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									Cumberland Business Incubator
        Feasibility Study




   Roane State Community College Foundation




                  August 2007
 Cumberland Business Incubator
       Feasibility Study




            Prepared for the

Roane State Community College Foundation



                  by

         John G. Stewart, Ph.D.
                   &
        H. Brown Wright, M.R.C.P




              August 2007
                                      Acknowledgements

         Stewart, Wright & Associates, LLC has prepared this feasibility study of the proposed
Cumberland Business Incubator. (See Appendix H for biographical information on the principals.)
An interim report was provided in May 2007 primarily covering the findings from the personal
interview phase of the study preparation. This is the final CBI feasibility study report. It covers all
phases of the feasibility investigation and strongly concludes that a business incubator is feasible
in Cumberland County and urges its implementation.

         A number of persons assisted in obtaining the data, information, and insights necessary
for the preparation of this study. It is not possible to identify all of them but the following were
especially helpful and close to the process: Brad Fox and Robbie Safdie, RSCC Faculty; Brock
Hill, Mayor of Cumberland County; Carl E. Mueller, PhD, volunteer consultant; Henry Bowman,
UCDD. In addition, all of those who were interviewed and are listed in the report Appendix were
extremely helpful to the study preparers in gaining an understanding of Cumberland County and
its surrounding area and helping establish the dimension of the opportunity that exists for
supporting new business start-ups there.

        In acknowledging the assistance of these persons, we hasten to assume full
responsibility for any and all interpretations of the data and information gathered with their
assistance.

       It has been a pleasure to get to know and work with many people in the Cumberland
County area on this study. We wish them and the CBI project every success.


H. Brown Wright                                             John G. Stewart
Stewart, Wright & Associates, LLC                           Stewart, Wright & Associates, LLC
Knoxville, TN                                               Knoxville, TN


August 24, 2007




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                              ii
                                            CONTENTS

                                                           Page

Executive Summary                                           1

Introduction                                                2

Success Factor Analysis and Economic Growth                 6

        Success Factor Values                               6
        Success Factor Application to Cumberland County     8
        Total Success Factor Values                        15
        Economic Development Growth Strategy               16
Personal Interviews                                        18

Cumberland Plateau Business Owners Survey                  19

Demand Analysis                                            24

        Business Assistance Services                       24
        Service Area                                       26
        Primary Information Sources                        26
        Secondary Information Sources                      28
        Service Center for Adjacent Counties               30
        Conclusions                                        32
Incubator Facility                                         33

Organizational Structure                                   35

Retiree Population                                         37

Development Cost and Funding                               39

Financial Sustainability                                   41

Summary Analysis                                           45

        Markets                                            45
        Stakeholder Buy-in                                 46
        Financial Feasibility                              47
        Availability of Real Estate                        47




Stewart, Wright & Associates, LLC – Knoxville, Tennessee          iii
Appendices                                                 49


    A. CBI Interviewees and Summary of Findings            50

    B. Cumberland Plateau Business Owners Survey           62

    C. CBI Site Plan & Preliminary Floor Plan              64

    D. CBI Memorandum of Agreement                         65

    E. CBI Start-up Budget                                 66

    F. CBI Projected Cash Flow                             67

    G. CBI Monthly Operating Budgets, Years 1-3            68

    H. SW&A Principals’ Bios                               69




Stewart, Wright & Associates, LLC – Knoxville, Tennessee        iv
                                                    TABLES


Number                                  Title                                Page

  1           Key Incubator Success Factors – Numerical Values                7
  2           Population Trends                                               8
  3           New Non-Farm Proprietors                                        9
  4           Business Start-ups                                              9
  5           Retail Sales Estimates                                         10
  6           Bank Deposits                                                  10
  7           Private Employment                                             10
  8           Manufacturing Units                                            11
  9           Industrial Recruitment/Expansion (2004-2007)                   11
 10           Professional/Scientific/Technical Core in 2005                 12
 11           Higher Education Institutions                                  12
 12           Industrial Development Entities                                13
 13           Small Business Support Agencies                                13
 14           Other Support Entities (Major Research, Nearby Incubators)     14
 15           Total Success Factor Values                                    16
 16           Are You Presently a Small Business Owner?                      19
 17           Is the Cumberland Plateau a Good Place to do Business?         20
 18           Survey Respondents: Categories & Number of Respondents         20
 19           Business Areas Where More Help Would be Welcome                21
 20           Potential User of Incubator & Related Services                 21
 21           Personal Level of Interest in the CBI & Services               22
 22           Type of Space Needed by Interested Respondents                 22
 23           Is the Cumberland Business Incubator a Good Idea?              23
 24           Typical Business Assistance Services Provided by Incubators    24
 25           Detailed Incubator Services by Categories                      25
 26           Business Support Services Needed by Potential CBI Tenants &
                    Affiliates                                               26
 27           New Non-Farm Proprietors & New Business Licenses               29
 28           Comparison of Selected Economic Indicators in Cumberland and
                   Contiguous Counties                                       31


      Stewart, Wright & Associates, LLC – Knoxville, Tennessee                      v
29           Major Personal Commuting Patterns Into and Out of Cumberland
                    and Contiguous Counties                                 32
30           Assessment of NBIA Factors for Cumberland Incubator Facility   34
31           Comparison of Population and Per Capita Income in
                  Cumberland County Communities                             37
32           Cumberland Business Incubator Development Cost Estimates       39
33           Cumberland Business Incubator Potential Funding Sources        40
34           Projected Cash Flows: Years 1-3                                41
35           Cumberland Business Incubator - Projected Operating Budget     43




                                                   CHART


 1           Classification of Incubator Programs                           3




                                                     MAP


 1           Cumberland and Adjacent Counties                               27




     Stewart, Wright & Associates, LLC – Knoxville, Tennessee                    vi
                                      Executive Summary


          Since 1959, business incubators have been an important tool to help achieve the birth
and subsequent success of thousands of small businesses across the United States. In recent
months key community leaders—from both public & private sectors—in the Cumberland County,
TN area have pursued the concept of a business incubator as an element in their local economic
development strategy focused on jobs and economic growth. These leaders commissioned a
feasibility study—executed by Stewart, Wright & Associates, LLC (SW&A) of Knoxville, TN to
examine whether a Cumberland Business Incubator (CBI) would likely succeed.

         SW&A based its feasibility analysis on four ―core elements‖ deemed essential to
incubator success: market capacity, stakeholder buy-in, financial feasibility, and real estate
availability. Each of these core elements was deemed to be positive indicators of likely success.

        Markets. An analysis of 15 key ―success factors‖ yielded a strongly positive outcome. A
mail survey of small business owners in the Cumberland County/Crossville area affirmed this
finding (550 businesses with a return rate of 18%). An examination of local educational
resources (secondary schools, a community college, a four-year university, and a U.S.
Department of Energy national laboratory) and other public resources (a Tennessee Technology
Center, Small Business Development Center and a SCORE chapter) concluded that CBI clients,
whether housed in the incubator facility or part of an affiliate network, could receive first-rate
support & business advisory services. The presence of a robust retiree community in the
Cumberland County area presented the likelihood of additional advisory resources, as well as
angel investors and incubator participants.

         Stakeholder buy-in. In December 2005, a consortium of the area’s principal
governmental and educational entities signed a Memorandum of Agreement to work toward the
creation of a business incubator and provide subsequent support. More than 40 personal
interviews conducted by SW&A revealed consistently strong endorsements of the CBI concept
and, among many interviewees, a willingness to work actively to achieve the incubator’s success.
Roane State Community College committed a full-time faculty member to coordinate the
incubator development process.

         Financial feasibility. Although firm commitments are just now being sought, the
willingness of Cumberland County government & the City of Crossville to seek the necessary
local matching funds required by the U.S. Economic Development Administration, as well as
seeking other federal and local support, provides a picture of where adequate initial resources
can be obtained. A conservative cash flow analysis projects the likelihood of an operating surplus
by the fifth year, assuming the addition of 10,000 sq. feet (Phase 2) to the initial building.

        Real estate availability. Roane State Community College has given an excellent site for
construction of a new facility on the campus of the Cumberland County Higher Education Center
in Crossville. This site meets all criteria identified by the National Business Incubator Association
as necessary for successful operation of a business incubator.

        In summary, the economic, business & financial environments in Cumberland County
and surrounding areas are favorable to the development and sustained successful operation of a
business incubator.




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                           1
                                           Introduction
The most effective incubators are developed within the context of a community. An
incubator development team that carefully researches its community entrepreneurial pool
and that builds broad-based community support will better its chances for long-term
success. The stakeholders in an incubator will help sustain its financing, offer assistance
to its client companies, serve on governing boards, and generally be invested in the
incubator’s success. The development process includes conducting a feasibility study,
rallying stakeholders, forming an entity, finding or building a facility, establishing boards
and staff, negotiating tax issues, tying down funding, marketing to potential clients, and
much more.

--quoted from “A Comprehensive Guide to Business Incubation,” published by the
National Business Incubation Association (2004)



        These words summarize in striking fashion the dimensions of the tasks involved in
launching a business incubator as part of a community’s overall economic development strategy.
The effort contained in this report represents but one small, yet essential, part of this process—a
determination of whether or not the conditions in Cumberland County and the surrounding area
required for probable success exist; that is to say, whether or not it is feasible to move ahead.
        Business incubators are a relatively recent addition to the tool kit of those community
leaders charged with economic development. According to the National Business Incubation
Association (NBIA), the nation’s first business incubator was launched by Joseph L. Mancuso of
Batavia, NY in 1959. Almost by accident, Mancuso found himself with the assignment of filling
850,000 sq. feet of vacant manufacturing space. He soon realized that one large company was
not likely to relocate to Batavia (an upstate New York town of 16,000) and he began renting
space to a series of smaller local companies. At one point, a chicken company moved in and
Mancuso had a history-making insight: the chicken company was incubating chicks and he was
doing the same thing with small companies. Grow them to the point where they can survive
outside the incubator and send them on their way. Thus, the concept of business incubation was
born nearly 50 years ago.
        Over the years, the incubation concept has developed in many ways—reflecting the
diverse needs of entrepreneurs in a world economy—but critical elements have not changed. As
the NBIA emphasizes on its excellent Web site (www.nbia.org): ―Critical to the definition of an
incubator is the provision of management guidance, technical assistance, and consulting tailored
to young growing companies. Incubators usually also provide clients access to appropriate rental
space and flexible leases, shared basic business services and equipment, technology support
services and assistance in obtaining funding necessary for company growth.‖
        The following chart, using data compiled by the NBIA, identifies the major classifications
among the estimated 1,400 incubators presently operating in North America.




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                            2
                                            Chart No. 1
                             Classification of Incubator Programs
                                          (Percentage)

             50
             45
             40
             35                                                        Mixed Use
             30                                                        Technology
             25                                                        Manufacturing
             20                                                        Service
             15                                                        Other
             10
              5
              0



           Regardless of functional classification, incubators historically have been a good
investment in terms of community economic development. The NBIA has calculated:
           Incubator client and graduate companies have created about a half-million jobs since
           1980.
           For every 50 incubator-created jobs in a community, 25 additional jobs are generated.
           In 2005, incubators assisted more than 27,000 start-up companies that provided full time
           jobs for more than 100,000 persons, generating $17 billion in annual revenue.
           For every $1.00 of estimated public operating subsidy provided an incubator, graduates
           and clients of incubators generate about $30 in local tax revenue.
           NBIA members report that 84% of incubator graduates stay in their home communities.

           To generate positive results such as these (and recognizing that not every business
incubator succeeds), incubators typically provide a broad range of client services. In fact, experts
frequently stress, ―the heart and soul of an incubator is the assistance it provides to clients.‖ That
is to say: client services are more essential to success than the building in which these services
are delivered—which helps explain why many business incubators provide services to companies
housed elsewhere, i.e., incubator affiliates, as supplemental to those made available to incubator
tenants.
           Brian Walker & Nan Kalis, associates of the NBIA, identify a menu of services that are
frequently provided. (See A Comprehensive Guide to Business Incubation, NBIA Publications,
2004, hereinafter cited as Guide, pp. 207-217). Among those identified by Walker & Kalis are:




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                            3
         Business basics—the skills needed to prepare a business plan and run a small
         entrepreneurial business.
          Professional service providers—assistance with accounting, financial management,
         legal services, regulatory & other governmental requirements.
         Networking among clients—sharing of challenges, successes, failures, opportunities,
         lessons learned, customer leads, service providers, and so on.
         Seminar & training programs—educational benefits providing a steady source of
         potential clients and incubator revenue.
         Shared administrative services—access to many office amenities, such as Internet
         connectivity, photocopies, faxes, conference facilities, receptionist and clerical services,
         etc., that otherwise would be difficult to obtain or afford during the early start-up period of
         many small businesses.
         Micro loan & financing programs—centralized access to governmental and local
         financing opportunities.
         Investment capital—leads to early-stage and venture resources, angel investors, and
         strategic partners, along with help in developing business financing presentation
         materials.
         Resource libraries—a cross-section of educational materials and/or computer links.
         Technology commercialization assistance—knowledge & experience to help bring a
         product, process, or service innovation through development to market introduction and
         beyond.
         Mentors/advisors—experienced business people who can help guide new
         entrepreneurs, as well as advising on incubator management.
         Marketing/promoting clients—expertise in developing marketing plans and executing
         them.
         University/community college/research lab links—knowledge of such topics as
         business & financial management, prototype development, technology transfer, and
         specialized equipment & training.

In other words, a mature and well-managed incubator will have resources available—some paid,
some voluntary—to assist clients, whether or not housed in the incubator facility, with the wide
range of problems routinely encountered by small entrepreneurial business ventures.
         Nonetheless, not every business incubator will succeed. The paragraph quoted at the
beginning of this introduction suggests the wide range of factors that must come together to make
success a reality. Although each business incubator initiative has its own set of strengths and
weaknesses, experts agree that one of the essential first steps is a rigorous feasibility analysis to
see if ―critical success factors‖ are present in sufficient number. The Comprehensive Guide to
Business Incubation, cited earlier, identifies four ―core elements‖ that should characterize most
feasibility studies:
         Market, including the composition of the community’s or region’s entrepreneurial pool, the
         needs of prospective clients, and whether the community can meet those needs
         Stakeholder buy-in, which focuses on garnering program champions and community
         support
         Financial feasibility of the project, both short term and long term
         Availability of real estate suitable for a business incubation program

This feasibility study will investigate each of these core elements as they relate to the likely
success of a Cumberland Business Incubator (CBI). A number of specific ―success factors‖ will



Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                              4
be identified; a numerical value will be assigned to each; and these will be analyzed to see if a
summation of these factors provides an environment supportive of a business incubator. The
nature and depth of the demand for the CBI will be investigated. In addition, the CBI will be
examined from the perspective of the ―Economic Development Growth Strategy‖ of Crossville &
Cumberland County (May 2006 update). As the NBIA states in its ―Ten Keys to Incubation
Success‖ ( Guide,      p. 26): ―The best business incubation programs are integrated into their
community networks, resources, and economic development plans and strategies.‖
        Extensive interviews with community leaders from all sectors will be conducted and
analyzed. A survey of small business owners will be distributed and analyzed to determine their
potential interest in the CBI.
        The available options for the incubator facility itself—site availability and space analysis—
will be assessed. Potential organizational and management structures will be investigated.
Finally, forecasts of financial requirements for the CBI will be developed, reflecting assumptions
concerning size, occupancy rates, rates for space and services, duration of occupancy,
operational costs and degree of sustainability.
        The study will seek to develop evidence of the following:
        Adequate market of potential tenants/service recipients
        A competent and willing champion
        Availability and suitability of an incubator site
        Business assistance resources to help incubator tenants/recipients
        Unmet business assistance needs of local entrepreneurs
        Ability to raise sufficient funds and in-kind contributions to launch the incubator
        Ability of the incubator to become financially self-sufficient

        On the basis of these assessments, the study will present its principal findings and
recommendations, along with a suggested implementation plan.




