We all know that starting a business is difficult. There is a lot to know and do, it is exhausting and expensive, and there are many moving parts. On top of that, as you also know only too well, money is usually tight. How do you balance the financial needs of renting space, hiring staff, building a brand, and launching a business?
That’s where business incubators come in.
Run as non-profit organizations, business incubators are intended to, well, incubate new businesses. Funded by colleges, governments, civic groups, and other organizations interested in job creation and economic development, business incubators are collaborative programs designed to help new startups grow and thrive.
They do so by providing workspace, support services, networking opportunities and training. Here’s an example: The Innovation Depot in Birmingham, Ala., is a 140,000-square-foot facility housed in a former Sears department store. It is funded by the University of Alabama at Birmingham, the Birmingham business community, leading foundations and the City of Birmingham and Jefferson County. This particular incubator focuses on the development of startups in industries as varied as biotechnology, IT and service.
While all business incubators have the same purpose, to help launch and grow successful businesses, not all incubators are the same. Some specialize in forming businesses applicable to a specific region of industry. In the Silicon Valley, for example, you will find business incubators that foster high tech startups. In Kansas, the incubator may focus on farming businesses. It all depends upon the region and the purpose of the particular incubator. And then again, it might just be an all-purpose incubator.
There are obviously many benefits to housing your business in a business incubator. Aside from the reduced rent (business incubators typically charge between 25-50% less than regular rents), other plusses that come from housing your startup in an incubator include:
- Great contacts
- Client referrals
So, how do you get in? What you do need is a great idea, a viable path and a good business plan. Because different incubators focus on different sorts of business, it is impossible to state specifically what different incubators look for and what the selection process may consist of. It may be as easy as an application and an interview, or as complicated as a stringent multi-round screening process. That said, it is safe to say that any business incubator wants a business or entrepreneur that not only has a good chance of succeeding, but one in which the incubation process can be the business’ tipping point. Incubators also obviously want business that will bring jobs to the area.
For more information on incubators, contact the National Business Incubation Association at www.nbia.org.