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Startup companies get a boost
by Annie Feidt, Minnesota Public Radio
July 1, 2004

Preparing Daisy Blue Naturals soap. (MPR Photo/Annie Feidt)

Albert Lea officials have been working hard to replace the 500 jobs lost when the Farmland Foods plant burned to the ground three years ago. They've had some success wooing big employers to town. But business leaders are also betting on another strategy. They've launched an incubator project aimed at helping local entrepreneurs expand small companies, and they hope the approach eventually pays big dividends for the town.

Albert Lea, Minn. — A few years ago, Jena Thompson was mixing batches of natural soaps in the basement of her home. Today, she strides through a sprawling complex of rooms that houses the company she named Daisy Blue Naturals.

"When we first moved in we had 2,500 square foot of space," she recalls, "and you'll see that we're up to 8,000 square foot in two years time. So we've had a very expansive growth in that short amount of time."

	Daisy Blue Naturals

Thompson started making her own products five years ago, after she had her first baby and couldn't find the type of natural soaps she thought would be best for him. She was a chemistry major in college, so coming up with a formula didn't intimidate her.

"I started making products for friends and family," Thompson says. "Then I tried to get them to make their own, but they all wanted to buy them from me, so I thought, this is a great concept."

A handful of employees at Daisy Blue Naturals now make more than 100 products. The company uses a direct sales model, like Mary Kay cosmetics, shipping soaps, bath oils and lotions to about 500 sales consultants in 35 states. Daisy Blue Naturals was the first company to sign on with the incubator project when it opened two years ago.

The incubator is set up in an unassuming rectangular warehouse on the edge of Albert Lea. The project represents a shift in focus for a city that's traditionally relied on a single big employer. The director of the incubator, Pam Bishop, says the center was at full occupancy nine months after it opened.

	Jena Thompson

"We've been amazed at the outcry of interest," says Bishop.

The small businesses in the center are a diverse bunch. There's a calendar maker, a custom wheelchair cushion company, and one of only two Zamboni repair shops in the country. The center accepts entrepreneurs who can prove there's a market for their product, but need help moving to the next level.

"It's fun to see the light bulb go on in someone's mind when they realize, I can do this," Bishop says.

The project was initially funded by Albert Lea's economic development agency, but it's now almost entirely self-sufficient. The business center leases space to the companies at below market rates, and offers entrepreneurs help with all aspects of business management.

"Whether it be developing a business plan or understanding how to do accounting or having legal questions, along with the space that we provide here," Bishop says. "It's provided a real opportunity for businesses and individuals who would not have been able to expand their businesses otherwise."

	The incubator

There are nearly 1,000 business development centers in the United States, according to the National Business Incubator Association, a promotional organization. The group reports more than 85 percent of companies that begin in an incubator are successful. But no one has studied whether cities also benefit from business incubators. Bishop says she's sure her center will pay off for Albert Lea.

"It's a risk, but growing your own businesses will have far greater success for the community than pouring all your resources into trying to attract that one company," Bishop says. "It will take a longer period of time, but the foundation you build will have a far greater impact on the community."

Albert Lea officials are already working to find the next crop of entrepreneurs for the business center. They give talks at the local high school to inspire graduating students, and hold regular meetings for town residents who may be interested in starting or expanding a business.

Bishop says the entrepreneurs are out there and it's her job to find them.

"You have to pay attention to what's going on in basements, garages and dorm rooms. You might have the next Bill Gates in your backyard and you just don't realize it yet," Bishop says.

Daisy Blue Naturals has already expanded about as much as it can in Albert Lea's business incubator. President Jena Thompson says she hopes to move the company to its own building in the next few years, and says she's committed to staying in Albert Lea.

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