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Welcome Putting the Business Back in Business Retention SmartBusiness – The Smart Way to Help Halifax Businesses Relationship-Building and Business Retention Making the Most of Statewide Business Retention, Expansion, and Modernization Efforts Chicago’s New Direction: Leading the Race in Global High-Performance Manufacturing Five “Musts” for Business Incubator Success Growing and Keeping Your Region’s College-Educated Workers Learning to Learn: What to Do Different in the New Modern World Competing in a Global Age: New Skills for Our Nation’s Students Business Retention on a Budget: Billings’ BEAR Program Leverages Volunteers  Subscribe
About Economic Development America
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Five “Musts” for Business Incubator Success (cont.)
Wanting to develop a biotechnology sector isn’t sufficient reason to create a biotech-focused incubator. It’s necessary to have existing deal-flow that can support a tightly focused program. I once knew of a university-created biotech incubator that had only four clients in four years. Needless to say, this resulted in a lot of disappointment and waste, especially since it was highly unlikely that one or more of these clients would succeed. There simply weren’t enough potential companies from which to choose candidates that had the promise of being successful. Any community interested in incubator development must scrutinize valid market information that can support the need for an incubator and the type of clients to be served. For example, the data might show that there’s need for a general purpose or mixed-use incubator that can also serve a subset of communications technologies companies. It might be necessary to work with an experienced consultant to develop the market information and a subsequent business plan for the incubator.1 Above all, understand the local market and tailor your incubation project accordingly.
It should be obvious that no business incubator can be successful if every member of its governing board, its management and the public think it should be achieving different goals. All supporters need to come together to gain consensus on the program’s mission and ensure this mission is well understood by the community. These same actors then need to develop a set of criteria that can be used to evaluate the program against its mission. These criteria will vary depending on the type of incubator. A program focused on construction-type businesses in a minority community will have different criteria than a technology incubator located on a university campus. For example, one might track the increase in contracts obtained by minority firms and jobs created for neighborhood residents, while the other might track its clients’ acquisition of capital investments and university-developed technologies that have been successfully commercialized. There are many potential criteria in either case. While it’s well known that evaluating any program’s success is important, this simple process frequently is not undertaken, or insufficient attention is given to determining the relevant criteria and coming to agreement on which are most important.
There are, of course, many, many do’s and don’ts of effective business incubation. The board of the National Business Incubation Association (NBIA) approved a set of best practices (and two principles) of effective business incubation in 1996. These may be found in the NBIA Web site’s Resource Center. No incubation program, though, can achieve its potential to become an effective engine of economic growth – fostering the creation of an environment that is friendly to entrepreneurs and that can promote their success – without adherence to the five minimum guidelines noted above. Investments in incubators that don’t heed these musts are doomed at best lackluster performance, and at worst to failure.
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