If you are a start-up company and you qualify, incubators can be a fantastic resource for you in your pursuit of success.
Here is the NBIA (National Business Incubation Association)’s description of Incubators. “Business incubation is a business support process that accelerates the successful development of start-up and fledgling companies by providing entrepreneurs with an array of targeted resources and services. A business incubator’s main goal is to produce successful firms that will leave the program financially viable and freestanding.”
Critical to the definition of an Incubator is the provision of management guidance, technical assistance, and consulting tailored to young growing companies. Incubators usually also provide clients access to appropriate rental space and flexible leases, shared basic business services and equipment, and assistance in obtaining the financing necessary for company growth.
Incubators are physical plants that primarily house the offices of start-up companies. They will rent you flexible leases, which can allow you to expand or shrink your space quickly. Rents vary by Incubator, but most often are lower than the market rates at the outset. As you grow, you can upgrade to more space. Fees are charged for some Incubator services and can vary by Incubator. Some have no fees but want equity in your company.
Incubators come in many flavors. Some are only for technology companies. Some are for a specialty technology. Some are mixed use while others are service or manufacturing oriented.
Here are some Incubator facts as supplied by Corinne Colbert, Director of Publishing at NBIA.
- There are 1100 to 1200 Incubators in the United States.
- 27% of Incubators have investment funds.
- 70% have links to angel investors.
- The average stay in an Incubator is 33 months.
- About 6% of North American Incubators are for-profit programs.
Most Incubator tenants accept start-ups, as well as existing companies
Besides the above described advantages afforded to Incubator tenants, some other positives are:
- Networking with other entrepreneurs.
- Getting business from other tenants.
- Getting assistance from specialists in the community to supplement on-site mentors.
Be forewarned: it is not easy to get accepted into an Incubator. You need to meet the criteria of the one to which you are applying. For sure, you need to prepare for your interview with a sound, well thought out business plan. These plans do not have to be lengthy dissertations. Succinct and short are good.
No matter the tediousness of the application process, an Incubator acceptance can be a defining moment in your future success.
To find the Incubators near you, go to the NBIA website: www.nbia.org. Their phone number is 750-593-4331.
(This blog is excerpted from Bootstrapping 101.)