What Are Business Incubators?
What is a small business incubator?
A generic name applied to a business development group that provides the
environment and resources to accelerate business growth. Incubators reverse the statistic
of small business failures - more than 80% of startup businesses succeed in an incubator.
How does it work?
An 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 can learn.
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 have them grow at a rate that is 7 to 22 times
faster than businesses started otherwise. Incubators do this by maintaining an inventory
of business experts, consultants, advisors, procedures, methodologies, state-of-the-art
technologies and total
resources that businesses are likely to use in the growth process.
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
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.
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.
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? Contact the National Business Incubation Association. In Texas, contact
the Texas Business Incubator Association.
What do I have to do to become
part of an incubator? Almost all incubators have specific
entry requirements. 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, assessment or qualification processes.
Prepared as a public service by
the Incubator
Self-Sufficiency Group,
consultants to incubators and incubator developers.
Houston, Texas 713-932-7495,
ext. 49.
FOR MORE INFORMATION click here |
