Full-service business help: the Fitzgeralds are among many black entrepreneurs turning to an incubator to ensure their success.

IT HAS BEEN SAID THAT SMALL BUSINESSES are the engine of the American economy. But these entities need to be nurtured to grow and thrive. Designed to assist with that growth are small business incubators. These outfits are funded by government agencies or private organizations--usually both--and help new companies operate during the crucial early stages of development. This may entail working with entrepreneurs to devise business plans; design marketing strategies; furnish office space; provide professional services; and, most importantly, secure financing.

Della Clark, president of The Enterprise Center, a minority business incubator located in West Philadelphia, says small businesses can get two main benefits from an incubator: "a place-based strategy (low-cost space) and hand holding (consulting)."

She explains, "Most clients think of an incubator as a low-cost way to start a business, but that is not necessarily true." Clark points out that today you can start a home-based business with a computer, multi functional copier, printer, scanner, fax, and high-speed Internet for about $2,500. This is cheaper than going to an incubator. In fact, Clark says home-based businesses that are growing fast make the best incubator clients because they come with established sales revenues. TEC works primarily with minority entrepreneurs and looks for businesses with strong leadership. For small businesses with established revenues, incubators can help get them to the next level, a great example of Declaration of Financial Empowerment principle No 8: to support the creation and growth of profitable, competitive black-owned enterprises.

David and Chioma Fitzgerald took advantage of TEC after opening their card and gift shop 16 years ago. Unable to move enough merchandise to pay rent, the couple set up a booth at a local flea market. The Fitzgeralds found it more cost-effective to rent a table and space for $15 for a weekend rather than paying $700 a month for a storefront. "We started to advertise in the local paper in affluent neighborhoods to buy out their attics and garages so we could acquire merchandise," says Chioma, 41. "That's what led us into the antiques and collectibles arena." The husband-and-wife team went from peddling small gift items at flea markets to selling high-end wares at antique shows. "At one time, we were doing 40 antique shows a year," says David, 41, a certified auctioneer.

Today, the couple runs Philadelphia-based Palmer Estate Liquidators L.L.C., a full-service estate liquidation company that purchases household contents and resells them via eBay, traditional auctions, and retail venues including consignment stores. Chioma, formerly an administrator with the Wharton School of Business at the University of Pennsylvania, says the couple bids from $1,000 to $15,000 on estate items that must be liquidated due to a family death or divorce. "When we acquire an entire estate it might mean everything from the flatware in the china cabinet to the armoire in the bedroom to the vehicle in the garage." The business has three full-time employees and revenues of $320,000 in 2005. The couple's 13-year-old daughter, Danielle, helps to package goods during the summer months and weekends. Initially, the couple ran the business out of their home, but since 2001, it has been housed in The Enterprise Center, which has been instrumental in Palmer Estate's growth. David says they started off as an affiliate without office space, "But we still had access to [TEC's] resources, such as training, marketing, accounting, and technical services."

TEC helped Palmer Estate secure $125,000 in financing, including a $50,000 line of credit with United Bank of Philadelphia--a BE 100s company.

The Fitzgeralds now rent a 2,200-square-foot suite at TEC as their headquarters. They store smaller items in their offices and larger items in a warehouse in New Jersey. TEC and the Wharton Small Business Development Center also helped the Fitzgeralds win a business plan competition for minority entrepreneurs in 2001 in which the couple was awarded a $20,000 cash prize. The assistance TEC gave Palmer Estate has been invaluable, says Chioma. "We went from earning about $10,000 [gross revenues] a month to about $30,000 a month, so we have grown three-fold since joining TEC."

To support the creation and growth of profitable, competitive black-owned enterprises

PRINCIPLE 8

Consider the following to decide if your business is right for an incubator:

Range of Services Make sure the incubation program offers the services and contacts you need, such as business plan development, procurement and contracting, and access to capital. Some incubators work with companies in a particular niche such as gourmet foods or technology. To find a business incubation program in your area, contact the National Business Incubation Association, 20 E. Circle Drive, No. 37198, Athens, OH 45701; 740-593-4331; www.nbia.org.

Track Record Talk to current and former tenants about their experiences at the incubator. Find out how long, on average, clients have remained in the program. Determine the experience and entrepreneurial success of the staff. Also, find out the success rate of companies that have left the incubator.

Graduation Policy Before you enter an incubator, find out how and when you are expected to leave. Clark says traditionally, incubators will house successful startups for three to five years, after which time, they move them out to make room for new tenants. TEC seeks to build long-term relationships with its clients. Determine what the exit criteria are and how flexible the policy is.

Declaration of Financial Empowerment

From this day forward, I declare my vigilant and lifelong commitment to financial empowerment. I pledge the following:

1] To use homeownership to build wealth

2] To save and invest 10% to 15% of my after-tax income

3] To commit to a program of retirement planning and investing

4] To engage in sound budget, credit, and tax management practices

5] To measure my personal wealth by net worth, not income

6] To be proactive and knowledgeable about investing, money management, and consumer issues

7] To provide access to programs that will educate my children about business and finance

8] To support the creation and growth of profitable, competitive black-owned enterprises

9] To use a portion of my wealth to strengthen my community

10] To ensure that my wealth is passed on to future generations

PHOTOGRAPH BY ED WHEELER