|Posted on Monday, March 07, 2005|
We Mean Business. Illinois Business.
Pennsylvania developer's business is building success stories
CAHOKIA - The investment group that recently announced its intent to purchase 50 acres and all of the buildings on the former Parks College campus in Cahokia is led by Loren Schultz of Philadelphia, Penn.
Schultz has a long history in developing and operating privately-owned business incubators.
His plan for Parks is to utilize the existing buildings for a multi-tenant business park, a 40,000-square-foot business incubator and for the village of Cahokia to retain four buildings - including the multi-purpose building on Camp Jackson Road - for a new government center. Saint Louis University is seeking a developer for the remaining acreage.
Since 1976, Schultz has been involved in the creation of 16 business incubators around the country; he is currently involved in the ownership of four, totaling 420,000 square feet under roof. Currently 229 businesses operate out of his centers.
Schultz's centers take residence in a variety of buildings. The 200,000-square-foot University Technology Center in Minneapolis houses 142 businesses in a former high school. The Dublin Technology Center in suburban Philadelphia is in a former garment factory. And his Technology Enterprise Center in Allentown, Penn. is in a 120,000-square-foot office building that at one time housed the Chrysler Credit Union.
But Schultz sees himself as much more than a landlord.
"Our business is building success stories. It's not renting space," he said.
Schultz, an entrepreneur who dislikes the term "business incubator," has a long history in privately developing and operating what he calls "technical enterprise centers," but he got into it almost by accident.
Schultz spent about 20 years working for a large company in the computer field. As he puts it, he grew up in an entrepreneurial, high-spirited technology industry, but ultimately yearned to start his own business.
"We started in the basement around a ping-pong table and it grew to be about a $200 million company," he said.
But that company got too big for Schultz's liking; he left in 1976. He preferred the challenges and excitement of starting a new small business.
"When I decided I wanted to do another company, I needed a place to do it and I saw a big building, more than I needed, about 20,000 square feet, and I made a ridiculous offer and they took it," he said. "I figured other people who are starting businesses need the same thing - someone to type a letter, a place to have a meeting and copies made. I thought that if other people need this, too, why don't we buy that building and share some of those services? So we did. And in no time, we had 20 companies in there. We had about 100 companies go through that center before we sold it," Schultz added.
Through that process, Schultz got interested in the whole concept of entrepreneurship.
"I really started to look more at the entrepreneurial process," he said. "Every single business in your community was started by somebody. That is the key to our economic success - people willing to take that risk and believing in themselves."
Schultz likes to mix start-up businesses with those that have weathered the tough early years, using them as role models and mentors for the rookies.
"If you start a company in the midst of a lot of activity, you have a much better chance of growing than if I put you out in the desert and say 'Go to it,'" he said.
Of the 240,000 square feet of space available at Parks, only 40,000 square feet will be devoted to incubator space. The rest will be available for rent by existing businesses; Schultz hopes to surround the incubator with successful companies.
His centers provide tenants with a receptionist, business counseling, marketing support, professional support, bookkeeping, a telephone answering service, copy machines, typing, fax machines, maintenance and janitorial.
"We'll do workshops here (at Parks)," Schultz said, "on topics such as how to start a business, why to start a business, how to do a business plan, how to finance your company, how to market and how to do record keeping for small businesses. We rely on the people who are in the second and third phases of their businesses to help the people who are just starting out. We have a theme: 'How to do it by people who have done it.'"
Schultz said it takes three things to make a successful enterprise center program: a source of entrepreneurs, a supportive environment and funding.
"Cheap space does not build companies," he said. "It's the environment that builds companies. They have to have reasonable rent, but we have to have enough rent to pay for the extra staff that they need like receptionists, etc."
This nurturing environment is far more important to the success of new businesses than cheap rent, according to Schultz.
"If you start a business in your basement and you're all alone," he said, "you ask a question and it just bounces around because there's nobody there to answer it. But if I put you in a building with 40 other presidents, people who are building their companies, you can find someone to talk to, someone who will listen to you. So we get a high success rate - about 90 percent to 92 percent."
Part of that environment is also projecting the image of success, according to Schultz.
"When you first start out, you want to seem bigger than you are," he said. "That's what the center does. There are three or four people who answer the phone. Customers think that if they've got three or four employees, they must be pretty good size. They come to a 50,000-square-foot building and meet in a nice meeting room. You may only have a 10- foot by 12-foot office, but they don't know that. We put a little charade on. We're there to help stack the deck in favor of the businesses man," he added.
Schultz likes to watch the growth process in a small business.
"Later on, you want to talk about how short a time you've been in business and how much you've accomplished," he said.