Nurturing New Businesses

While the drills are drilling, the hammers are hammering and the dust is flying, new ideas are being created at the Rockville Innovation Center.

The business incubator, which opened in July, smells like new paint, sawdust and fresh ideas. A tour of the facility last month shows some firms already spilling out of their offices, others have expanded to take over two and three offices, while some tenants are still unpacking. The smell of freshly unwrapped furniture permeates the air and accentuates the thick plastic wrap still draped over office furniture. The office of KeyGene, a 100-person Dutch firm looking to get a foothold in the United States, boasts the lone foliage on the center's two floors. It specializes in plant genetics.

Many small firms are attracted to the idea of an incubator environment because it enables an entrepreneur to focus on a burgeoning idea and not on how to hire a receptionist and other administrative costs. Incubators, like the Rockville center, often offers a receptionist to greet any tenants' visitors.

"The incubator provides us with business services, the ability to do networking, discounts on standard office costs as well as free accounting and legal advice," said James Baxendale, the president and chief technology officer of Synaptic Science, a Rockville tenant, which creates software allowing medical researchers and others to perform collaborative data analysis in real-time.

The Rockville center benefits from its neighbors who soon will occupy the building's second and third floors. The VisArts arts center lends it artwork to the center where for a price, anyone can purchase a piece adorning the center's walls. The sixth floor houses a rooftop garden that Rockville hopes will attract businesses from the region looking to host cocktail parties or other events.

The incubator currently has nine firms, which are tucked away in office space on the fourth and fifth floors in Rockville's newly refurbished town center.

It primarily attracts life sciences firms, which spring up from the region's deep biotechnology roots, including the U.S. government's National Institutes of Health and National Institute of Standards and Technology along with Johns Hopkins University.

"We reached out to the life sciences community because Rockville had found that a lot of these types of firms were traveling north to find cheaper facilities and more space," said Sally Sternbach, executive director of Rockville Economic Development.

Some incubator residents are branches of large international firms that are looking to break into selling their product or service in the United States, like KeyGene. Another firm at the center, Inteliguard, is a new U.S. unit of Advanced Filtering Technology, a U.K. firm specializing in Internet and e-mail filtering tools.

The incubator offers a legal resource center staffed by graduate students, who are overseen by a professor, to help its residents with contracts and other legal matters. A representative from the local Small Business Development Center, a program of the Small Business Administration, usually visits the 185,000 square-foot center once or twice per month to offer guidance.

As with most incubators, utilities are included in rent but residents must pay for their own telecommunications and data services. Each must sign a year lease. A photocopier room offers services on a pay-per-use basis and a conference room is available for free to any incubator resident.

While incubators can be an excellent choice for a new business to get its footing, they generally are encouraged to leave after about three years. Cities like Rockville hope that its business "babies" will grow up to move into commercial space nearby, giving citizens employment and generating tax dollars for the region.

Most metro-area counties offer similar incubators. The National Business Incubation Association offers a list of state incubator associations as well as similar international groups.

Additional Resources in the Washington region:

* Maryland Business Incubation Association

* Maryland Technology Development Corporation

* State of Maryland resources

* Housing and Urban Development Small Business Resources in D.C.

* Virginia Business Incubator Association

* Virginia Department of Business Assistance

By Sharon McLoone |  September 19, 2007; 7:00 AM ET Tools and Tips
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