Rural business incubators are facilities managed by public, private, or nonprofit organizations that provide resources like office space, services, and networking opportunities to startup businesses. They aim to improve businesses' chances of success by lowering costs. Potential tenants include "lone eagles" - educated entrepreneurs attracted to rural areas' lower costs and beauty who can work remotely using technology. However, rural incubators face challenges like funding, facilities, and staffing. Successful incubators conduct feasibility studies, educate communities on entrepreneurship, and ensure technology and leadership support for tenant businesses. Examples show incubators creating jobs and renewed optimism in communities like Maddock, ND.

1. Rural Business IncubatorsRural Business Incubators
Effects on Rural Economic DevelopmentEffects on Rural Economic Development

2. Rural Business IncubatorsRural Business Incubators
 What are they?What are they?
 Who might be attracted by these Incubators?Who might be attracted by these Incubators?
 What are problems facing successful developmentWhat are problems facing successful development
of Rural Business Incubators?of Rural Business Incubators?
 RecommendationsRecommendations
 Examples of Rural Business IncubatorsExamples of Rural Business Incubators

3. Rural Business Incubators DefinedRural Business Incubators Defined
Managed by public, private, and/or nonprofitManaged by public, private, and/or nonprofit
organizations and academic institutions,organizations and academic institutions,
incubators offer qualified businesses aincubators offer qualified businesses a
range of products critical to businessrange of products critical to business
success, including space, shared officesuccess, including space, shared office
services, business services, financialservices, business services, financial
resources, and tenant networkingresources, and tenant networking
Businesses participating in incubators mayBusinesses participating in incubators may
have a better chance of success ashave a better chance of success as
operating costs are lowered, access tooperating costs are lowered, access to
business counseling, and networking amongbusiness counseling, and networking among
tenants is encouraged to facilitatetenants is encouraged to facilitate
information gathering.information gathering.

4. Rural Business Incubators DefinedRural Business Incubators Defined
 The National Business Incubator AssociationThe National Business Incubator Association
definition: A business incubator is a comprehensivedefinition: A business incubator is a comprehensive
business assistance program targeted to startup andbusiness assistance program targeted to startup and
early stage firms with the goal of improving theirearly stage firms with the goal of improving their
chances to grow into healthy, sustainablechances to grow into healthy, sustainable
companies.companies.
 Businesses are allowed to start up in the incubatorsBusinesses are allowed to start up in the incubators
but must move out after a prearranged time period.but must move out after a prearranged time period.

5. Rural Business Incubator Potential TenantsRural Business Incubator Potential Tenants
 A successful rural business incubator may have aA successful rural business incubator may have a
certain criteria that potential tenants must meet butcertain criteria that potential tenants must meet but
who might be attracted to a rural area for a start upwho might be attracted to a rural area for a start up
business.business.
 ““Lone Eagles” are perhaps an increasing source ofLone Eagles” are perhaps an increasing source of
potential tenants to rural business incubatorpotential tenants to rural business incubator
facilities.facilities.

6. Rural Business Incubator Potential TenantsRural Business Incubator Potential Tenants
 ““Lone Eagle” – Well-educated entrepreneurs who useLone Eagle” – Well-educated entrepreneurs who use
the latest telecommunications gear to sell specialty goodsthe latest telecommunications gear to sell specialty goods
and services all over the country, if not world wide.and services all over the country, if not world wide.
 Often times these individuals are tired of dealing withOften times these individuals are tired of dealing with
the ills of the urban environment such as crime, trafficthe ills of the urban environment such as crime, traffic
congestion, smog, poor schools, burdensome taxes, andcongestion, smog, poor schools, burdensome taxes, and
the high cost of living.the high cost of living.
 These individuals tend to be drawn to rural areas byThese individuals tend to be drawn to rural areas by
natural beauty, outdoor recreation, no commute times,natural beauty, outdoor recreation, no commute times,
and lower crime rates.and lower crime rates.

