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Business Incubator
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SBA 7a Loan
Proud Member |
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WHAT'S A BUSINESS INCUBATOR?
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An incubator’s main goal is to produce successful graduates, or businesses that are more financially viable and stable when they leave the incubator, usually in two to three years. Businesses incubated today often are at the forefront in developing new and innovative technologies, creating products and services that can enrich citizen’s lives and their communities. Perhaps the most important aspect of business incubation is the fact that it uses local institutions and resources to build a local capacity for business startup. The incubator employs financial resources, professional networks, and intellectual capital to broaden the local economy one enterprise at a time. According to NBIA, an incubator program helps build an entrepreneurial culture within a community by pulling together the support of financial institutions, business owners, community leaders, schools, government, and business assistance professionals. Adding this depth to an economy can provide greater insulation against the effects of the negative business cycles that occur from time to time. What evidence do we have that business incubation actually works? The National Business Incubation Association (NBIA) estimates that approximately 80 percent of incubated firms survive their first three years, compared with a 35 to 40 percent survival rate for non-incubated startups. Business failures waste important capital, whereas success stimulates future investment potential within a community. In a recent study conducted by NBIA, some 66 percent of 126 incubated companies reported that incubator services were important to their survival and success. NBIA has estimated recently that roughly 500 business incubators are operating in the United States alone. |
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The phrase “business incubator” evokes an image of a specific building or complex where businesses locate, pay relatively low rents for space, and share common support services. These businesses also can have access to a wide variety of business development and professional consulting services. Incubators offer small business clients financial and professional assistance that typically includes: