When you're searching for the perfect spot to locate your start-up company, look for a small business incubator in your community. An incubator is an organization dedicated to the growth and success of your company. A successful incubation program offers business training, management assistance, and administrative services to the entrepreneur, in addition to flexible rental space. The facilities provide a professional work area in an environment designed to encourage and promote success.
Incubators encourage small business owners to work together. Gatherings at the water cooler or coffee pot give you a chance to share ideas, ask questions, and celebrate successes. It's not uncommon to see tenants combine their energies or talents to collaborate on a job that either couldn't do alone.
Incubators have been around for over twenty years now, and have worked to reverse the traditional rules for business failure. The Small Business Administration has observed that only forty-four percent of small businesses are still in operations at the end of their fifth year. Companies who participate in an incubator program experience much higher success rates.
Other Services an Incubator May Provide
Incubators may have loan funds to help new businesses get started, or have connections with people in the community interested in helping new businesses-called business angels, or with venture capitalists-who invest money in companies with high potential for making lots of money. Many incubation programs work with established entrepreneurs who volunteer to serve as advisors for tenant companies.
What an Incubator Will Expect from You
When you move into an incubator, you agree to abide their rules-which may include working with volunteer advisory teams to review your progress and help with questions, problems, or opportunities.
You'll generally need a formal business plan before you move in. If you don't have one, ask the incubator staff for assistance or for a referral to the Small Business Development Center, Service Corps of Retired Executives (SCORE), or other resources available in your community. Take advantage of training opportunities in areas of accounting or legal issues, dealing with employees, sales and marketing, or humor in the workplace. Often they are provided either free of charge or at a discounted price.
If you decide to start your business in an incubator, understand that your stay may be limited to just a few years. Business incubators are like egg hatcheries; they're intended to help you get started, not provide a permanent nesting place. At the three-to-five-year mark, or at a certain revenue level, or other goal you agreed upon, you move out into your local community and into your own space. This arrangement frees your incubator space to assist another small business owner become successful.
If locating your business inside an incubator isn't right for you, you can still use the services the facility provides. Through an affiliates program, you pay either pay a monthly fee for a set menu of services, or a per-use fee for conference rooms, administrative services, seminars, etc.
Incubators have tremendous impact on the success of their tenant companies. Ask your local chamber of commerce, small business development center, or other small business or professional organization for more information. To find an incubator near you, go to the web site for the National Business Incubation Association www.nbia.org.
Hope Player started her own CPA firm in Roanoke, Virginia, in 1987. She promotes small business by helping start-up companies, and speaking at national, state, and local meetings on various topics relating to entrepreneurship. Hope is currently the Managing Member of The Arcadian Group, LLC, a CPA firm in New Jersey which provides accounting, consulting, and tax services to businesses, individuals, and nonprofit organizations. http://www.thearcadiangroupcpa.com