7. Rural Business Incubator Potential TenantsRural Business Incubator Potential Tenants
Location of
Purchaser
Lone Eagle Locally Oriented
Firm
Local Area 15.2% 89.8%
Elsewhere in
State
21.9% 9.1%
Elsewhere in
Region
20.9% .7%
Elsewhere in U.S. 24.9% .3%
Canada 8.1% 0%
Other Countries 9% .1%

8. Rural Business Incubator Potential TenantsRural Business Incubator Potential Tenants
Table illustrates the Lone Eagle’s reliance onTable illustrates the Lone Eagle’s reliance on
computer technology and telecommunications.computer technology and telecommunications.
Must also have access to Overnight Parcel ServiceMust also have access to Overnight Parcel Service
(UPS or Fed X) and must be within a reasonable(UPS or Fed X) and must be within a reasonable
distance to a airport.distance to a airport.
Incubators could provide the appropriateIncubators could provide the appropriate
computer technology and telecommunicationscomputer technology and telecommunications
infrastructure as well as training to these potentialinfrastructure as well as training to these potential
tenants making the decision to locate in atenants making the decision to locate in a
particular community that much more attractive.particular community that much more attractive.

9. Problems Facing SuccessfulProblems Facing Successful
Rural Business IncubatorsRural Business Incubators
 FundingFunding
 Lack of community understanding of the incubator’s roleLack of community understanding of the incubator’s role
 Inadequate facilities or space for clientsInadequate facilities or space for clients
 Lack of full-time staff dedicated to the incubatorLack of full-time staff dedicated to the incubator
 Lack of governing board involvementLack of governing board involvement
 Inability to follow up with client’s (graduates) addressing clientInability to follow up with client’s (graduates) addressing client
issuesissues
 Difficulty recruiting clientsDifficulty recruiting clients
 It has been determined that size of community has generally noIt has been determined that size of community has generally no
affect on success or failure of a Rural Business Incubatoraffect on success or failure of a Rural Business Incubator

10. Recommendations for SuccessfulRecommendations for Successful
Rural IncubatorsRural Incubators
 Conduct feasibility study preceding development of a RuralConduct feasibility study preceding development of a Rural
Incubator Program. A study should examine problems and giveIncubator Program. A study should examine problems and give
clear direction in overcoming them.clear direction in overcoming them.
 Those involved in supporting and developing an incubatorThose involved in supporting and developing an incubator
should bridge political and organizational boundaries to ensureshould bridge political and organizational boundaries to ensure
that everyone in the community who can bring value to startupthat everyone in the community who can bring value to startup
companies is coordinating their efforts for maximum impact.companies is coordinating their efforts for maximum impact.

11. Recommendations for SuccessfulRecommendations for Successful
Rural IncubatorsRural Incubators
 Where entrepreneurship has not traditionally been a strongWhere entrepreneurship has not traditionally been a strong
part of the culture or economic development strategy,part of the culture or economic development strategy,
incubation proponents should work to educate andincubation proponents should work to educate and
demonstrate the impacts that startup businesses can have ondemonstrate the impacts that startup businesses can have on
the community.the community.
 Incubator developers should make it a top priority to hire andIncubator developers should make it a top priority to hire and
adequately compensate an experienced top executive toadequately compensate an experienced top executive to
oversee the program and ensure that individual has the skills tooversee the program and ensure that individual has the skills to
help companies succeed.help companies succeed.

12. Recommendations for SuccessfulRecommendations for Successful
Rural IncubatorsRural Incubators
 Incubator developers should pursue all pathways possible toIncubator developers should pursue all pathways possible to
ensure that the facility is technologically up-to-date to meet theensure that the facility is technologically up-to-date to meet the
needs of client companies.needs of client companies.
 Rural communities developing incubation programs shouldRural communities developing incubation programs should
continue to place emphasis on improving infrastructure-fromcontinue to place emphasis on improving infrastructure-from
roads to communications technology-through all meansroads to communications technology-through all means
available. This will help ensure business retention.available. This will help ensure business retention.

13. Examples of RuralExamples of Rural
IncubatorsIncubators
 Maddock, North DakotaMaddock, North Dakota
 A community which had decreased in populationA community which had decreased in population
from 750 to 550 from 1986 to 1989.from 750 to 550 from 1986 to 1989.
 Maddock Economic Development CorporationMaddock Economic Development Corporation
(volunteer organization consisting of 10 to 15(volunteer organization consisting of 10 to 15
individuals) started 15 years ago to try to addressindividuals) started 15 years ago to try to address
Maddock’s out migration.Maddock’s out migration.
 The answer was a technology center that placed allThe answer was a technology center that placed all
of Maddock’s economic development efforts underof Maddock’s economic development efforts under
one roof.one roof.

