Definition: An organization designed to accelerate the growth and success of entrepreneurial companies through an array of business support resources and services that could include physical space, capital, coaching, common services, and networking connections .
Business incubation programs are often sponsored by private companies or municipal entities and public institutions, such as colleges and universities. Their goal is to help create and grow young businesses by providing them with necessary support and financial and technical services. There are approximately 900 business incubators nationwide, according to the National Business Incubation Association.
Incubators provide numerous benefits to owners of startup businesses. Their office and manufacturing space is offered at below-market rates, and their staff supplies advice and much-needed expertise in developing business and marketing plans as well as helping to fund fledgling businesses. Companies typically spend an average of two years in a business incubator, during which time they often share telephone, secretarial office, and production equipment expenses with other startup companies, in an effort to reduce everyone's overhead and operational costs.
Not all business incubators are alike, however, so if you have a specialized idea for a business, try to find the incubator that best suits your requirements. If you're interested in finding an incubator in your state, visit the National Business Incubation Association's website. Or get in touch with your local economic development agency, located in the phone book under the listing for your state government. You can also call the information offices of your local colleges and universities to see whether they have any business incubation programs.
If an incubation program seems interesting to you, be prepared to submit a fleshed-out business plan. The plan will be reviewed by a screening committee to determine whether or not you meet the criteria for admission. Incubators carefully screen potential businesses because their space, equipment, and finances are limited, and they want to be sure they're choosing to nurture businesses with the best possible chance for success.