Small Business Incubator Certification Program

2020 Annual Report Incubator Certification Program Overview

Business incubators nurture the development of Oklahoma Business Incubator entrepreneurial companies, helping them survive Association and grow during the startup period, when they The Oklahoma Business Incubator Association are most vulnerable. These programs provide their (OkBIA) was formed more than 20 years ago. The client companies with business support services purpose of the OkBIA is to provide information, and resources tailored to young firms. The most networking, guidance and assistance to incubator common goals of incubation programs are creating operators, as well as to work with the Legislature jobs in a community, enhancing a community’s to promote and benefit business incubators and entrepreneurial climate, retaining businesses in a tenants. community, building or accelerating growth in a local industry, and diversifying local economies. Oklahoma Business Incubators Incubators vary in the way they deliver their In 1988, the Oklahoma Legislature passed the services, in their organizational structure and in Oklahoma Small Business Incubators Incentives the types of clients they serve. As they are highly Act. The Act enables the tenants of a certified adaptable, incubators have differing goals, including incubator facility to be exempt from state tax liability diversifying rural economies, providing employment on income earned as a result of occupancy for up for and increasing wealth of depressed inner cities, to five years. In 2001, the legislature amended the and transferring technology from universities and act to extend the tenant’s tax exemption from five major corporations. Incubator clients are often at to 10 years. The exemption remains in effect after the forefront of developing new and innovative the tenant has graduated from an incubator. For technologies – creating products and services that tax years starting before January 1, 2020, in order to improve the quality of our lives in communities qualify for the tax exemption from the sixth through around the world. the 10th year, the tenant must make at least 75 percent of its gross sales to out-of-state buyers, to The earliest incubation programs focused on buyers located within the state if the product or a variety of technology companies or on a service is resold to an out-of-state customer, or to combination of light industrial, technology and the federal government. service firms – today referred to as mixed-use incubators. However, in more recent years, new For tax years starting after January 1, 2020, the incubators have emerged targeting industries such requirement for the sixth through the 10th year is as food processing, medical technologies, space and not required. The exemption will be in effect for ceramics technologies, arts and crafts, and software ten years as long as the tenant graduates from a development. Incubator sponsors have also targeted certified incubator. programs to support microenterprise creation, the needs of women and minorities, environmental Since the inception of the Act, the State of endeavors and telecommunications. Oklahoma has benefited from increased revenues and increases in the number of start-up and A business incubator’s main goal is to produce expanding small businesses. These businesses have successful firms that will leave the program created jobs and enhanced economic activity in the financially viable and freestanding, usually in two Oklahoma communities in which they are located. to three years. These incubator graduates have the potential to create jobs, revitalize neighborhoods, commercialize new technologies, and strengthen Oklahoma Department of local and national economies. Typically, 30 percent Commerce and Incubators of incubator clients graduate each year. The role of the Oklahoma Department of Commerce in the incubator process is to certify the incubators pursuant to O.S. Title 74 Section 5071-79. It is the responsibility of the incubator owner to hire managers to manage and market their incubators and provide business services to their tenants.

2 NUMBER OF SMALL BUSINESSES LOCATED IN INCUBATORS

Oklahoma Incubator 0 50 100 150 200 250 Program Growth 2020 31 certified small business incubators are operating in Oklahoma, with tenants ranging from small 2019 service companies to high-tech research and development operations and manufacturing entities. 2018

During 2020, Oklahoma incubator managers were 2017 asked to complete a questionnaire to document 2016 their activities for the current reporting period. Based on the information received from the responding 2015 incubator managers: 2014 2013 109 2012 small businesses 2011 are currently 1165 leasing space full-time jobs in Oklahoma’s are provided certified NUMBER OF JOBS CREATED BY INCUBATOR CLIENTS by incubator incubators tenants 0 250 500 750 1000 1250

2020 2019 NUMBER OF INCUBATORS 2018 0 10 20 30 40 50 2017 2020 2016 2019 2015 2018 2014 2017 2013 2016 2012 2015 2011 2014

2013 More than 1,000 small businesses have located in a small business incubator, throughout the life 2012 of Oklahoma’s Certified Small Business Incubator 2011 Program.

