Entrepreneurship

The Importance of New Businesses What is Takes

Resources Available

A New Business Exercise

Facts About Economic Growth Today

Job Creation is Coming From “New” Businesses*• Businesses < 5 yrs old , Create Nearly 66% of Net New Jobs• 45% of Startups are Established in the State where the

Founders were EducatedThe Jobs We Grow in New Jersey Will Likely Stay Here

Entrepreneurial Regions in the US**125% more employment growth 58% more wage growth109% higher productivity67% more patents per labor force participant

*The Kauffman Foundation analysis of U.S. Census Bureau Data, Nov 2009**Eugene Chung, Managing Partner TechStars, providing seed funding from 75 top VC firms and mentoring to entreps in 6 global locations

Major Types of Early Stage Businesses

Innovation Driven (IDE), typical Incubator Clients • Pursue opportunities Beyond the Neighborhood or region, Global View• NEW Idea (innovative technology, process, business model)• Clear Competitive Advantage defined often by Copyright, Patents, etc.• External capital providers and Equity Investors, Diverse Ownership Base • Lose Money Initially but exponential growth possible, with investment, cash

flow and job creation does not respond quickly

Small and Medium Enterprises (SME), typical SBDC Clients• Focus on Local and Regional markets• Innovation and Competitive advantage Not Critical• Often Family Businesses, little external capital outside of bank loans• Grow Jobs Linearly with revenue generation and investment

The Value Incubators Provide Innovation-Driven Early Stage Businesses

• Critical Support Services, Training, Mentoring • Navigation Through Government Agencies • Networking Opportunities, Introductions• Access to Capital, Technical Resources, Interns• A Formal Business Environment, Affordable Space

Assisting Entrepreneurs with potential to grow higher paying jobs,and

Turn a Technology or Idea into a Profitable Business

Global Economic Impact of Incubation

7,000 Business Incubators World Wide, 1,100+ in USA globally proven model for

• Job growth• Business commercialization• Economic development• Community revitalization

Incubators Contribute Substantial ROIHistorically 87% of incubator graduates are still in business after 5 yrs, but less

than 50% are in business if they “go it alone”

For every $1 of public subsidy, it is estimated that incubator clients generate ~$30 in local tax revenue alone

Incubation in New JerseyGrowing The State’s Economy

a.BCC Technology & Life Science Incubatorsb.Bus Development Incubator at NJ City Universityc.Commercialization Centre of NJ EDAd.Enterprise Development Center at NJITe.Meadowlands Regional Accelerator at BCCf.One-Stop Business Incubator , Plainfieldg.Picatinny Technology Innovation Center, Morris CCh.Rohrer College of Business Incubator, Rowen Universityi.Rutgers Camden Business Incubatorj.Rutgers EcoComplex, Bordentownk.Rutgers Food Innovation Center, Bridgeton

Juicetank in Somerset and the Asbury Park Shore Incubator are the newest additions to the state’s incubation network

Impact of New Jersey’s Incubators YEAR END 2012

•1380 higher paying jobs created @ $600 State cost/job* •450 incubated companies, ~ 80% High Tech and Life Science•$250 mil in aggregate revenue from client companies •$72 mil in 3rd-party-funding brought into NJ•54 Graduated, self sustaining companies •130 Student Interns trained•85 to 90% graduates remain in NJ•Nationally-recognized business clusters formed:

– Life science – Food– Defense– Clean Tech, Energy and the Environment– Urban and Disadvantaged Communities

Resources Beyond Incubators

• Meet ups• Small Business Development Centers• Score• Accelerators ($ and mentoring, but competitive)• Libraries! (Reference USA)

• Friends, family ……….

Significant NJ Incubator Successes*Amicus Therapeutics, created hundreds of jobs and went public at an evaluation over $200 mil. The movie “Extreme Measures” staring Harrison Ford tells the Amicus story

*Water Journey, a woman owned, alcohol free hand sanitizer company growing at the Meadowlands incubator is selling in over 50,000 retail stores and was approved to sell under the Red Cross label

Helo Holdings, a graduate of the Jersey City University incubator opened the 1st new commercial heliport in more than 30 years. The heliport is located in Kearney, NJ.

Randall Pinkett, was a 1st place winner of the “Apprentice,” a top TV program highlighting what it takes to win at business. He grew his company BCT Partners in the Newark Incubator

Gestalt grew from 3 people to over 300 people in 10 cities. It was acquired by Accenture which retained 100 jobs in Camden

Schar, a gluten free Italian food company piloted their new product line at Rutgers Food Innovation Incubator and is currently constructing a commercial facility in NJ

TerraCycle has grown from an organic fertilizer company to a major manufacturer of eco-friendly products from waste. They started in the EcoComplex incubator in Bordentown, NJ.

Genewiz, graduated from 3000 sq ft and 3 employees in the NJ EDA incubator to 20,000 sq ft in South Plainfield. They currently have laboratories in Boston, Washington , DC, China and San Diego,

SmarterAgent LLC grew from 2 people to 27 people in Camden in 2008 following a $6M investment from local VCs

*Acrion Technologies, a technology leader in landfill gas clean up and utilization created 20 jobs and licensed technology to Mack Truck

Mutationengine, a multi-media company produced a feature film which premiered at the Museum of Modern Art and completed the first-of-its-kind "book trailer" for a NY Times bestselling author nominated for a Pulitzer Prize

MET Tech with Federal grants, developed a product line of inertial sensors with no mechanical parts. The Defense Advanced Research Projects Agency has awarded them a contract for a next-generation sensor

Turning Leaf Communications a minority-owned cabling company created 20 jobs in Jersey City

A consortium of small and M/W/DBE firms with varying trade specialties was formed to market to the Trans Hudson Tunnel Project and other infrastructure projects

Goals TodayA New Business Plan

•Think of an idea for a new business•Share it with your group•Each group will select one business idea to work on•Each group will present their idea to the larger audience

Elements of a Business Plan

– What is the Problem? – How BIG is the Problem/Market– How are you solving it? – Who are your competitors?– Why is your product/service better than competitors?– How will you fund the business in the beginning? – How you will make money?– Who will buy your product or service?