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ECDI Launches Kitchen Incubator Program

Walker Evans Walker Evans
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The Economic and Community Development Institute has been helping entrepreneurs in Columbus to start up and grow their businesses for the past five years. ECDI is now currently rolling out a new program to provide a wider range of development assistance. Their new Growing Entrepreneurs Initiative is launching with a focus on food-related industries and provides assistance to folks looking to take their kitchen ideas and turn them into a full time business. We sat down with Bob Leighty and Amy Szabo recently to talk about this new “Kitchen Incubator” program and what it can mean both for entrepreneurs as well as the community as a whole.

Walker Evans: For those who are unfamiliar with ECDI, can you give us a quick overview and how this new food-related business incubator came about?

Amy Szabo: ECDI has been a resource in Central Ohio since 2004, and we are essentially a micro-lender, which means that we provide very small business loans. A micro-loan is a loan that is under $35,000 for a micro-enterprise, which is a business with 5 employees or less and $35,000 or less in initial capitalization. So, the Economic and Community Development Institute is the only SBA intermediary micro-lender in Central Ohio. We also are a U.S. Treasury Certified Community Development Financial Institution (CDFI), which basically means that we meet a certain level of standards that the US Treasury sets for community lenders. We are the sole micro-lender for Franklin County, the City of Columbus, and we have several other private loan funds and some federal and local funds to lend to new or existing micro-entrepreneurs throughout Central Ohio.

Since 2004, we’ve loaned around $5 million to hundreds of entrepreneurs to help them get their businesses started, help them expand their businesses, and help them stabilize their businesses. We’re a pretty unique resource in Central Ohio.

The Growing Entrepreneurs Initiative is a new initiative that we’re launching in partnership with Franklin County. We also have some private funding from The Kroger Company, US Bank Central Ohio Foundation, Huntington Bank and federal funding from the SBA Program for Investment in Microentrepreneurs. We’ve been providing very general micro-enterprise development training since inception, but the Growing Entrepreneurs program will provide more specialized industry-specific training, starting with food-related businesses. We plan to eventually expand that to include home childcare businesses, transportation businesses, sustainable development construction businesses, and community-based healthcare businesses. We chose those industries because we’ve traditionally worked with a lot of entrepreneurs those industries. Those are businesses that are easy for people to start with a small amounts of capital and just a few employees.

Bob Leighty: Essentially, this is sort of building on ECDI’s existing programs. Around 20% of our clients are food related businesses. We’re starting with food because of the opportunity with Kroger and with some other partners. My involvement in the Growing Entrepreneurs Initiative came about through some of my other community involvement. I had heard about some of the wonderful work that ECDI was already doing, and I have been interested in getting some type of food incubator off the ground. I heard that ECDI was interested in that, and so I joined the board a couple of years ago. I’m now fortunate enough to be on staff with Amy and the other wonderful folks here, and we’re actually making this initiative happen. The big news for us right now is that Franklin County just formally approved $100,000 of stimulus money for a revolving loan fund for our food-related entrepreneurs. We’re targeting 17 individual entrepreneurs and at least 20 jobs initially, but we think it’s going to end up used for even more than that. That’s all being used for loans to help small businesses started in Columbus.

We also have this partnership with Kroger where they are providing shelf space for local entrepreneurs’ products in a new store they’re building in Lewis Center, which will be open in November. Not every entrepreneur is interested in a Kroger necessarily, but it’s a really cool program for folks who want to go in that direction. We’ll help our clients get their products considered for the Kroger space if they’re interested. We’re providing access to larger markets for them, and it can be used as a test market for their products.

AS: That’s a really good point. That’s another innovative aspect of this new initiative. We are not only providing training and capitalization, but we’re also working with people to get their products into markets, whether it’s Kroger or whether it’s a farmers’ market. ECDI was instrumental in getting the Pearl Market started. There was a grant that we received from the Health and Human Services Office of Community Services in 2005. We worked closely with the Capital Crossroads Special Improvement District to get that market started. So, we’re busy working in the background to build connections with different stores, markets, and distributors that will help our entrepreneurs find places to sell products.

WE: So if someone has an idea for a food product that they want to develop, this initiative can provide them with business and logistical assistance so they can remain more focused on the product itself and make sure they are executing their ideas properly.

BL: That’s absolutely right. It’s one thing to be cooking something at home for the family… but just making the step to the Pearl Market or North Market requires a lot of different types of knowledge. And then when you go to Kroger, that’s an even bigger step. At that point you can’t just make the product from your home. You would need to be working in a special certified kitchen environment… and we have access to facilities already established in the area. We can help people get in contact with Ohio State’s Food Industries Center or other similar facilities and help them to rent time in those kitchen facilities and maybe even help them get access to some of the professors and some of the expertise that can be found there. Many times your recipes may need to change when you’re ramping up to a larger production.

AS: And in-house here, we will be providing entrepreneurs with the business training on how you run a food related business and be successful with it.

BL: Think about this initiative as being your one place to go where we can point you in different directions for different resources. We have the business experience here, we have the micro-enterprise training, and we can take you through the process of writing a business plan and figuring out all the numbers. It’s great to have a passion for creating a product but is it something can you make money from selling? The pricing can be very different if you’re selling at the Pearl Market compared to Kroger, where you may be dealing with a food broker or food distributor which then would provide you with access to more stores. Small business owners may also need help with packaging and labeling and other various things, and we have contacts and resources available for that too.

