Could Your Startup Benefit from a Business Incubator?
When most people hear the word “incubator,” they think of a plastic box used to keep babies who are born prematurely warm and protect them from noise, light, and infection. But add the word “business” and you’ve now got a very different meaning.
Business incubators are organizations that help startup and early-stage companies achieve success faster. Also sometimes referred to as business accelerators, these organizations can provide valuable business assistance to new and startup entrepreneurs.
“Aspiring new entrepreneurs often think they can be a jack-of-all-trades,” says Dustin McQuillan, founder of Think Big Ideas, an organization dedicated to helping startups succeed. “They don’t realize they need a team of advisors who can help them at every step along the way.” This is one of the key benefits of business incubation.
Business incubators focus exclusively on startup and early-stage businesses that are often run by entrepreneurs who are starting their very first companies. This is in contrast to the SBA’s Small Business Development Centers (or SBDCs) and similar business support programs that work with any type of business, at any stage of development.
There are currently about 1,400 business incubators operating in the United States, according to the National Business Incubation Association (NBIA), and about 2,100 operating worldwide. The importance of the role that business incubators play is evident when you consider the fact that an estimated three out of every four new startup businesses fail. However, businesses that go through incubators historically have a nearly 90 percent survival rate.
What Business Incubators Provide
Business incubators provide many different types of practical, hands-on assistance to owners and entrepreneurs. “This includes access to a network of industry leaders and business experts that startup founders may not have access to themselves,” says McQuillan.
In addition, business incubators can introduce entrepreneurs to bankers, lawyers, accountants, and venture capitalists who can help them when it comes to the financial and legal aspects of their business. And perhaps most important, they offer one-on-one coaching and mentorship that can prove invaluable to brand new entrepreneurs dealing with the rigors of business startup and ownership for the first time.
“It’s so important for new entrepreneurs to have a mentor—someone else who has been successful in business whom they can learn from,” says McQuillan. “Entrepreneurs can talk about their challenges out loud with this person and they can come up with solutions together.” Sometimes referred to as the Master Mind principle, this pools the mentor’s knowledge base from other experiences that can help save the entrepreneur both money and time, McQuillan adds.
Some business incubators work with entrepreneurs in a physical, face-to-face environment, while others work virtually. In the former instance, business incubators can provide entrepreneurs with actual physical office space in which to conduct business as well as shared administrative and other support services. Also, in addition to introducing entrepreneurs to venture capitalists and angel investors, many business incubators have their own capital to invest in startup ventures.
The NBIA is a good place to start your search for a business incubator. There is a search engine on the NBIA’s website that you can use to locate a business incubator near you as well as a directory of state business incubation associations.
Right for You?
Among the many important lessons he has learned as a successful entrepreneur, says McQuillan, is the fact that “you can’t do everything yourself. Figure out what your strengths and weaknesses are, and then leverage your strengths and work on improving your weaknesses. And surround yourself with resources that can help you.”
One of these resources could be a business incubator. If you are a startup entrepreneur, it might be worthwhile to investigate whether working with a business incubator is a wise move for you and your startup business. McQuillan’s company, Think Big Ideas, has a wealth of information available to those who sign up for their free newsletter at this link.
Commissioned Article (Source: Think Big Ideas)
