-house grads

Goal: Attract $1 million in annual new investment

Goal: 80% business survival of grads at 5 yearsGoal: First year failure < 5%

125,000 taxes800 jobs

Track informally as known; formally annually

Viable & Sustainable Business Incubator

What is NABINorthern Alberta Business Incubator

A business resource center for small and medium enterprises for developing/expanding their business

The primary objective is to support and grow businesses that will stay/move into the community or region

Through training and coaching, Incubators reduce the number of small business failures

NABI should be seen as an investment, no different than support for SAEDAC, Economic Development or the local Chamber of Commerce

NABI contributes directly to non-residential tax base

Core Products

• Office space licenses – market rates• Ala carte support services (e.g. reception,

printing) (Staples prices)• Business Counselling (no charge)• Business Planning programs ($4K per

year per client)• Network, family environment

Promotion

• Word of mouth• Website• Breakfast seminars• Marketing materials• Relationship with media• Direct marketing

www.nabi.ca Phone 780.460.1000

BackgroundNABI provides economic development support and services to the City

of St. Albert through:• the provisioning of 41000 sq.ft. of office space and support services, • business education, courses and seminars, and• counselling and management advice to start-ups, small and

medium-sized enterprisesNABI is a mixed-use business incubator, one of about 1200 in North

America; NABI is now in its 20th year of operationsNABI improves the chances of client success from 20% to 80% at 5

yearsNABI operates as a business in a fiscally responsible manner, while

capitalizing on the benefits of being a non-profit society; most incubators depend heavily on public funding; NABI receives about 20% of its operating dollars from public sources

NABI currently supports 42 organizations with 154 employees

Board of Directors(working Board and Cheerleaders)

• Jeanette Bancarz ATB • Al Henry View Office Technology• Susan Bradley Bradley Wells Consulting• Andy von Busse Forte Record Storage• Bruce Randall Economic Development St. Albert• David Klippenstein UMA Engineering• Gerry Hood Canadian Peat Association (retired)• John McDonnell Brownlee LLP• Yves Lussier Western Economic Diversification• Cor de Boon Focus Industries (semi-retired)• Malcolm Parker Imperial Oil (retired)• Bob Stoyand Economic Development St. Albert• Jerry Werhun WCMI

NABI Staff

• Cindy Killoran – Program Coordination• Pat Dawes - Reception• Melissa Rutledge – Administration• Gerry Hood - Maintenance• Dar Schwanbeck – Manager & Head Coach• Coaching Staff• Other suppliers – accounting, janitorial, security,

mechanical, snow

Key NABI Partners• Western Diversification• Province of Alberta – Advanced Education and

Technology• City of St. Albert• TEC Edmonton• NAIT• Shaw Communications• Avison Viveiros Accountants• Micro-business training centre• Deb Barrie – Profit Crankers• Garth – Locks• - Housekeeping

www.nabi.ca Phone 780.460.1000

Estimated Economic BenefitsEconomic Contribution* 2007 Base

Year2008 @ September

2010 Targets

NABI tenant revenue contribution to economy

$11 million $15 million $20 million

# Businesses – in house 25 37 50

# Businesses – region-based 10 50

# Jobs 68 154 140

Payroll $3.7 million $6.2 million $7.0 million

# Clients counselled on annual basis 100 +

GOAL: Over 10 years, NABI has 100 graduates, generating 800+ jobs, with $125,000 in municipal taxes and $233 million in annual economic benefits for the City of St. Albert.*NABI estimates based on previous City & independent studies

Situation and Results for 2008• Completed purchase of Campbell Centre, bringing

NABI’s operations to 41,000 sq.ft.• Added $2.75 million in net equity to NABI’s balance

sheet• Completed $110,000 in renovations to Mission Avenue

property; new lease in place with City• Attracted 13 new businesses; 24+ jobs• Secured $25,000 in increased Provincial support• Maintained 90% occupancy• Managed 25% increase in costs...challenges continue• NABI will cover operating deficits of approximately

$32,000 in 2008 from reserve funds

Coming and GoingNew Arrivals• Tyco Thermal Controls• AETAS Health• Nite Tours• Chantal Ross Design• SGS Canada• Clair Chauvet• Gaia Energies• Megger Limited• Michelle Jensen Counselling• Profit Cranker• Maxium Financial• Monetta Planning• Arbor Memorial

Grads (and Not so Successful)• Avison Viveros• WCMI• Bryden Psychological • Trakware• Exciton• Nail Oasis• St. Albert Community

Foundation

Looking Forward to 2009

• 2008 and 2009 are transition years as NABI moves to a doubling in scale of operations

• $350,000 in renovations planned for 2009• NABI will cover operating deficit of

approximately $6,000 in 2009 from reserve funds

Revenue Overview2008Projected

2009 2010 2011

Rent(Existing Building)

387,343 518,244 566,162 577,897

Programs 39,000 45,990 47,370 48,791

Provincial Grants 65,900 50,000 50,000 50,000

City Grant – Ops.- Mission Repairs

50,000100,000

52,000 54,080 56,243

Total 642,243 666,234 717,612 732,931

Expenditures Overview(Figures adjusted for inflation in 3% to 4% range)

2008 Projected

2009 2010 2011

Wages 234,538 249,699 257,190 264,905

Mortgage Costs 22,500 64,479 64,479 64,479

Program Delivery 30,400 30,562 30,729 30,901

Promotion 18,000 13,905 14,322 14,752

Property Tax 40,842 42,067 43.329 44,629

Utilities & Telecom 110,207 125,075 129,673 134,443

Other Operating 108,547 93,553

Repairs & Maint.GST Recovery

124,600(15,000)

