A business incubator is an excellent tools for the development of companies at the time of their birth, as they provide the necessary assistance to take first steps to grow.
What is a business incubator?
We can define business incubator as a program that gives the necessary support to businesses in their earliest stages in order to help them grow, strengthen and develop.
The incubators offer their consulting services from the initial phase of the project, from the moment that the business idea was created. However, their role goes much further.
Among other services: they are in charge of evaluating the technical, financial and market feasibility of a plan, providing legal advice, developing market and sales plans, and even accessing financing and seed capital.
They can also offer a physical space, which includes basic services (water, electricity, telephone and internet, as well as, financial, accounting, etc.). Likewise, some incubators put companies in contact with potential investors.
Business incubators can be both public and private entities. The company that starts its projects must participate in the suitability selection process carried out by the incubators themselves in order to be able to benefit from their services.
How do they work?
As mentioned earlier, for a company to benefit from the advantages offered by an incubator, it must overcome the selection processes and criteria established for each occasion, and at the same time select the most suitable companies. Among the most common features required by incubators, the following can be highlighted:
- Innovation in the marketed product or in the service provided.
- Economic feasibility,
- Good technical qualification.
- Minimum financial resources to start the project
Assistance stages of business incubators
The assistance provided by a business incubator is usually divided into three stages.
- The first of these is the so-called pre-incubation stage, during which entrepreneurs are given guidance for the development of their company.
- The second stage is incubation, during which the implementation, operation and development of the business and all the processes are reviewed and monitored.
- Finally, after the business has started, the post-incubation is applied to continuously improve it.