Business incubators are essentially organizations that increase the survival rates of innovative startups and support the entrepreneurial process. Incubators earlier used to focus mainly on the IT segment but now they work with companies from diverse industries and orientations. This post discusses the concept of business incubators and business incubation, the role of business incubators, types of incubation services, and the phases involved in business incubation development.

The people working for a business incubator perform intensive research before supporting or funding startups. The primary objectives of business incubators are creating employment opportunities in the local economy and commercializing technologies.

National Business Incubation Association (NBIA) defined Business Incubators as a catalyst tool to Regional and National Development.

The whole idea behind business incubators is to offer a range of business development services, full-access to small spaces on flexible terms, and to meet the needs of new firms. The package of services offered by a business incubator is designed to enhance the success and growth rate of new enterprises; hence, maximizing their impact on economic development.

The number of incubators has grown considerably in recent years. This rise is attributed to factors such as corporate downsizing, increased entrepreneurship, new technologies, economic globalization, and the transfer of technology.

What are the Benefits of a Business Incubator?

Based on the typical offerings, the implications for a startup taking up residence at a business incubator are clear. Unrivalled access to funding, mentors, skills development programs and a collaborative work environment can make a world of difference to your success. There are less obvious benefits, though

Unlike accelerators, incubators don’t put a time stamp on their support programs. That means you aren’t bullied into growing too quickly, and are free to scale and expand at your own pace. Likewise, business incubators don’t ask for equity in your company in return to access for resources. That means you reap all the benefits without having to hand over a piece of your company in the process.

What are the Drawbacks of a Business Incubator?

Incubators do have a couple of drawbacks, too. Because most incubators are non-profit organizations, they generally can’t offer you the sort of access to capital you might enjoy from an accelerator or wooing an angel investor.

Furthermore, business incubators aren’t quite as intensive as accelerators – which means the support you receive from an incubator will be a bit more ad hoc and spaced out. An incubator is a place your company will generally live and grow for years on end, and so if you want instant results, an incubator might not be for you.

Yet by and large, incubators are invaluable safe havens that the vast majority of start-ups should seek to benefit from. Incubators aren’t for everyone, but they’re definitely worth checking out. Remember to do your homework, though. Just like any other organization, no two incubators are alike, and some are undeniably better than others.

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