Maddux Report - Tampa Bay's Business, Finance and Development Magazine

Along the Corridor

High Tech Incubators
Incubators are important for a very basic reason: starting a new business is tough. Nationwide, nine out of 10 new businesses fail in their first year, usually because of lack of training in standard business practices or because of being undercapitalized. However, business start-ups that collaborate with an incubator have a very high first-year survival rate. Nationally, about 87 percent of them are still in business, according to the NBIA. Plus, an average of 84 percent of companies that have graduated from an incubator stay in their communities, giving the entire concept a true economic value for the communities that incubate and hatch the fledgling companies. Like venture capitalists, incubators impose selection criteria upon prospective clients. Some accept a mix of industries, but others concentrate on industry niches. According to the NBIA, typical incubator clients are 43 percent mixed use and 25 percent technology, with the remainder split between manufacturing, service and various other entities.

An Incubator Success Story
When Tami Kilger moved her company into the Seminole Technology Business Incubation Center (STBIC) in 1997 its annual sales were less than $500,000. When it moved out in early 2001, the five-employee company's sales were at about $4.5 million. Founded in 1995, Kilger's company is Sanford-based Rainbow Distributors Inc., a firm that distributes telecommunications products like wire, cable, connectors and traffic signals.

Kilger, company president, started her business from home after working for a similar company, where she developed a yearning for the freedom of entrepreneurship. Her husband, Kyle, now vice president, joined her about a year later and soon the pair was at the helm of a successful company. Rainbow Distributors was one of the first tenants in the STIBC, and got there purely by accident, according to Kilger. "We were looking for affordable space in Seminole County," recalls Kyle Kilger. "We found the incubator one day while driving around the industrial area where it's located, and thought Œhey, that looks like a nice place.'"

Little did they know that the STIBC was more than just a nice place. Upon learning of its status as an incubation center, the Kilgers grabbed the opportunity to get less-than-market rental rates and a host of services for growing their firm. "One of our biggest problems was that most of our money went for inventory and equipment, so we needed low rent," says Kilger, adding that along with that the company got a host of networking contacts in banking, accounting, printing and other areas. "Wayne Hardy, the director, knows everyone," says Kilger. "You can ask him for just about any type of referral and he's bound to know someone. Within 24 hours he'll come back with four or five names."

Since graduating from the incubator, Rainbow Distributors has obtained a line of credit with the help of a banking contact that the Kilgers met through the incubator. They also purchased a city block in Sanford where the company occupies one of the two 20,000-square-foot buildings that it now owns. Looking ahead, Kilger says Rainbow Distributors will soon print its first catalog and expand into the adjacent building, which they bought as an investment and as insurance that they "wouldn't have to move again" anytime soon. "We also plan to add some employees," he says, "and double our inventory over the next few years."

Tech fyi
MethodFactory, a Sarasota-based technology application development company, says it has been selected by Charlotte, Fla. and the county of Mecklenburg in North Carolina to develop respective government Web sites Š eAutoclaims, which provides online claims management for the auto industry, says it is moving its corporate offices from Palm Harbor to a 30,000-square-foot facility in Oldsmar. The company's revenues have jumped from $1.7 million in 2000 to more than $20.2 milllion in 2001.

Send high tech news and tips to Frank Ruiz, editor, Maddux Report, P.O. Box 202, St. Petersburg, Fla., 33731. Email: fruiz@maddux.com Coverage extends from St. Petersburg along the Interstate-4 corridor to the Space Coast, among 21 counties.

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