Business Incubators: What to Know Before You Go
Incubators offer a space where startup businesses can locate under one roof.
As the name implies, it’s more than just a location—incubator tenants gain access to services, advice and assistance in growing their businesses, plus the built-in networking advantage of being around other startups all day long. The Journal cites figures from the National Business Incubation Association that of the 1,200 business incubators nationwide, approximately 5 percent are niche incubators. That’s still a small percentage, but it’s almost doubled since 2006. The NBIA also points out that in dotcom era, most niche incubators focused on technology; today, there are niche incubators in many industries.
A niche incubator can be a natural for some types of businesses, such as food startups, that need access to the same type of equipment; for instance, one food incubator cited in the article is going to have seven kitchens.
For others, though, being in a niche incubator brings pros and cons. While most niche incubators avoid directly competitive businesses, being around others who are targeting the same general market as you and trying to solve some of the same problems can be both inspiring—and unnerving. The Journal spoke to one startup fashion entrepreneur who admitted sharing space with other designers can become a battle of egos.
If you’re considering locating in any incubator—niche or not—there are some key questions to ask:
- What kinds of services are available (Internet access, conference rooms, reception)?
- What kind of assistance will be offered, and who is giving it? Are you required to attend training sessions or classes as part of your tenancy?
- Who else will be in the incubator? Are there potential competitors—or partners? If possible, meet some of the other tenants and get a feel for the vibe.
- How long can a business remain in the incubator? As its name implies, an incubator is for fledgling companies only. Most programs will have a “graduation date” by when you need to be ready to fly on your own.
No business incubator near you? Don’t fret—you can get plenty of one-on-one assistance and mentorship from the counselors at SCORE. And even if you do enter an incubator, it’s a good idea to keep talking to your SCORE counselor to help you navigate your way to success.