More than 500 of those have graduated from the program or relocated to a larger facility.

1,373 people are currently employed by 259 of the graduated businesses that remained in the state. Incubator Standards for Success Characteristics of Model Two Core Principles That Business Incubation Programs Characterize Effective Business Incubation: Commit to business incubation’s two core principles

consensus on a mission that defines Obtain The incubator the incubator’s role in the community, then aspires to have a develop a strategic plan containing quantifiable positive impact on objectives to achieve that mission its community’s economic health by maximizing 1 Structure the program for financial emerging companies’ sustainability by developing and implementing successes. a realistic business plan

Recruit and appropriately compensate management capable of achieving the incubator’s mission and helping companies grow 2 The incubator itself is a dynamic model Build an effective board of directors of a sustainable, committed to the incubator’s mission and to efficient business maximizing management’s role in developing operation. successful companies The Best Incubators Provide: Prioritize management time to place the greatest emphasis on client assistance, Flexible space and leases including proactive advising and guidance that results in company success and wealth creation Office services and equipment Develop an incubator facility, resources, methods and tools that contribute to the An on-site incubator manager as a effective delivery of business assistance to resource for business advice client firms, as well as address each company’s developmental needs Exposure to a network of outside business and technical consultants, Develop stakeholder support, including a often providing accounting, marketing, resource network, that helps the incubation engineering and legal advice program’s client companies and supports the incubator’s mission and operations Assistance with financing Maintain a management information system and collect statistics and other Assistance with marketing information necessary for ongoing program evaluation, thus improving effectiveness and allowing the program to evolve with clients’ needs

4 Incubator Certification Program Overview Oklahoma’s incubators have many success stories. The examples below are just a few for 2020.

Coast Audio Video Despite the pandemic, Coast is ahead of Center for Emerging Technology and schedule as 2020 winds down. When Coast Entrepreneurial Studies launched the company, he set a goal of Cameron University growing sales to $1 million annually with one Lawton, Okla. salesperson, four techs and one engineer by year five. In three years, he exceeded those Located in the heart of Lawton, CAV provides goals debt free by expanding the company’s services including designing, servicing and range of services and hiring nine employees. installing audio/visual products as well as In fact, CAV has already outgrown its first prolighting systems. Coast joined Cameron brick and mortar with the acquisition of the University’s Center for Emerging Technology new IT and computer services company. and Entrepreneurial Studies (CETES) business incubator in 2016. In early 2018, “We as a community are very blessed to CETES partnered with the Oklahoma Small have CETES/Oklahoma SBDC as amazing Business Development Center, and Coast partners to help grow the economy in began working with center director Dr. southwest Oklahoma through small Samantha Lankford. Coast took advantage business development,” said Coast. “We of the tools and resources provided by could not thrive without the support of the the partnership and blossomed by being Oklahoma SBDC and SBA.” actively involved in the community and surrounding himself with like-minded Platypus BJJ, Inc. entrepreneurs. At the end of 2018, Coast graduated from The Strategy Center – Tri County the incubator after moving to its own Technology Center brick-and-mortar location and received the Bartlesville, Okla. Business Partnership Excellence Award from Platypus BJJ provides beginning Ju-Jut-Su the Oklahoma State Regents for higher lessons. The company went from having Education. only a few clients a few nights per week to now being at maximum (CDC compliant) In spring of 2019, Coast expanded CAV capacity on a nightly basis. Owner Josh with the acquisition of a new company Pulsifer creatively and effectively used that specialized in computer repair and social media and other outlets to promote internet services. From this purchase, Coast the business. When Pulsifer first came to acquired the company’s clients, seven the Strategy Center, he was struggling to new employees, additional inventory and keep the doors open. He was in a high rent property that has been since developed as a situation in an older building downtown. training facility for his clients. The Strategy Center was able to provide a space with plenty of room for necessary When COVID slowed business in 2020, equipment as well as access to parking and Coast continued to work with Dr. Lankford, room to move. “We are excited to watch who provided business continuity planning Josh grow even more and move forward and marketing strategies. Coast was also in his business endeavor here at the TCT able to obtain both EIDL and PPP disaster Incubator,” said Erica Gallamore, Manager, funding, along with Oklahoma Business Tri County Tech Center. Relief Program funds. Coast was also guest lecture for Dr. Lankford’s class of student entrepreneurs at Cameron University.

