Benefits of Business Incubators

 

A lot of recent MBA graduates are hoping to pursue an entrepreneurial route and create their own business instead of becoming a corporate worker an employee. A great business concept however, is not a assurance that you will succeed in the current highly competitive market. Entrepreneurs also need to be able to establish and run a profitable business that can transform their ideas into a profitable, marketable real-world reality.

To go from concept to reality numerous entrepreneurs who are just starting out turn to incubators to get help. Startup incubators are specifically designed to provide startups with the space, resources knowledge, connections, and expertise they require to start their journey.

The numbers of success are hard to find, but one Forbes article written by OneClass Chief Executive Officer Jack Tai cites some research that provides insight into the value of incubators. These include:

A study conducted in 2010 by the now defunct National Business Incubation Association (NBIA) found that businesses that were incubated achieved a 87 percent success rate, which is more than double that of businesses that were not incubated.

The UK report from the year 2014 showed the 92 per cent of the incubated companies were successful.

He also explains that many of the most successful businesses, like Airbnb, Dropbox, and Reddit were famously founded or got their beginnings in incubators.

With such a wealth of data and the anecdotal evidence to support them incubators can be a great choice for many entrepreneurs looking to establish a company. Before embarking on this journey it is important to have a solid foundation in the fundamentals of business is crucial. This type of foundation is available through MBA programs like Washington State's Online Master of Business Administration. It offers a complete entrepreneurial MBA program, the WSU on-line MBA degree program allows students to fully benefit from any incubator for startups.

Providing Basic Needs

In their most basic form incubators assist entrepreneurs by providing practical specific resources that can be difficult for new businesses to acquire or to afford and include:

Office space. Incubators typically have office spaces that startups can utilize for a fraction of the expense of traditional offices. Based on the requirements of the business the participants have the option of choosing from alternatives like offices that are shared or private offices. They can also choose single cubicles. The space will usually include shared facilities like printers, photocopiers and bathrooms, high-speed internet and utilities, and even support for administrative tasks.

Equipment that is specially designed. Some startups require specific equipment that is expensive to purchase. For instance, an food-related company that requires kitchen facilities or a medical startup that requires access to a laboratory. Incubators are able to provide these facilities. They could also offer expert training and equipment for special equipment.

Through providing these requirements incubators do not just eliminate certain financial obstacles for entrepreneurs, but can also ease the work involved when starting a company.

"Because the infrastructure of running a business is already in place when you arrive at an incubator, you'll be able to focus solely on the core of your business without needing to worry about all of the distractions that typically occur while doing so," An company known as University Lab Partners.

Expertise on Tap

Beyond the essentials for daily operations, incubators offer participants access to valuable business-related information and advice. The information is provided in three principal types:

Peer contact. Most incubators have sufficient lab or office space to accommodate dozens of startups. The participants constantly cross paths with each when they are doing their tasks. They can establish friendships and exchange "war stories" about what they're up to, including what's successful, what's not success, failures, and successes. They are also able to give and receive feedback, advice, and suggestions. The daily support from peers is extremely valuable. "Speaking with and learning from other entrepreneurs can be the inspiration you need to push yourself--and each other--to reach the next benchmarks of success," according to CO. U.S. Chamber of Commerce's website CO.

Training. The majority of incubators provide formal training however the details differ from one incubator to the next. According to the website for financial services CFI the most common offerings are the training of managers; advisory services; as well as support or education in business fundamentals like market research and marketing accounting, financial management, and legal compliance.

Mentorship. Opportunities to learn from and connect with business professionals who have been around for a while is an important advantage of incubators. They are determined to help entrepreneurs get started on the right foot and avoid the numerous pitfalls that come with new venture ownership. "While making mistakes along the way to success is an expected part of the process, these mentors are there to help you avoid making similar ones they've made when they were just starting out," CO clarifies.

Networking and Funding

Another benefit of incubators is the access to financing and networking sources, which are essential components which any business in its beginnings requires to succeed. University Lab Partners (ULP) talks about the importance of these advantages:

Networking. Networking is the act of sharing information and forming connections with business professionals. It is crucial for the success of any business. "If you've never started a company before, you'll likely find it difficult to develop a strong network without a solid foundation of professional relationships and connections in the industry," states ULP. Incubators help facilitate this process with peers within the program as well as outside professional connections. The participants should be prepared to have solid professional networks established by the time they quit the incubator.

Funding. A lot of startups require outside capital for their ideas to come to fruition. Some incubators provide participants with an amount of money in exchange for a small part of their company. Some do not offer directly funded funding, but do connect users with "angel" investors who may be able to assist. The incubator could also offer opportunities for training and pitches where entrepreneurs can present their ideas to investors who are interested.