Land Yachts Become Incubators

by Talk Business & Politics ([email protected]) 71 views 

As business incubators go, a vacant lot dotted with Airstream trailers isn’t particularly awe-inspiring.

At the corner of College and Trenton avenues in Fayetteville, however, Cynthia Morris has elped turn just such a scene into an appealing launching pad for certain entrepreneurial types. Dubbed the Yacht Club on College, the space will be home to four businesses by the end of January.

“I just want to be a cheerleader for all of them and hope they do well,” said Morris, who bought the lot in March and leases space to its mobile vendors.

There has been much to cheer about recently, as two previous Yacht Club tenants have moved on to brick-and-mortar homes.

“I wouldn’t have been able to do this if I didn’t start there,” Molly Clark, owner of Grey Dog vintage boutique, said while standing inside the 1,800-SF building her business has called home for about a month.

Incubation Origination

According to a 2011 article in The New York Times, Joseph Mancuso deserves credit for first attaching the term “incubator” to business pursuits. Mancuso, the Times reported, converted an 850,000-SF abandoned manufacturing complex in Batavia, N.Y., into something called the Batavia Industrial Center.

That was in 1956, and several businesses, including a winery, a charitable organization and a chicken processor soon called it home. In addition to office space, the tenants gained access to other entrepreneurs and experts willing to offer business advice.

Later, after watching newly hatched chicks scurry around the building, Mancuso reportedly dubbed the facility an “incubator.”

Today, the National Business Incubation Association, based in Athens, Ohio, serves more than 1,900 members in 60-plus nations. The association’s aim, per its website, is to advance “the business creation process to increase entrepreneurial success and individual opportunity, strengthening communities worldwide.”

According to the NBIA, Northwest Arkansas is home to one incubator, the Genesis Technology Incubator. Genesis provides tech-based entrepreneurs everything from office space and business services to professional management, marketing and financial advice, and technical expertise from University of Arkansas personnel.

The Yacht Club, meanwhile, offers a decidedly different vibe. The entrepreneurial spirit among its tenants is no less evident, though, and it fits a more general definition of an incubator that might be translated as any place where great ideas are grown.

Morris, “a real estate appraiser and banker by trade,” is thrilled to be part of the process, though she concedes her initial interest in the property was as an investment.

“It’s a corner lot that’s paved, on a major street,” Morris said. “That seems like a good investment to me.”

There were three mobile vendors, including Clark’s Grey Dog operation, on the lot when Morris bought it for about $170,000. Ten months and about $12,000 in improvements — including landscaping and water and electricity upgrades — later, Morris is excited about the Yacht Club’s pending lineup.

The largest trailer, a 31-footer, houses MGB Photo. The trailer belongs to Mallory Berry, who has divided it into a small studio and meeting space for her clients.

The remaining three trailers are more in the 18-foot range. One of them, owned by Morris, is being converted into Now and Then, a women’s clothing boutique that will target the college crowd.

Another will be the home of Pigmint, a floral and event design company, while the fourth will open as Parks Purity Pie Co. The latter will feature homemade pies for sale either made to order or by the slice.

Morris is contemplating the addition of a gelato vendor in the spring, which would bring the total number of vendors to five. She doesn’t believe the lot can accommodate more than six.

Morris charges tenants $335 per month, with $35 of that going toward utilities. She said 30-day leases are the norm, and she maintains active dialogue with tenants to gauge their status.

“My goal is really to make my investment back, but I also want to be a good community citizen,” Morris said. “In my own way, this is a way for me to make the city look better, dress it up a little bit.

“And I’m having fun working with the young people.”

Lead Dog           

Most Yacht Club tenants have been in their 20s and 30s, and as such, have faced financial challenges typical for many startups. The biggest is a scarcity of capital.

Clark, for example, had handpicked her inventory during years of travel abroad, but couldn’t afford to commit to a long-term brick-and-mortar lease. She also was well aware of the high failure rate among new businesses, and keen on the idea of the low overhead costs it would take to run her business out of a trailer.

“I thought I might start on wheels in case the market wasn’t receptive,” she said.

