Starting a business is tough and success is never guaranteed. In fact, the majority of aspiring small business owners will be faced with the difficult decision to permanently close their doors within the first three years of existence. However, in most cases, shuttering the business is not the result of a poor product or lack of passion. Rather, the business’s demise can be attributed to a lack of general business know-how, experience and infrastructure.
Are you looking for intensive training? Consider business incubation.
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How can a business incubator help your startup?
“Business incubators make it possible for businesses to get through those first three years,” said Larry Triplett, executive director of the Muskingum County Business Incubator (MCBI). “They provide entrepreneurs with coaching, office space, business planning resources, networking opportunities … everything a startup needs to be successful. And, with access to a team of expert coaches and mentors, you really get an opportunity to tap into several sources of input and expertise.”
Because most owners of startup businesses have never been exposed to the unique demands of business ownership, the resources provided by incubators are critical. In Muskingum County for example, participants regularly have access to 17 industry experts who are committed to providing specialized assistance in a variety of critical fields, such as accounting and law.
These days, business accelerators, an evolution of the traditional incubation program, are growing in popularity as more owners are looking a way to turn their idea into a commercialized product faster. To accommodate the demand for accelerated assistance, coaching and mentoring efforts are oftentimes more rigorous.
How an incubator works
Because different types of incubators utilize different strategies, owners should commit to learning more about the specific incubators available in their area before making their choice. For example, some business incubators, like MCBI, are located in a physical space and startups have the option of utilizing a common space to conduct business, hold meetings and network. Other incubators operate exclusively online.
Typically affiliated with universities (though not always), business owners will meet regularly to gain general business insight, hands-on training, and truthful feedback from industry experts and each other. And while most lessons will be structured, but an ‘ah-ha’ moment is never far away.
Most business incubators are nonprofits and will work with business owners for little to no charge. Oftentimes, additional funding is donated by local entities and individuals. That being said, in exchange for the business incubation service, most incubator programs will ask for a portion of the startup’s equity as payment.
… Beyond startups
There are plenty of opportunities for more mature businesses and owners to get involved.
“It’s a neat way to give back to the community. Whether you want to be included in the pool of experts who make themselves available to mentor new owners or you want to make a donation, there are many opportunities to help aspiring business owners who are facing the same challenges you once faced,” said Larry. “Likewise, if you’re a new business owner, you owe it to yourself to tap into the invaluable resources available when you work with a formalized business incubator.”
To learn more about business incubators, check out the International Business Innovation Association’s website at www.inbia.org.
By Chad Bice, CPA (Zanesville office)
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