By Dan McCue
KFR Services Inc., a diversified Summerville, S.C. company with subsidiaries serving the telecommunications, business continuity, and maritime industries, has hit upon a novel approach to giving entrepreneurs a leg up in a difficult economy.
It has decided to turn unused space in its headquarters outside of Charleston, S.C. into a business incubator where startups will be afforded advice, back-office services and the space to grow, without their founders being asked to sign away a portion of their dream in the process.
“With the economy being what it is — and with people either losing or worrying about losing their jobs — this is when would-be entrepreneurs naturally start thinking it’s time to go into business for themselves,” said Stephanie Fetchen, co-president of the company.
“At the same time, because we’ve always been a diversified company, our management team concluded we have the expertise — especially in the back office and operational areas — that most entrepreneurs don’t have,” she continued. “Our hope is that by providing support and guidance to these start-ups, they’ll prosper and in time be able to grow on their own.”
Certainly, KFR Services Inc. has the entrepreneurial bonafides. Founded by Stephen and Janice Kromer in 1975, the core business of the company was designing and implementing databases, as well as crafting billing solutions for the telecommunications industry.
In time, and as their daughters, Stephanie Fetchen and Kimberly Russo, KFR Services other co-president, got involved in the family enterprise, the company grew and diversified.
In addition to Tele-Tech Services, its original division, it is now comprised of Atlantic Business Continuity Services, a thriving hazard mitigation consultancy, and America’s Great Loop Cruisers’ Association, a maritime organization comprised of adventurers who circumnavigate the Eastern United States by boat.
Interested in keeping that diversification and growth going, the management team began mulling the concept that evolved into their proposed business incubator last year.
“We had been talking about it for a long time, but really began to focus on it in the last quarter,” Fetchen said.
Everyone around the table agreed that one of the biggest obstacles entrepreneurs face is not having the resources to get their business their business off the ground. They also agreed that working with entrepreneurs would be a good way to continually stimulate their own business and find new ways to expand the company.
It quickly developed that KFR Services could provide furnished office space in a secure building, Internet access, phones, accounting, payroll, billing, strategic planning, and first-level IT support, not to mention free parking in its lot.
The hardest part, Fetchen said, was figuring out how KFR Services would ultimately be compensated.
“Initially we talked about taking an equity stake in the companies, but we decided we’ all be more comfortable — and our future entrepreneurs would be more comfortable — if we had contract that called for a set payment at some point down the line, after the start-up begins to show a profit.”
KFR Services began promoting the program last week, and the application is available at http://www.kfrservices.com/incubator.htm.
Fetchen said the company’s goal is to work with two or three companies at a time, bringing in new start-ups as they entrepreneurs they work with grow from the incubator stage to being a stand-alone entity in their own right.
“Obviously we’d love to work with people who, like us, are in the tech or information business, but we don’t want to limit it,” Fetchen said. “We don’t have a timeframe in mind for how long we expect start-ups to stay with us; the idea is for it to be ongoing.”