Gananoque Incubator Feasibility Study February 7, 2017
Today’s agenda Today’s review highlights the executive summary of the feasibility study What is a business incubator? 1 Incubators statshot 2 Vision for a Gananoque Incubator 3 Key options & financial requirements 4 Top 3 risks 5 Top 4 key success factors 6 Overall assessment of feasibility 7 Roadmap 8 2
What is a business incubator? Support for start-up & early stage companies to see them through until they are strong enough to fly on their own Business incubators nurtur ure e the devel elopm opment ent of entrepreneur epreneurial al compani panies es, , helpi ping ng them survive e and grow during ng the start-up up period, od, when n they are most t vulne nerabl able. These programs provide their client companies with business support services and resources tailored to young firms. The most common goals of incubation programs are creati ting ng jobs in a community, enhancing a community’s entrepr epreneuri eneurial al climate ate, retaini ning ng busines nesses es in a community, building or accel eler erat ating ng growth h in a local industry, and diversi ersify fying ng local al econo nomies es. Source: NBIA 4
What is a business incubator? Incubators support their members with more than just space Serv rvices ices Co-working space comm mmonly only Access to advisors and mentors offer ered ed Shared IT services Shared administration Networks, contacts, events Education (e.g. accounting, how to pitch) 5
Incubator snapshot Incubators are well established globally and driving significant economic contribution to their communities. Sources: NBIA 2012, Business Incubation Works 30:1 Tax revenue to government subsidies leverage 1250 1250 Incubators in the United States 7000 7000 Incubators worldwide 200k Workers in N.A. incubators (2011) 200k $15B $15B Rev associated with N.A. incubators (2011) 84% 84% Survival rate (still in business) It is important to acknowledge that this data is US based. Canadian data to date is largely inconclusive regarding long-term viability, job growth and overall economic impact. This is largely due to a lack of standardized measurements of such impacts, and definitions around job creation, survival rates and other outcome metrics. Source: DEEP Centre 2015 6
Vision: goals for a Gananoque STEAM Incubator Drive development of year-round 1 full time skilled jobs Provide opportunities for young 2 people so that they will stay (or return) Support development of community 3 initiatives, programs, and events 7 * STEAM: Science, Technology, Engineering, Arts, and Mathematics
Vision for a Gananoque STEAM incubator STEAM incubator that is integrated with the Gananoque community Conce ceptu tual l make keup of 3570* square re ft ft space ce 3000+ 0+ squar are e feet et of space ace Progr gram ams s for or non-member embers Includes meeting rooms and a Events for the community-at-large kitchen area such as seminars Anchor tenants (1280 ft – 16 desks) 24+ + coworki orking ng space aces s + ancho hors Links s to the e commun unity 80 ft/desk Open concept desks with free WiFi; Events (e.g. receptions, education on approximately 5 – 10 member companies + entrepreneurship for adults and high- Quiet rm rm (100 ft) additional anchor tenant space schoolers) and volunteers ICT focus; cus; SEAM secon onda dary Partne nershi ships ps Boardroom “Inclusive”, members in Information and Links to the Town, funding agencies, (350 ft) Co Co-working Communications Technology; Science, other incubators, and program 24 desks Engineering, Arts, Mathematics providers such as RICs Meeting room Incl. 2 admin desks (150 ft) (1440 ft) Commun unicat cation ons Progr gram ams s for or members embers 60 ft/seat Web site, social channels, traditional Education programs and mentorship (200 ft) public relations customized to evolving needs of members Reception & kitchen (200 ft) Revenu nue e strea eams Staf affing ng 1) Public subsidies, 2) member fees Board of Directors & full-time * Final total size and allocations of footage are (mainly rent/desk), 3) anchor tenant Executive Director to start, later dependent on the space chosen and negotiations rent, 4) sponsorships & donations, adding half time admin support with the potential landlord and anchor tenants; 5) non-member fees and event revenue meeting room and quiet room could be dropped 8
Conceptual view of a first-floor space PEI Ignition Startup Zone provides a picture of functional cost-effective co-working PEI Ignition Startup Zone has 3600 square feet total space, most of which is can be used for desks or event space 9
Conceptual view of a second floor office space Hamilton Seedworks has basic space that works well with existing architecture (though it lacks valuable main floor access to general foot traffic and is likely larger than Gananoque’s) 10
Job creation 1 estimated full-time job per occupied seat per year, some of which will stay in the community Based ed on availabl ilable e resear earch ch and nd estim timates tes for the pace e of companies “flowing” through the spac ace (gradua duatin ting), g), about t 1.0 jobs bs can be create ated d per occu cupi pied ed seat t per year r (See appendix for logic and sources) * Very approximate guess based on the best available Canadian data coupled with team expertise and insight on how a Gananoque incubator will operate 11
KSD Market area and commuter shed Defining the regions of focus for analysis on areas within daily commute and day-trip range * Source: OMAFRA Analyst Database The Commuter Shed * is identified as the following 97 communities are defined for the Market Area * • The image above identifies a 150km radius, with communities: Elizabethtown-Kitley Brockville Front of Yonge • Gananoque as the centre point Leeds and the Thousand Islands Gananoque Kingston 12
Market analysis: summary Historical workforce data suggests limited expected ICT growth; the incubator represents an opportunity to shift growth by focusing on the commuter shed and market area Focus ICT-related sectors • Forecast employment growth (Professional, scientific in key growth sectors and technical services) Tertiary are showing some Other areas (such as growth in the market GTA/Waterloo) Health care & 10,467 area social assistance 1,236 18 The commuter shed is • Secondary Market area also showing some Professional, 3,884 scientific and growth 287 technical services 7 Primary Commuter shed Forecast growth is • insignificant in the Town itself Market Area Commuter Shed Gananoque Health care & social assistance depicted to show that relative importance of other sectors is expected to grow faster than ICT Source: Growth forecast from OMAFRA’s “Analyst” database 13
Key options for how to begin Major options reflect differences in financial risk taken on in the early months (approx. figures to be refined during business planning) Caref reful ul firs rst step ep Modes dest beginn eginnings ings Straig raight ht for r priz ize Risk Low Mediu ium High Initia itial l seats ts (sq sq ft ft*) *) 13 seats ts (<1000ft ft) 24 seats ts (2300ft ft) 42 seats ts (3600ft ft) Starti rting capita ital l ($)** ** 124,0 ,000 345,0 ,000 620,0 ,000 Annual l operatin rating ($) 120,0 ,000 184,0 ,000 223,0 ,000 Staff ffin ing ($) 1 FTE 1.5 5 FTE 1.5FTE+ 5FTE+ 66,0 ,000 Ann nnual l fund ndin ing g req equi uired ed ($)** *** 88,0 ,000 70,0 ,000 * Includes anchor tenant seats; smaller options may not include a boardroom initially and no anchor tenant ** Some capital could be covered by a landlord (pending detailed plans and negotiations) and sponsors; some aspects such as fibre line to be estimated in business planning; 14 *** Public funding can come from a range of sources – not necessarily the Town
Top 3 risks for a Gananoque ICT incubator The most important risks relate to generating revenue and a flow of appropriate clients Risk Descrip riptio tion Seed funding ding The amount of funds needed for pre-build and for initial operating cash flow is significant and most potential funding sources are matching grants. Occup upancy ncy Too many empty chairs (affecting financial performance, employment objectives, and ability to achieve scale that drives interest from partners) Break-eve even Since the Incubator has significant fixed costs, attracting sufficient revenue to cover costs is critical. 15
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