Business Incubation

Lots of startup asking me to create a reference for a Business Incubator idea so summarizing this post / blog for them. A business incubator is a company that helps specifically new business and startup companies to develop by providing services such as Business alignment, management training or logistics such as office space as well.

There is lots of pondering debates on the building more entrepreneurs, and so their business in each society so that the work uplifting with employment and financial growth etc. etc. This study analysis gave rise to various models I am trying to share a few in here as well.

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.

Additionally to the entrepreneurs’ benefits, I would insist that incubator’s management should consider and possibly organize the program depending on main entrepreneur’s needs. This list includes in the early stages of a venture life cycle:

1. Knowledge & Information            
2. Concentration and focus, self-motivation            
3.  Dedicated personal resources to venture (time, money, will, relatives support) 
4.   Personal mentoring
5. Market validation of an idea
6. Relevant connections (industry, experts, investors, etc)  Relevant connections (industry, experts, investors, etc)
7. Expertise to solve particular problems (access to mentors, experts, investors, entrepreneurs)
8. Feedback mechanism for self-learning
9.   Opportunity (problem) recognition
10. Team building (finding relevant team members, selection high-quality people, formation of optimal size team and retention)
11.  Technology commercialization assistance
12. Help with regulatory compliance
13. Help with presentation skills
14. Links to higher education resources
15. Links to strategic partners
16. Comprehensive business training programs
17. Advisory boards and mentors
18.   Help with business etiquette

Lets Understand some famous models. India Training Services give all above 18 services to help to build a better business Incubator & start a new growing business effectively  

Smilor Model: Smilor created structure model in 1985 via describing main incubator affiliates, support systems and description of main outcomes of the incubation process. He considers an incubator as a transformation mechanism that assist entrepreneur in building a venture. Even though the representation of the model doesn’t provide extensive information about particular services that business incubator  supplies to tenants, Smilor categorizes the benefits that business incubators provide to their tenants through four dimensions:

1. 1.       Credibility development.
2. The shortening of the learning curve.
3. Faster troubleshooting.
4. Access to the network of entrepreneurs

Smilor was one of the pioneers in 80s who shifted the viewpoint on incubators (from provision of physical resources to the business expertise and services provision).

Smilor (1987) emphasizes that business incubator is a system which is constructed from different building blocks (support systems) and it seeks to identify the different components of the new business incubation process. The model was developed and proposed having in mind typical innovation-based entrepreneurs (which is not always the case for an incubator).  It conceptualizes the incubator as a system that gives incubatees the structure and credibility for the creation of new firms while ensuring a set of immediate, key resources for the setting up of the new undertaking. However, the systemic approach, encompassing the internal and external environment, seems to be lacking in Smilor’s (1987) model, as well as description of the process of transformation which happens with entrepreneur inside.

Nijkamp & Smilor’s Generic Incubator Model (1988) : This model is the combination of two. Firstly, Smilor introduced his model and then it was extended by Nijkamp. Nijkamp’s (1988) model is the interpretation of a generic business incubator. He argues that any  business incubator acts as a mediator between entrepreneurs and community. Thus, successful implementation of the incubator requires combination of at least these elements:

1. Sources of entrepreneurs
2. Recognition of opportunities by entrepreneurs
3. Demand for business incubation service.

2000, Carter & Jones-Evans, white-box, process model, operations. This is a first true process model in a row. Carter & Jones-Evans (2000) proposed a typical five-step incubation process, as shown in the figure above. As it can be seen from Carter & Jones-Evans’ (2000) model the process is organized and focused on the needs of the incubatee, which will be supported by the services provided by the incubators during the incubation process. The incubation process according to the Carter & Jones-Evans consists of the following stages: idea formulation, post entry development, opportunity recognition, entry and launch, pre-start planning and preparation.

The model described by Lazarowich and Wojciechowski explains ‘new economy’ incubators. They are characterized by the following:

1.  “Business incubators are private-sector, profit-driven with the pay-back coming from investment in companies rather than from rental income.
2.   They tend to focus mainly on high-tech and internet-related activities and unlike ‘traditional’ incubators, do not have job creation as their principal.
3. ‘New economy’ incubators often have an essentially virtual presence with financial and business services at the core of the offering unlike their ‘traditional’ counterparts that usually  center on the provision of physical workspace.”

2004, Hackett & Dilts Generic Incubator model, black-box, structure, operations: The model is a universal business incubation model which can be used both in public and corporate purposes. In short, it is structured as black-box: inputs of the process, process activities, and outputs of the process. Authors also present a formula of Business Incubation Process. We think that this is the most successful representation of business incubator among all in the series.

In India, Technology Business Incubator. Technology Business incubator (TBI) is an entity, which helps technology-based start-up businesses with all the necessary resources/support that the start-up needs to evolve and grow into a mature business. http://www.nstedb.com/institutional/tbi.htm

The National Science & Technology Entrepreneurship Development Board (NSTEDB), established by Government of India in 1982 is an institutional mechanism, with a broad objective of promoting gainful self-employment amongst the Science and Technology (S&T) manpower in the country and to setup knowledge based and innovation driven enterprises.

NSTEDB functions under the aegis of Department of Science & Technology. It has representation from socio-economic and scientific Departments / Ministries, premier entrepreneurship development institutions and all India Financial Institutions.

 India Training Services give all necessary services to help to build a better business Incubator & start a new growing business effectively  feel free to contact me Ravindra Pande, ravindrapande@gmail.com.

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