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                           5
                   Success Factor Analysis and Economic Growth


Success Factor Values
        For the Cumberland Business Incubator (CBI) to be successful, the local area needs to
demonstrate a number of necessary supporting characteristics. In addition to the demand for the
incubator’s services, there needs to be evidence that the community already has a reasonable
rate of new business start up activity in a number of product/process/service areas, a financial
community that is willing to help new companies obtain the necessary business capital,
professional business service providers who are willing to work with and assist start up
companies, and opportunities for budding entrepreneurs to obtain the necessary additional skills
they will need.
        Given the conclusions gleaned from the SW&A interviews for the Cumberland Business
Incubator, it appears likely that a successful incubator should be designed to serve a mixture of
clients, not just those engaged in technology development and marketing.        Accordingly, this
feasibility analysis will focus on more general considerations related to those elements necessary
for success. These elements include:
         Population trends
         Economic Activity
            o Non-farm proprietors
            o Business start-up activity
            o Retail sales trend
            o Bank deposits
            o Private employment growth
            o Number of manufacturing units
            o Industrial activity
         Technical core
            o Attorneys
            o Certified public accountants
            o Engineers
            o Computer system designers/programmers
            o Management, scientific and technical consultants
         Educational institutions
            o Four year colleges
            o Two year colleges
            o Technical institutes/schools
         Industrial development organization(s)
         Small business support
            o Industrial Development Board
            o Chamber of Commerce
            o Small Business Development Center
            o SCORE chapter
            o Nearby incubator/research activities



Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                        6
         Leadership consensus


        In order to provide an integrated analysis of these key elements, a grading scheme has
been developed, based in part on a similar approach used by Stacey and Associates (Mobile, AL)
in other incubator feasibility analyses. Numerical Success Factor Values (SFV) associated with
the elements will be assigned by county as indicated in Table No. 1:


                                            Table No. 1
                   Key Incubator Success Factors – Numerical Values

1. Population trends                                       Annual growth rate exceeds state      2
                                                           Annual growth rate same as state      1
                                                           Annual growth rate below state        0
2. New non-farm proprietors                                More than 3/month—average             3
                                                           More than 2/month—average             2
                                                           More than 1/month—average             1
                                                           Less than 1/month—average             0
3. Business start-up activity                              More than 4/month—average             3
                                                           More than 2/month—average             2
                                                           More than 1/month—average             1
                                                           Less than 1/month—average             0
4. Retail sales trend                                      Positive trend (last 24 months)       1
                                                           Flat or negative trend                0
5. Bank deposits                                           Positive trend (last 24 months)       1
                                                           Flat or negative trend                0

6. Private employment growth                               Positive trend—last 24 months         2
                                                           Stable/Flat                           1
                                                           Negative                              0
7. Manufacturing units                                     100 or more                           3
                                                           51 to 99                              2
                                                           50 to 26                              1
                                                           Less than 25                          0
8. Industrial recruitment/expansions                       2+ new locations/expansions—last 12   2
                                                           months
                                                           Less than 2                           1
                                                           None                                  0
9. Professional/technical core                             ―Abundant‖ professionals              3
                                                           ―Ample‖                               2
                                                           ―Adequate‖                            1
                                                           ―Inadequate‖                          0
10. Educational institutions                               Four year college                     3
                                                           Two year college                      2
                                                           Technical institutes/schools          1
11. Industrial dev. organizations                          Two or more                           2
                                                           One                                   1
                                                           None                                  0
12. Small business support                                 SBDC and SCORE                        2
                                                           SBDC or SCORE                         1
                                                           No support                            0
13. Other support entities (major research,                Two or more                           2


Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                         7
  nearby incubators                                          One                                       1
                                                             None                                      0
  14. Leadership attitudes                                   Very positive                             3
                                                             Positive                                  2
                                                             Accepting                                 1
                                                             Negative                                  0
  15. Presence of a “champion”                               Clearly identified/accepted               3
                                                             Several possibilities                     2
                                                             None identified                           0


  Once assigned, the Success Factor Values (SFV) will be summarized as follows:

  26 points and above – deemed to have the necessary elements to support a full service incubator
  without the addition of any support programs

  25 to 19 points – likely more effective as a satellite incubator linked to a primary facility; addition
  of missing or low scoring success factor elements could enable the area to support an incubator

  18 to 14 points – some success factor elements in place but support needed from a primary
  facility; suitable as a satellite facility only

  13 points and below – inadequate success factor elements to support an incubator


  Success Factor Value Application to Cumberland County

           The above SFV rating system has been applied to Cumberland County as discussed in
  the following paragraphs.

  1. Population Trends

                                              Table No. 2
                                          Population Trends

    Area                   2000          2005 (Est.)            +/-          % Change         SFV
Cumberland Co.
                          46,802           51,346             +4,544             9.7            2
    UCDD                 304,998          320,756            +15,758             5.2
  State of TN           5,689,283        5,962,959           +273,676            4.8
  Source: U. S. Census Bureau



           Population growth is a basic economic indicator; most other growth indicators tend to be
  tied to it. An increasing population provides for an expanding economy while static or declining
  population trends make it difficult for a community to support additional growth and development.
  As shown in Table No. 2, the population growth in Cumberland County is robust with a 9.7%
  increase between 2000 and 2005. This is double the population growth rate for the state of
  Tennessee during the same period and almost twice that of the surrounding Upper Cumberland
  Development District (UCDD) counties.



  Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                             8
         According to the numerical values in Table 1, a SFV rating of 2 is given for this element.

2. New Non-farm Proprietors

                                                 Table No. 3
                                       New Non-Farm Proprietors
                                                                                          Ave. Per
   County              2002          2003          2004          2005            +/-       Month     SFV
 Cumberland            5,592         5,830         6,148         6,475          +883        24.5      3
Source: Regional Economic Profiles, Bureau of Economic Analysis, Table CA30, April 2007



         Non-farm proprietors are unincorporated, single-owner or partnership businesses. An
examination of the trends in the creation of these enterprises provides an indication of ongoing
entrepreneurial activity in an area as well as a reflection of the area’s favorability as a support
base for small businesses. As shown in Table No. 3, Cumberland County showed strong growth
in new non-farm proprietors between 2002 and 2005 with a total increase of 883 during the period
which equates to a monthly average of 24.5 new starts.
         An SFV rating of 3 is given for this element.

3. Business Start-up Activity

                                                 Table No. 4
                                            Business Start-ups
                                                                             Ave. Per
          County             2005-06         2006-07           +/-            Month          SFV
        Cumberland             521             581             +60              5             3
       Source: Cumberland County Clerk, Business License Sales



       Overall business start-up activity is a key indicator of a healthy local economy and active
local entrepreneurs. It also indicates that the community is a place where new ideas for business
enterprises are present and that new products, processes, and services are already finding their
way into the marketplace. Moreover, it suggests that some amount of risk capital is available to
start-up entrepreneurs.        As shown in Table No. 4, recent business start-ups in Cumberland
County have been active. As measured by county business license sales, there were 521 and
581, respectively, for the past two years or a monthly average of 5.
         An SFV rating of 3 is given for this element.




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                                   9
4. Retail Sales Trends

                                                Table No. 5
                                 Retail Sales Estimates ($000)

         County            2003           2004            2005         +/-          SFV
       Cumberland         569,115        605,821         633,321     64,206          1
      Source: Tennessee Department of Revenue

        Retail sales data is a reflection of an area’s economic health and, to some extent, may
reflect its role as a service center for its surrounding area. A healthy retail service center is a
supportive location for new business start-ups because a market is already established to some
degree for the products, processes, or services being offered. Also, the supplies, services, and
other needs of the new business are more readily available in a thriving retail center. In addition,
as the business grows, the labor pool of the surrounding area will be available as a source for the
additional employees that will be needed. Between 2003 and 2005, retail sales in Cumberland
County rose from $569,115,000 to $633,321,000, an increase of $64,206,000 over the two years
as indicated in Table No. 5,
        An SFV rating of 1 is given for this element.

5. Bank Deposits
                                                Table No. 6
                                        Bank Deposits ($000)

         County            2004           2005            2006        +/-           SFV
       Cumberland         611,970        690,920         751,072   +139,282          1
           Source: FDIC Data Book, Summary of Deposits


        Bank deposits are another indicator of the economic health of an area. They indicate the
availability of local capital to support all business activity including start-up entrepreneurs.   As
indicated in Table No. 6, bank deposits in Cumberland County between 2004 and 2006 rose from
$611,970,000 to $751,072,000 or an increase of $139,282,000 during the two-year period.
        An SFV rating of 1 is given for this element.

6. Private Employment Growth

                                                Table No. 7
                                        Private Employment

         County            2003           2004            2005         +/-          SFV
       Cumberland         20,762         21,351          22,078      +1,316          2
        Source: USDOC/BEA, April 2007




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                           10
        The overall ability of an area to create jobs is another key indicator of local economic
health. Many factors enter into the mix such as general population trends, business and industry
expansions and declines, relocations, changing manufacturing practices, location advantages,
and national economic trends.           Sustained job growth generally indicates local economic
advantage. As shown in Table No. 7, jobs in Cumberland County increased from 20,762 in 2003
to 22,078 in 2005 for a net gain of 1,316 over the two years.
        An SFV rating of 2 is given for this element.

7. Manufacturing Units

                                              Table No. 8
                                        Manufacturing Units

                               County              2005            SFV
                             Cumberland             52              2
                       Source: U.S. Census Bureau, 2005 County Business Patterns



        Manufacturing activity in an area is an important indicator of the suitability of the
community as an incubator location and the likelihood of its success. The labor and management
skills that manufacturing firms bring to a community, as well as the processes they create and
utilize, can be sources of new ideas and spinout ventures.           As indicated in Table No. 8, there
were 52 manufacturing units in Cumberland County in 2005. The largest concentrations were in
the following manufacturing sub-sectors: fabricated metal, non-metallic mineral products, food,
printing & related support, and wood products.
        An SFV rating of 2 is given for this element.

8. Industrial Recruitment/Expansion

                                              Table No. 9
                       Industrial Recruitment/Expansion (2004-2007)
                           New
        County           Locations     Expansions          Jobs         Investment        SFV
      Cumberland            1              11              357         $139,440,000        2
      Source: Crossville-Cumberland County Chamber of Commerce

        The location of new industries indicates an aggressive community economic
development initiative and cooperation between local entities.             Similarly, the expansions of
existing firms indicate the presence of sound companies that are satisfied with the local business
environment. Both are indications of a business-friendly community and one likely to support




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                            11
spin-off and start-up ventures.      As indicated in Table No. 9, there was substantial industrial
expansion and investment in Cumberland County from 2004 to 2007.
                 An SFV rating of 2 is given for this element.

9. Professional/Technical Core

                                              Table No. 10
                        Professional/Scientific/Technical Core in 2005

                 County             Total         Business
                                    Core       Establishments           Ratio             SFV
              Cumberland            364              59                  6.2               2
           Source: U.S. Census Bureau, 2005 County Business Patterns (Industry Code 54)

        A number of professional technical business support services are necessary to support
the tenants and affiliates of a business incubator. These include legal, accounting/bookkeeping,
tax      preparation,        professional/scientific/        technical,         information         technology,
management/environmental consulting, and advertising & public relations. The services of these
professionals are essential to the success of incubator occupants in dealing with business
planning and marketing, financial analysis, regulatory matters, intellectual property protection,
prototype design, fabrication & testing, and many other issues. These support services must be
readily available and affordable in the community if the incubator and its clients are to be
successful.    As indicated in Table No. 10, in 2005 Cumberland County had a total
Professional/Scientific/Technical core of 364 persons employed in 59 business establishments.
This represents a ratio of 6.2 persons per establishment.
        An SFV rating of 2 is given for this element.

10. Educational Institutions

                                              Table No. 11
                                   Higher Education Institutions
                                                                          Agricultural
                         4-Year        2-Year           Technical         Experiment
      County             Colleges      Colleges         Schools           Station         SFV
      Cumberland             1              1               1                   1               3
      Source: RSCC-Crossville

      Institutions of higher learning are critical to the success of business incubators. In addition
to basic post secondary education, they provide opportunities for joint-venture research leading to
the development and commercialization of business ideas, the additional credit and non-credit
training opportunities that start-up entrepreneurs need, affordable faculty sources of business
advice and counseling, as well as libraries and other information sources. Moreover, technical
schools are important resources for employee skills training that successful start-up companies



Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                                    12
will need as they grow and graduate from the incubator.              As indicated in Table No. 11,
Cumberland County is fortunate to have three post secondary educational institutions and an
agricultural experiment station located in the county. The Cumberland County Higher Education
Center is a cooperative effort between Roane State Community College (RSCC) and Tennessee
Technological University (TTU) that jointly offers two-year and four-year degrees.            The
Tennessee Technology Center at Crossville offers training in fourteen vocational areas that can
support incubator tenants and affiliates. The University of Tennessee Agricultural Experiment
Station can assist local entrepreneurs with research and development of agricultural products for
the marketplace.
        An SFV rating of 3 is given for this element.

11. Industrial Development Organizations


                                               Table No. 12
                                Industrial Development Entities
                                            Industrial     Chamber of
                                           Development     Commerce
                        County                Board                     SFV
                      Cumberland               Yes            Yes        2
                     Source: RSCC-Crossville

        Local industrial development organizations are important in maintaining and advancing
the objectives discussed above under private employment growth, manufacturing units, and
industrial recruitment/expansion. Job creation and the community benefits that result from them
are not things that can be left to chance. Active communities are constantly seeking to attract
new firms and expand existing ones as means of keeping the number of jobs increasing and
offsetting natural job loss that occurs. In Cumberland County the Crossville-Cumberland County
Chamber of Commerce and the Cumberland County Industrial Development Board lead the
community’s efforts to recruit new industries and assist existing ones expand.
        An SFV rating of 2 is given for this element.

12. Small Business Support

                                               Table No. 13
                              Small Business Support Agencies

                                                   Sm. Bus.
                                                  Development
                  County          Incubator         Center          SCORE     SFV
                Cumberland           No               Yes            Yes       2
                 Source: RSCC-Crossville




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                       13
        For small businesses to be successful, including incubator tenants and affiliates, it is
necessary that organized sources of readily available business support services be available to
train, counsel, and advise business owners in a wide range of skills and disciplines. This includes
assistance in business planning, marketing, financial sourcing, management, and mentoring to
mention a few.    In Cumberland County, there are two organizations that provide these services.
The Small Business Development Center (SBDC) at RSCC serves small firms by providing free
consulting, workshops, and materials to help develop and fine-tune business management skills.
The Small Business Administration (SBA) and the State of Tennessee are its sponsors.
        The second organization is SCORE, a nonprofit association dedicated to entrepreneur
education and the formation, growth, and success of small businesses nationwide. SCORE is a
resource partner with SBA. Through the organization, both working and retired executives and
business owners donate time and expertise as business counselors. Cumberland County has
recently been placed in the service area of the East TN SCORE chapter, as are all of the other
RSCC service area counties. Dana Peterka, who lives in Kingston, is the regional director. He is
the contact point for linking incubator tenants and affiliates with SCORE volunteers.
        An SFV rating of 2 is given for this element.

