Council backs bid for downtown business incubator

City Council approved a funding request from the Sault Ste. Marie Economic Development Corporation (SSMEDC) Monday in a bid to create new small businesses and jobs in the city’s downtown core.

$190,000 will come from the Economic Development Fund as the City’s share of funding for a three-year pilot project to establish a Small Business Incubator in Sault Ste. Marie’s downtown core, from Gore Street to Church Street and from Albert Street to Foster Drive.

The incubator project’s total cost is $565,000, which means extra provincial funding from the Northern Ontario Heritage Fund Corporation (NOHFC) and federal funding from FedNor will be needed ($187,500 from each).

The EDC’s General Manager for Enterprise Services (of Business Sault Ste. Marie) Andrew Ross told SooToday.com he is hopeful the necessary provincial and federal funding will come, though he acknowledged funding is hard to obtain in these times of fiscal restraint.

The Small Business Incubator would provide services to help new small businesses succeed and create jobs.

Services provided by the incubator for client businesses include Entrepreneur Education, Coaching Services, Mentoring, Marketing Assistance and Post-Incubation Services.

An EDC report to Council noted that many small businesses, without assistance and training that an incubator would provide, face failure within the first three to five years of operation.

Through the pilot project, the EDC hopes to see if establishment of a permanent incubator to help small businesses outside of the Science and Technology sector will be needed.

It is projected by the EDC that there would be approximately 10 businesses started up throughout the local three year pilot project, creating an estimated 15-20 jobs.  Once participating businesses “graduate” from the incubation program, the EDC report says a total of 30-40 jobs are expected to be created.

Graduation from the program will be determined by EDC staff.

Ward Five Councillor Frank Fata asked Ross if incubation is another example of government getting involved in the private sector, pointing out many owners of solid small businesses have succeeded without government funding.

Ross replied that a carpenter, for example, may be highly skilled in his work but may need help in marketing skills.

The EDC report states there will be admission criteria for entrepreneurs interested in the incubator program, including the need for a viable business plan, willingness to create jobs and pay program rents and fees while generating cash flow.

Ward One Councillor Steve Butland asked Ross how many local entrepreneurs have expressed interest in the incubation program so far.

Ross did not provide an exact figure, but stated “there is interest.  Ten is a conservative number, and there will be a waiting list at some point.”

Ross told us “it’s a decent sum of money we’ve asked for and there is potential risk with the project, but with any project with potential benefits there is potential risk.”

“However, with the amount of work that has gone into this project over the past couple of years, the feasibility study indicators show us this will be a success.”

Ross added there is also the possibility of some businesses eventually moving outside the downtown target area.

“We realize that certain businesses may find the most ideal location for them may or may not be downtown, but Councillor Terry Sheehan has said as you build recognition and location, customers come to know you for where you are, as much as for what you do and who you are.”

Ward Two Councillor Terry Sheehan has been a long-time advocate of the business incubator program.

After approving the EDC’s funding request, Council also approved a motion that Sheehan be named Chair of the Small Business Incubator Advisory Steering Committee.

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