Business Incubator

Business Incubators Bridge The Gap

Entrepreneurial startups are often strapped for cash and can’t afford to lease office space, purchase office equipment or hire administrative support staff necessary to run their businesses. Business incubators help bridge the three-to-five-year gap between startup and successful maturity, by providing flexible facility rents in move-in condition including utilities at less than going rates for area industrial or business complexes.

Business Incubators Provide Services

Services are provided for a fee and include janitorial, high-tech manufacturing environment requirements, T1 and DSL connections, security systems and shared common areas such as kitchens and conference rooms. Administrative office support is provided with common waiting rooms, staff to answer phones, shared binding machines, voice mail systems, photocopiers, fax machines and audio and visual equipment, including presentation projectors, TV monitors and TV/VCR combos.

In return fledgling companies get a business mailing address, a professional image and a network of other like-minded business owner residents of the same incubator encouraged and eager to do business with one another.

What Are Incubators?

Incubators are public and private organizations including universities, state and local government agencies and community groups that charge a fee for their services.

Public institution business incubators sometimes focus on the development of science-based high tech product and service businesses because these often have the highest potential for future growth and return on investment. These incubators often collaborate with universities and research institutions to identify and motivate researchers to take the risk of creating a company based on their inventions or research.

Private incubators are for-profit firms or investors that get equity or charge a fee for services provided. The incubator programs encourage and promote the creation of new businesses, because these have the potential to strengthen local, regional and national economies through the creation of new jobs, revitalization of older neighborhoods and commercialization of new technologies. There are currently more than 1,000 incubators in the United States.

What Services Are Provided?

Tech support, hands-on management, strategic planning, marketing and consulting services, legal advice, accounting services, and assistance in obtaining financing necessary are provided. Assistance is offered on how to develop a business plan, and guidance on developing and marketing ideas, intellectual property and other intangibles. Business incubator coaches bring to the table an invaluable source of contacts for entrepreneurs to tap into.

Financial Assistance

New firms need seed and start-up capital financing to grow. Business incubators bring to the table contacts and relationships they have with many different investors including seed and venture capital firms, business angels and banks. They also bring contacts they have with regional and national government agencies and their network of financial grants.

What Businesses Can Qualify?

At one time, incubators focused primarily upon light industrial, technical and service firms. But today industries include food processing, medical technologies, space and ceramics technologies, arts and crafts, software development and telecommunications. Other microenterprise programs target the needs of women, minorities and environmental firms.

For information on business incubation programs in your state, go to the National Business Incubation Association's Links To Member Incubators page or send an e-mail message to info@nbia.org.

National Business Incubation Association An organization advancing business incubation and entrepreneurship.