13. Other Support Entities (major research, incubators)

                                            Table No. 14
              Other Support Entities (Major Research, Nearby Incubators)

                           Oak Ridge                        Tennessee
          County            National        Technology     Technological
                           Laboratory          2020         University           SFV
        Cumberland                                                                2
          Roane                 Yes
         Anderson                               Yes
          Putnam                                               Yes
      Source: RSCC-Crossville

        In addition to local higher education institutions and small business support agencies, the
proximity and availability of other support entities such as major research laboratories, major
universities, and other business incubators can be key to the success of a local incubator.
Laboratories and universities can be sources of start-up entrepreneurs who want to become
incubator tenants and commercialize a product, product, or service licensed from the lab or
university.   Researchers at these institutions also can collaborate with incubator clients on
SBIR/STTR and/or other research grants leading to further technology product development.
Moreover, other ongoing, successful incubator programs can be a source of assistance and
collaboration in creating and operating a new incubator. As indicated in Table No. 14, there is a
major university, a national research laboratory and one business incubator in counties adjacent
to or very near Cumberland County. They are the Oak Ridge National Laboratory in Oak Ridge,


Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                        14
the main campus of TTU in Cookeville, and the Technology 2020 incubator in Oak Ridge. Each
has agreed to support and assist with the creation of a business incubator in Cumberland County.
        An SFV rating of 2 is given for this element.


14. Leadership Attitudes

        As noted in the Personal Interview section below, there is overwhelming
support for a business incubator in Cumberland County among those interviewed. There is every
reason to believe that the community leaders, scientific/technical professionals, educational
institutions, and business people will be supportive of an incubator and will assist in the creation
and operation of the program. Moreover, as noted more fully in the section on organizational
structure, the major educational and business entities in the Cumberland County area initiated the
incubator development process by signing a Memorandum of Agreement to work together in
support of the incubator’s mission.
        An SFV rating of 3 is given for this element.

15. Presence of a Champion

        Also from the interviews that were conducted, there is ample evidence that there are
several potential champions for an incubator in Cumberland County. A number of individuals—
associated with county and city government, educational institutions, private businesses and
financial organizations, and business support organizations—already have been working
diligently to bring an incubator into being. Others in the educational, retiree, and governmental
sectors are actively assisting in the effort. Until definite plans and funding are in place, the
identification of an incubator ―operating champion‖ has been less pressing. However, SW&A is
convinced that, once the decision is made to move forward, the community will identify the
specific individual(s) who will make the incubator a success on a day to day basis.
        An SFV rating of 2 is given for this element.


Total Success Factor Values

                 As indicated in Table No. 15, the total SFV score for Cumberland County is 32,
which is within the 26 points and above range. By these measurements, Cumberland County is
deemed to have the essential elements to support a full service incubator.




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                                                Table No. 15
                                      Total Success Factor Values

                                                                          Cumberland
                               Success Factor                             County
                      1        Population Trends                               2
                      2        New Non-farm Proprietors                        3
                      3        Business Start-up Activity                      3
                      4        Retail Sales Trends                             1
                      5        Bank Deposits                                   1
                      6        Private Employment Growth                       2
                      7        Manufacturing Units                             2
                      8        Industrial Recruitment/expansions               2
                      9        Professional/technical Core                     2
                     10        Educational Institutions                        3
                     11        Industrial Development Entities                 2
                     12        Small Business Support                          2
                     13        Other Support Entities                          2
                     14        Leadership Attitudes                            3
                     15        Presence of a ―Champion‖                        2
                    Total                                                     32



Economic Development Growth Strategy

        The assessment of critical success factors as an environment for launching and
sustaining a business incubator in Cumberland County is strongly positive.          The Economic
Development Growth Strategy (EDGS) developed by Crossville & Cumberland County, with the
assistance of the Tennessee Valley Authority, provides another look at the potential environment
for a business incubator.
        The EDGS provides a guide for the County and cities from 2005—2009. It declares as a
formal policy that the EDGS ―seeks to build on existing economic strengths, tap under-utilized
human, physical & financial resources . . . (as) a coordinated approach, which is sensitive to the
needs and concerns of the private sector and to the community as a whole.‖ The EDGS also
―attempts to mobilize local resources in a concerted effort to establish a productive public-private
partnership.‖ (See ―An Economic Development Growth Strategy—A 5-Year Development Plan,‖
Crossville & Cumberland County, May 2006). Although the EDGS does not specifically call for
creation of a business incubator, the broad goals and specific objectives of the strategy are
congruent with the CBI’s proposed benefits.
        The EDGS—taking account of the county’s rapid population growth compared to the
statewide growth rate, the rapid growth of the community’s service sector, growth in the retail
sector, and a recent decline of manufacturing jobs—came to this principal conclusion:




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                         16
        The need for the creation of new jobs with the resulting new capital investments and local
        expenditures for goods & services is Crossville and Cumberland County’s top priority.
        (p.6)

        The EDGS goes on to analyze the community’s resources that ―are more than adequate
to provide the type of quality & diversified growth we are seeking‖ (p. 7).       This assessment
covers, in essence, the critical success factors noted above. It also underscores the importance
of existing industry in creating 70%--85% of all new manufacturing jobs. The capabilities for
workforce development in the community, provided through the Cumberland County Schools, the
Cumberland County Higher Education Center, the Tennessee Technology Center at Crossville,
and the University of Tennessee Agricultural Experiment Station, can likewise be sources of client
support for the CBI.      The importance of the retiree community as a factor in economic
development is also examined.
        The EDGS concludes with the creation of major goals in manufacturing, tourist
development, and retail expansion. As of May 2006, each of these goals was being exceeded,
affirming the critical success factor analysis of this study. The CBI can be another positive factor
in helping achieve these EDGS goals over the long run.




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                                      Personal Interviews
        A cross-section of community leaders provided a valuable perspective of the feasibility
and likely success of the CBI proposal.        More than 45 persons were interviewed, including
government & political leaders, community leaders, academic leaders & experts, higher education
leaders, school system leaders, teachers, business leaders, bankers, potential incubator tenants,
retirees, and non-profit organization leaders. (The list of persons interviewed, together with a
more detailed summary of the interview results, is found in Appendix A.)
        The overwhelming sentiment of the interviewees supported creation of the CBI. Some
persons, particularly those from the financial sector, showed a note of caution in terms of the
availability of financing for incubator clients, indicating that any requests for financial support
would be evaluated according to established requirements. No interviewee expressed outright
opposition to the CBI concept and a large majority were enthusiastic.
        It should be noted that these outcomes were similar to those expressed by small
business owners in a written questionnaire returned by mail, as examined in the following section
of this report.   This outcome ameliorates the concern that personal interviewees were only
expressing views they assumed would be acceptable to the interviewers. The bottom line—
indicating strong support for the CBI—was similar in both instances.
        These are some of the more relevant observations expressed in the personal interviews:
         The community needs more homegrown business opportunities.
         Start-up firms need a physical location with a critical mass of basic support and shared
         services.
         The greatest need of start-ups is connections with people who already know how to do
         what they want to do, i.e., mentoring. The Crossville area has a large number of retired
         business people who could help in this way.
         Local investors will support the CBI, just as they supported construction of the Crossville
         campus for Roane State Community College (RSCC) and Tennessee Tech.
         Retirees come with a high level of volunteerism, with their passions, and are anxious to
         share their knowledge.
         The Cumberland County School System is teaming with RSCC on dual enrollment.
         Students could team with CBI tenants and affiliates and receive high school credit plus
         earn money.
         RSCC will actively support development and operation of the CBI.
         Tennessee Tech’s Centers of Excellence—manufacturing/engineering, energy systems,
         and water quality—are sources of innovations that potentially could be developed as part
         of the CBI.
         The CBI could provide advice and assistance in helping clients apply for initial financial
         support through the federal government’s SBIR and STTR programs.
         Residents of Cumberland County and surrounding counties have access to the Small
         Business Development Center, the Tennessee Technology Center, and the SCORE
         program, in addition to the education and training opportunities at the area’s institutions
         of higher education.
         Technology 2020 and Oak Ridge National Laboratory in Oak Ridge and the University of
         Tennessee in Knoxville are also potential supporters and participants in the CBI.




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                         18
                    Cumberland Plateau Business Owners Survey

        In addition to the personal interviews conducted with more than 45 area citizens, a short
written questionnaire was sent with the assistance of the Crossville-Cumberland County Chamber
of Commerce to 550 small business owners in Cumberland County and surrounding areas. (The
complete survey instrument is found in Appendix B.)               The survey sought more specific
information about the potential market for the CBI and its assistance services from possible
clients; 100 responses have been received for a response rate of 18%, an excellent return for this
type of mail-out survey. It is important to bear in mind that most respondents had no advance
knowledge of the CBI proposal and based their responses solely on the descriptive information
contained in the covering letter.
        In this regard, the incubator concept was described with these words:
          A small business incubator is being considered that would serve Cumberland County and
surrounding areas. An incubator is a program that helps small businesses (including start-ups
and existing firms) succeed. The incubator includes a building that houses a limited number of
small businesses (usually one or two person firms) that can share facilities with other tenants
such as photocopiers, computers, and conference rooms, along with easy access to business
assistance and loans, through workshops and one-on-one help. Sometimes this business
assistance is also available to companies that are not physically located in the incubator building
(affiliates).

         Tables No.16 through 23 summarize the results of the survey.

        The survey verified that the respondents were small business owners. Ninety-seven of
them were.
                                            Table No. 16
                       Are You Presently a Small Business Owner?
                                                n=100
                                                           Yes    No
                             Response Percentage           97.0   3.0


        The survey asked respondents their opinion on whether or not the Cumberland Plateau
was a good place to do business.




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                                            Table No. 17
               Is the Cumberland Plateau a Good Place to do Business?
                                                n=100
                                         Excellent    Very good        Good   Fair   Poor


             Response Percentage            23.0           38.0        29.0   6.0    2.0


        Less than 10% of the respondents believed the Cumberland County area to be only a
―fair‖ or ―poor‖ place to do business, with more than 88% expressing more positive views,
confirming the evidence of business activity developed in the critical success factor analysis and
repeated in the personal interviews.
        The respondents represented a wide range of businesses and occupations.

                                            Table No. 18
              Survey Respondents: Categories & Number of Respondents
                                                n=100


                                    Medical                       17
                                    Tourist/Leisure               17
                                    Home improvements             14
                                    Real Estate                   11
                                    Manufacturing                  7
                                    Retail                         5
                                    Banks                          4
                                    Distribution                   4
                                    Insurance                      4
                                    Law Office                     4
                                    Automotive/Motorsports         3
                                    Publishing                     3
                                    Financial                      3
                                    Non-profit                     2
                                    Education                      1
                                    Agricultural                   1

        On the one hand, this table indicates the diversity of businesses and occupations that are
potential clients for the CBI. On the other hand, as indicated in the next table, these diverse
businesses and occupations express a greater interest in more traditional areas of business
activity, as contrasted to manufacturing or related technical pursuits.




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                                            Table No. 19
                  Business Areas Where More Help Would be Welcome
                                                n=100

                              Response Percentage
                              (Selected all that applied)

                              Finding qualified workers             75.0
                              Marketing                             56.0
                              Promotion & advertising               55.0
                              Marketing analyses                    43.0
                              Managing people                       40.0
                              Business planning                     36.0
                              Competitive strategy                  38.0
                              development
                              Legal advice                          26.0
                              Business insurance                    19.0
                              New product commercialization         15.0
                              Securing financing                    15.0
                              Financial analysis                    15.0
                              Industrial sales                       7.0
                              Product development                    5.0
                              Manufacturing processes                3.0
                              Intellectual property protection       2.0


        This ranking underscores the importance of the CBI helping its clients with a variety of
basic business activities, rather than the more technical challenges of manufacturing processes,
intellectual property protection, or product development. The significance of workforce-related
assistance is striking, along with a basket of services related to marketing, marketing analysis,
promotion, and advertising. Business planning and competitive strategy development also are
deemed important.
        Other services also volunteered by respondents included: background checks (1),
secretarial selection (1), temporary workers (1), public relations (1), intern program (2), optimizing
Website (1), and qualifying customers (1). These services also fall in the category of office or
administrative services, rather than technical assistance.

                                            Table No. 20
                      Potential User of Incubator & Related Services
                                                n=100

                                                             Yes    No

                                Response Percentage          92.0   8.0


It would be significant if a large majority of respondents indicated they were not potential users of
the CBI and its services. As it is, the door appears to be open to client participation. The



Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                           21
numbers who eventually walk through that door will, in part, depend on the quality of the services,
rental space, support, marketing skill, and community understanding that is developed. But, in
the opinion of SW&A, the opportunity for a successful enterprise is there.

                                            Table No. 21
                      Personal Level of Interest in the CBI & Services
                                                n=100

                 Response Percentage
                 Use of common resources & services, but not rental space     76.0
                 Consider renting space and using services                    19.0
                 No interest in space, common resources, or services           5.0


        Again, the potential for a successful incubator project appears to exist, especially if a
major effort is carried out to develop an attractive menu of support services. The nature of this
response underscores the importance of designing and developing the CBI as a multi-use, multi-
purpose incubator, reflecting the diverse nature of the interests expressed by the small business
community.

                                            Table No. 22
                    Type of Space Needed by Interested Respondents
                                                n=100

                                 Response Percentage
                                 (Selected all that applied)

                                 Conference room               14.0
                                 Office space                   8.0
                                 Storage                        4.0
                                 Retail space                   2.0
                                 Training room                  2.0
                                 Service space                  1.0
                                 Loading dock                   1.0
                                 Production/assembly space      0.0
                                 Light laboratory space         0.0
                                 Arts/craft studio              0.0
                                 Commercial kitchen             0.0

        These responses point to more of an office environment for the CBI rather than one
specializing in production and assembly. Whether these preferences become reality depends, of
course, on the actual needs of the small businesses that actually become associated with the
incubator as renters and/or support service users.




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                                            Table No. 23
                  Is the Cumberland Business Incubator a Good Idea?
                                                n=100

                                                           Yes    No    N/A

                             Response Percentage           98.0   1.0   1.0

        Experts in developing and operating business incubators unanimously stress the
importance of community acceptance as one of the most decisive ―critical success factors.‖ This
nearly unanimous expression by the respondents of their belief that the CBI is a good idea
reflects this sense of acceptance.




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                    23
                                        Demand Analysis


        In assessing the demand for incubator services, a number of factors are examined from
several sources to identify the likely response to and use of the facility by start-up entrepreneurs.
Among these are the business assistance services that incubators typically provide, the service
area from which users will be drawn, primary information sources about start-up entrepreneurs in
the area, and available secondary data sources. Following is a review of the findings from these
sources for the CBI.


Business Assistance Services
        The literature on business incubators is rich with information on the kinds of basic office
and business assistance services that incubators typically provide to their tenants and clients.
Basic tenant services include receptionist/phone answering, shared office equipment, furniture
and equipment leasing, Internet access, conference/training rooms, and common areas. The
business assistance services are perhaps more important, are provided to both tenant and
affiliate clients, and vary according to the needs of the clients served by individual incubators.
Two different organizations have surveyed existing incubators to identify the most prevalent
business services being provided.        They were the National Business Incubation Association
(NBIA) in 2002 and the Appalachian Regional Commission (ARC) in 2004. Table No. 24 gives
the findings of both surveys.
                                                Table No. 24
                 Typical Business Assistance Services Provided by Incubators

                                                               2004 ARC     2002 NBIA
                        Financial/Accounting                     72%           74%
                        Mentoring Programs                        85            63
                        General Legal Services                    44            49
                        Networking Activities/Assistance          99            80
                        Help with Access to Loan Funds            93            77
                        International Trade                       48            49
                        Manufacturing Practices Assistance        52            50
                        Federal Procurement                       67            56
                        Product Design                            37            42
                        Marketing                                 88            80
                        Commercialization R&D                     42            55
                       Sources: ARC; NBIA




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          As indicated in the table, financial/accounting, mentoring, networking, access to loans, and
          marketing are the business assistance services most frequently provided by the incubators in
          both surveys.
              More specifically, a theme of this feasibility study is that these support services are more
          important than the incubator’s physical structure. As envisioned for the CBI, the support services
          would be separated into three broad categories:
                   Administrative/business services, such as clerical assistance, receptionist services, office
                   equipment and conference facilities;
                    Profession/technical services, such as accounting, marketing, legal, research, and public
                   relations;
                   Consulting/training opportunities related to business planning, financial analysis,
                   marketing and sales planning, human resources, and computer/Internet applications.


