When you think of incubators, you might think of babies who need a little more help to grow. In the world of business, incubators also exist to do just that. Only this time, they’re incubating startup companies instead of babies.
The Basics of a Business Incubator
To put it simply, a business incubator is a company that helps to develop startup companies. They provide a wide range of services that startup companies need. These services include training facilities, trainers, office space, or links to potential funding services. These business incubators accelerate the growth of a company that would otherwise need to take out loans or survive on uncertainty until their product takes off.
The five types of business incubators are categorized based on the services they give: academic institutions, non-profit development corporations, for-profit property development ventures, venture capital firms, and any combination of the above incubator types.
What Do Business Incubators Do?
Business incubators are usually big, established businesses that have a little extra manpower or capital to invest in small businesses. Startup companies can reach out to business incubators through the National Business Incubation Association. The NBIA has a search engine and directory of businesses that provide assistance to businesses in each state.
Once a startup business and a business incubator get in touch, they work on finding the best strategy to accelerate the growth of the startup. These strategies vary dramatically based on the nature of the business and business environment.
In many cases, the business incubator helps out by giving the startup some capital to invest. Funding is one of the biggest challenges of a startup, so a little more capital can go a long way in helping the business grow.
Another way a business incubator can help out is by giving access to various services. Many startups don’t have accountants, lawyers, or even administration staff. The business incubator may sometimes even allow the startup company to rent an office in their premises. This gives the smaller company access to a wide range of services – from the aforementioned staff to more complex services like training and networking connections.
The Downside of Having a Business Incubator
The one potential downside to getting involved with a business incubator is not being able to focus on the mission of your startup. Many startups become so focused on the growth of their business that they can sometimes forget that bright idea that got them started in the first place.
Business incubators are a huge help to small startup businesses that need a leg up in the game. They provide valuable support that a small but growing business needs.