Business centre fosters connections
Twenty-five years later, NABI's tenants still swear by the power of networking
Wednesday, Jun 04, 2014 06:00 am
One of the first businesses to start out at the Northern Alberta Business Incubator, Studio 107 almost didn’t make it in.
Owner Diane Chong says she had to fight for the small office space she wanted to open a hair salon in the organization’s first building at 13 Mission Ave.
They did not want strangers to walk in and out, she says. So she promised them business by-appointment-only. She also had to reconfigure the room, to allow for plumbing and electrical services.
“They said no originally,” she says. “I don’t remember all the names of the men that I had to fight so hard to get in. But I ended up finally winning them over.”
That was 1992. Chong was in her mid-20s and had just been fired – the owner of the hair salon she worked at had heard of her plans to go solo, she says.
She had been looking for a place to rent when she stumbled upon the Business Development Centre (later called NABI) while looking for brochures on self-employment.
“So I walked in and said ‘what’s this all about’ and found out that you could rent space,” she says.
The incubator has recently turned 25 years old. And Chong, as one of its first tenants, has long since moved out of her 10-by-20 foot office to purchase a larger salon in St. Albert’s north. She also quadrupled her staff and has won several small business awards.
But she may have never opened Studio 107 without the incubator, she says.
Back in the ’90s, the BDC only gave you two to three-year leases before you had to move out, she says. Rent started at $200 per year, and moved up to $400. That did not prepare you for the real world, but it helped you get started, she says.
She also couldn’t have done it without the advice from the other businesses in the building and support from the staff.
“Just the emotional support and ideas” she says. “NABI was very instrumental by pulling all these people together.”
There was a “shoot-out” at city hall between then-councillor Anita Ratchinsky and other council members.
That’s how executive director Dar Schwanbeck and other members of NABI describe the birth of St. Albert’s first Business Development Centre (BDC) in 1987.
The talk had been about how to best diversify the local economy and expand the tax base. Ratchinsky and her supporters thought the city needed an incubator for small businesses, funded by city coffers.
Her opposition, among them many entrepreneurs, said the city was giving advantage to new businesses over existent ones. They lost the battle. The incubator officially opened two years later.
“We offered the idea of a boardroom, a small office, a telephone and a typewriter,” says Gerry Hood, former tenant and now project and maintenance manager at NABI. “And a receptionist that can answer the phone when you aren’t here to make it sound as if you’re kind of a big deal.”
By 2000, the BDC had acted as a business incubator for more than a decade and helped 48 small businesses directly by providing office space, secretarial and seminar services.
The centre housed everything from hairdressing salons, to an orthopedic shoe specialist to telecommunications businesses.
Then the board decided it was time for a change. The BDC became a non-profit society, broadened its service area to all of northern Alberta and adopted a new name: NABI.
“We realized we can access more money provincially or federally if we are not a city-bound organization,” says Schwanbeck. “So a board of directors was put in place and we became a non-profit society and NABI was born.”
In 2006, the year Schwanbeck was hired as NABI’s managing director, the centre applied for funding from the provincial government and the city to build a new centre in Campbell Business Park.
That fell through two years later, he says. In 2008, house prices skyrocketed and NABI’s plans to build a $4-million facility became unfeasible.
Instead, the organization took ownership of another building at 205 Carnegie Dr., with $1.3 million in aid from the city.
That building and the original Mission Avenue headquarters now offer 41,000 square feet of space, which keeps NABI on par with other incubators in North America, says Schwanbeck.
Now the incubator is looking to expand again. Most business incubators are 68 per cent occupied on average. NABI has been 99 per cent occupied for the last five to six years, he says.
“We’ve been full, hence we are looking to grow,” he says.
All about networking
Some of NABI’s popular graduates include tenants such as Ken Bautista, founder of Hot Rocket Studios, then a web-design company, now an interactive producer of entertainment.
Since starting out with NABI 10 years ago, Bautista has created about six different businesses including StartUp Edmonton and Flightpath Ventures, both incubators of sorts.
Another success story is JDR Insurance. The local insurance business started out in the early 2000s with an office that barely fit three people, says Schwanbeck. Today, it has five offices across northern Alberta.
Like Chong, many of the entrepreneurs don’t credit NABI alone for their success but the diverse neighbourhood of start-ups they grew their business in.
Connie Clark says she started working at the Mission Avenue building around the same time as Diane Chong. Hired as the manager at Goldnet Computer Services in 1991, she did not partake in many of the seminars offered at the time, she says.
But two years later, when she bought the company and named it Mission Computers, she took advantage of the strong relations she had fostered with the other entrepreneurs and managers at the centre.
“I probably wouldn’t have started the business if I had not been there,” she recalls. “Because being in that building, amongst a community of entrepreneurs, built my confidence in business and it became a constant motivator seeing all these people starting out.”
Others at NABI have just now gotten their foot in the door, such as Steadfast Engineering. Owner Dean Anderson incorporated his company in 2011, while still employed with a large steel fabricator.
A structural engineer with a specialty in steel connections, he wanted to expand his skills to other areas of the business, he says. When demand for his business grew, he decided to move into his own office at NABI in 2012.
Anderson says he has received a lot of personal mentorship around business planning and hiring strategies from NABI. He’s found a niche market, which is key to his success.
But without his connections in the organization, and the month-to-month leasing NABI now offers, there would be a lot more to fear, he says.
“There is an electrical engineer and we talked about how they hired people when I was looking to hire someone,” he says. “If I got my own lease space, I think I would miss out on the sense of community. Not being able to talk to anybody.”
Since its beginnings, NABI has received almost $5 million in public funding, of which the organization returned about $1 million in property taxes, and, through their businesses, generated about $300 million in gross domestic product for the city and region, Schwanbeck says.
Today, there are 70 tenants housed inside the two buildings, with 30 more who work with NABI on a virtual basis. Businesses include everything from engineering services, to hypnotherapy, to environmental consulting and a dental tourism referral service.
On average, tenants stay between four to five years, says Schwanbeck. Some have stayed much longer. The turnover rate each year is about 20 per cent.
“What we are trying to do is just take the risk out of starting,” he says. “We are not in favour of giving space away, we are not in favour of subsidized rent. I hate that language … we charge market rates.”
Market rates with extras, he adds.
You may pay $30 to $40 per square foot but you get coaching, Internet, a reception service and advice in areas like creating a business plan, hiring people and filling out your taxes, he says.
But the networking potential is probably NABI’s greatest strength, adds Hood.
Different businesses work door-to-door, every day. Entrepreneurs meet in the hallway, or at the many events put on by the organization.
“It’s one of the things that is hardest to sell. We have the receptionist, the photocopiers, the office space,” says Hood. ”But we also have the networking that’s a terrific part of this.”
“The people in this building get to know each other on both a social and a business level. They talk about their problems amongst each other.”