One of the latest trends in the world of business is incubators that have the power to fulfill the growing needs of small ventures. An incubator refers to a campus or edifice that growing firms can enter into via an application. Such an incubator typically rents office space, technology, and equipments to the patrons as per the type of business. So, the major aim of an incubator is to offer an environment where upcoming businesses can obtain the desired support for progressing well in their respective niches. Apart from space and tools, a few incubators also make a few vital professional services available such as marketing and bookkeeping as well as facilitate successful industrialists to serve their clients as mentors. Moreover, a few incubators work on behalf of clients to seek investors for getting the required capital.
Generally, several businesses tend to operate under an incubator that may be led by a private firm or by the government. Although a majority of incubators are non-commercial in nature, they do charge ongoing fees for their support and that they do have their own set of entry criteria without which a business cannot enter.
The Entry Criteria
The eligibility criteria to enter into a business incubator tend to differ drastically as per the niche. For example, several informal incubators running through associations or local community support often have unofficial criteria that are quite easier to fulfill rather than those set by official ones. Moreover, the official or professionally-set incubators tend to follow a selection process that might demand a fund commitment from the owners as well as an established level of revenue. After fulfilling the entry criteria, the owner requires to pay a monthly rent that is quite lower than the prevailing market rate for the primary requirements such as space, tools, and services. Further, an additional amount of fees is demanded for any kind of change required in the space. As per the business area, an owner might be eligible for government grants for getting in an incubator.
The Rewards
Taking the advantage of a business incubator can grant a lot of rewards to the small business owners. The clearest reward is to enjoy a relatively affordable space that is scalable enough to facilitate growth without investing highly. Several incubators offer tools and machineries on rent for scaling the production, which a juvenile company might not be able buy yet. Another main benefit is the easy availability of shared business services at a reduced cost. Because an incubator entails several businesses, the owners can opt to share the cost of essential services such as legal advice and marketing research.
Working together with other business owners who are also struggling to develop their businesses is actually a big opportunity to help gown one’s own. Such a work environment offers a group of peers who can share experiences in dealing with different scenarios as well as challenges. This means opportunities always exist for useful interactions of idea exchange. This is something that may not be available to other owners facing everyday troubles for developing and running a business.
It is a great help when a new business is associated with a professional staff for receiving a timely and accurate guidance as well as for organizing their accounts for making an appeal to banks. This, together with good reputation, facilitates the business to obtain loans easily for their commercial needs. Banks are also ensured of the genuineness and credibility of the new small business because of its presence in the incubator. Just like banks, other experts such as angel investors and venture capitalists consider dealing with owners in the incubators as beneficial for allowing the latter to establish a long-term practicality of a new setup.
Bio: Shawn Winkler is a business consultant in a small agency in New Jersey. He wishes to be a famous personality when it comes to giving new ideas for any situation or problem. Shawn is much inspired by Charles Philips and Alex Von Furstenberg.