              Table No. 25 breaks down these three categories into more specific tasks:


                                                         Table No. 25
                                     Detailed Incubator Services by Categories

Administrative/Business                              Professional/Technical                   Consulting/Training
      Secretarial/clerical                                  Legal assistance                         Business plans
      Receptionist/telephones                                  o Contracts                           Financial analysis
      Mail & package handling                                  o Patents                             Marketing/sales
      Bookkeeping                                              o Copy write protection               Management skills
      Computers/desk-top publishing                            o Corporate papers                    Cash flow
      Access to office equipment                            Accounting                               Human resources
           o Computers/printers                                o Bookkeeping                         Access to capital/
           o Software                                          o Financial planning                  financing
           o Copier/fax machine                                o Taxes                               Website
           o Scanner                                           o Payroll                             development
           o PowerPoint projector                           Research                                 Computer
           o Postage meter/scale                               o Market research                     applications
           o Furniture                                         o Database research
           o Paper shredder
           o Hand truck
          Source: NBIA, A Comprehensive Guide to Business Incubation



          As discussed more fully below, the provision of these services will come from many sources.
          These services will be provided both on a fee-for-service basis and as a pro bono contribution to
          the mission of the CBI. The incubator’s leadership team is planning to begin offering these
          support services as soon as possible, prior to when the incubator facility is built and open for
          business.


          Service Area


          Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                          25
        The service area for the CBI is expected to be Cumberland County and the adjacent
counties as shown on Map 1. However, the demand analysis has focused largely on primary and
secondary data and information for Cumberland County.


Primary Information Sources
        Two primary sources of information on the local demand for the incubator were available
for this study. The first was the personal interviews that were conducted with more than 40
people in the local area in February and March 2007. Among the interviewees were six local
entrepreneurs who are either in the beginning stages of a business enterprise or who want to
grow their existing small business. It is believed that they are a representative sample of the
start-up entrepreneurs in the county and are also potential tenants or affiliates for the CBI. They
included a photographer, an electronic products design & services firm owner, an environmental
products and services provider, ceramic artist, a cabinet-maker, and a consumer products
fabricator. Each of them displayed sound technical knowledge of their business activity but all of
them were in need of basic business assistance services that the incubator could provide.
Marketing was a key need; it was identified by all of the entrepreneurs interviewed. Also, one of
them summed up his business support services needs succinctly, ―I need everything on the paper
side of doing business‖. Table No. 26 lists the business service needs indicated by the six
interviewees.


                                            Table No. 26
      Business Support Services Needed by Potential CBI Tenants & Affiliates
                                                   n=6

                                    Business Service       Needed
                                    Marketing              6
                                    Business Plan          3
                                    Website                3
                                    Advertising            3
                                    Mentoring              3
                                    Networking             3
                                    Financing              2
                                    Accounting             2
                                   Source: Personal Interviews


Five of the eight business service needs mentioned are included in the list of the most frequently
provided incubators services identified in the NBIA and ARC surveys (Table No. 24).
        The second source of primary information available was the findings of the business
owners survey that was conducted with the assistance of the Crossville-Cumberland County
Chamber of Commerce. As noted in a previous section, written questionnaires were sent in May




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                        26
                                               Map No. 1

                                 Cumberland and Adjacent Counties




Stewart, Wright & Associates, LLC – Knoxville, Tennessee            27
2007 to 550 small business owners in Cumberland County and surrounding areas. From the 100
responses received (18% return rate) a number of needs regarding incubator provided services
was revealed. As indicated in Table No. 19 (p. 21), the survey respondents selected 16 business
areas where more help would be welcomed; they also volunteered seven others.         The resulting
list is longer than that resulting from the personal interviews, but there is considerable overlap
between the two sources with marketing, business planning, advertising, website development,
and business financing being among the most often mentioned. Most of the services identified
focus on basic business development and management needs rather than on the technical
aspects of product, process, or service development.
        In response to the question, is a business incubator, and its associated business
services, something your business might use, 92 of the 100 respondents answered, yes.         This
tends to reinforce the need for an incubator facility in Cumberland County where start-up
businesses can be nurtured and assisted in obtaining needed business support services during
their early years.


Secondary Information Sources
        The secondary sources of information that were examined about the need for and
potential use of a business incubator facility yielded more mixed results. They included data from
the Bureau of Economic Analysis (BEA), county business license sales, Dun & Bradstreet, local
banks, SBDC & SCORE activity in the county, and the county’s Economic Development Growth
Strategy report.
        Data has been obtained from BEA on the new non-farm proprietors in the county in 2004-
2005 and from the county clerk’s office on the new business licenses issued in 2005 and 2006.
These are two different measures of new business activity in the county, and the information is
presented in Table No. 27. While it cannot be concluded that the data only reflect start-up
companies, such companies should be included in the measures. Since the numbers of both
non-farm proprietors and new business licensees have increased each month during the periods
at 27 and 5, respectively, the measures are indications that new business activity is being created
in the area at a modest level and that the community is generally supportive of the creation of
new businesses.




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                                            Table No. 27
                  New Non-Farm Proprietors & New Business Licenses
                                Cumberland County

                                          2004    2005     2006   +/-    Ave. Per Month
                                                                         Increase
         New Non-Farm Proprietors         6,148   6,475           +327         27
         New Business Licenses                    521      581    +60          5
        Sources: BEA & Cumberland County Clerk
        Another source of data on the creation of new businesses is Dun & Bradstreet. However,
a check with D&B revealed that only 149 new businesses categorized as either ―headquarters‖ or
―single locations‖ were located in Cumberland County between 2004 and 2007.               This is an
average of 3.5 new locations per month during the period and reflects a lower level of activity
than the new non-farm proprietors and county business license measures.
        In some communities, the local banks can provide indications of entrepreneurial activity
based on the number of inquiries they receive each month for new business start-up loans. The
banks that were contacted in Cumberland County responded that they do not track these kinds of
inquiries and were therefore were unable to provide any information. However, it was learned
that at least two of the local banks do make business loans. One reported that 25% of its loan
portfolio is currently in commercial loans and another one reported 6% of its portfolio in
commercial loans.
        It was also learned that the Cumberland Area Investment Corporation (CAIC) is a special
local source of low interest, long-term business capital loans. CAIC is a not for profit coalition of
area banks that makes collateralized loans to local businesses using both local and federal funds
in the 14 Upper Cumberland Development District counties. The organization makes 10 to 12
loans per year in the $100,000 to 300,000 range at a fixed rate of 4½% to expanding or start-up
companies that will create jobs as a result of the loan. It receives 30 or more loan inquiries per
year. CBI companies would be eligible and likely would be viewed as better loan risks because of
the CBI support they receive.
        Activities in the county by organizations like Small Business Development Centers
(SBDC) and SCORE to provide workshops and individual client counseling to start-up
entrepreneurs are additional indications of the local demand for the services provided by
business incubators. The SBDC serving Cumberland County is part of Roane State Community
College (RSCC) and is housed in Oak Ridge. Activity by the SBDC in the second half of 2006
was limited due to the illness of its staff person. However, during 2005 and 2006, three business
start-up seminars were held in Cumberland County with 37 attendees, 25 of who were already in
business. The seminars covered business licenses, taxes, financing, and business plans. During
this period, the SBDC also provided one-on-one counseling to 64 clients in Cumberland County.
Of these, 35 were already in business and 29 were not. Twenty-six of them were in service



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businesses; 6 were in retail trade; 19 were divided among construction, real estate, and health
care; and 13 of them did not indicate their business emphasis. The counseling can cover any
business topic for either existing or pre-venture businesses.
          A conversation with the SCORE representative currently responsible for Cumberland
County focused more on future plans than past activities. Cumberland County has recently been
reassigned from the Nashville to the Knoxville SCORE office. This was done to align the SCORE
service area with that of RSCC. Also, the Nashville office concentrated on working with clients
who visited its office rather than field outreach. Cumberland County was at the periphery of the
service area and not many clients visited the Nashville office. This is expected to change in the
future with the realignment. In fact, SCORE expects to have a part-time presence on the RCSS
Crossville campus working jointly with the college and the CBI to provide its workshops and
individual counseling to entrepreneurs through its retiree and other volunteers in Cumberland
County.
          As noted earlier in this report, the Economic Development Growth Strategy (EDGS)
developed by Crossville and Cumberland County in May 2006 ―seeks to build on existing
economic strengths, tap under-utilized human, physical & financial resources . . . (as) a
coordinated approach, which is sensitive to the needs and concerns of the private sector and the
community as a whole.‖ The report also notes ―the need for the creation of new jobs with the
resulting new capital investments and local expenditures for goods & services is Crossville and
Cumberland County’s top priority‖. It is clear that the CBI can be a positive factor in helping
achieve these EDGS goals over the long run. It is also clear that the absence of an incubator up
to now may have been a missed opportunity for promoting economic growth.


Service Center for Adjacent Counties
          There is some evidence in the secondary data that Cumberland County is also a service
center for some of its adjacent counties, particularly those to the north. For this reason it can be
expected that the CBI will also attract some tenants and affiliates from these counties.
          In Table No. 28, several of the same economic indicators that were examined in the
Success Factor Analysis and Economic Growth section of this report for Cumberland County are
compared for the eight counties that are contiguous to Cumberland County. Except for Putnam
County, each of these counties ranks considerably lower in each of these indicators than does
Cumberland County.        This suggests that for fulfillment of the reflected needs, e.g., job
opportunities, access to professional/technical services, retail purchasing, and most likely other
needs, Cumberland County is the nearest external service center for the residents of these
surrounding counties.




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                                            Table No. 28
                     Comparison of Selected Economic Indicators in
                        Cumberland and Contiguous Counties


                   %          Ave. New      %Change        Change                                 Total
               Population      Non-farm     in Retail      in Bank       Change in            Professional/
                Change        Proprietors     Sales        Deposits        Private   Manuf.    Technical
                 2000-        per month       2005-          2004-      Employment   Units        Core
  County         2005         2002-2005       2006           2005        2003-2005    2005        2005
                                                            ($000)
 Bledsoe           4.3            4.6          2.8          17,000           25        10        20-99
 Fentress          5.1            8.9          3.7          35,000          579        21          62
 Morgan            5.6            8.7          1.3          10,000          244        21          29
 Overton           3.1            9.6          1.0          27,000          499        31          98
 Putnam            9.5           24.2          NA          210,000         2287       113         700
  Rhea             6.9            9.6          6.9          37,000          451        28          87
  Roane            2.7            7.4          7.5          36,000          257        26         267
  White            5.9           11.3          0.7          27,000          270        45          68

Cumberland         9.7           24.5         12.6         139,000         1316        52         364

   UCDD            6.5           11.1          8.5            --             --        --          --
Sources: U.S Census Bureau, BEA, TN Dept. of Revenue, FDIC


The service center role of Cumberland County is further reinforced by an examination of the
personal commuting patterns into and out of Cumberland and contiguous counties.                These
patterns are given in Table No. 29 and are presumed to reflect where people go each day to their
places of employment. In four of the eight counties, particularly Overton, Fentress, and Morgan
Counties, the number of daily commutes into Cumberland County substantially exceeds the
number of out commutes from Cumberland County.                     This underscores the importance of
Cumberland County as an employment location for people in these counties. It follows that start-
up entrepreneurs from these counties are also likely to look to Cumberland County for services
such as the CBI will offer.




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                                            Table No. 29
                   Major Personal Commuting Patterns Into and Out of
                         Cumberland and Contiguous Counties

                    To Cumberland       Cumberland         Contiguous     From
                                          + or -             County     Cumberland
                           127              +               Overton         23
                           676              +               Fentress       107
                           219              +               Morgan          34
                           122              -                Roane         449
                            54              -                 Rhea         153
                           310              -               Bledsoe        443
                           172              +                White         151
                           413              -               Putnam         736
                    Source: 2000 Census of Population


Conclusions
        The personal interview and business survey results that have been reviewed, as well as
the earlier success factor analysis, make strong cases of the need for greater community
nurturing of its start-up entrepreneurs through a business incubator.         Yet, the secondary
information sources examined give a mixed picture of community involvement and support for
these businesses, even suggesting that with the lack of an incubator there may have been a
missed opportunity to achieve greater local economic growth. To build on its strengths, the
community should commit to a program of identifying and supporting entrepreneurial ventures
through the CBI, and to strengthening and mobilizing certain of its lagging business nurturing
services, e.g., financial sourcing, training and counseling, mentoring and networking, plus
providing marketing and other needed business assistance. There is also evidence that the
county serves as a service center for some of its surrounding counties and that this role can be
expected to extend to the CBI.
        In other words, the CBI can become a catalyst to focus community resources more
effectively on supporting home grown businesses and garnering the positive economic growth.




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                                        Incubator Facility
        When considering the size and design of a business incubator building, it is essential to
bear in mind that, fundamentally, business incubators are service programs, not buildings. Dinah
Adkins, president and CEO of the NBIA, put it this way:
        ―No building can grow companies, provide mentoring, and assist an emerging company
        in meeting benchmarks necessary for growth. It has been many years since any
        knowledgeable person thought a building was the key innovation in business incubators.‖
        (Guide, p. 26)

Nonetheless, a well-designed building of sufficient size is a vital component in working toward
self-sustainability and in attracting a continuing stream of small businesses as tenants. It is
clearly the case that an attractive incubator facility, by itself, cannot ensure a successful
operation; but it is also true that a poorly-designed and badly-sized building will likely be a major
factor in the incubator’s eventual demise.
        The NBIA identifies a long list of factors that should be taken into account in developing a
functional incubator facility. (Guide, pp. 23-25) These include:
     1.    Zoning
     2.    Building Codes
     3.    Location
     4.    Traffic & Parking
     5.    Leasable space
     6.    Security
     7.    Insurance
     8.    Access to shared facilities
     9.    Material flow
     10.   Hazards
     11.   Staging areas
     12.   Floor loads
     13.   Telecommunications
     14.   Heating, ventilation & air conditioning
     15.   Electrical service
     16.   Plumbing

        The Cumberland County leaders who have been spearheading development of the CBI
 received a commitment from RSCC to provide land for a new facility to be located on the
 campus of the Cumberland County Higher Education Center in Crossville. This commitment of
 land, valued at $330,000, followed an extensive survey of existing buildings in Cumberland
 County that could provide suitable space. No suitable location was identified. A local
 architectural design firm then developed preliminary plans for a new structure.
        This initial design called for a 7,000 sq. ft. building with capacity for future expansion.
 However, as an outgrowth of a thorough review of relevant documents, e. g., Appalachian
 Regional Commission, ―A Survey of Business Incubators in Appalachia,‖ and discussions with
 knowledgeable persons at the Appalachian Regional Commission and at area incubators, the
 preliminary plans were revised to provide for a 10,000 sq. ft. facility to be located on the campus



Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                          33
 site as Phase 1 of the project (see Appendix C). There are also plans to add another 10,000 sq.
 ft. to the building (Phase 2) as soon as funding availability permits.
        In terms of the factors related to a successful facility, as identified by the NBIA and noted
 above, the proposed location and design of the CBI structure produces a positive outcome, as
 summarized in Table No. 30.


