In this article, we will look at what a business incubator is, who creates such projects and what new entrepreneurs can get from them.
Let’s start with the generally accepted definition. A business incubator is a special platform that provides various types of support to aspiring entrepreneurs and contributes to the development of a promising business from scratch. The main goal of such an organization is to help an entrepreneur who has the enthusiasm and an idea but lacks sufficient starting capital and experience. Typically, a business incubator provides a novice with the following:
- Office. The cost of renting a room for the team is perhaps the main problem of most startups. A business incubator provides the right space for the lowest possible cost, which is very useful in case of a limited budget.
- Communication with authorities. Lack of business experience, including the absence of contacts with the authorities, can kill a young but promising business. Incubators can offer solutions.
- Consultations. To come up with something original is one thing. To establish production, obtain a patent, license, etc. is something completely different. There are professional lawyers and legal consultants in business incubators, and they can help you to draw up a contract correctly, assess the legality and legitimacy of the requirements of authorities, partners, suppliers, or clients.
- Legal issues of participation in tenders and trades. If the product is really interesting and stands out from the competition, you can try to sell it in large quantities through open bidding and tendering. Business incubator specialists will help you with this.
- Assistance in attracting investments. Any business needs investments, but for a novice entrepreneur, they are necessary as the breath of one’s nostrils. Business incubator specialists know well where and how to look for investors, as well as how to present the project to the investor in order to get the desired result.
- Advice on advertising. In order for a new product or service to be sold, you need to work on advertising. Since newcomers do not understand how to deal with it, consultations from marketers at a business incubator will be useful.
Thus, we can say that business incubator provides a “breeding ground” for start-up entrepreneurs, where they will be able to put their business idea into real-life companies. But business incubators are very different in the range of services they offer. For example, state-owned companies, as a rule, provide only premises for rent at a reduced cost, and basic consultations. As for private business incubators, they can show “personal interest” offering their investments and share in future business.
Before you choose a specific organization for yourself, you must first think if your business incubator offers the services you need and whether you are ready for the conditions offered to you; in other words, you need to understand what exactly they offer and what you will need to pay for.