By Carol Ann Dykes Logue
“This was a great meeting. We actually worked ON the business and didn’t spend all the time working IN it!” It may surprise you to know that statement wasn’t made by one of our clients. It was made by an incubator team member at the end of our most recent management meeting. I appreciated that comment because it reminded me we have many of the same challenges our clients have and need to put into practice much of the same advice we give them.
Many have the perception that, because we are part of the University, we get lots of money from the State or the University and don’t face the same challenges a business does. In reality, we are very much like one of our clients and are running our own “business” which just happens to be anchored in an academic institution.
The fact that we do share many of the same challenges as our clients is part of what enables us to understand, coach, and support them. We continuously ask ourselves many of the same questions we ask them.
“What problem in the market are we solving?” Entrepreneurs have a lot of choices about if and where to get help starting and growing their businesses. We are fortunate to have many excellent organizations in Central Florida that exist to support entrepreneurs. What is the gap that we fill? The UCF Business Incubation Program addresses the need for a longer-term, wholistic offering of services and support providing sustained support during those critical, first years. We offer a surprising array of services…space just being one of them…and tailor our offerings to the specific needs of each client.
“Who is our target customer?” We are not the right fit for every entrepreneur and many are not the right fit for us. We exist to support a specific profile of an early-stage company. Our target customer is one that is solving an existing and/or growing identifiable problem in the market, has a competitive product with a clear value proposition, has validated that customers will spend money for their solution, has the desire to grow the company, and (above all else) desires and will accept coaching and guidance.
“What is the value proposition we offer our customers? At the heart of it, we are their systems engineering support team. What does that mean? Systems engineering is an interdisciplinary field of engineering and engineering management that focuses on how to design, integrate, and manage complex systems over their life cycles. Successfully starting and growing a business is very much a systems engineering challenge that requires designing, integrating, and managing a complex set of activities and circumstances to support the growth and sustainment of the business. The Incubation Program provides guidance, resources, and support over a several-year period to help our clients do that well.
“What is an effective marketing and sales strategy?” Knowing who we are targeting as customers is one thing. Knowing how to reach them and get their attention is another. We constantly are assessing where we should be speaking, messaging, and collaborating in ways that get us in front of the types of companies we are looking for.
“Who do we need to partner with to reach potential customers?” The fact is we work with most of those other entrepreneurial support organizations in the community to complement what they offer.
We don’t want to duplicate what they already do. We connect clients to them to take advantage of their services. We develop referral relationships with them as part of our marketing and sales channel.
“What are our costs of doing business?” Just like you, we face rising costs of salaries, services, rent, and operational costs for facilities, supplies, etc. We reconcile and balance our multiple budgets every single month to be sure we know what our income and expenses are and how close to the projected budget we are. As part of the university, we don’t seek to generate a profit. But we have to cover all of our costs.
“What is a viable revenue model?” There are two customer groups to consider when answering that. For one set of customers – our incubator clients – we charge for services based on operational costs and comparable market rates. For our other set of customers – our city and county government funders – we receive what they allocate in their annual budget to support the economic development work we do for them.
“How do know if our products and services are successful in the market place?” Our “product” is a solid, scaling company that graduates from the Incubation Program and continues to thrive and grow. We collect data (jobs, revenue, investment, etc.). We analyze trends for each company’s progress.
We highlight the milestones and achievements of our clients. Over 80% of the companies that have graduated from the UCF Incubator Program (and that have not been acquired) are still in business and most of them are in the region.
It’s easy to get caught up in day-to-day demands neglecting the critical strategic analysis of our answers to all those previous questions and planning then for the future. Yet it is the strategic work that results in thoughtful, informed changes to the business and maintains growth and relevance. When we advise a client to step back from the daily grind and take time to work on the business, it’s because we know how important it is.
This is year 23 for the UCF Business Incubation Program, so it must be working.
The University of Central Florida Business Incubation Program is a community resource that provides early-stage companies with the tools, training, and infrastructure to become financially stable, high growth/impact enterprises. Since 1999, this award-winning program has provided vital business development resources resulting in over 300 local startup companies reaching their potential faster and graduating into the community where they continue to grow and positively impact the local economy.
With eight facilities throughout the region, the UCF Business Incubation Program is an economic development partnership between the University of Central Florida, the Corridor, Orange, Osceola, Seminole, and Volusia Counties, and the cities of Kissimmee, Orlando, and Winter Springs. For the 2017/2018 fiscal years, the activities of these participating firms have helped to sustain more than 6,725 local jobs and have had a cumulative impact of over $725 million on regional GDP and over $1.3 billion on regional sales. During the same period, the program has returned more than $12.00 in state and local taxes for every $1.00 invested in the program. In addition, for every $1.00 of public investment, the firms also produced $118 of additional regional GDP and $226 of regional sales. For more information, visit www.incubator.ucf.edu.