                                               Table 30
             Assessment of NBIA Factors for Cumberland Incubator Facility


     1. Zoning                        No zoning barriers to proposed facility
     2. Building codes                Facility will comply with all relevant codes
     3. Location                      One mile from downtown Crossville; adjacent to I-40;
                                      Direct access to RSCC classrooms and instructors
     4. Traffic & Parking             Ample parking on RSCC campus
     5. Leasable space                Phase 2 needs to be added as soon as possible
     6. Security                      RSCC security available, to be supplemented as needed
     7. Insurance                     Will be coordinated with city inspectors & architects
     8. Access to shared facilities   To be coordinated with architects
     9. Material flow                 Ground-level design provides for vertical flow
     10. Hazards                      Greenfield site; absence of all environmental constraints
     11. Staging areas                Ample parking & staging areas; vertical flow of materials
     12. Floor loads                  Ground level design to provide 200-250 lbs/sq. ft. loads
     13. Telecommunications           Secure space/lines to be coordinated with architects
     14. HV & AC                      To be coordinated with architects & city inspectors
     15. Electrical service           To be coordinated with architects and specific tenants
     16. Plumbing                     To be coordinated with architects & city inspectors
Source: NBIA, A Comprehensive Guide to Business Incubation


        A possible constraint on the basis of the key factors identified by the NBIA is the question
of leasable space. Phase 2—the addition of another 10,000 sq. ft.—will be an important element
in resolving this question. All other factors are currently positive, e.g., zoning, location, traffic &
parking, security, material flow, etc., or will be accommodated satisfactorily in the plans and
construction of the new facility.




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                            34
                                    Organizational Structure


The literature on business incubators frequently stresses the reality that every incubator has its
own unique characteristics and features. These should be recognized and capitalized upon.
There is no cookie-cutter model on which to rely. By the same token, the presence of some
1,500 business incubators now operating in North America has produced a storehouse of best
practices, many of which are captured in the NBIA’s publication, A Comprehensive Guide to
Business Incubators, a source that has been tapped in this feasibility study.
        This section of the study examines some principles and approaches in the critical area of
organizational structure and program. These observations should be viewed as suggestions, and
nothing more, for consideration by those entities charged with launching and then operating the
CBI. It is to be expected that unique features will be pursued as the CBI’s directors, managers,
and advisors strive to develop an operation that ―works‖ for Cumberland County and surrounding
areas in meeting their unique economic development needs.             (For example, the surprising
presence of motorsports related businesses in the Cumberland County area suggests the
possibility of an incubator with a special focus on that rapidly growing business sector.)
        First, a bit of history.    On December 19, 2005, a group of interested parties came
together to sign a Memorandum of Agreement (MOA) to develop the CBI. (See Appendix D.)
Signatories included:


           The City of Crossville
           Cumberland County Government
           Roane State Community College
           Tennessee Technological University
           Tennessee Technology Center at Crossville
           Cumberland County School System
           Crossville/Cumberland County Chamber of Commerce


       These entities agreed to work together in partnership to facilitate creation of the CBI and to
work collaboratively in support of its mission:
        The Cumberland Business Incubator will provide an environment of learning, mentoring,
        and support services for the incubation and growth of successful businesses that will
        create and sustain jobs in the community by leveraging the unique resources of our
        region.




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        To implement this mission, it is anticipated that the CBI would be organized as a not-for-
profit 501(c)3 corporation, either as a stand-alone entity or associated with an existing 501(c)3
corporation. The corporation would be governed by a board of directors, as set forth in the
papers of incorporation (or as an off-shoot of an existing board). Whatever the ultimate
arrangement, it is assumed that the signatories to the 2005 MOA would be represented on the
CBI’s board, along with whatever additional members were deemed desirable. Consideration, for
example, could be given to representation of the Tennessee Technology Center, the Small
Business Development Center, and SCORE.
        An alternative to this arrangement would be a direct association of the CBI with Roane
State Community College and its governing entity, the Tennessee Board of Regents (TBR). In
this instance, a subsidiary body would be needed to oversee management and operation of the
CBI under the broad authority of the TBR. Other arrangements that cannot be foreseen at this
juncture are no doubt possible.
        Whichever path the MOA signatories decide upon, the CBI’s governing entity will face a
number of crucial decisions. Hence, establishment of this entity should take place as promptly as
possible. These decisions include, among others:
                  Adoption of by-laws
                  Selection of the site for the CBI facility
                  Final development & implementation of a funding plan for facility construction
                  and operation
                  Design and construction of the CBI facility
                  Development & adoption of a policy manual to set ground rules for operation of
                  the CBI
                  Review and approval of CBI’s services and terms of usage
                  Adoption of an operating budget, including rates for rental space and business
                  services
                  Preparation of a job description for the executive director and his or her
                  selection
                  Oversight of a marketing plan for CBI

A direct association of the CBI with the TBR would affect this list of decisions since some
decisions, such as facility design and construction, would be subject to established TBR
standards.
        The board also could decide to establish a board of advisors that would represent a
range of community interests, such as business, finance, education, technology, agriculture,
manufacturing, marketing, small business owners, and the retiree community in and around
Cumberland County. The advisors can be essential links to the community support base needed
for long-term success, as well as consultants to CBI management and incubator clients on a host
of operational and business issues.




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                       36
                                        Retiree Population

        As reported in the 2000 Census of Population, 20.5 % of the population in Cumberland
County is over the age of 65.        The Tennessee state average for this age group is 12.4%.
Therefore, a potentially unique dimension of the CBI is the large population of retirees living in the
immediate area, particularly in the retirement communities of Fairfield Glade, Pleasant Hill, and
Lake Tansi. The extent of this rapid growth and the relative affluence of these communities are
reviewed in Table No. 31.


                                             Table No. 31
                   Comparison of Population and Per Capita Income in
                          Cumberland County Communities

                                             Population        Per Capita Income

                                             1990     2000           2000
                      City of Crossville     6930     8981          $18,066
                      Fairfield Glade        2209     4885          $26,403
                      Pleasant Hill           494      544          $21,384
                      Lake Tansi              NA      2621          $15,749
                    Source: Upper Cumberland Development District

        Fairfield Glade, a development of Fairfield Communities, more than doubled in population
between 1990 and 2000. Per capita income in Fairfield Glade is more than $8,000 higher than in
the City of Crossville.   Pleasant Hill, a faith-related retirement community (United Church of
Christ), has experienced more moderate growth but its per capita income exceeds that of
Crossville by more than $3,000. The per capita income of Lake Tansi is lower than both the City
of Crossville and the other two retirement communities.
        The large majority of the residents of these communities is retired and represents a
potential source of support for the CBI. This support could manifest itself in three primary ways:


         Mentoring and assisting incubator clients—many retirees are from business or the
         professions and possess considerable experience and expertise;
         Angel investors—many retirees are higher income former executives (especially in
         Fairfield Glade) with the economic potential to invest in CBI-related small businesses;
         Incubator clients—a few retirees might decide to return actively to the business world on
         their own and seek the services of the CBI.




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     Several of the personal interviewees expressed a belief that a fair number of retirees would
welcome an opportunity to help with volunteer services or return to more active involvement in
business. As one interviewee said: ―After you’ve played golf every day for six months, you’re
ready for some new challenges. The incubator ought to be able to attract and profit from this
energy and knowledge. It can be a very productive source of support.‖
        The CBI management should develop a strategy to introduce the CBI to retirees in the
community and develop concrete opportunities for their active participation.




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                      38
                              Development Costs and Funding
        Even though the general environment in Cumberland County and surrounding areas look
favorable to developing a business incubator, sufficient funding must be within reach of the
community leadership if the concept is to become reality.        The first critical element in this
calculation is the estimated cost of facility development. The section of this report (pp. 33-34)
dealing with the incubator facility examined the characteristics and attributes of locating the
10,000 sq. ft. incubator on the RSCC campus in Crossville. On the basis of the 16 criteria
established by the National Business Incubator Association, this site was evaluated to be
positive. The estimated construction cost of $130/sq. ft. in order to comply with architectural
standards of the Tennessee Board of Regents (the supervisory body of community colleges)
translates into a higher construction cost than originally planned. We recommend a detailed
breakdown of this estimate in order to identify, if possible, construction economies. There also is
the question of the need to add an additional 10,000 sq. ft. to the facility (Phase 2) as additional
funds are available.


                                            Table No. 32
            Cumberland Business Incubator Development Cost Estimates



                                      Category                                   Amount

       Facility Construction
       Land                                                             $ 330,000
       Building                                                          1,300,000
       Contingency                                                          25,000
       Total facility cost                                               1,655,000
       First year operating subsidy (including ―start-up/launch costs‖)     78,192
       Total development cost                                           $1,733,192

        Source: RSCC-Crossville




        A summary of the CBI development costs is given in Table No. 32. A detailed breakdown
of ―equipment, furnishings‖, and first-year ―launch costs‖ (contained above as part of the ―first
year operating subsidy‖) is found in Appendix E. Table No. 33 sets forth the expected funding
sources for the CBI. It must be underscored that local funds are essential for the CBI to be




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                         39
realized, both in terms of providing a valid 50 percent local match required by the EDA and to
demonstrate a firm local commitment to other potential funding sources.




                                            Table No. 33
              Cumberland Business Incubator Potential Funding Sources


                                      Category                Amount

                           Economic Development
                           Administration                    $ 650,000
                           County Government                    250,000
                           City Government                      250,000
                           Other Federal government            170,000
                           Other sources                       420,000*
                           Total Funds Available             $1,740,000
                           Source: RSCC-Crossville
                          *Includes $330,000 for incubator sited donated by RSCC


        One potential source of ―other federal government‖ funding is the Appalachian Regional
Commission (ARC). The ARC has supported incubator development in Appalachia for many
years. Other incubators in the ARC’s jurisdiction have received funding in the range of $100,000
to $200,000 over a two-year period.         ARC funds can be used for construction, equipment,
furniture, and technical assistance but not as part of the EDA match or for incubator operations.
The ARC should be approached as a potential funding source for the CBI.
        Other sources of funding can come from private sources.            RSCC has donated land
estimated to be worth $330,000 and this has been included in the total for ―other sources.‖ The
community leadership can seek contributions from corporate and institutions for the additional
$90,000 in this category. Items on the list of equipment and furnishings can be donated. It is
also possible that professions, such as architects and the general contractor, can donate all or a
portion of their regular fee. Some incubators have borrowed funds for facility construction but this
currently is not under consideration for the CBI.




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                                       Financial Sustainability

        Once the CBI is constructed, it must address the considerable challenge of operating in a
manner that will achieve sustainability in the long term and forego the annual operating subsidies
that are needed during the incubator’s early years.
        Whether or not the CBI can achieve this goal in a reasonable number of years is
revealed, at least in part, by the projected cash flows. The detailed estimate of these flows is
found in Appendix F. Table No. 34 provides a high level summary of the projected cash flows for
years 1-3.


                                                  Table No. 34
                                  Projected Cash Flows: Years 1-3

                                  Item                                        Year
                                                                    1         2         3
                Opening Cash                                    $ 30,000    $ 15,000    $ 15,000
                Total cash in (tenants, etc.)                     85,338     103,560     123,473
                Total cash available                             115,338     118,560     138,473
                Cash Out
                Administrative                                  154,530*     129,876     135,124
                Utilities/maintenance                            24,000      26,200       28,500
                Total cash out                                   178,530     156,076     163,644
                Change in cash                                  ($63,192)   ($37,516)   ($25,171)
                Partners’ Support                               $ 78,192     $52,516     $40,171

                Assumptions
                % incubator occupied                             70%         80%         90%
                Rent escalation                                   0%          5%          5%
                Sq. ft. rate—flex space/month                    1.25        1.31         1.38
                Sq. ft. rate—mfg./lab space/month                1.08        1.13         1.19
                Services rate/hour                               20.00       20.00       20.00
             Source: RSCC-Crossville
             * Includes first-year start-up and launch costs.

        The item noted as ―opening cash‖ is funding from various sources that will assist with
operations in each of the first three years. It is estimated that this underwriting of $30,000 in the
initial year can be cut in half in Years 2 & 3, since ―start-up and launch costs‖ will not be repeated
and there is an increasing flow of resources from CBI tenants and users of the incubator’s




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                            41
services. The level of ―partners’ support‖ ($78,192 in Year 1) is estimated to decrease to $52,516
in Year 2 and to $40,171 in Year 3. These numbers illustrate the importance of moving to Phase
2 of the construction plan, i.e., adding an additional 10,000 sq/ ft., as soon as possible. This
addition reduces the level of ―partners’ support‖ to approximately $12,000 in Year 4 and into a
probable break-even or profitable cash situation thereafter.
        The incubator contains both general office space (flex space) and space more
appropriate for light manufacturing or laboratory activities. The income from these sources is set
forth in Appendix F. The rate for rental space of from $1.25/sq. ft/month to $1.38 for flex space,
and from $1.08/sq. ft/month to $1.19 for light manufacturing & laboratories, reflects comparable
commercial rates quoted by the Crossville-Cumberland County Chamber of Commerce.
However, it should also be recognized that support services received by tenants are often
considered to be more important than attractive rental rates in building a financially viable
incubator.
        Occupancy rates grow gradually over the first three years, rising from 70% to 90%. It is
assumed that common areas of the incubator, e.g., reception area, conference room, restrooms,
hallways, incubator offices, will occupy about 20% of the total square footage, leaving about 80%
of the building (7,500 sq. ft.) for leasing. Revenue from ―affiliates‖ comes from participants who
are not tenants in the incubator facility but participate in the services support program.
        The incubator’s projected operating budget for Years 1-3 provides additional detail in
regard to salaries & benefits, administrative expenses, and utilities & maintenance.         It also
provides a more detailed look at the incubator’s estimated cash flow position in the first three
years. Table No. 35 presents the projected operating budget for Years 1-3.




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                                                   Table No. 35
                    Cumberland Business Incubator - Projected Operating Budget



             Item                             Year 1                  Year 2                Year 3

Salaries and Benefits*
Salaries                                      68,000                  69,360                70,747
Benefits                                      14,280                  14,566                14,857
Family Insurance                              22,000                  24,200                26,620
Total Salaries and Benefits                              $104,280                $108,126            $112,224

Operating Expenses
Administrative
Travel                                         1,000                   1,500                2,000
Printing/Duplicating                           1,200                   1,300                1,400
Office Supplies                                1,200                   1,300                1,400
Technology support                             3,000                   3,250                3,500
Web & Software                                 2,000                   2,000                2,000
Marketing and PR                               4,000                   3,000                2,000
Speakers/consultants                             500                   1,000                1,500
Equipment                                      3,000                   3,500                4,000
Postage/Shipping                                 600                     800                1,000
Petty Cash                                       600                     600                  600
Insurance                                      2,500                   2,500                2,500
Other                                          1,200                   1,000                1,000
Total Administrative                                      $20,800                $21,750             $22,900

Utlilities
Communications                                 6,000                   6,000                 6,000
Electric/Gas                                  12,000                  13,200                14,520
Maintenance
Building expenses                              6,000                   7,000                8,000
Total Util. & Maintenance                                 $24,000                 $26,200             $28,520
Total Expense                                            $149,080                $156,076            $163,644

Less revenues from tenants                                85,338                 103,560             123,473

Total Net Expense                                         $63,742                $52,516             $40,171

*                                 Salary      Benefits   Health Ins     Total
Director                         $50,000      $10,500     $11,000      $71,500
Administrative Assistant         $18,000       $3,780     $11,000      $32,780
                                 $68,000      $14,280     $22,000     $104,280
       Source: RSCC-Crossville




       Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                       43
        The incubator’s director and administrative assistant are funded on a full-time basis. It is
assumed that additional personnel can be recruited from the large retiree community in
Cumberland County or from other volunteers. It is also assumed that the CBI will be exempt from
all property taxes.
        A month-by-month budget for Years 1-3 is found in Appendix G.




