So, you’re thinking of launching a startup. You've got a good idea that you believe will change the planet. Maybe business idea won’t necessarily alter the world and can change your life — propelling you against your boring old 9-to-5 to successful entrepreneur. Unfortunately, it requires considerable time, work, and capital to turn your idea right into a thriving business. If you’re new to entrepreneurship, finding the resources you have to help be sure that your success can be a challenge. If you’re like many aspiring entrepreneurs, you may not even know where to get started!
Do a fast search on the internet for startup resources, and it’s easy to get overwhelmed. Private investors, P2P lenders, vc's … everything gets so confusing. While these are certainly great resources to think about, this post is going to concentrate on one startup resource in particular: Business incubators.
While what may appear confusing or perhaps intimidating, a company incubator may potentially be one of the biggest resources that will help you launch your startup. While not for everybody, it’s vital that you understand what a business incubator does and just how it can benefit your startup remove with an abundance of resources, from financing to shared office space. Whether business incubators are completely new for you or you’re actively weighing out your options, you’re in the right place.
Keep reading to explore business incubators, how they work, and how to determine whether this is actually the right financial resource for the startup.
A Business Incubator Can Help You Launch Your Startup Idea
There are roughly over 7,000 business incubators over the United States, per the International Business Innovation Association. These incubators have helped launch countless startups across the nation. But what exactly is a business incubator?
The InBIA defines an incubator as “a business support process that accelerates the successful development of startup and fledgling companies by giving entrepreneurs with an array of targeted resources and services.” Still scratching your face? Don’t worry — the concept is actually fairly simple.
Think of the term “incubator.” Inside a hospital, an incubator is really a device used to help support the health and development of a baby born by having an illness or that was premature. The incubator provides ideal conditions that can help the kid thrive despite these challenges. On a farm, incubators are utilized to create the perfect conditions for successfully hatching eggs despite environmental challenges.
A business incubator works in exactly the same. While it isn’t an actual device, the concept of a company incubator is similar to other types of incubators: To supply resources and ideal conditions for launching and growing a startup. An incubator helps the business navigate common challenges (for example, a lack of funding or perhaps a requirement for networking) in order to give the business a greater chance for success. We’ll further explore what incubators specifically offer and how these benefit small business owners a little later in this article.
A quantity of startups can usually benefit from business incubation, including businesses during these industries:
- Technology
- Construction
- Manufacturing
- Energy
- Defense
- Aerospace
- Biosciences
- Electronics
Why Entrepreneurs Work With Business Incubators
Why do entrepreneurs work with business incubators, and why wouldn't you use one? There's a host of advantages that come with working with business incubators, including:
- Access To Capital
- Networking Opportunities
- Business Advice & Mentorships
- Management Tasks
- Internet Access & Shared Workspaces
Access To Capital
One from the major challenges faced by startups is access to capital. Deficiencies in business credit, a short time in business, and low (or non-existent) revenues are just a few of the barriers startups face when seeking capital to launch or expand their businesses. A business incubator will help you navigate these challenges and open opportunities for financing that wouldn’t well be available.
A business incubator can refer its startups to vc's, angel investors, along with other investors. Business incubators may also connect businesses to loans, grants, and guarantee programs.
In addition to these resources, business incubators will also help startups prepare presentations for investors and banks and finish other tasks to secure financial backing.
Networking Opportunities
Business incubators open opportunities for meeting key players, including potential partners, future investors, and leaders within your industry. Business incubators will help you interact with other entrepreneurs and can provide you with a heads-up on relevant networking events and help spark connections that will help your business now and well in to the future.
Business Advice & Mentorships
Let’s just say it: Starting your own business is tough. Growing that business and ensuring its success could be even tougher, particularly if you’re a new player in the game.
As part of a business incubator, you are able to connect with others who will be in your shoes and who are in possession of insight that can be passed along for you. Sure, it isn’t necessarily the important thing to success, but having someone working for you that can help you navigate the rocky road of entrepreneurship isn't bad.
Your mentors can help you identify your present objectives, determine your goals for the future, assist you in finding your audience, and may help you navigate regulatory hurdles and manage your ip.
