An organization that aims to speed up the development of start-up companies by providing them with series of support resources and services including workspace, networking connections, coaching is called a business incubator. All these incubation programs are usually sponsored by large corporations and public institutions because more often than not all the growing companies need financial and technical assistance.
As National Business Incubation Association states, there are about 900 business incubators in Europe striving to nurture the growth of entrepreneurial companies and helping them to survive their most vulnerable period ever.
Main Types of Business Incubators
There are different types of business incubators that can be distinguished according to their method of obtaining profit, the business sphere they prefer to invest in and the area they choose to operate in.
- Profit: The majority of business incubators operating in North America (about 93%) are non-profit organizations geared toward economic development. However, it should also be noted that a small percent of business incubators (about 7%) aim to gain returns on shareholder investments.
- Sphere: Some business incubators are more interested in technology businesses while others are more inclined to support service businesses, niche markets or manufacturing firms.
- Location: One can find business incubators that focus their operation on urban areas while others tend to develop start-up companies in suburban and rural areas.
Business Incubator Benefits
In fact, the benefits that business incubators can provide you with are innumerous. They will help you to secure your company’s capital in a number of ways. Let’s see what you will get!
- Connection with potential business partners: Business incubators are capable of connecting your start-up company with so called angel investors. In case you don’t know, they are high-net-worth individual investors. If you are striving with making your company’s venture capital presentations perfect or you have hard time getting in a trustful relationship with venture capitalists then you’d better turn to business incubators; they know how to efficiently solve this issue of yours.
- Affordability: As a potential successful entrepreneur your dream is probably to increase your company’s revenue and maximally reduce unnecessary costs. By sharing secretarial office, production equipment and conference room expenses with your start-up company they will dramatically reduce your overhead and operational costs. Also, in case you are struggling with finding manufacturing space at below-market rates you should definitely get in touch with business incubators.
- Rich expertise: Business incubators may become jack-of-all-trades when it comes to business prosperity and money drawing. Need a mentor with rich expertise in turning young companies into huge corporations? Are you in search of an expert that can fund fledgling businesses and make efficient marketing plans? Congratulations! Business incubators are the specialists who will land their hands to you with pleasure.
Business Incubator Downsides
When you desire to give your business a powerful start you need to research all the potential incubators very carefully because here are some challenges that you may face during the procedure;
- Application process: The application process can be tiring, rigorous and of course, competitive. Professional and established business incubators will demand a detailed business plan alongside with the data of all your business activities. If that does not bother you, go ahead!
- Incubator involvement: The second downside that a business owner may face in regard to business incubators is time commitment. Most business incubators, for example, will require a time commitment of around one or two years. Plus, you may need to get adapted with the schedule set by your business incubator, including different types of trainings, workshops and many more. If you are a fast learner and have nothing against educational courses you will not have anything to regret about.
- Incubator is a stakeholder: Finally, each business owner should remember that an incubator is not a place where he can do whatever his heart desires. This is a professional environment where the business owner is expected to be responsible for his mistakes, to answer all kinds of questions in regard to the company’s progress and to treat the business incubator as a boss. After all they invested their time, money and energy into your success!
If you’re already bouncing off the walls then don’t waste your time and get in touch with number one business incubators in your local area. Start a new lease of your life by introducing them with the most creative and productive business ideas. Get ready to face obstacles though; as they say nothing ventured, nothing gained!