Thus, she started a Facebook page to document the restoration of her Airstream and build a following of potential customers. Clark opened Grey Dog on Nov. 30, 2010, with about 200 pieces of clothing.

“You can fit more than you think in a trailer,” she said with a smile.

Grey Dog attracted customers almost immediately, but Clark soon learned about the city of Fayetteville’s rules concerning mobile vendors.

Jeremy Pate, development services director for the city of Fayetteville, said vendors must submit an application to city officials. If approved, the vendor can stay in one location for 90 days during a 12-month period.

Technically, the permits require vendors to move at least a half-mile away from the original site after the 90-day period, but Pate said some vendors have requested — and been granted — variances by the city’s planning commission.

Clark eventually was granted an 18-month extension, but that appears to be an exceptional case. The extra time allowed Grey Dog’s customer base to expand significantly.

“About a year ago, I started thinking that if I was going to stay in Fayetteville, I needed to expand,” Clark said. “I needed more space for more inventory and more traffic.”

Spotting a nearby building for sale on College Avenue, Clark “came in on a whim and made a low-ball offer. It got accepted, so I got a small-business loan and here we are.”

She now maintains an inventory of about 350 pieces, plus a much wider offering of shoes and accessories in a 900-SF showroom that meshes with the Keep-Fayetteville-Funky vibe. Below the sales floor is 900 SF Clark uses for an office and storage, with additional room for a seamstress to set up shop.

 Clark, whose parents once owned Dickson Street’s Boardwalk Café, said she’s invested a total of about $175,000 in Grey Dog since its inception. She hopes to expand her business into other markets someday, but said that dream wouldn’t have been possible without the success she enjoyed at the Yacht Club.

“I always knew I was going to have my own business,” Clark said. “I just didn’t know when or where.”

‘How Great is That?’

Michael and Shanea Holmbeck of Hawaiian Brian’s also got their start at the Yacht Club. They began selling “Hawaiian home cooking” from a modified Airstream in August, and recently made the move to a brick-and-mortar restaurant in Fayetteville’s Evelyn Hills shopping center.

After finishing a few remodeling chores, Shannon Parks Strickland soon will open Parks Purity Pie Co., a business originally opened nearly a century ago in Terre Haute, Ind. She acquired the original recipes about 18 months ago, and has been making pies for clients out of her home in Madison County.

Word-of-mouth advertising has increased her orders exponentially, Strickland said. After making 38 pies for Thanksgiving and 100 6-inch pies for a single client who gave them away as Christmas presents, she’s now ready to test the market in a bigger way.

Strickland previously delivered all of her pies, which range from fruit to cream and savory selections. Now she’ll be able to operate out of the trailer at a more centralized location, while also offering pie by the slice to walk-up customers.

“Just paying rent — and not investing tens of thousands of dollars in a building when you don’t know for sure if it’s a good idea — is a great option for someone like me,” Strickland said.

“I’m starting a new business without a loan. How great is that?”

John Gaber thinks it’s pretty great. Gaber is a political science professor at the University of Arkansas who researched New York City street vendors while at Columbia University in the late 1980s and early 1990s.

Also a certified city planner, Gaber went back 10 years later to track some of the vendors he’d studied. What he found cemented the notions he originally formed.

“They are far more sophisticated and entrepreneurially oriented than people think … than it looks to the naked eye,” Gaber said of mobile vendors.

“They’re not there to be fly-by-night, to make some quick cash and get out of town. They’re looking to build a business, and the successful ones often go on to have a brick-and-mortar business.

“And the good news for the local economies is they tend to stay close to where they started.”

That has been the case with Hawaiian Brian’s and Grey Dog, too, and Morris hasn’t had a problem finding others hoping to follow their successful formula. Due in part to the success of the businesses at the Yacht Club, in fact, Pate said there has been talk among city council members and those within the mobile vending community of extending the permit from 90 days to five or six months.

Pate also said the city’s planning commission generally is supportive of the concept, especially given the Yacht Club’s success as an incubator of sorts.

“I think it’s been a good thing,” Pate said. “It’s not come without some ibuprofen at times … but I think it’s really kind of produced a whole new vibe for that area. I hope they continue to do good business there.”