are Business Incubators?
What is a small business
incubator? A generic name applied to a small business development group that
provides the environment,
education, methodology and resources to accelerate business growth. According to the National Business Incubation Association incubators
reverse the statistic of small business failures - more than 80% of startup businesses
succeed in an incubator and grow at a rate of 7 to 22 times faster than businesses started
How does it work? A
successful incubator uses a structured program that produces focus on the "what's
next - what's missing" aspect of the marketing, operations, finance and
administrative components of the business, then provides the "what's missing" to
take the business to the next level of development and the next and so on.
What does it do? An
incubator is a new type of educational institution. It teaches hands-on
"entrepreneurial development" to the business owner in a very precise manner
because the instructional method is not generalized. It teaches only what the business
owner doesn't know or can't do. Since each business owner and each business is different,
the methodology is designed to teach you what you need to know in the best way that you
Does an incubator help me
start a business? Yes, but incubators don't just "start" businesses.
(Assistance in starting a business can be found almost anywhere.) Incubators "quick
start" businesses and "accelerate" their growth by maintaining an inventory
of business experts, consultants, advisors, procedures, methodologies, state-of-the-art
technologies and total resources that businesses are likely to require in the growth
What kinds of businesses are
in an incubator? Virtually any type of business, in almost every type of industry
has been grown with an incubator development program. Many incubators now have a
specialized Entrepreneurial Development Program(SM) for business type, like the Software Business Center, Product Development
Enterprise Center and International
Business Center, to name a few. There are also some incubators for particular
types of business owners, like the Womens Business
Center and MicroEnterprise Center.
Is an incubator only for new
companies? No. Emerging, growth, mature and other companies past the startup stage
benefit from an Entrepreneurial Development Program without being physically
located in the incubator. Virtual/Remote
Will an incubator find
financing for me? Some will, like the Entrepreneurial Development Center,
if you qualify according to the incubator guidelines, pass the screening and are accepted
into the Development Program. Most incubators have an internal "seed
fund" and access to private placements in addition to conventional forms of debt and
equity financing. But, incubators traditionally accept only the "cream of the
crop" type of business owner for financing. Incubators also work with
well-capitalized companies that do not require financing.
Where can I find or get in
touch with a business incubator? Call the Texas Business
Incubator Association at 713 932-7495 ext. 13 and ask for C. Dean Kring, past
chairman of TBIA. Nationally, contact the National Business
Incubation Association at:
20 East Circle Drive, #37198, Athens, OH 45701-3751
Phone: (740) 593-4331
Fax: (740) 593-1996
What do I have to do to become
part of an incubator? Almost all incubators have some sort of an entry
requirement. Most of the well-established incubators with a track record of successful
businesses will want to know more about you, your business and your goals before making
any commitment. Be prepared to pay for incubator screening or qualification processes.
Is there a difference
between a business incubator and an accelerator? Only in name, not in
function. After research data was published conclusively demonstrating that business
incubators accelerated business growth many of the next generation incubators came online
using that term.
Is there a difference in
a not-for-profit business incubator and a for-profit business incubator? Not
in mission, both having the goal of starting and growing businesses. Past these two
commonalties, there are substantial differences in entry criteria, support personnel,
success rates and methodologies.
Prepared as a
public service by the Incubator
Self-Sufficiency Group, consultants to economic development units, incubators
and incubator developers, Houston, Texas 713-932-7495, ext. 49.