Incubation Business incubators support the development of start-ups by providing them with advisory and administrative support services. According to the International Business Innovation Association, an incubator’s primary objective is to produce successful and financially viable organizations that can survive on their own. Early incubators focused on technology companies or on a combination of industrial and service companies, but newer incubators collaborated with companies from diverse industries. such as product and vocational skill acquisition.
1. Financial Management
Incubators help start-ups save on operating costs and investments costs. The companies that are part of an incubator can share the same facilities and share overhead expenses, such as utilities, office equipment rentals, and receptionist services. Start-ups can also take advantage of lower lease rates if the incubator is in low-rent industrial parks. Incubators may also help start-ups with their financing needs by referring them to angel investors, a microfinance institution, and venture capitalists and helping them with presentations. Start-ups may have better luck securing financing if they have the stamp of approval of incubator programs put in place
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2. Management Support
In addition to financial help, start-ups also need guidance on how to compete successfully with established industry players. As Velocity Global reports, Incubators can tap into their networks of experienced entrepreneurs and retired executives, who can provide management guidance and operational assistance to them. For example, a biotechnology start-up would benefit from the counsel of retired pharmaceutical executives who have first-hand experience in drug development and the clinical approval process. Similarly, a restaurant entrepreneur could learn about the difficulties of overseas expansion from retired hospitality-industry executives.
Start-ups usually benefit from having respected individuals on their boards of directors and scientific advisory panels, because these individuals bring invaluable connections and experience to bear
3. Synergies Between Start-ups
The close working relationships between an incubator’s start-ups create synergies as a natural part of the business incubation process. Even after the start-ups leave an incubator, the connections and networks established through these relationships can endure for a long time. Start-up founders can provide encouragement to one another across entrepreneur industries, and employees may share ideas on new approaches to old problems. Start-ups may plan joint marketing campaigns and cooperate on product development initiatives and programs.
These synergies do not necessarily exist among start-ups funded by venture capitalists, because the companies that receive the funds do not necessarily know one another and they may be in different geographic locations.
Job Creation Potentiality
By helping new businesses prosper, incubators assist in creating jobs for their host communities. As start-ups mature and grow, they create long-lasting jobs for new graduates, experienced mid-career personnel, and veteran executives. This benefits the ecosystem and drives economic growth and development.
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A good example of an incubation Center in Abuja, Federal Capital Territory (FCT) is the printing hub in Area 10. This Center solves the printing needs for people in FCT and environs up to North Central Nigeria and beyond. Outside the benefits mentioned above, a typical incubation Center also provides activities such as an array of business and technical services, initial seed funds, lab facilities, advisory, network, and linkages. Whether the Area 10 printing incubation hub has been able to provide all services is another day question. One of the services that we feel that an incubation Center such as the one in the area should provide is that of cooperative and microfinance. By now the Center should own its own microfinance bank.
Incubation Center answers other names like Business Hub, Business Accelerator, Industrial Park, One-stop-shop. One such a One-Stop-Shop of repute is the Gleaning Center, located at Apo-Gudu District Abuja, FCT. Gleaning Center is now known to function as Enterprise Development Institution providing Business Development Services. The Center sits on 600 square meters, having about 10 training halls for entrepreneurship, ICT, educational, and skill acquisition training hub. It also has embedded in it, a business Center, a state-of-the-art studio, and mini refreshment Center for your drinks.
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Think today of setting up an incubation Center with the defined business model. This could ultimately help to solve your financial and other needs.