5 BeeLine Heat and Air TetherTech Safety USA Strate Center for Business Development – Caddo Kiowa Business Development Autry Technology Center Center Enid, Okla. Fort Cobb, Okla.

BeeLine brings projects and ideas to life In 2020, Caddo Kiowa Business with their extensive knowledge in the Development Center incubator participant Heating, ventilating, and air conditioning TetherTech Safety USA landed a contract (HVAC) and plumbing trades. The company with the State of Oklahoma to place their specializes in customized duct-work for any product on all State of Oklahoma tractor size job, kitchen equipment service, exhaust trailers. hoods, ice machines, boilers, chillers, complex automation integrations, plan and TetherTech Safety USA (TTS USA) is an spec projects and elaborate design build Oklahoma-based company passionate projects. about highway safety. Wheel off incidents are a huge safety hazard for our global Upon becoming an official tenant in the highway systems. Statistically speaking, Strate Center for Business Development there are approximately 50,000 accidents in 2018, their company found immediate per year, with three to five per day that success in the heat, air, and plumbing scene are classified as catastrophic, meaning in Enid, Okla. and beyond. Every goal and they result in extensive damage, severe projection that they set for the company injury, and/or loss of life. TTS USA has was exceeded through their hard work and made it its mission to solve this problem, utilization of the vast resources of the Strate providing a solution for the betterment of Center and community partners. the transportation industry. After several prototypes, dedicated testing, and market In late 2020, the company transitioned to implementation, TetherTech Safety USA has their own space in Enid and even opened a produced the only known product that can branch location in Oklahoma City. They are stop wheel off incidents, whether it be from a true success story for the Strate Center for common bearing failure, the loss of lug nuts, Business Development. or lug stud failure.

Mortgage Solutions Financial TetherTech Safety USA met with Oklahoma Secretary of Transportation, Tim Gatz, The LINK and Oklahoma House of Representatives, Sand Springs, Okla. Speaker Pro Tempore Harold Wright, to Mortgage solutions Financial started at The introduce the TTS Safe Wheel System. The LINK by occupying 2 private desk spaces. value TTS USA brings to safeguarding our The company has flourished, doubling the roads was realized, and it was decided initial number of employees. They have that the TetherTech Safety Safe Wheel outgrown their work space three times and System will be installed on every trailer in now occupy three office suites. Their growth service with the Oklahoma Department and financial standing has far exceeded of Transportation. TetherTech Safety USA their expectations. They anticipate was awarded the state Department of graduating from The LINK incubator soon. Transportation contract and currently is installing the Safe Wheel System on the entire inventory of trailers in the Oklahoma Department of Transportation fleet.

