It is an undeniable truth that small business start ups face numerous challenges and obstacles. One way to combat the statistics is to look into something called a small business incubator. Small business incubators are programs that provide support and hands-on advice, as well as office space and access to office equipment and supplies. These are places designed to foster the growth of small business all over America. Studies show that legitimate small business incubator programs can increase the tenant companies’ success between 80-90%, whereas only about 20% of small businesses tend to survive under normal circumstances. This is obviously very tempting for a potential small business owner.
There are numerous kinds of small business incubators; really, there are as many individual types of small business incubators as there are small businesses. These incubators are facilities that provide a very real support network and safety net for fledgling companies. Most start ups have an excess of only one thing – the entrepreneurial spirit coming from the small business owner. The incubators cushion the demands that small businesses are short of, usually working capital. There are four main characteristics of small business incubators to look for if you are looking into this strategy and seek a legitimate incubator. Let’s examine these in depth.
Flexible space: The incubator should provide flexible space that is at the lower end or below average rent prices for the area. Another alternative is that the incubator provides exceptional services for the rent that they charge. The flexibility comes in because there should be room for each of the incubating businesses to expand before they go out on their own.
Shared equipment: The incubator should provide services that the fledgling business would otherwise be unable to afford, or they should provide equipment that would be otherwise unavailable to the start up. Receptionist services, photocopying rooms with a lot of different kinds of equipment, and the use of conference rooms are very popular perks to being incubated. Sometimes incubators offer security and phone answering services as well, or they give access to computer equipment, audio visual equipment, or they can provide a shipping/receiving department.
Good advice: Perhaps one of the most important components of a business incubator is that they offer start up companies experienced management advice, as well as professional expertise advice. This should be backed by a policy that ensures that each of the start up companies being incubated comes up with a solid business plan during the incubation period.
Access to capital: Facilities that help provide funding can be difficult to get involved with because there is obviously a lot of competition for those spots. These incubators tend to evaluate companies with stricter limitations.
The key to success with these facilities is that they provide a nurturing, supporting environment in the often harsh world of business start ups. Most incubators are non-profit companies, operated by groups ranging from community development offices and municipal governments seeking to increase commerce in their area, to federally-funded institutions. There are a growing number of private, for-profit business incubators. When examining a small business incubator, consider the location, growth space, available services, and physical facilities. Also consider the incubator’s track record, the types of tenants already there, and the graduation policy. As always, consider the costs and trade offs before making the decision to enter into an interaction with a business incubator.
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