Business incubators provide resources and services to entrepreneurs, including working space and offices, technical expertise, management mentoring, assistance in compiling an effective business plan, shared administrative services, technical support, business networking, and advice on intellectual property, sources of financing, markets, and strict admission/exit rules.
An incubator concentrates its effort on helping innovative and fast-growth startups that are likely to have a significant impact on the local economy. Some of the functions of the incubators are:
- They guide startups/ventures on how to compete with established industry players.
- Business incubators help with the basics of business.
- They provide networking activities.
- They help startups save on operating costs.
- Incubators provide marketing assistance.
- Incubators help with market research.
- They provide high-speed internet access.
- They create long-lasting jobs for new graduates, experienced mid-career personnel, and veteran executives.
- Incubators help with accounting/financial management.
- They provide access to bank loans, loan funds, and guarantee programs.
- Incubators bring credibility to the company. This helps the company receive loans and credit facilities from financial institutions.
- Incubators help with presentation skills.
- They have a strong network of influential people who can connect startups/ventures with established businesses and individuals.
- They provide access to higher education resources.
- Incubators can tap into their networks of experienced entrepreneurs and retired executives.
- They link companies with strategic partners.
- They provide access to angel investors and venture capital.
- Business incubators organize comprehensive business training programs.
- They act as advisory boards and mentors.
- They help in management team identification.
- They offer marketing and PR assistance to new companies for brand establishment.
- They help with business etiquette.
- They provide technology commercialization assistance.
- They help with regulatory compliance.
- They provide intellectual property management.
- They create jobs for mid-career personnel and veteran executives which benefits communities and drives economic growth.
Conclusion
The performance of business incubators is often affected by incompetence in business management, financial handling, human resource management, and the lack of interpersonal and people skills.
With regard to the skills required by business incubators to be efficient, it was revealed in several studies that administration, technical, financial management, marketing, human resource management, and interpersonal skills were extremely important.
Access to advanced technology-based facilities, self-sustainability measures, support structures, and funding was found to be the major challenges confronting business incubators. It is also recommended that incubation managers, who lack the necessary entrepreneurial skills, enrol in business courses at local colleges or universities.