6 Clay Norrell, Fleet Manager of the Oklahoma Department of Transportation Maintenance Chisholm Broadband Division, felt it necessary for TTS USA to Major County Economic Development reach out to other states with this game Business Incubator changing technology. The company’s Fairview, Okla. goal is that this system will be on all state When Chisholm Broadband joined the department of transportation vehicles MCEDC Incubator in 2019 they were across the nation. providing quality internet service to a few towns in Northwest Oklahoma. Aircraft Logistics Group, LLC Acorn Growth Companies Since joining MCEDC they have been able Oklahoma City, Okla. to expand into many more towns and cities in Northwest Oklahoma. Locally, the The success of Aircraft Logistics Group, company has provided quality internet to LLC continues to be a compelling story for many rural homes and businesses – quality incubators. In 2017, the company completed internet that has not been available and the sale of a significant portion of its historically impeded rural development. loan portfolio to a strategic buyer in the Aerospace and Defense sector that carried The town can now say with confidence forward the mission of airborne intelligence that quality internet service is available to missions in support of the global war on citizens and businesses looking to move to terror. The sale represented an 8x return on Fairview, Oklahoma. invested capital and a 46% gross IRR. Indigo Technology Group

Generation FSH The Forge Hemphill Create Tulsa, Okla. Tulsa, Okla. Indigo Technology Group, a Tulsa based Generation FSH is a new tenant of Hemphill software company, uses their scalable Create. The owners of the company saw an technologies as a platform to launch other opportunity to start their family business startups alongside industry veterans. As at Hemphill in October 2020. The husband a technology platform, they become a and wife duo wanted to leave the shuffle multiplier when coupled with domain and control of the corporate grind and bet experts, cutting the costs and shortening on themselves. Duane Grundy is a welder ramp-up time to profitability. Indigo has and fabricator, while his wife Shavonne successfully helped launch several growth- Grundy handles corporate affairs. Gaining oriented companies and highlights their perspective from Hemphill’s successful achievements through Indigo’s annual family business has helped further the “Technology Showcase” each spring. Grundy’s outlook on success and provided historical data and industry knowledge to add to their repertoire of talent.

Flexibility and support are key to success in these unprecedented times. Hemphill has offered companies a safe haven to grow and explore business strategy and growth in spite of the on-going global pandemic.

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The Strate Center Bartlesville Mf.Mied 8 Internet access, Tri Count se Mailmessae service, Technolo Ctr shared copier and fa, business counselin

Roers Count Chelsea Mf.Mied 1 1 Customied trainin Industrial uthorit se throuh the local RCIDE Tech Career Tech sstem Business Incubator

Central Oklahoma Drumriht Mf.Mied Shared fa and copier Business ob se Development Corporation

Duncan Center for Duncan dvanced Business Development Mf.

rancis Tuttle Edmond Mied se 1 The aunch ad

Strate Center for Enid Mied se 1 Shared orkspace, Business Development odcast Room

Major Count airvie Mf.Mied Business uidance, Economic se leal and insurance Development advice, fa, cop, Business Incubator secretarial assistance

Caddo ioa Business ort Cobb Mf.Mied Development Center se

rtist Incubation, Inc. umon rtists 1 aller space, openins

Hobart Economic Hobart Mf.Mied 1 inancin Development uthorit se Business Incubator

RCIDE Tech Inola Mf.Mied Business Incubator se

Center for Emerin aton Technolo ccess to universit Technolo and Based resources like student Entrepreneurial Studies interns and facult Cameron niversit video, conferencin, printercopierscanner

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reat lains aton Mied se 1 Business uidance, ov. Technolo Center bid assistance, accountin, commercial kitchen, arts incubation, and liht manufacturin

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corn roth Oklahoma erospace 1 inancial plannin, Companies Cit Defense business development and capital

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Central Oklaoma Stroud Mf. 1 1 Business and ob Development Corp

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Tonkaa Business Tonkaa Mf.Mied 1 Incubator C se

Hemphill Create Tulsa Mf. 1 Industrial arehouse manufacturin space and services such as cuttin steel and forklift operation for tenants

The ore Tulsa Hih roth 1 Offer partnerships ith Mf.Ener the entrepreneurial Tech communit and proactive connections ith capital providers.

orthest Tech Small Wanoka Mf. 1 Business Incubator

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