Incubators are essential in the early stages of startups for they provide them with several opportunities to grow their business. Incubators offer them with all the necessary resources to launch and operate growing companies at a lower cost. Otherwise, they will spend more if they decided to go on their own. Therefore, young companies with or without adequate resources and skills to effectively grow their business should join the incubators program.
New businesses can achieve success on a large scale when supported and directed. Industry giants like Dropbox, Reddit, and Airbnb were startups that were guided through incubator programs. Today, these firms’ current valuations are more than $1 billion.
Therefore, if you’re a growing business seeking ways to grow or expand beyond the local markets, then incubators are the way to go. The program will give you the means to grow and eliminate the inherent risks associated with new businesses.
Things Every New Business Should Know About Incubators
The Role of an Incubator
They work with a baby or early-stage business until they attain the level of self-sustainability. They help them access resources such as funding, talents, connections, and knowledge. Startups should always turn to incubators whenever they need coaching, mentorship, collaboration, networking with like-minded, and office space.
Examine Incubator’s Track Record before Enrolling
Investors have to consider your startup’s traction before investing their money in it. Likewise, startups should evaluate the performance of the previous businesses under the incubator’s support program. You can only measure the success of the incubator by examining the track record of the graduated startups.
Consider the Fees
You need to understand the nitty-gritty of the incubators program before signing up. Incubators are mostly known to provide inexpensive working space, internet connectivity, mentors, and conference rooms at a fee. Thus, every growing business should understand what the program entails and at what cost.
Different Between Late-Stage and Early Stage Incubators
There are two types of incubators. The early-stage incubators help young entrepreneurs to turn their idea into successful businesses. These incubators provide startups with mentorship through experts in areas such as financial strategy, business plan, operations, management, marketing strategy, branding, as well as pitching to investors. The late-stage accelerators and incubators come in when the business has shown the initial market traction. These incubators will help you access investors and guide you on how to pitch to them. Another advantage is that they will help you build crucial networks for partnership and financing prospects.
It would be best if you considered your level of commitment to your company before enrolling in this program. Consider the incubator’s location and its requirements as well as if you’re ready to be taught and accept input from the incubator’s leadership.
Benefits of Joining an Incubator Program
Now that you know a lot about incubators, you may consider signing up in an incubator program due to the following benefits.
Availability of Professional Resources
Working with an incubator will enable you to access professional resources such as software, education, and business tools. However, these resources differ from one incubator to the other, but the minimum you should get is internet access and administrative support. You will also access regular workshops that are hosted by the incubator that focuses on topics like business fundamentals, forecasting, legal structures, and access to funding.
Startups may consider entering into a partnership as they gain exposure in the industry. These partners can be other startups or established businesses. Additionally, some incubators specialize in one industry or a set of similar industries. That means that startups in your incubator program will be working in the same industry. Therefore, you can access partners with similar interests, and this might be just what you need to succeed.
Rent is one of the expenses that incubators can help you bring down by providing you with a coworking space. Thus, an incubator will offer you a shared office space, single cubicle, or private office based on your needs and budget. In view of that, look for an incubator that can offer some office amenities like access to conference rooms and central printing at a low cost.
Working with an incubator will expose you to industry leaders that have successful businesses. Learning from such leaders will help you to avoid common mistakes that are made by startups.
Access to Expensive Equipment at a Low Cost
One of the major benefits of working with incubators is to access sophisticated equipment that your new business can’t afford. Therefore, an incubator will give you unlimited access and professional training for the equipment that you will use during the program.
Opportunity to Network
There are two factors to consider when managing a startup. The initial success that you achieve when your products are accepted in the market and the scale of growth that you desire to attain. Thus, having the right product and service is not enough. Networking opportunities will help you achieve both short-term and long-term growth. It will also help you to access information and obtain professional advice from entrepreneurs, experts, and investors.
The Downsides of an Incubator Program
As stated above, incubators are different; some will offer more benefits than others. More so, there are also other disadvantages associated with incubators.
- Most of the incubators demand that you should commit your time for nearly two years. That means that you will be attending workshops and training throughout the program. Although you will learn a lot, you will also be required to spend a significant amount of doing it.
- Enrolling in an incubator program means that you have agreed to answer to someone just like you did in your previous job. It’s a professional environment, and you can’t walk in as you please. The incubator is investing in your success.
- The Incubator program has an application process that is rigorous and competitive. You will be required to provide a detailed business plan and divulge all your business activities.
Therefore, there are more benefits a startup is likely to enjoy by enrolling in an incubator program. However, it would help if you committed yourself and your business to reap these rewards.
Launching a new business is not a walk in the park; however, the journey has been made easier by opportunities such as access to an incubator program. The program provides you will technology, networking and partnership opportunities, education, and working space. However, working with an incubator requires dedication, commitment, and discipline.