`




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                                      Summary Analysis
        In the introduction to this study, four ―core elements‖ that should characterize an
incubator feasibility study were identified. These are:
        Market—including the composition of the community’s or region’s entrepreneurial pool,
        the needs of prospective clients, and whether the community can meet those needs
        Stakeholder buy-in—garnering program champions and community support
        Financial feasibility—both short term and long term
        Availability of real estate—suitable for a business incubation program

SW&A examined these core elements, along with a number of related subjects, such as the
relationship of the CBI to the Economic Development Growth Strategy developed by Crossville &
Cumberland County with the assistance of the Tennessee Valley Authority, organizational
structure, support services, and the existence of a robust retiree community.    More than 40
community leaders and potential incubator clients were interviewed. A direct mail survey was
distributed to 550 small businesses in the Cumberland County area and more than 100 written
responses were received. Development costs and funding and the incubator’s projected financial
sustainability were also analyzed.
        Drawing from these various sources, the following conclusions have been reached.


Markets
        A number of factors that create a positive market environment for launching a business
incubator and for meeting the needs of incubator tenants were assessed. These included:
            Population trends indicated a robust 9.7% population increase between 2000 and
            2005, double the growth rate for the state of Tennessee and almost twice that of the
            surrounding UCDD counties during the same period.

            New non-farm proprietors increased at a monthly average of 24.5 between 2000 and
            2005.

            Business start-ups, as reported by the Cumberland County Clerk, averaged 5 per
            month for the past two years (2005-2006).

            Retail sales in Cumberland County increased by $64,206,000 (8.9%) over the past
            three years (2003-2005).

            Bank deposits increased by $139,282,000 (23%) from 2004 to 2006.

            Jobs increased by 1,316 (6.3%) from 2003 to 2005.

            A professional/scientific/technical core of 364 persons exists in 59 business
            establishments from which the incubator’s service support personnel can be drawn.

            Three post-secondary educational institutions and an agricultural experiment station
            to provide support are located in Cumberland County.




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              A Small Business Development Center and a SCORE chapter are operating in
              Cumberland County.

              A major research facility (Oak Ridge National Laboratory), a four-year technical
              university (Tennessee Tech), and a business incubator (Technology 2020) are in
              counties adjacent to Cumberland County and have indicated a willingness to support
              the CBI.

         The personal interviews and the Cumberland Plateau business owners’ survey provided
additional corroboration regarding the core element of markets. Some of the relevant points
made by interviewees include:
              Start-up firms in Cumberland County need a physical location with a critical mass of
              basic support and shared services.

              Tennessee Tech’s Centers of Excellence are sources of innovations that potentially
              could be developed as part of the CBI.

              The large retiree community in Cumberland County is an excellent source of
              business expertise, mentors, financial angels and incubator clients.

              The incubator can assist clients in applying for initial funding through the federal
              government’s SBIR and STTR programs.

              The principal business areas where additional assistance would be welcomed include
              finding qualified workers, marketing, promotion & advertising, marketing analyses,
              and managing people.

         The Economic Development Growth Strategy identified as its principal conclusion ―the
need for the creation of new jobs with the resulting new capital investments and local
expenditures for goods & services (as) Crossville and Cumberland County’s top priority.‖
         The demand for the CBI has been clearly demonstrated. A representative sample of
local start-up entrepreneurs have indicated a strong need for business support services in the
areas of marketing, business planning, website development, mentoring, networking as well as
other areas. Services are available from the SBDC, SCORE, and RSCC to be provided through
the CBI program. The local retiree population represent a unique supplemental resource for
mentoring and assisting local entrepreneurs. In the past, the absence of a business incubator
may have been a missed opportunity for increasing local economic development and job creation.
However, through the CBI, the community now has the opportunity to focus resources more
effectively on supporting home grown businesses and garnering the positive economic growth
that is likely to result.


Stakeholder Buy-in
         The campaign to develop the CBI formally began in December 2005 when key interested
parties signed a Memorandum of Agreement to work toward its creation and operation. The key
parties included the City of Crossville, Cumberland County Government, Roane State Community


Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                       46
College, Tennessee Technological University, Tennessee Technology Center at Crossville,
Cumberland County School System and Crossville/Cumberland County Chamber of Commerce.
Subsequently, each of these entities has contributed to the development process.
           The personal interviews, covering representatives of all parties to the Memorandum of
Agreement and augmented by leaders from business, financial, medical, higher education, public
school system, retirees, and non-profit organizations, produced enthusiastic support from a large
majority of interviewees; no one expressed basic opposition.
           The Cumberland Plateau business owners’ survey revealed significant support for the
concept and utility of a business incubator:
               92% of the 100 respondents to the business owners’ survey identified themselves as
               potential users of the incubator and related services.

               76% expressed personal interest in using common resources & services and 19%
               would consider renting space and using services.

               98% of the respondents believed the incubator was a good idea.


           Roane State Community College has donated land for the incubator on the RSCC
campus in Crossville. In addition, a RSCC faculty member has been assigned to oversee the
development process nearly full time. The County and City governments are expected commit
funds to match the EDA contribution.
           The interview and consultations associated with this feasibility study have disclosed
several persons who can assume the role of ―Incubator Champion‖ once the decision to proceed
is formally made. These champions would come from the governmental, financial, and business
sectors.


Financial Feasibility
           The projected cash flow analysis establishes the level of ―partners’ support‖ at $78,192
for the initial year. This figure includes start-up expenditures for furniture & equipment ($24,250)
and a launch budget associated with marketing the incubator ($5,200) that will not recur in
subsequent years. Due to increasing rental and service income in Year 2 & 3 and the absence of
start-up/launch costs, the partner’s support will decline to $52,516 in Year 2 and $40,171 in Year
3. The addition of 10,000 sq. ft to the facility (Phase 2) makes it probable that a break-even or
profitable situation can be achieved by Year 5 and thereafter.


Availability of Real Estate
           A new incubator facility will be built on the RSCC-Crossville campus on land donated by
the college. Assuming financing is in order, this site meets all the criteria established by the




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                         47
National Business Incubator Association for incubator facilities. Architectural drawings have been
prepared for a 10,000 sq. ft. building with a Phase 2 expansion of another 10,000 sq. ft. likely.


        In summary, the economic, business, and financial environments in Cumberland County
and surrounding areas are favorable to the development and sustained operation of a business
incubator. There is evidence of strong and committed community support. SW&A recommends
that the consortium of supporters who signed the Memorandum of Agreement in December
proceed to seek funding from the U.S. Economic Development Administration, the Appalachian
Regional Commission, other federal sources and the local funding sources that will provide the
necessary 50% match and the initial operating funding support that will be needed.




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                                           Appendices

                                                             Page

     A           CBI Interviewees and Summary of Findings    50


     B           Cumberland Plateau Business Owners Survey   62


    C            CBI Site Plan & Preliminary Floor Plan      64


    D            CBI Memorandum of Agreement                 65


    E            CBI Start-up Budget                         66


    F            CBI Projected Cash Flow                     67


    G            CBI Monthly Operating Budgets, Years 1-3    68


    H            SW&A Principals’ Bios                       69




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                                           Appendix A

                      CBI Interviewees and Summary of Findings

CBI Interviewees


        Stewart, Wright & Associates, LLC, interviewed the following persons in
conducting the feasibility study for the Cumberland Business Incubator (CBI).
They are listed according to six categories of interest in the project.



      CBI partners and advisory partners regarding:
             o Why a local business incubator Cumberland County?
             o What will you provide?
             o What do you believe the communities will provide?

             Interviews:
             Brock Hill, Mayor, Cumberland County
             J.H. Graham, Mayor, City of Crossville
             Dr. Robert Bell, President, Tennessee Tech
             Dr. Gary Goff, President, RSCC
             Robert Safdie, RSCC faculty
             Brad Fox, RSCC faculty
             Carl E. Mueller, PhD, volunteer consultant
             Debbie Miller, RSCC grants coordinator
             Debbie Thurman, Tennessee Tech regional economic development
             Kevin Liska, Tennessee Tech Business Media Center

      Local business and community representatives regarding their
       support for the CBI and potential start-up firms in their industry or
       area of specialization:

             o Bio-Ag
             o Transportation/GIS/Distribution
             o Ceramics/Materials/Medical Applications

             Interviews:
             Beth Alexander, Cumberland County Chamber of Commerce
             Cosby Stone, TAP Publishing
             Jim McMakin, CEO, Cumberland Medical Center
             Ed Camera, CoLinx
             John Smith, Crossville Ceramics
             Frank Bohanon, Bilbrey Funeral Home


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             Dr. Robert Freeland (retired), UT Institute of Agriculture, Grassland
             Experiment Station
             Mark Davis


     Local bankers/business financial institutions regarding their interest
      in providing business financing to CBI start-up companies.

                 Interviews:
                 Jack Chadwell, Highland Federal Savings & Loan
                 Bill Startup, Cumberland County Bank
                 Millard Oakley, 1st National Bank
                 Randy Graham, 1st National Bank
                 Gary Green, Progressive Bank
                 Earl Carlyle, Cumberland Area Investment Corporation

     Representatives of the local community of retired business
      executives (Fairfield Glade, Pleasant Hill, Lake Tansi) regarding their
      interest and availability in assisting and mentoring start-up
      entrepreneurs.

                 Interviews:
                 Ken Burnett, Chairman, City Planning Committee and business-
                 related boards of directors
                 Ginny Nixon, former mayor, Pleasant Hill

     Recent and prospective local start-up entrepreneurs regarding their
      experiences and needs.

                 Interviews:
                 Dr. Jim Braden, entrepreneur
                 Martha & Wally Raisanen, RSCC faculty & high-tech business
                 consulting
                 Dennis Gregg, entrepreneur
                 C.W. Pemperton, entrepreneur
                 Merin Neely, entrepreneur
                 Kenny Keck, entrepreneur
                 Don Beane, entrepreneur


     Government-related potential partners & supporters.

                 Interviews:
                 Henry Bowman and Sue Dyer, Upper Cumberland Development
                 District



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                 Jim Purcell, Tennessee Technology Center
                 Arona Van Winkle, Cumberland County Public Schools
                 Tom Hunter, Appalachian Regional Commission
                 David Hughes, Appalachian Regional Commission
                 Tom Rogers, Technology 2020, Oak Ridge
                 Tom Ballard, Oak Ridge National Laboratory
                 Jutta Bangs, SBDC/RSCC
                 Dana Peterka, SCORE – Knoxville Office




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Summary of Interview Findings



The Cumberland Business Incubator (CBI) is a proposed program to help small
businesses (including start-ups and existing firms) succeed, grow, and create
jobs. The incubator is expected to include a building that houses a limited
number of small business tenants (one or two persons) that can share facilities
like photocopiers, computers, and conference rooms, along with easy access to
business assistance and loans, through workshops and one-on-one help. The
CBI building is proposed to be located on the Crossville RSCC campus. Some of
the business assistance services are also expected to be available to affiliate
companies that are not physically located in the incubator building.

In order to assess the feasibility & likely success of the CBI proposal, SW&A
talked to a cross-section of 40 persons, including government & political leaders,
academic leaders and experts, business leaders, bankers, potential incubator
tenants, community leaders, retirees, and non-profit organization leaders.
Following is a detailed summary of their collective responses.

Why the CBI?

        The community needs more homegrown business opportunities. Outside
        of construction, there are limited economic development opportunities for
        younger people.
        Start-up firms need a physical location with a critical mass of basic
        support and shared services
        The CBI is needed and will be a good thing for the community (repeated
        by every interviewee).
        Locating CBI on the RCSS campus will be good, part of the learning
        experience. Continuing education at the college can be linked to the CBI.
        Will build on the college’s traditional role of training workers by adding
        entrepreneurship training.
        It can support and nurture local start-up businesses by providing the
        following to its tenants and affiliates:
            o Help finding investors
            o Affordable, flexible rent
            o Mentors who understand their business and can troubleshoot
            o Link to resources outside the local area
            o Marketing assistance
            o Patent help to protect ideas and inventions
            o Business development training courses and workshops on:
                    Business plan preparation
                    Marketing
                    Financing
                    Business management skills



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        The CBI shouldn’t wait for a building to be built before beginning to
        provide these business support services.
        The greatest need of start-ups is connections with people who already
        know how to do what they want to do, i.e., mentoring.
        The CBI should result in local people thinking positively and cohesively
        about themselves and how to make their own ideas succeed. It should
        also contribute to and be part of a larger local economic development
        strategy.

        Possible CBI Niche -- Volunteer retiree assisted business incubator
        (resident expertise, mentors, investors, participants, links to
        business/industry contacts)
            o Also leverage resources at RSCC, Tennessee Technological
              University, and Oak Ridge National Laboratory.

CBI Memorandum of Agreement

        On December 19, 2005, representatives of the following entities (initiating
        partners) signed a memorandum of agreement to work together to create
        the CBI to ―provide an environment of learning, mentoring and support
        services for the incubation and growth of successful businesses that will
        create and sustain jobs in the community by leveraging the unique
        resources of our region‖:
           o The City of/Crossville
           o Cumberland County Government
           o Tennessee Technology University
           o Roane State Community College
           o C/C.C. Chamber of Commerce
           o Cumberland County School System
           o TN Technology Center at Crossville

Potential CBI Tenants or Affiliates

        One interviewee recently relocated his out of state electronics services
        start-up company to Crossville to grow, diversify its services, and broaden
        its customer base. The company needs help now with marketing,
        targeted advertising, accounting, other support services, plus mentoring
        and networking.
        Another interviewee is a part-time photographer and would like to start a
        full-time photography business. His photographic skills are established,
        but he needs business planning and management assistance to start his
        photography business.
        Another interviewee intends to open a studio for selling artistic pottery and
        jewelry she creates.




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        Another interviewee produces cabinetry for homes and offices. He needs
        capital to expand and acquire more advanced machinery, as well as
        advice in marketing and distribution.
        Another interviewee runs a native-plant nursery and also is developing
        vegetable oil as a motor fuel. He is also converting vehicles to run on
        vegetable oil. He provides consulting services on energy conservation,
        lighting, and solar power. He badly needs a marketing plan.
        Another interviewee has developed a cooling system for clothing that is
        being used widely in NASCAR and under police bulletproof vests. He is
        currently adapting the system to cooling seats in golf carts. He also needs
        marketing and manufacturing assistance.
        There are other local examples of start-up businesses with current needs.

Community Business Financing Support

        A Local Bank President
           o The CBI will work. We can get some investors to provide seed
              money.
           o Our bank will invest in new business ventures.
           o We’re more oriented to commercial loans than others.

        The Cumberland Area Investment Corporation (CAIC) is a special local
        source of low interest, long-term capital business loans. It is a coalition of
        area banks that makes collateralized loans to local businesses using both
        local and federal funds. CBI companies would be eligible and would be
        viewed as better loan risks because of the CBI support they receive.
        Most local banks are not doing SBA loans because of the specialized
        requirements. One interviewee said, ―they are just too much trouble for
        us‖.
        The local business community raised money for the Crossville RSCC
        campus. With effective leadership, the CBI is likely to get the same kind of
        response.

The Crossville Community

        Crossville is a growing community; its residents have an excellent quality
        of life.
        It is located in a ―rural corridor’‖ equidistant from Nashville, Knoxville, and
        Chattanooga.
        The community is still small, likes small business; most businesses are not
        large.
        A large percent of the population between 18 and 45 does not have a high
        school diploma.
        There is a large number of unskilled workers, and wage levels tend to be
        low.



