Using the lure of ultralow rents, Lavelle was able to attract start-up companies, particularly those that needed light manufacturing space. It wasn't exactly luxurious: "When we were loading out our first exhibit, the docks collapsed," recalls William Murphy, an early tenant. But the price was right, and Fulton-Carroll began providing services like shared clerical support and office machines. Over time Lavelle was also able to direct tenants to professional advisers and encourage the tenants to learn from one another and use one another's services. Starting in 1985 her incubator began breaking even on its operations; subsequently, Lavelle was able to add services like financing assistance.
According to Lavelle's most recent survey, the incubator houses 69 businesses with 441 employees and has a 94% occupancy rate; an additional 71 companies with 561 employees have "graduated" because they needed larger quarters. Only 16% of the tenants and graduates have failed over an 11-year period; in contrast, one study has shown that 60% of new businesses don't last even 6 years. And the incubator is doing its part for neighborhood revitalization: Lavelle reports that 46% of the tenant companies are owned by women or minorities, and estimates that about three-quarters of the employees live within a two-mile radius.
Lavelle's work has become a model for incubators around the world. She is "the intellectual and spiritual leader of our industry," says Dinah Adkins, executive director of the National Business Incubation Association. "June has created a human miracle in Chicago. I see her as being a sort of larger-than-life figure, and I always have."
-- Martha E. Mangelsdorf
SOCIALLY RESPONSIBLE ENTREPRENEUR
Pam Del Duca
The Delstar Group
Scottsdale, Ariz.
* * *
For years Pam Del Duca kept her community and business worlds separate. While she grew her retail business, she dutifully served on boards of civic groups during her off-hours.
There was just one catch to that approach: entrepreneurs don't have very many off-hours. So now Del Duca has another solution: she's integrated her concerns about social issues into her business. "I knew I wanted to make a difference," she says. "And as an entrepreneur the place you make a difference is at work."
Del Duca has been running successful Phoenix-area gift stores and boutiques for 20 years. In 1979 she got into airport retailing, and within a few years she had three stores in the Phoenix Sky Harbor International Airport. By 1989, the airport was in the process of opening up a new terminal, and Del Duca was eager to expand. As a woman-owned business, her operation qualified for special consideration under Federal Aviation Administration affirmative-action goals, but the awarding of the spots also depended on Phoenix City Council approval. Since Del Duca was applying for several of the available stores, it would probably have helped her case if she had had a minority partner as well.
That much was dictated by political reality. But Del Duca's solution was uniquely her own. She formed a partnership with three well-known nonprofit organizations: the Phoenix Urban League, the Phoenix Indian Center, and Chicanos por la Causa, a Hispanic community development group. Each group became an affiliate with one or more of the six new stores, agreeing to recruit low-income employees to staff them while getting a small percentage of annual gross sales for 10 years.
Del Duca, meanwhile, hired a full-time trainer to set up classes not only to cover the basics of sales attitudes and the stores' computerized registers but to create a whole series of courses for all of Delstar's employees. Although the initial jobs are entry level and can be filled by people without previous retail experience, the classes enable motivated employees to move up through the ranks. According to training director Carol Gleason, about 100 people recruited by the agencies have gone through the training program since the stores opened. About a third are still employed at the stores, a turnover level she calls standard. She says at least 10 agency-recruited employees have been promoted to the rank of supervisor or higher. In addition, Delstar is offering after-hours classes for all employees interested in learning about how to start a small business themselves. So far, Gleason says, at least five have launched full-time start-ups, and a number have begun part-time businesses.
Still, controversy surrounded Del Duca's unusual proposal to the city council back in 1989. A more conventional approach would have been simply to take on a minority businessperson as a part owner. "I thought the proposal was fabulous," says Rose Newsome, equal-opportunity director of the city of Phoenix. "And some people thought it was horrible." But to the three nonprofits, the program represents an unusual effort by an entrepreneur to make a real commitment to them and their clients. "I think it's a model program," says Pete Garcia, president of Chicanos por la Causa. Delstar remains profitable and its revenues are growing, despite a tough retail climate.
-- Martha E. Mangelsdorf