So, the idea is that for the people who we are loaning money to, you naturally want to have that investment be as smart of an investment as possible. Instead of loaning money for a new $20,000 piece of kitchen equipment which may or may not be the right machine for you, we can instead provide a loan and the access to try out different machines at OSU. This will let an entrepreneur test out their recipes and utilize the partnership with Kroger to find out what flavors and variations sell the best in a particular environment.

WE: You mentioned that you’re already working with some specific small businesses as this program is launching. What has the response been so far?

AS: Well, we’ve been getting this Initiative ready to go for about a year, and Bob came on board with us last summer. Around that time, Kroger approached our founder, Inna Kinney, who had been talking about a food incubator for years. Kroger had an interest in partnering on that idea, so we started the planning process and started to get the word out there informally. Bob came on and gathered all of the resources and started leveraging all of his community connections and finding partners. Without any formal advertising, I think we have 42 people that Bob has been working with so far. So yeah, there’s definitely a big interest.

WE: Do you think that the growing public awareness of the importance of buying local foods and shopping locally plays a part in the interest in this program?

BL: Yes, it’s a growing interest and people are realizing the importance of supporting local entrepreneurs. If somebody wants to ultimately grow a food company beyond selling locally, they can do that here as well, but providing assistance to local entrepreneurs is the root of what we’re looking to accomplish. Columbus has a great history with the food based companies that have been founded here from the larger companies like Wendy’s or Bob Evans to the smaller restaurants. Look at what Elizabeth Lessner is doing with her restaurants. There are people like her who we’ve been talking with about this program and getting their advice and input. There’s a lot of expertise and creativity in this community and we’re trying to tap into that and make sure people know each other. We’ve been talking to Graydon Webb who worked for Dave Thomas in the original Wendy’s and later founded G.D. Ritzy’s. So, it’s people like that who we’re trying to pull to the table to help out.

WE: Over the past few years, there’s been a lot of discussion about the growth and the importance of the Creative Economy. Many consider the culinary arts to fit under that umbrella. Do you see this initiative as being helpful in stimulating development in that sector of the local economy?

BL: I definitely think it will. In general, people are looking at doing things in a different way and we’re seeing enormous amounts of creativity with some of these new products. It’s really cool to be meeting with these different entrepreneurs and get a sense of why they’re doing what they’re doing. It’s really cool to be able to help them achieve their dreams and be a part of that process.

When I first started researching this with a couple of retired folks from Columbus State, including Carol Kizer who founded their culinary school, I had never heard of a kitchen incubator. I thought that part of it could tie into some revitalization plans I was working on in the Parsons Avenue corridor. We were trying to think of how could we lure interesting new restaurants to set up down here instead of attracting generic chains. If we can stimulate that type of growth and show people there are opportunities there for small businesses, then I really think it’s a wonderful thing for our neighborhoods and for the quality of life in Columbus.

WE: That’s a great point. Even outside of stimulating jobs within the Creative Economy, the program sounds like it can also help improve the city as a whole. Everyone stands to benefit from a wider array of unique local businesses and local products.

AS: When I moved to Columbus 5 years ago, I came here after living in Athens, Greece and Budapest, Hungary… and I’ll be honest with you… I was not happy to be moving to Columbus. I was coming here to attend Grad School and I was thinking at first that I would finish my degree and be out of here in 2 years. When I got here and started exploring the city, I found out that this is a really interesting place to live. There’s a good local economy here. There’s art, there’s good food, and there’s a great park system. After grad school I started working at ECDI and was very happy because what we’re doing here is really foundational in helping make Columbus what it is. We are working every day with local entrepreneurs who are making sure that we all have choices other than just chain restaurants. There are all sorts of innovative local business here in Columbus. So I agree. What we help entrepreneurs with definitely makes Columbus a more interesting place to live.

BL: When you look at the value of what Elizabeth Lessner’s restaurants add to the community, the more we can help stimulate growth like that, the better. We want to help spur creativity and make people realize that there are ways to start a business and make money. Restaurants are tough, and food products are tough. Margins are thin. There are plenty of restaurants that are wonderful that have failed, but that’s all the more reason we need to be looking at how we can make them successful and help decrease their risk. Most jobs in this country are being created by the starting of small businesses. So the more entrepreneurial we can make our society, the better.

And again, food products are just the first focus. We are already doing the legwork on some different entrepreneurial tracks in other areas… and we’re not trying to reinvent the wheel either. We’re looking for partners and other interesting things going on that we can support with our resources and connections. There are a lot folks out there who know what ECDI is and those who don’t. That’s why it’s exciting to reach out to folks through Columbus Underground and say “Hey, here’s some programs that we can possibly help you with.”

WE: What’s the best way for anyone reading to find more information on this program?

AS: Give us a call at 614-559-0115. Our website is in the process of being redesigned.

BL: Yeah, this program is new enough that it’s not on the website yet. Folks can also email me at [email protected] with any questions they may have.

WE: Great. Thanks for taking the time to share this information with us today.

More information can be found online at ECDI.org.

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