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        The Chamber of Commerce seeks business diversity; doesn’t want the
        community to be dependent on one large industry.
        Many young families w/children moving into the community creating a
        good market for creating companies. Some have moved because their
        parents have retired here.
        There is a long list of recently issued business licenses in the county.
           Crossville is an eclectic community.
           Crossville is the national headquarters of the U.S. Chess Association.
           There are political differences between the leadership of the city and
           the county; the two jurisdictions need to work together better. The city
           has more discretionary money than the county.

Retiree Community/Volunteers

        There is a strong & diverse base of retirees in and around Crossville.
        Everything they need is here, i.e., health care, recreation, good
        transportation connections, etc.
        Fairfield Glade and the other retirement communities contain many middle
        and upper level management people. There is a wealth of retiree
        knowledge there.
        Very active volunteers in Pleasant Hill.
        Lake Tansi residents are much more laid back and less organized.
        Retirees come with a high level of volunteerism, with their passions, and
        are anxious to share their knowledge.
        Some retirees want to retire and spouse does not. Incubator would
        provide numerous opportunities for the latter.
        Some retirees are potential investors in incubator businesses; a few might
        be interested in starting a business in the incubator.
        Retirees are looking for opportunities to be involved in the community.
        Many can be expected to respond as mentors and other supporters of the
        CBI when asked (repeated by many interviewees).
        For example, over 150 volunteers serve thousands of hours each year at
        the local hospital.
        Also, volunteers make the Cumberland County Playhouse successful – a
        $14 million local impact.

                               Getting the CBI Word to Retirees

            o Need to let the retirees know about CBI; recruit them as volunteers.
            o Best reached through their community organizations/service clubs
              and the community newsletters.
            o Start with a small active group and the word will spread.




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Community Business Focus Areas

                         Transportation-Logistics/GIS/Distribution

            o One transportation company is in Crossville because the
              community is at the center of its distribution area. Natural off spring
              businesses to expect:
                        Forklift maintenance
                        Dock doors
                        Fabrication, welding, machine shops
                        Truck driver training
                        Computer applications support technicians
                        Pallet and box manufacturing
                        Third party warehousing and distribution
            o These could be CBI companies.

                                          Bio-Agriculture

            o Biomass is a marriage between forestry and agronomy.
            o At one time the Cumberland Plateau was covered in switch grass.
            o Switch grass could again be grown on the plateau for biomass fuel
              production.
            o Several different kinds of specialized contractors would be needed
              for harvesting and processing (similar to those used in bean
              harvesting).
            o These could be CBI companies.
            o Local resources: UT Agricultural Experiment Station and TTU
              School of Agriculture




                          Ceramics/Materials/Medical Applications

            o Two tile companies are located in Crossville primarily because of
              good truck transportation advantages for bring raw material in and
              moving finished product out.
            o The local ceramics companies are tile production facilities and not
              ceramics research facilities (although a limited amount of R&D is
              conducted related to developing new ceramic styles, colors, and
              finishings).
            o Medical ceramics applications have been mentioned yet they are
              quite different from tile production.

                                                Other




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            o The large, local retiree community requires a lot of service
              companies and workers

Local Education & Training Support

    Cumberland County Schools

            High School courses relevant to CBI
               o Home health care
               o Auto repair; mechanics, body
               o Agriculture – greenhouse, cattle, sheep
               o Building trades
               o Key boarding, Microsoft works (certificate offered)
               o Business courses – accounting, business math, economics

            The Cumberland County School System is teaming with RSCC on dual
            enrollment. Students could team with CBI tenants/affiliates and
            receive high schools plus earn money.
            High school student tours of CBI would expose them to workforce
            applications.
            Retirees seek out the schools to help as tutors in small groups and with
            individuals.

                                     Tennessee Technology Center

            The Tennessee Technology Center provides training in the following
            14 vocational areas that can support CBI tenants and affiliates:
               o      Auto body technology
               o      Auto Technology
               o      Brick, block & stone masonry
               o      Business systems technology
               o      Computer-aided drafting technology
               o      Computer operations technology
               o      Electricity technology
               o      Electronics technology
               o      Heating, ventilation & air conditioning technologies
               o      Industrial maintenance technology
               o      Machine tool technology
               o      Practical nursing
               o      Surgical technology
               o      Welding technology

            TTC could make product prototypes for CBI tenants and affiliates on a
            limited basis.
            TTC can train future employees for CBI companies.
            Presently, one retiree volunteer teaches at TTC.




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        Tennessee Technology University (TTU)

        TTU has a presence and a partnership with RSCC on the Crossville
        campus.
        TTU has a long history of providing support services for entrepreneurs that
        will be extended to CBI tenants and affiliates.
            o Emerging technology sourcing
                    Commercializable products & services
            o Mentoring by experienced entrepreneurs
            o Joint R&D projects, i.e., SBIR/STTR
            o Prototype product development
            o Business management & marketing assistance

        Support from TTU College of Business, Media Center, and three Centers
        of Excellence
            o Manufacturing/Engineering
            o Energy Systems
            o Water Quality

        Media Center will soon launch a series of virtual tools and templates that
        can be shared with CBI tenants and affiliates via the Internet on a
        subscription fee basis.
        (Suggestion: Ask the TTU Media Center prepare a presentation for use in
        publicizing the CBI program.)

        Roane State Community College Support

                 CBI building site located on Crossville campus.
                 Small Business Development Center staff.
                 Faculty release time to promote CBI and provide business support
                 to client companies.
                 Cooperate with SCORE to provide business support.
                 Seek grants for capital funding.
                 College budget for utilities and housekeeping.

                 RSCC Goals for the CBI

                 o Support tenants housed in CBI.
                 o Support CBI affiliates housed elsewhere in community.
                 o In first 36 months generate 10 to 15 new jobs/employees as a
                   beginning of increased employment opportunities and wage
                   levels in the RSCC service area.
                 o A ―half-way house‖ location may be needed for CBI ―graduates‖
                   to make sure they stay in the community.




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                 o County developing a 771-acre airport industrial park jointly with
                   Roane and Morgan Counties. To be known as ―Mountains of
                   Technology‖ it will be a place where CBI ―graduates‖ can locate.
                 o CBI needs to be a 501(c)(3) organization, not part of the state
                   community college system.
                 o A search will be needed to find a CBI director (some believe a
                   local person can be identified).

Other Factors to Consider

            A critical mass of strong community support and hands-on involvement
            will be essential.
            CBI organizational structure and management will be key.
                o Tech 2020 is an available resource/potential partner.

            The Crossville economy is not generally conducive to launching
            technology-based small businesses.
            CBI tenants and affiliates are likely to be a blend of technology and
            non-technology entrepreneurial companies.
               Tenant/affiliate selection criteria critical to CBI success
               o Solid product ideas
               o Entrepreneurial drive, commitment
               o Business management and marketing skills
               o First round and potential second round financing in place
               o Growth potential evident

Outside Sources of Assistance and Funding for Start-up Companies

                                              SCORE

        SCORE "Counselors to America's Small Business" is a nonprofit
        association dedicated to entrepreneur education and the formation, growth
        and success of small business nationwide. SCORE is a resource partner
        with the U.S. Small Business Administration (SBA).

            o SCORE has 389 chapters in locations throughout the United States
              and its territories, with 10,500 volunteers nationwide. Both working
              and retired executives and business owners donate time and
              expertise as business counselors. SCORE was founded in 1964.
            o Cumberland County has recently been placed in the service area of
              the East TN SCORE chapter, as are all of the other RSCC service
              area counties. Dana Peterka, who lives in Kingston, is the regional
              director. He is the contact point for linking CBI tenants and
              affiliates with SCORE volunteers.




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                                            SBIR/STTR

        SBIR is a program of the U.S. government that encourages and assists small
        business in exploring their technological potential and provides the incentive to
        profit from its commercialization. By reserving a specific percentage of federal
        R&D funds for small business, SBIR protects the small business and enables it to
        compete on the same level as larger businesses. SBIR funds the critical startup
        and development stages and it encourages the commercialization of the
        technology, product, or service, which, in turn, stimulates the U.S. economy.
        Since its enactment in 1982, as part of the Small Business Innovation
        Development Act, SBIR has helped thousands of small businesses to compete
        for federal research and development awards. Their contributions have
        enhanced the nation's defense, protected our environment, advanced health
        care, and improved our ability to manage information and manipulate data.
        STTR is another important small business assistance program that expands
        funding opportunities in the federal innovation research and development arena.
        Central to the program is expansion of the public/private sector partnership to
        include joint venture opportunities for small business and the nation's premier
        nonprofit research institutions. STTR is a highly competitive program that
        reserves a specific percentage of federal R&D funding for award to small
        business and nonprofit research institution partners. Small business has long
        been where innovation and innovators thrive. But the risk and expense of
        conducting serious R&D efforts can be beyond the means of many small
        businesses. Conversely, nonprofit research laboratories are instrumental in
        developing high-tech innovations. But frequently, innovation is confined to the
        theoretical, not the practical. STTR combines the strengths of both entities by
        introducing entrepreneurial skills to high-tech research efforts. The technologies
        and products are transferred from the laboratory to the marketplace. The small
        business profits from the commercialization, which, in turn, stimulates the U.S.
        economy.
        SBIR and STTR conferences are held regularly each year to provide information
        about the programs and provide opportunities for those interested to speak
        directly with representatives of the various participating federal agencies.
        More information about SBIR and STTR can be found at www.sba.gov/SBIR.
        SBIR and STTR grants are highly competitive and professional grant writers
        often receive the many of the available grant awards.




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                                           Appendix B

                    Cumberland Plateau Business Owners Survey




                                         Introduction

      A small business incubator is being considered that would serve
the Cumberland Plateau area. An incubator is a program that helps
small businesses (including start-ups and existing firms) succeed. The
incubator includes a building that houses a limited number of small
businesses (usually one or two person firms) that can share facilities
with other tenants such as photocopiers, computers, and conference
rooms, along with easy access to business assistance and loans,
through workshops and one-on-one help. Sometimes this business
assistance is also available to companies that are not physically
located in the incubator building (affiliates).

      This survey is being conducted as part of a feasibility study
supported by, The City of Crossville; Cumberland County Government;
Crossville and Cumberland County Chamber of Commerce; Fentress
County Chamber of Commerce, Cumberland County School System;
Tennessee Technology Center at Crossville; Tennessee Technological
University; and Roane State Community College. The consulting firm
of Stewart, Wright & Associates, LLC, of Knoxville is preparing the
feasibility study.

      Your response to this survey is very important! We need to know
your opinion as to whether the proposed incubator is needed and
whether it can succeed. Please return this short survey today. You can
refold and seal this survey with the return address showing.

      If you have any questions about this survey, please contact Brad
Fox, Assistant Professor, Roane State Community College
(foxbj@roanestate.edu or 931-456-9880). Many thanks for your
assistance and interest.

                     ______________________________
              Dr. Gary Goff, President Roane State Community College




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                        Cumberland Plateau Business Owners Survey

1. Are you presently a business owner?             Yes        No        (circle one)
2. If you are presently an owner, please describe in one sentence the nature of your
business. _______________________________________________________________________
_________________________________________________________________________________
3. How would you rate the Cumberland Plateau area as a place to start and run a small
business?       Excellent        Very Good          Good           Fair         Poor (circle one)
4. In what areas of your business would you welcome more help? (circle all that apply)
Marketing                         Marketing analysis                    Managing people
Financial analysis                Securing financing                    Business planning
Legal advice                      Finding qualified workers             Intellectual property
Manufacturing processes           Product development                   Business insurance
Promotion & advertising           Competitive strategies                Industrial sales
New product commercialization
Other: _________________________________________________________________________
5. Is a business incubator, and its associated business services, something your
business might use?       Yes                 No             (circle one)
6. Which description best describes your level of interest in the proposed incubator?
(Indicate your most likely preference)
                  I would consider renting space in the incubator for my business.
                  I would consider using the common resources and business assistance
                  services of the incubator but probably not rent space.
                  I probably would not be interested in either renting space or using
                  common resources and business assistance services.
6. If you might be interested in renting space in the incubator, which of the following
best describes the type(s) of space you would need? (Indicate all that apply)
Office space                      Production/assembly space                    Retail space
Service space                     Light laboratory space                       Storage
Commercial kitchen                Arts/crafts studio                           Loading dock
Other: _____________________________________________________________________
7. Overall, do you think starting a business incubator in Cumberland Plateau is a good
idea?       Yes                     No                   (circle one)



Name______________________________ Company_________________________________
Address________________________________________________________________________
Phone___________________________             Email____________________________________




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                                            63
                                           Appendix C

                         CBI Site Plan & Preliminary Floor Plan




Stewart, Wright & Associates, LLC – Knoxville, Tennessee          64
                                           Appendix D

                             CBI Memorandum of Agreement




Stewart, Wright & Associates, LLC – Knoxville, Tennessee   65
                                           Appendix E

                                      CBI Start-up Budget




Stewart, Wright & Associates, LLC – Knoxville, Tennessee    66
Cumberland Business Incubator - Start-Up Budget

           Start-Up Budget
Furniture/Equip./General Budget*
           Item - Unit - Cost                              Total
           Computers 6 @ $1,500                              9,000
           Color Laser Printer 1 @ $2,000                    2,000
           Software - - - $2,000                             2,000
           Fax Machine 1 @ $350                                350
           Typewriter 1 @ $200                                 200
           Television/DVD-VCR 1 @ $500                         500
           Telephone Switchboard 1 @ $2,000                  2,000
           Desks 2 @ $250                                      500
           Office Chairs 4 @ $150                              600
           File Cabinets 4 @ $230                              920
           Conference Table 1 @ $750                           750
           Conference Chairs 8 @ $200                        1,600
           Bookshelf 4 @ $175                                  700
           Handtruck 1 @ $150                                  150
           Coffee Pot 1 @ $80                                    80
           Microwave 1 @ $150                                  150
           Refrigerator 1 @ $500                               500
           Mailbox Unit 1 @ $100                               100
           Shipping Scale 1 @ $200                             200
           Mail Scale 1 @ $100                                 100
           3 Hole Punch 1 @ $50                                  50
           Folding Tables 4 @ $100                             400
           Program Chairs 10 @ $50                             500
           White Boards 4 @ $100                               400
           Miscellaneous - - - $1,000                          500
                                   Total Furn/Equip Cost              $24,250
Launch Budget
           Item
           Web site development                              2,500
           Workshop promotion                                1,000
           Stationary                                          250
           Office Supplies                                     150
           Postage                                             300
           Newspaper                                           500
           Miscellaneous                                       500
                                      Total Launch Cost                $5,200
                       Total Start-Up Cost**                          $29,450

           * whenever available furniture/equip. donations will be accepted
           ** donations will be solicited to reduce total start-up cost
                                               Appendix F

                                        CBI Projected Cash Flow




Stewart, Wright & Associates, LLC – Knoxville, Tennessee          67
Cumberland Business Incubator - Projected Cash Flows

                                                                                 Year
            Item                                                        1          2         3
               1   Opening Cash                                       $30,000    $15,000    $15,000

              2    Cash In (Revenues from Tenants)
              3    Rental-Flex. Space (2,990 sq. ft.)                  31,395     37,602     44,563
              4    Rental-Mfg/Lab (4,850 sq. ft.)                      43,999     52,613     62,332
              5    Comn Area Maint. Charge (1,960 sq. ft.)              2,744      2,305      2,178
              6    Services in-house                                    2,400      3,840      4,800
              7    Services outreach                                    4,800      7,200      9,600
              8                  Total Cash In                        $85,338   $103,560   $123,473
              9    Total Cash Available (item 1 + 7)                 $115,338   $118,560   $138,473