28,338 29,188 30,064

Building Reserve 0 25,000 25,000 25,000

Total 674,634 672,678 690,690 709,298

Summary Surplus / Deficit

2008Projected

2009 2010 2011

Revenues 642,243 666,234 717,612 732,931

Expenditures 674,634 672,678 690,690 709,298

Surplus / (Deficit)

(32,391) (6,444) 26,922 23,633

Capital (not included in expenditures)

$3,550,000 $350,000 0 0

Who do we work with?We work with businesses who:• Don’t have enough customers• Have lots of customers….but little profit• Are stuck in first gear….lots of activity, less than glamorous results• Have niggling problems like staffing and employee turnover • Want better alignment of their products and services with customer

expectations• Are having trouble getting necessary finance and money• Feel stuck in the mud and want to break out to a new level of

performance• May be operating their business without a rudder and need a plan• Want to grow, but aren’t sure what path to take• Want to be their own boss and create the independence of having

their own business• Might be riding dead horses…and are not sure what to do…..

Why do they work with us?• NABI is a business resource center for small and medium enterprises for developing/expanding

their business• Incubation can be good for most businesses, not just start-ups• Accelerate business innovation and commercialization• Access to capital; matchmaking of local investors and other contacts / customers• Proactive mentoring & coaching• Creates a more holistic environment with the right conditions for business growth• Presence in incubator adds credibility to the business• Foster better use of capital. Capital is often wasted through premature marketing of products and

weak business processes.• Improves a business’s chance of surviving 5 years from about 20% to 80%• Better business plans (real road maps for success); step by step training to give people

knowledge, research skills, planning skills and an action plan• Improved competitive strategy; better sales performance• Better time / activity management• More effective use of resources• Support services (mail drop, reception, state of the art printing & copying, telecommunications)• Accelerated networking and relationship building• Source of inspiration• Benefits all technologies (low tech, high tech, no tech)• Our programs are not limited to in-house tenants; we reach out to neighboring communities and

businesses

What do our customers expect?

• Practical training on how to plan, start or grow a business

• Advice on what decisions they need to make to implement their plan

• Support and encouragement throughout the business building process.

Twenty-two challenges to effective business building

1. Lack of clear goals and a viable vision; no tie to personal goals

2. Buy-in to the plan3. Specification sickness4. Trying to do to much5. Not setting goals and timelines to complete the plan6. Lack of clear product focus7. Insufficient customer input…you don’t know your

customer as well as you think you do8. Lack of focus on few core products9. Not engaging end users vs. brokers10. Insufficient market research11. Not really understanding the “available” market

Twenty-two challenges to effective business building (continued)

12. Over-emphasis on production, finance and process13. Under-emphasis on listening to customers14. Failure to use “throughput thinking” and to concentrate

resources appropriately15. Weak organization (lack of sales person, no advisors,

inexperienced management team)16. Weak image / brand17. Use of traditional project management versus critical

chain project management18. Lack of real competitive advantage (red versus blue)19. Start with revolutionary product vs. an existing market20. Overemphasis on price….price wars are never won21. Working “in” versus “on” the business22. Planning is never finished

What our customers say…

"Our business has grown three fold since moving in from our home offices and now it's time to move on. We have really enjoyed our time with NABI and staff Lorne, Dar, Pat and Irene, and the support that they have provided for us. The incubator has definitely helped move our business from part time to full time. We have grown now to the point that we can stand on our own and grow within the community."

Paul Falkowski & Bob HolmNew Dimension Investments Inc

Target Customers

Aspiring Business Owner• Have a concrete business to develop• Need a business plan• Want practical, hands-on training and coaching to help

them through start-up

Existing Business Owner• Work mostly in the business, not on the business• Never prepared a business plan or didn’t follow through• In business but barely making it• Want practical support to prepare and implement a

business plan

Useful Tools

• Entrepreneurial Test• Roadmap• Coaching Model• Planning Frameworks

Programs

• Tilling the Soil of Opportunity NxLeveL Guide for Agricultural Entrepreneurs

• Get the Buzz on Biz!NxLeveL Guide for Enterprising Youth

• Business Plan BasicsNxLeveL Guide for New Entrepreneurs

• Take Your Businessto the Next LevelNxLeveL Guide to Growing Your Business

• Canadian Microbusiness Training ProgramComplete Business Planning Guide

Characteristics of the ideal business

• Sells the world• The $/t ratio steadily increases• Inelastic demand; not easily copied• Minimal labour needed• Low overhead• Requires little investment• Cash billing• Free from regulation• Easy to move• Satisfies your intellectual needs• Leaves some free time• Income is not limited by your personal output

So you want to take your business to the next level.

What are the hurdles?1. Personal Readiness2. Strategic Versus

Tactical Thinking3. Viable Vision4. Customer-Centered

Culture5. Integrated, Balanced

Competitive Strategy6. Shift From a Cost to a

Throughput Model7. Constraint

Management (Sales)

8. People and Capabilities9. Organization Structure10. Leadership11. Technology

Accelerators12. Driving Improvement13. Measurement14. Up-To-Date Business

Plan

8. People and Capabilities9. Organization Structure10. Leadership11. Technology

Accelerators12. Driving Improvement13. Measurement14. Up-To-Date Business

Plan

Criteria for Working with NABI

1. Viable business idea

2. Passion to grow a business…not just create a job

3. Willingness to learn

Formal process in place…but not rigorously followed at the moment.

Graduation Criteria

• Formal criteria in place, but rarely used• Practical policy…like teenagers, they know

when its time to go.