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The Incubator Business

February 15, 2012 in News

The Regional Incubator is a business, in the business of creating and helping small businesses grow to become successful. The folks in charge of the incubator are charged with helping businesses develop business plans that mitigate the risk of failure

One popular business axiom is start small and grow carefully, to avoid the risk of “growing broke”. You can only grow as fast as your capital will allow. If you start with grandiose plans and spend your money foolishly, you will run out of money before achieving success. “If you build it, they will come”, is not a solid business plan. It’s a hope and pray it works strategy. If it doesn’t work there is no fallback position. You have spent all your money before you have a proven product.

Most advisors would tell you to start small, prove the feasibility and market strategy is on target, and then grow as your capital allows. You grow with profits or additional investment in the form of capital injected into the business.

The incubator folks started with grandiose plans. They could have started small, proven the concept (which has failed in many places in Wyoming) and grown according to demand. They staffed up two years before the building was built. This is like hiring assembly line people before there is anything to assemble. Before construction began, there were large change orders signed, which could lead you to believe the original plans were incomplete or changed. A very expensive mistake that perhaps could have been avoided with a little more thought and preparation.

The out of state consultants utilized to research and create a business plan concluded that these start-up companies would be willing to pay rental rates that are 50% higher than the average commercial rates currently available in Casper. The assumption that there were enough companies operating out of their house or garages, willing to pay excessive rates and fill up a 40,000 square foot building, now appears flawed.

Now, like any business that recognizes their business plan was, and is, flawed, CAEDA is scrambling for ways to address the problems before they become fatal. Perhaps we should change the project to a hotel or a restaurant. A retail outlet on the golf course or perhaps some other type of for-profit business would save the day. This is not likely to happen because those types of businesses would be competing with private sector businesses. As a commercial office building it would generate better cash flow, but again, competing private interests are not too excited about competing with government enterprise in the private sector.

It is time for CAEDA to level with the residents of Natrona County. If there are known problems, tell us what they are. If you involve the residents openly and honestly they will be more inclined to help with solutions. This is a Natrona County issue that will impact us all. This problem doesn’t sound like it is going away anytime soon. Lack of action is the worst possible solution. To date, this business plan continues to have fatal flaws. To ignore those flaws and continue down the path of failure is not what an entrepreneur, with limited resources, would do. A true entrepreneur anticipates problems, set- backs and alternate strategies.  The incubator is a start-up business. It is in the business of helping start-ups grow and prosper with advice on the methods, decisions, planning and hurdles that must be overcome to be successful.

It appears that CAEDA’s plan is “do as we say, not as we do”. We all stand to benefit if the incubator can be successful. In some form or fashion we are all investors in this project, like it or not. As investors, if mistakes have been made tell us. Tell us the magnitude of the problem and your plans to resolve those problems. If you have no plan, tell us. If you have a plan, tell us how we as resident investors can help. None of us want to lose our investment. However, it makes even less sense to continue to invest in subsidizing this project for 20 years if it cannot be made to stand on its own soon. We are waiting for disclosure and discussion.

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