14. Examples of RuralExamples of Rural
Incubators (Maddock, ND)Incubators (Maddock, ND)
 Decision to build technology center was based on funding.Decision to build technology center was based on funding.
 Money appeared to be readily available to construct RuralMoney appeared to be readily available to construct Rural
Business Incubators, so Maddock pursued this course of action.Business Incubators, so Maddock pursued this course of action.
 $400,000 from USDA low interest loans, $200,000 from city of$400,000 from USDA low interest loans, $200,000 from city of
Maddock, $149,000 in USDA Grants, and $25,000 from the state ofMaddock, $149,000 in USDA Grants, and $25,000 from the state of
North Dakota.North Dakota.
 The building is now self-sufficient, pulling in enough rent from itsThe building is now self-sufficient, pulling in enough rent from its
assorted tenants to pay $2,350 in dept service each month plusassorted tenants to pay $2,350 in dept service each month plus
$1,650 in operating expenses.$1,650 in operating expenses.

15. Examples of RuralExamples of Rural
Incubators (Maddock, ND)Incubators (Maddock, ND)
The 12,000 sq. foot building features fiber opticThe 12,000 sq. foot building features fiber optic
connection which offers the ability for 51 T-1 telephoneconnection which offers the ability for 51 T-1 telephone
line connections.line connections.
Current tenants include the Benson County InformationCurrent tenants include the Benson County Information
Technology Coordinator, Kids on the Block ChildTechnology Coordinator, Kids on the Block Child
Development Center, Homelink Televoice, YoungDevelopment Center, Homelink Televoice, Young
Entrepreneurs, Herm’s Repair (computer sales andEntrepreneurs, Herm’s Repair (computer sales and
service), Innes Publishing, Marianne Sears (CPA),service), Innes Publishing, Marianne Sears (CPA),
Farmers Union Insurance, Early Head Start and HeadFarmers Union Insurance, Early Head Start and Head
Start, Agri ImaGIS, Touchstone Transport, and NodakStart, Agri ImaGIS, Touchstone Transport, and Nodak
Insurance.Insurance.
A study by the Maddock Economic Development Corps.A study by the Maddock Economic Development Corps.
Indicates that the center employs 50 people, 75% of whichIndicates that the center employs 50 people, 75% of which
would not be employed in Maddock if it were not for thewould not be employed in Maddock if it were not for the
center.center.

16. Examples of Rural IncubatorsExamples of Rural Incubators
(Maddock, ND)(Maddock, ND)
Implications of CenterImplications of Center
 EducationEducation
 Has begun computer classes to educate residents on how toHas begun computer classes to educate residents on how to
operate computers and surf the internet and hope to teachoperate computers and surf the internet and hope to teach
classes on website design.classes on website design.
 Offers for computer terminals providing free internet accessOffers for computer terminals providing free internet access
to residents.to residents.
 A renewed hopeA renewed hope
 Before the center opened the pharmacist and grocery storeBefore the center opened the pharmacist and grocery store
closed up.closed up.
 After center was constructed a new pharmacist moved intoAfter center was constructed a new pharmacist moved into
town. He stated the reason for locating in Maddock was thattown. He stated the reason for locating in Maddock was that
the center showed the towns character to survive. The grocerythe center showed the towns character to survive. The grocery
store also reopened after center was constructedstore also reopened after center was constructed..

17. Examples of Rural IncubatorsExamples of Rural Incubators
(Watford City, ND)(Watford City, ND)
 Set up a “virtual” community technology center,Set up a “virtual” community technology center,
served by high-speed telecommunications, whereserved by high-speed telecommunications, where
local citizens upgrade their technology skills tolocal citizens upgrade their technology skills to
move into new or more advanced jobs. The promisemove into new or more advanced jobs. The promise
of a tech-skilled workforce attracted threeof a tech-skilled workforce attracted three
companies to the area, generating 80 new jobs.companies to the area, generating 80 new jobs.

18.  GED ProgramGED Program
 Co-working SpacesCo-working Spaces
 Homestead TrainingHomestead Training
 Farmers MarketFarmers Market
 Indoor NurseryIndoor Nursery
 Aquaculture, etc.Aquaculture, etc.
 Recycling PlantRecycling Plant
 Money CenterMoney Center
 E-Commerce CoursesE-Commerce Courses
 3D Printing/Scanning3D Printing/Scanning
 Shipping StationShipping Station
 Robotics ClassesRobotics Classes
Rural Economic DevelopmentRural Economic Development
Service IdeasService Ideas