             10    Cash Out
                                  Administrative
             11    Start-up                                            29,450          0          0
             12    Salaries                                           104,280    108,126    112,224
             13    Travel                                               1,000      1,500      2,000
             14    Printing/Duplicating                                 1,200      1,300      1,400
             15    Office Supplies                                      1,200      1,300      1,400
             16    Technology support                                   3,000      3,250      3,500
             17    Web & Software                                       2,000      2,000      2,000
             18    Marketing and PR                                     4,000      3,000      2,000
             19    Speakers/consultants                                   500      1,000      1,500
             20    Equipment                                            3,000      3,500      4,000
             21    Postage/Shipping                                       600        800      1,000
             22    Petty Cash                                             600        600        600
             23    Insurance                                            2,500      2,500      2,500
             24    Other                                                1,200      1,000      1,000
             25                             Total Administrative     $154,530   $129,876   $135,124
                                     Utlilities
             26    Communications                                       6,000      6,000      6,000
             27    Electric/Gas                                        12,000     13,200     14,520
                                  Maintenance
             28    Building expenses                                    6,000      7,000      8,000
             29                               Total Util. & Maint.     24,000     26,200     28,520
             30          Total Cash Out (item 24 + 28)               $178,530   $156,076   $163,644
             31    Change in Cash (item 8 - 29)                      -$63,192   -$37,516   -$25,171
             32    Partners' Support                                  $78,192    $52,516    $40,171

             33    % incubator occupied                                70%        80%       90%
             34    Rent escalation                                      0          5%        5%
             35    Sq. Ft. rate Flex Space per month (15/12)          $1.25      $1.31     $1.38
             36    Sq. Ft. rate Mfg./Lab per month (13/12)            $1.08      $1.13      $1.19
             37    Services rate/hour                                $20.00     $20.00     $20.00
                                           Appendix G

                      CBI Monthly Operating Budgets, Years 1-3




Stewart, Wright & Associates, LLC – Knoxville, Tennessee         68
Cumberland Business Incubator - Projected Operating Budget
                         Salary     Benefits   Fam. Ins Total
Director                   $50,000     $10,500 $11,000 $71,500
Administrative Assistant   $18,000      $3,780 $11,000 $32,780
                           $68,000     $14,280 $22,000 $104,280

Item                                  Year 1              Year 2              Year 3
    Salaries and Benefits
Salaries                              68,000              69,360              70,747
Benefits                              14,280              14,566              14,857
Family Insurance                      22,000              24,200              26,620
   Total Salaries and Benefits                 $104,280            $108,126            $112,224

     Operating Expenses
        Administrative
Travel                                 1,000               1,500               2,000
Printing/Duplicating                   1,200               1,300               1,400
Office Supplies                        1,200               1,300               1,400
Technology support                     3,000               3,250               3,500
Web & Software                         2,000               2,000               2,000
Marketing and PR                       4,000               3,000               2,000
Speakers/consultants                     500               1,000               1,500
Equipment                              3,000               3,500               4,000
Postage/Shipping                         600                 800               1,000
Petty Cash                               600                 600                 600
Insurance                              2,500               2,500               2,500
Other                                  1,200               1,000               1,000
         Total Administrative                   $20,800             $21,750             $22,900

           Utlilities
Communications                         6,000               6,000               6,000
Electric/Gas                          12,000              13,200              14,520
         Maintenance
Building expenses                      6,000               7,000               8,000
          Total Util. & Maint.                  $24,000             $26,200             $28,520
                Total Expense                  $149,080            $156,076            $163,644

less Revenues from Tenants                       85,338             103,560             123,473

Total Net Expense                               $63,742             $52,516             $40,171
 Cumberland Business Incubator
 Year 1 Operating Budget             1          2         3         4        5         6       7         8           9         10       11       12        Total
             Item                 January    February    March     April    May      June     July     August    September   October November December    Year 1
        Salaries and Benefits
             Salaries                5,667       5,667     5,667    5,667    5,667    5,667    5,667     5,667       5,667     5,667    5,667     5,663    68,000
             Benefits                1,190       1,190     1,190    1,190    1,190    1,190    1,190     1,190       1,190     1,190    1,190     1,190    14,280
             Family Insurance        1,833       1,833     1,833    1,833    1,833    1,833    1,833     1,833       1,833     1,833    1,833     1,837    22,000
al Salaries and Benefits             8,690       8,690     8,690    8,690    8,690    8,690    8,690     8,690       8,690     8,690    8,690     8,690   104,280

       Operating Expenses
          Administrative
           Travel                       83         83         83       83       83       83       83        83          83        83       83        83     1,000
           Printing/Duplicating        100        100        100      100      100      100      100       100         100       100      100       100     1,200
           Office Supplies             100        100        100      100      100      100      100       100         100       100      100       100     1,200
           Technology support          750          0          0      750        0        0      750         0           0       750        0         0     3,000
           Web & Software            1,000          0          0        0        0        0    1,000         0           0         0        0         0     2,000
           Marketing and PR            500          0        500        0      500        0      500         0         500       500      500       500     4,000
           Speakers/consultant         100          0          0      100        0        0      100         0           0       100        0       100       500
           Equipment                   250        250        250      250      250      250      250       250         250       250      250       250     3,000
           Postage/Shipping             50         50         50       50       50       50       50        50          50        50       50        50       600
           Petty Cash                   50         50         50       50       50       50       50        50          50        50       50        50       600
           Insurance                 2,500          0          0        0        0        0        0         0           0         0        0         0     2,500
           Other                       100        100        100      100      100      100      100       100         100       100      100       100     1,200
   Total Administrative              5,583        733      1,233    1,583    1,233      733    3,083       733       1,233     2,083    1,233     1,333    20,800

              Utlilities
            Communications             500         500       500      500      500      500      500       500         500       500      500       500     6,000
            Electric/Gas             1,000       1,000     1,000    1,000    1,000    1,000    1,000     1,000       1,000     1,000    1,000     1,000    12,000
           Maintenance
            Building expenses          500         500       500      500      500      500      500       500         500       500      500       500     6,000
    Total Util. & Maint.             2,000       2,000     2,000    2,000    2,000    2,000    2,000     2,000       2,000     2,000    2,000     2,000    24,000
        Total Expense               16,273      11,423    11,923   12,273   11,923   11,423   13,773    11,423      11,923    12,773   11,923    12,023   149,080

            less Revenues from       5,334       5,334     5,334    7,112    7,112    7,112    7,112     7,112       7,890     8,630    8,630     8,630    85,338
               Tenants
            Total Net Expense      $10,940      $6,090    $6,590   $5,162   $4,812   $4,312   $6,662    $4,312      $4,033    $4,143   $3,293    $3,393   $63,742
 Cumberland Business Incubator
 Year 2 Operating Budget            13         14        15        16      17        18       19        20         21       22       23       24       Total
             Item                 January    February   March     April    May      June     July     August    September October November December   Year 2
        Salaries and Benefits
             Salaries                5,780      5,780     5,780    5,780    5,780    5,780    5,780     5,780      5,780    5,780    5,780    5,780    69,360
             Benefits                1,214      1,214     1,214    1,214    1,214    1,214    1,214     1,214      1,214    1,214    1,214    1,214    14,566
             Family Insurance        2,017      2,017     2,017    2,017    2,017    2,017    2,017     2,017      2,017    2,017    2,017    2,017    24,200
al Salaries and Benefits             9,011      9,011     9,011    9,011    9,011    9,011    9,011     9,011      9,011    9,011    9,011    9,011   108,126

       Operating Expenses
          Administrative
           Travel                      125        125       125      125      125      125      125       125        125      125      125     125      1,500
           Printing/Duplicating        108        108       108      108      108      108      108       108        108      108      108     108      1,300
           Office Supplies             108        108       108      108      108      108      108       108        108      108      108     108      1,300
           Technology support          813          0         0      813        0        0      813         0          0      813        0       0      3,250
           Web & Software            1,000          0         0        0        0        0    1,000         0          0        0        0       0      2,000
           Marketing and PR            500          0       500        0      500        0      500         0        500        0      500       0      3,000
           Speakers/consultant           0        250         0      250        0      250        0       250          0        0        0       0      1,000
           Equipment                   292        292       292      292      292      292      292       292        292      292      292     292      3,500
           Postage/Shipping             50         50        50       50      100      100       50        50        100       50       50     100        800
           Petty Cash                   50         50        50       50       50       50       50        50         50       50       50      50        600
           Insurance                 2,500          0         0        0        0        0        0         0          0        0        0       0      2,500
           Other                        50        100       100       50      100       50      100       100        100      100      100      50      1,000
   Total Administrative              5,596      1,083     1,333    1,846    1,383    1,083    3,146     1,083      1,383    1,646    1,333     833     21,750

              Utlilities
            Communications             500        500       500      500      500      500      500       500        500      500      500      500     6,000
            Electric/Gas             1,100      1,100     1,100    1,100    1,100    1,100    1,100     1,100      1,100    1,100    1,100    1,100    13,200
           Maintenance
            Building expenses          583        583       583      583      583      583      583       583        583      583      583      583     7,000
    Total Util. & Maint.             2,183      2,183     2,183    2,183    2,183    2,183    2,183     2,183      2,183    2,183    2,183    2,183    26,200
        Total Expense               16,790     12,277    12,527   13,040   12,577   12,277   14,340    12,277     12,577   12,840   12,527   12,027   156,076

            less Revenues from       8,630      8,630     8,630    8,630    8,630    8,630    8,630     8,630      8,630    8,630    8,630    8,630   103,560
               Tenants
            Total Net Expense       $8,160     $3,647    $3,897   $4,410   $3,947   $3,647   $5,710    $3,647     $3,947   $4,210   $3,897   $3,397   $52,516
 Cumberland Business Incubator
 Year 3 Operating Budget            25         26        27        28      29        30       31        32         33       34       35       36       Total
             Item                 January    February   March     April    May      June     July     August    September October November December   Year 3
        Salaries and Benefits
             Salaries                5,896      5,896     5,896    5,896    5,896    5,896    5,896     5,896      5,896    5,896    5,896    5,896    70,747
             Benefits                1,238      1,238     1,238    1,238    1,238    1,238    1,238     1,238      1,238    1,238    1,238    1,238    14,857
             Family Insurance        2,218      2,218     2,218    2,218    2,218    2,218    2,218     2,218      2,218    2,218    2,218    2,218    26,620
al Salaries and Benefits             9,352      9,352     9,352    9,352    9,352    9,352    9,352     9,352      9,352    9,352    9,352    9,352   112,224

       Operating Expenses
          Administrative
           Travel                      167        167       167      167      167      167      167       167        167      167      167     167      2,000
           Printing/Duplicating        117        117       117      117      117      117      117       117        117      117      117     117      1,400
           Office Supplies             117        117       117      117      117      117      117       117        117      117      117     117      1,400
           Technology support          875          0         0      875        0        0      875         0          0      875        0       0      3,500
           Web & Software            1,000          0         0        0        0        0    1,000         0          0        0        0       0      2,000
           Marketing and PR            333          0       333        0      333        0      333         0        333        0      333       0      2,000
           Speakers/consultant         375          0         0      375        0        0      375         0          0      375        0       0      1,500
           Equipment                   333        333       333      333      333      333      333       333        333      333      333     333      4,000
           Postage/Shipping             83         83        83       83       83       83       83        83         83       83       83      83      1,000
           Petty Cash                   50         50        50       50       50       50       50        50         50       50       50      50        600
           Insurance                 2,500          0         0        0        0        0        0         0          0        0        0       0      2,500
           Other                        50        100       100       50      100       50      100       100        100      100      100      50      1,000
   Total Administrative              6,000        967     1,300    2,167    1,300      917    3,550       967      1,300    2,217    1,300     917     22,900

              Utlilities
            Communications            500        500       500       500     500       500      500       500        500      500      500     500      6,000
            Electric/Gas             1210       1210      1210      1210    1210      1210     1210      1210       1210     1210     1210    1210     14,520
           Maintenance
            Building expenses          667        667       667      667      667      667      667       667        667      667      667      667     8,000
    Total Util. & Maint.             2,377      2,377     2,377    2,377    2,377    2,377    2,377     2,377      2,377    2,377    2,377    2,377    28,520
        Total Expense               17,729     12,695    13,029   13,895   13,029   12,645   15,279    12,695     13,029   13,945   13,029   12,645   163,644

            less Revenues from      10,289     10,289    10,289   10,289   10,289   10,289   10,289    10,289     10,289   10,289   10,289   10,289   123,473
               Tenants
            Total Net Expense       $7,439     $2,406    $2,739   $3,606   $2,739   $2,356   $4,989    $2,406     $2,739   $3,656   $2,739   $2,356   $40,171
                                           Appendix H

                                     SW&A Principals’ Bios



                                    John G. Stewart, Ph.D.

        John G. Stewart is presently a partner in Stewart, Wright & Associates,
LLC, a management-consulting firm located in Knoxville, Tennessee. He has
been associated with the Georgian Institute of Public Administration in Tbilisi,
Republic of Georgia, where he served as founding co-director in 1995 and as
visiting professor (1995-2001). He has served as consultant to the National
Aeronautics and Space Administration (1980 – 2001) in association with the
Aerospace Safety Advisory Panel. He previously served as executive director of
the Consortium of Research Institutions in Knoxville. Prior to these assignments,
Stewart served as Vice President of TVA for Economic and Community
Development and Assistant General Manager (Administration) at the Tennessee
Valley Authority (1980-93). In this latter capacity he directed TVA’s Strategic
Planning and Evaluation that measured performance in all TVA’s programs
supported with funds appropriated by the U.S. Congress. Prior to TVA, Stewart
served as staff director of two subcommittees in the U.S. Senate and as Director
of Communications, Democratic National Committee. He was Legislative
Assistant and subsequently Executive Assistant to Senator and Vice President
Hubert H. Humphrey (1962-69). Stewart is a Fellow of the National Academy of
Public Administration and a recipient of its National Public Service Award. In
2005, he was selected as ―Practitioner of the Year‖ by the Southeastern
Conference for Public Administration. He has been selected as a Fulbright
Professor and a Fellow, Institute of Politics, Harvard University. He holds a Ph.D.
degree in political science from the University of Chicago and a B.A. from
Colgate University. He recently published a book, Witness to the Promised Land,
(Seven Locks Press) that analyzes the programmatic achievements of the mid-
1960s in relation to contemporary activities by the legislative and executive
branches of the U.S. Government.



                                  H. Brown Wright, M.R.C.P

H. Brown Wright is a partner in Stewart, Wright & Associates, LLC, a
management-consulting firm located in Knoxville, Tennessee serving business
and public sector clients in the areas of policy and project development, project
evaluation, business and economic initiatives, and strategic planning. Since
2000, SW&A has served as the independent evaluators for several educational
development projects funded by the U. S. Department of Education and the
National Science Foundation at the University of Tennessee and Nashville State
Community College. In this role, the firm is responsible for conducting formative


Stewart, Wright & Associates, LLC – Knoxville, Tennessee                         69
and summative evaluations of the projects and providing annual as well as final
evaluation reports to the project management. Previously, Wright directed
Regional Planning and Technology Transfer and Commercialization at the
Tennessee Valley Authority. In these capacities, he developed and carried out
new program initiatives such as socioeconomic impact assessment and
evaluation techniques for large construction projects as well as the transfer and
commercialization of Federal technologies and technological innovation by
private sector companies. He was the Southeast Region Coordinator for the
Federal Laboratory Consortium for Technology Transfer (FLC) and a Technology
Counselor with the NASA Southeast Regional Technology Transfer Center.
Wright is a Charter Member of the American Institute of Certified Planners and
recipient of the Harold Metcalf Award for sustained significant service to the FLC.
He holds a B.S. degree from the University of Tennessee and a Master of
Regional and City Planning degree from the University of Oklahoma.




                                              #####




Stewart, Wright & Associates, LLC – Knoxville, Tennessee                         70

								
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