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M State hosts Business & Entrepreneurial Center, a business incubator

Kelly Schiffner opened her graphic design business, Right Hook, in the BES-supported incubator The Hive. Photo by Pippi Mayfield

The Business and Entrepreneurial Center at M State offers services for start-up companies that need a little extra boost.

It operates from offices at M State in Detroit Lakes and has satellite sites in Frazee, Perham, Park Rapids, New York Mills and Hawley.

The Business and Entrepreneurial Center originally opened in October of 2009 with eight offices at M State.

In addition to the office space grouped around the BES administration center, the site offers light industrial space in an area that had been used by the neon sign and tube program.

The incubator has been popular, and last year it expanded at M State, opening four more offices.

The BES incubator opened in Frazee in September of 2010, with nine offices in a building at 109 Main Street, kitty-corner from the grocery store.

The site was different than the Detroit Lakes site in that it offers retail space.  (Recently, the Frazee EDA opted to pull out of the BES and go it alone).

Last year, the business incubator program opened with nine offices in the former Hawley Realty office building in Hawley, next to the Whistlestop Café.

The business incubator opened 11 offices in Perham last year in the administration wing of the former Perham hospital.

The BES also has an informal agreement with the New York Mills Economic Development Authority.

The BES started a business incubator with a half-dozen office spaces in a former creamery building that the New York Mills EDA gifted to the NYM Cultural center.

In all those places, the incubator model is the same — the BES provides space and manages it on behalf of an EDA, and EDC or a city.

The governmental unit acts as landlord of the incubator building, be it leased or owned outright.   The BES provides business start-ups in its incubator system with basic office furniture, a desktop computer and Microsoft software programs.

There is also a common work area with coffee, a fax machine, a printer, PowerPoint technology, a screen and Skype for web-based face-to-face conference calls.

They also get the services of the BES incubator manager and the BES administrative assistant, who can answer the phone for anyone at any location that has a local phone line.

The incubator system offers business counseling, workshops and training, free SCORE, a free mentorship program, a Small Business Development Corp. satellite office, shared business services, (fax, copy, notary public) a resource library and professional phone answering.

All that plus utilities is included in the lease price.

The average office space leases for $100 to $160 a month, depending on square footage, location and similar considerations.

In return, tenants have obligations. They must take a QuickBooks (accounting software) class and meet with BES staff once a quarter to discuss growth and challenges they are facing. They must provide BES staff with a business plan, and they must be doing the business of business — that means being active with their financials.

The incubator helps start-ups get registered with the state and licensed if necessary.

Not all businesses in the incubator system are start-ups. Some are existing businesses that moved there for the support. It’s about a 50-50 mix.

Businesses can’t stay in the incubators forever. There’s a three-to five-year maximum stay. After three years, BES staff starts moving them towards graduation.

Sometimes they leave sooner. A business can grow so big it needs to move, or — if they are not actively working the business — BES staff will coach them out of business. It’s a safe place to fail.

BES funding comes from three main sources — support from M State; revenue from leases, service fees and professional classes; and grants, sponsorships and underwriting.