Launching a successful small business is no easy feat—according to the National Business Incubation Association, about 80% of them fail in the first five years. Tennessee’s business incubators, with their useful resources and professional expertise, are helping area entrepreneurs improve those odds.

“The stats are flip-flopped when it comes to incubators,” says Hurley Buff, the facility manager of Cleveland/Bradley Business Incubator at Cleveland Community College. “Eighty percent of the business that start in incubators are still in business five years later.”

Business incubators assist small businesses by offering entrepreneurs a protected, nurturing environment during the startup period—the time when new businesses are most vulnerable.

“The lowered rent attracts people,” says Mildred Walters, executive director of the Nashville Business Incubation Center. “But then they realize that they have so much more at their fingertips here.”

Along with the low cost office space—the Nashville Business Incubation Center rates start at $7 per square foot, while an average retail space outside the center starts at about $15 per square foot—incubators provide other business services, such as phone systems, internet service, and fax and copy machines.

“A small business can literally go broke while trying to lease a copier,” Walters says. “Our purpose is to provide those services so that our new businesses don’t have to pay as much for those big things right off.”

Entrepreneurs also benefit from being surrounded by other new business owners. “There’s a spirit of neighborliness in these halls,” says Buff about the Cleveland, Tenn.-based center. “So much so that we have direct competitors in our building that are helping each other.”

One such competitor is Jessica Carrasquillo, founder and president of Social Security Advocates and the first non-attorney case worker to begin working on behalf of disabled citizens in Cleveland. After opening her business in the incubator facilities, her business broke even within six months—an impressive feat for any startup. But perhaps even more telling is that when a similar company, Disability Solutions, opened in her building a few months ago, Carrasquillo found herself collaborating with the owner, sharing her insights and receiving tips from the owner in return.

“If it hadn’t been for the incubator, I wouldn’t have been so successful so quickly. The high overhead of a new business can be overwhelming,” Carrasquillo says. “But what’s really made the difference is the support system of people around me. Whether I need help with accounting, advertising or computers, there’s a business around to help, one that’s in the same boat as I am. It’s very comforting and encouraging.”

But business incubators are more than just landlords. Many incubators help their tenants analyze their books to ensure that everything is done properly. “First-time business owners are always afraid of making mistakes, especially when it comes to accounting and finances,” Buff says.

That’s why business incubators regularly host instructional programs to aid their tenants in complicated business matters.

Gwin Scott, president of Emerge Memphis, says that his downtown-Memphis technology incubator holds mandatory workshops that instruct business owners on everything from increasing cash flow to how to outsource workers. The Nashville Business Incubation Center requires its tenants to attend programs as well.

“We have practitioners from the business community come and talk to our tenants,” Walters says. “For example, we’ll have an executive in human resource management talk about how to put together a policy and procedure manual. Our clients get to talk to someone with real world experience.”

Apparently, the instruction has been beneficial. Founded in 1986 with grant money from the Tennessee Valley Authority, the Nashville Business Incubation Center, the first ever in Tennessee, boasts that 90% of its graduate companies have stayed in business until the owner retired or the business was acquired.

“We’ve created 74 jobs in the Middle Tennessee area, and 2003-2004 revenue figures for our companies are at $4.6 million,” Walters reports.

Success stories like these abound in the dozen incubators throughout Tennessee. And plans to develop more incubators throughout the state are in the works.

In September, Cumberland County officials met in Crossville to discuss opening an incubator there. Kevin Liska, founder and director of the state’s first “virtual” incubator—which serves Cumberland County’s rural area entrepreneurs with many of the services of traditional incubators, minus the bricks and mortar of an actual building—helped lead the meeting.

“Incubators are about so much more than providing a building,” Liska says. “It’s about relationships, working with peer groups with related challenges, and growing and succeeding together.”

So far, there are incubators in Bristol, Chattanooga, Cleveland, Cookeville, Hartsville, Knoxville Memphis, Nashville, Oak Ridge and Sneedville. But no two are the same. Most of them are mixed-use incubators that assist various types of new business, while others, such as the East Tennessee State University Innovation Lab, cater only to businesses that are technology-based. Clinch-Powell Community Kitchens in Treadway, Tenn., the only food product incubator in the state, provides a facility that people can use to produce vegetable and fruit products for commercial sale.

All of the incubators have different requirements. Emerge Memphis requires a detailed business plan and prefers to work with small businesses that have been operating for a year or so. On the other hand, the Cleveland/Bradley Incubator doesn’t require a formal business plan (though it is highly recommended) and only accepts businesses that are less than a year old.

Finding the right incubator takes research, persistence and patience. Nearly all of Tennessee’s incubators are filled to capacity; however, the three, four and five year caps on how long a business can take before it “graduates” from the program into the real world ensure that entrepreneurs with innovative ideas today will have access to an incubator tomorrow.

It’s worth putting your name on a waiting list if it increases your chances of success in the long run, Buff says. “There’s no better resource to help a new business get off the ground.”