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Rohnert Park cluster sees entrepreneurs blossom, benefit to overall economy

ROHNERT PARK – Entrepreneurship is thriving in the North Bay if the Sonoma Mountain Business Cluster is any indication.

Just 18 months old, the Rohnert Park incubator is well on track to meet its goal of 100 percent occupancy within two years of being founded, according to Executive Director Michael Newell.

“We’re too young an enterprise to confirm it, but other incubator directors say that historically they thrive during tough economic times,” he said.

After a sudden job loss, many people turn to forming their own small companies but may lack funding know-how or the skills to write up a business plan. That’s where incubator services, especially mentoring by successful business people, are invaluable.

During the last six months the Sonoma Mountain Business Cluster has put together a formidable board of mentors, drawn from business executives, successful entrepreneurs and the investment community.

“Each of our member companies is assigned a lead mentor, but they can tap the expertise of any other mentor when they need it,” said Mr. Newell.

The cluster has ambitious plans for the coming year, he said. It’s putting together an investor forum, tapping its relationships with the North Bay Angels and the Keiretsu Forum.

Dearest to the incubator’s heart is a project to build a revolving line of credit for its client companies, working with local banks.

“Let’s face it. What any startup company or established company with growth plans needs right now is investment. We understand how important that is in today’s economy, and it’s not impossible. Companies should not despair,” Mr. Newell said.

Among the cluster’s 24 companies, several already have outgrown their original spaces, a sure sign of health.

And the cluster has several potential candidates in the wings.

“I can vouch for the continued entrepreneurial activity in the North Bay,” Mr. Newell said.

After screening many, he has come to define the ideal incubator member.

“And it’s not what I would call the classic inventor type, the person who has a great idea and only wants money to make it happen,” he said.

People who most benefit from incubators recognize the need for others’ experience and networks, he said.

“They realize they can’t do it all themselves: make contacts within their space, set up supply chains, find manufacturers,” he said. “They need people who can open doors. That’s the greatest resource an incubator can offer.”

Starting up in a poor economy can be an asset as well, he said. Companies that emerge from downturns are battle-hardened but flexible, able to survive during lean times.

“From my experience, I’d rather invest in an A team with a B product, than a B team with an A product,” Mr. Newell said. “They’ll know how to position themselves.”

And incubators are good for the economy during recessions.

A recent federal study concluded that incubators provide up to 20 times more jobs than community infrastructure projects like roads and bridges, water and sewer projects, and at a cost of only $144 to $216 per job compared with $2,920 to $6,872 for the latter.

Traditionally the least well-funded by the Economic Development Administration, business incubation programs generate the greatest impact in their local communities, the study found.

According to Dinah Adkins, president and CEO of the National Business Incubation Association, a mid-1990s study found that 87 percent of all firms that had graduated from member incubation programs were still in business.

“And the jobs created aren’t one-time construction jobs, but enduring, high-paying positions that contribute to community and U.S. global competitiveness,” she said.

Mr. Newell agreed.

“With a new administration in Washington, and federal studies pointing out our value, perhaps we’ll even see some stimulus funds,” he said.