Management Tasks & Marketing
A business incubator might help its startups with management tasks and marketing. This includes:
- Assistance with marketing plans & campaigns
- Helping with market research
- Accounting & financial management guidance
- Management team identification
Internet Access & Shared Workspaces
A business incubator also typically provides high-speed access to the internet and shared workspaces. Besides this provide you with the space and tools you need to launch your startup, however it can also help you cut your expenses by saving money on rent, utilities, and access to the internet.
Types Of Business Incubators
Depending on whom you ask, there are a number of various kinds of business incubators. The InBIA classifies its member incubators into five separate groups:
- For-profit property development ventures
- Non-profit development corporations
- Academic institutions
- Venture capital firms
- Combination of several from the above
These broad categories can be divided further into groups such as:
- Public incubators
- Medical incubators
- Virtual business incubators
- Venture builders
When A company Incubator Is a great Option for Your Startup
Business incubators sound great, but unfortunately, they’re not a good fit for every business. How do you determine whether a company incubator may benefit your business? Think about these points:
- Time Commitment: Are you ready to commit serious time to launching and growing your company? Should you view your new venture as only a side project, avoid working with a business incubator. Business incubators are perfect for startups and businesses that are ready to commit time for you to meetings, events, along with other tasks.
- Access To Business Resources: If you simply need financing to get your business off the ground, consider other options, like a ROBS plan or getting an unsecured loan for business use. However, if you’d like use of capital, the chance to network with investors, mentors, and resources which takes your business off the ground and to a higher level, a business incubator may be right for you.
- Speed Of Growth: Business incubators really are a little different from business accelerators. If you want to propel your growth one stage further inside a almost no time, think about a business accelerator. If, however, you’re comfortable with slower, steadier growth that could stretch out over a few years, a business incubator can be a good fit for the business.
- Your Industry: The majority of the business incubators within the U.S. are industry-specific (i.e., the tech industry or even the medical industry.) This isn’t always the case, but if you need assistance breaking through in a niche industry, a business incubator may help.
How To locate & Get Accepted To A Business Incubator
Think a business incubator can help you get your startup off the ground? If so, the next step is finding the right one for the business. Fortunately, there are a variety of free resources at your disposal that will help you explore different business incubators in your area.
The InBIA which has already been mentioned in this article is a superb resource to explore business incubators. You can learn more about business incubators, take a look at webinars, and state-specific information and resources on incubators.
The Sba (SBA) is another top resource for researching business incubators, accelerators, and low-cost loans. Unsure of where to start? Browse the SBA’s list of local offices that provide business development resources, counseling, and training. These experts can help point you in the direction of local company incubators.
Finally, you will get in touch with the local or state economic development departments to explore incubators along with other helpful resources in your town. A quick online search can help you discover the department you’re looking for. Once you’ve found an incubator that you’re thinking about joining, contact the organization for more information concerning the application. While this varies across incubators, there are several commonalities, including:
- Meeting Admissions Criteria: Admissions criteria varies, so make sure to do your research. Some incubators may require you to definitely be in certain industries, have specific revenues or headcounts, or meet other criteria. In some instances, you may also be asked to sign an agreement or pay membership fees, so make sure you know what is expected individuals before you apply.
- Showing Your company Plan: Incubators are ideal for businesses that are primed and ready to grow and become successful. Among the first stuff you must always have ready is the business plan. Not only may this be a requirement for admission, but your own business plan will help you clearly outline your purpose that will help you maintain focus.
- Meeting With The Screening Committee: Generally, you’ll have to speak with people in the incubator before you’re admitted towards the program. This committee may request information about your past experience, what your business offers, and your future goals to find out if you’re a great fit.
Learn About Other Resources For Entrepreneurs
While business incubators have certainly helped their share of companies, they aren’t precisely the right option for every business. If you’re still on the fence or you’ve went another route, don’t worry — there are lots of great options out there that will help your startup dreams be realized. Obviously, we here at want that will help you find the right option for your business. From your listing of entrepreneur financing choices to finding an angel investor or venture capitalist to back your company, we’ve got your back. Take a look at our additional resources to obtain the strategy that’s good for you. Good luck!
