Incubator a hand up, not a handout

Startup businesses benefit from local, state assistance

Sunday, July 22, 2007

By JOHN R. PULLIAM

The Register-Mail

GALESBURG - A manufacturing incubator, which can also be used for warehouse/distribution operations, is many different things to the companies that locate there.

Sutech Industries Inc., a Chinese lawnmower company that moved its assembly operations to GREDA's Galesburg Business Incubator in September 2005, may be able to expand while still located in the incubator. Overhead cranes are now used to lift the mowers to perform much of the assembly, largely because there are just five employees in the factory portion of the business.

Terry Tulin, vice president of operations, said the recent addition of Honda engines to the lawnmowers is making it difficult to keep up with orders. He said the company has a potential solution.

"We have, from Aurora, the whole framework for the assembly line that we've never put together" in Galesburg, Tulin said. "If we stay here, we'll probably put that framework together here."

While Sutech has been in the incubator for almost two years, BDI, a manufacturer of stainless steel industrial screens, was the first tenant in October 2004. Rick Dechow, one of four owners of BDI, said the incubator is a nice fit for the company. He said businesses share equipment. Sutech recently used BDI's forklifts.

"They have used our forklifts to unload 40 truckloads of lawnmowers, while they were using their forklifts to load trucks," Dechow said. "It's been a great relationship. Terry Tulin has been great."

"Rick probably knows as much about this building as anybody," said Linda Utsinger, GREDA's vice president of business development.

Dechow said the incubator concept has worked well for BDI, but he thinks some members of the public don't understand how it works.

"A lot of people think because of the incubator, you get free money," Dechow said.

While acknowledging GREDA and the state of Illinois, Dechow said, "We had lots of help, but it's money we had to pay back."

For some companies, the best option is to grow quickly and move into more traditional quarters. Simmers Crane, an Ohio company that makes and repairs cranes, moved to the incubator in the former National Seal building on Monmouth Boulevard in July 2005.

"They were starting to have quite a lot of business in the Midwest but didn't know if it made sense to locate here," Utsinger said.

The lower rent charged at the incubator convinced the company to give it a try. Within a year, Simmers grew from two to 16 employees and moved to the former Butler Manufacturing complex, now known as the Galesburg Industrial Center.

In fact, this is the second time the building has been a business incubator. Utsinger said there always is a chance a company may grow large enough to decide to buy the facility. That is what happened with the original incubator. When Outboard Marine closed its Gale Products Division, the city ended up owning the plant. The city sold it to the Business and Technology Center, which turned it into a manufacturing incubator. National Seal, which started as a tenant, eventually bought the building and operated here for a number of years.

"So it's gone full circle," Utsinger said.

This time, Waste Management was a catalyst for the incubator, donating the building to GREDA after GREDA leased it for three years.

"Without Waste Management being the partner they were, this wouldn't have happened," Utsinger said. "They're a very good corporate citizen."