When you start your business, you are almost overwhelmed by the limited funds, lack of experience, lack of mentors and advisors on board with our business incubator, lack of knowledge in sourcing resources, and difficulty managing operations. You are also unsure about the following:
- Recruiting the right kind of staff.
- Managing cash flows.
- Scaling your business at a rapid rate.
- Planning your exit strategy.
- Legal terms and conditions.
- Knowing the state and country regulations.
- Building the right kind of business network, and much more.
In such cases, incubators for small businesses prove to be angels. With all the above confusion and the pressure to earn enough to meet the basic expenses during the first year, using an incubator for small businesses is always advisable.
Earlier, there were only a few incubators in certain cities. However, with the rapid rise in the number of startups worldwide, incubators have also increased over time to support startup entities.
Incubators are known to increase the survival rate of small businesses. The business incubator is the perfect place to start if you want to scale up your business and are ready to run. Let’s understand what a business incubator is and its benefits and disadvantages. If you have an online marketplace for sale and want to get it validated, get into a business incubator, get your idea validated, and kick-start your business journey with a great support system.
What is a business incubator?
Business incubators are thriving communities and places for startups. It helps startups grow, innovate, and come out with flying colours.
Business incubators provide an in-depth assistance program to startup founders, including mentorship, training, consulting, and networking opportunities with the right target audience and investors. Incubators for small businesses make them fund-ready. The founders have to undergo the processes and due diligence defined by the incubators in the workspace.
The various brainstorming sessions founders have with their mentors each week are enjoyable. The mentors come from different backgrounds and have different experiences.
Business incubators play a significant role in creating the mentor pool for aspiring founders in their incubators. These academic and hard-hitting sessions help them grow faster and know the real-world challenges while giving shape to the business at a lower cost.
Incubation centers seek a minimum commitment period from the startups. It houses dozens of startups and helps them become commercially viable. In addition, it helps them connect to various local, national, and international communities and platforms. Business incubators work with early-stage startups.
Did you know there are typically nine types of incubators?
- Startup Studio
- Venture Capital incubators
- Corporate Incubators
- Seed accelerators
- Kitchen Incubators
- Social Incubators
- Academic incubators
- Virtual Business Incubators
- Medical incubators
With strong community partnerships and critical business advisory services to support entrepreneurs, every business incubator has a different operating model. Research says that small businesses incubated in business incubators receive more leads and generate more business than those running independently outside.
What is a business accelerator program?
A business accelerator gives funding and mentorship opportunities to growth-stage startups. They support early-stage, growth-stage, and growth-driven companies in terms of mentorship, training, financing, and networking. It runs a short program to make the startup marketable and investment ready. Business accelerators generally run a few months of cohort programs for startups rather than training them individually. Such programs, or cohorts, typically last from three to twelve months. The cohort or program is generally intense, innovative, and aimed at improving young and emerging entrepreneurs’ business mindset and life cycle.
Let’s check out some examples of startup accelerators.
The number of accelerators is exponentially growing each day. Listed below are some of the best accelerators in the world.
- Y Combinator
- Founder Institute
- 500 Startups
- Plug and Play
Learning by doing is the prime focus of accelerators, which helps ventures scale faster. Accelerators are meant to accelerate the process from a few years to a few months.
When is the right time to apply for a business incubator?
Incubators are meant to nurture your idea and get you and your idea ready for scaling. Small business incubators help hone the business idea and are best suited for entrepreneurs who have started their entrepreneurial journey. When you are unclear about your path or about how to kick off your product or service, opt for an incubator
On the other hand, if the startup already has a minimum viable product and some traction in its business, an incubator will be the right choice. For instance, incubating can be an excellent option to build the right niche marketplace if you are into buying and selling in an online marketplace.
Benefits of Business Incubator:-
- Provides a competitive environment – A business incubator for small business saves your rent by providing you with a coworking space environment. Coworking Space is a healthy environment to work in with many other startups working in different domains. It opens up a world of opportunities with extensive learning from fellow innovators.
- Bunch of Mentors & network professionals – Business incubators have a vast network of mentors, advisors, and consultants who gear you up for the entrepreneurial journey. Mentors can be from diversified backgrounds, such as lawyers, accountants, marketing specialists, digital marketers, angel investors, HR professionals, and many more.
- Structured processes – Business incubators generally have a structured environment that helps the founders build focus and dedication. It also helps in the later stage of funding as startups incubated or graduated from a reputed business incubator make a difference.
- Getting your fund ready – Certain incubators provide that early access to capital to some emerging startups. Incubators have access to most government grants, and they offer you those government grants to run your business.
- Preparing a Pitch Deck- They help you design a powerful pitch deck making you most competitive in the market.
To Wrap Up!
If you have blind spots in your business and want a strong foundation for your entrepreneurial journey, getting incubated will align your needs and give your company a leg up. Consider the pros, cons, and alums success stories of the business incubator and decide which would be the best to incubate your business.