September 28, 2007

Incubators: An insight


Business rendezvous for September 2007

Business incubators are private or public sector organisations that are established with the main purpose of supporting the entrepreneurial process, by helping to increase survival rates, particularly of new businesses.{{more}} While the widespread practice is to work with start-up businesses, it is not uncommon, nowadays, to find incubator facilities that assist existing businesses which have the potential to expand their operations. With the scope and range of incubators varying, organisations may also choose to work with businesses only in a particular sector or with several businesses across multi-sectors.

Entry into an incubator programme is often based on set criteria and a rigorous selection process. Each organisation or incubator management would have its stipulated criteria based on the outcomes that it expects from such a venture. Before selection, most organisations implement a process of counselling business owners and assessing the viability of their business ideas. This process helps to identify potential barriers that may hinder the development of the enterprises. It also aids in guiding the design of a plan of action for working with the business virtually or during its period of tenancy within the incubator. The total length of time or period of tenancy a particular business stays in the incubator depends on a number of factors and would be agreed on by the incubator management and the tenant. Incubator tenancy, on average, ranges from three to five years.

Incubators offer businesses specialised support through the provision of physical resources and services. The spectrum of resources and services that might be offered ranges from assistance with accounting and recordkeeping to advice on funding. This may include:

  • Provision of physical space for location of the business facility-appropriate rental space, flexible leases, reception and product display area, conference room, training room, library and computer room with reference materials, kitchen facility;
  • Shared basic services and equipment, technology support services-computer, photocopier, fax machine, telephone, audio-visual equipment;
  • Management coaching -accounting, marketing, human resources, etc;
  • Help in preparing business plans, budgets, etc;
  • Administrative services – secretarial, typing and word processing, mail service, telephone answering;
  • Technical support -computer network, data base management, tax and payroll, training, etc;
  • Business networking -tenant businesses with similar goals and objectives, professional and technical business development service providers locally as well as overseas;
  • Counselling and advice on various subject areas -management systems, appropriate equipment and machinery;
  • Help in identifying and finding sources of financing -completing applications for assistance.

Business incubation has been identified as a means of meeting a variety of socio-economic needs for the individual businesses, as well as the country. Some of these have been identified as:

  • employment and wealth creation;
  • support for smaller businesses that have high growth potential;
  • technology transfer;
  • promoting innovation;
  • enhancing links between educational, and research institutions and the business community;

There is little doubt that incubators play an important role in national business support. They offer excellent opportunities to turn your business ideas into reality. Through the provision of tailored business support and resources, incubators nurture fragile start-ups and struggling businesses to become resilient and commercially successful. Countries such as the USA, since the 1960’s, have long recognised the importance of incubation as a strategy to support entrepreneurial businesses. Here in St. Vincent and the Grenadines, business incubators may very well become a significant instrument to attract financial resources from donor agencies while achieving the major socio-economic objectives of employment and wealth creation, innovation and technology transfer.

Submitted by the Centre for Enterprise Development Inc. (CED), a non-profit company that provides business development services to the local private sector. We are located on the 1st Floor, Methodist Building, Granby Street, Kingstown. Telephone 784-451-2235/6. Email cedsvg@vincysurf.com or cedsvg@hotmail.com. ‘’Developing the Local Economy One Business at a Time”