How to benefit from a business incubator.

Every entrepreneur knows the early phases of a business are the toughest in terms of survival. The list of decisions to be made is endless, forming a network of business connections is time-consuming, and costs must constantly be monitored.

Business incubators provide precisely this type of assistance. A business incubator's main goal is to produce strong ventures that will lead to successful survival in the working world. This is accomplished by providing management support, referrals and shared resources.

Typical incubator clients are pre-launch phase entrepreneurs who have an idea, but need the support and assistance of a structured framework or existing entrepreneurs who are looking for support services while regrouping in anticipation of a growth phase.

Whether it is a new or existing business, these clients benefit from a support network of other business owners in the business incubator and essential management support from the business incubator staff. Typically, this includes an incubator manager and assistants who act as sounding boards for clients. Key connections and referrals are also made through established links to the community.

Client operating costs are greatly reduced by the policy of shared resources. The scope of shared resources may vary from one business incubator to the next. However, shared resources usually include a receptionist, use of a boardroom and office furniture, photocopier, fax service, telephone and Internet connection.

Government, education and corporate sector involvement further supplements the support and services offered by business incubators. Government funding is one component. Another key benefit stems from community partnerships with educational institutions. The third beneficial element comes from local corporation partnerships specifically established and nurtured by the business incubators.

Typical incubators have a graduation policy of three years. This length of time allows the business to get through the introductory cycle and into their growth phase. By that time, incubator clients are deemed ready to survive in the working world. Operating costs begin at a relatively low level. During the first year, rent is usually minimal, always far below market value rates. Rent typically escalates by year three to meet or exceed market value. This increase is inflated as an incentive to get the entrepreneur out on his/her own.

OPERATING IN A BUSINESS INCUBATOR

Business incubator clients run their own businesses within the incubator framework. The material they produce is their product. They choose whether or not to take the advice given, and the final decision for each business rests with the entrepreneur.