Boost Innovation

Business Incubators

Getting Off to a Good Start

The International Business Innovation Association defines business incubators as entities that nurture the development of entrepreneurial companies, helping them to survive and grow during the startup period when new businesses are most vulnerable. Incubators may offer office or manufacturing space at below-market rates and staffs to provide mentoring and expertise in developing business and marketing plans. Some incubators offer assistance with funding, but that is the exception rather than the rule.

Incubators are generally attached to universities, but they also may be sponsored by economic development organizations or government entities; only about 4% of incubators in North America are for-profit entities. Generally speaking, companies spend an average of two years in a business incubator, and to help reduce everyone’s overhead, they share telephone, secretarial services and production equipment expenses with the other startup companies.

The process for joining an incubator varies. Most require a formal application and an appearance before a selection committee.

Not all business incubators are alike, so try to find one that best matches your firm’s special requirements. You’ll find a list of Florida-based incubators with websites for additional information here. To search more widely, visit the International Business Innovation Association’s website at www.inbia.org.

Accelerators and More

More Options for Startups

Depending on your needs and the nature of your business, you also may want to consider the following:

Business Accelerators share the same overall goal as incubators — improving a fledgling business’s odds of success — but with a different method and a shorter time frame. The focus is on small teams, a single project and a deadline that’s usually within three months. Most accelerators end their programs with a “demo day” in which participants present to potential investors; a seed investment is usually made in exchange for equity.

Coworking Space is an office or other type of working environment that is shared by people who are self-employed or working for different employers with the goal of creating an environment to foster connections and creativity. Participants pay a monthly rent for shared space and equipment.

Research Parks are property-based ventures consisting of R&D facilities for technology- and science-based companies. Sometimes called science or technology parks, these larger-scale projects generally do not offer comprehensive programs of business assistance; their focus tends to be more toward economic development and technology transfer.

Is a business incubator right for you?

Securing a place for your company in a business incubator doesn’t guarantee financial success. Here, instead, is what you can realistically expect from your incubation experience:

• Expert Mentoring and Training Successful incubators all share in common these traits: strong leadership and staff with solid business and investment credentials. When you go “shopping” for an incubator, look for one that is more than simply a place to park your laptop.
• Peer Support At startup incubators, you’ll be working alongside peers who can provide both emotional support and expertise in areas you may not be so comfortable with.
• Ample Resources Ready access to affordable office and meeting space, administrative services and advanced technology is a huge plus for struggling entrepreneurs. So the incubator you choose should be about more than vacant space and cheap rent.
• Learn by Doing There’s no teacher quite like experience. In an incubator, you can test ideas in the real world within an atmosphere of structure and discipline while expending a minimum of time and money.
• Funding and Connections Affiliating your firm with an incubator doesn’t guarantee that you will receive any funding. However, like an MBA from the “right” school, it could open some doors, providing connections to influential people and easier access to venture capital.

Tags: Florida Small Business, Business Basics