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Once your business receives an initial capital investment
and you are accepted into an incubator, your goal should
be to make full use of its services and benefits. Your
time as a client in an incubator can last up to five years
or more. This period can include both incubation and commercialization.
The following processes occur (not necessarily in this
order) throughout this time.
Business Plan Refinement
It would be unrealistic to assume that you will never
stray from your original business plan. As you progress
through the first stages of incubation, it is inevitable
that you will alter your original goals and shift resources
into different areas. Here, you should take advantage
of the expertise offered by the incubator's management,
which should have considerable knowledge of the entrepreneurial
process. Incubators generally offer a business consultancy
network. They will help you revise and maximize budgets
and adjust target markets and market strategies.
Facility Maximization
One of the primary advantages of an incubator is the flexible,
affordable working space it provides. Normally, commercial
developers assess the balance of risk/return as disadvantageous
for spaces smaller than 1,500 square feet. From the developer's
standpoint, smaller subdivisions are often seen as being
unprofitable. New companies are also challenged by requests
for long leases, bank references and licenses. Incubators
do not generally put such conditions on their clients.
Leases are generally reduced to easy-to-understand, two-page
agreements. If the client's business fails, they can extricate
themselves with minimal expense.
Incubator buildings usually contain spaces in a variety
of sizes. As clients grow, it is easy to relocate to a
larger space. This spatial scalability means that you
can expand over time with only minimal risk. For many
companies, the rent paid is only a small portion of their
overall cost structure.
Technology Transfer
As client companies progress, their needs tend to change.
Learning the general basics of business concepts becomes
less important (because you will master them early on)
while the more specialized areas of knowledge become increasingly
critical. At some point, your company will focus more
of its energies on harnessing the knowledge of professors,
specialists and experts within your industry. Issues such
as product development, prototyping, test-trials and manufacturing
methods will take precedent as your company capitalizes
on the relationships provided through your incubator program.
Whether it is of a private or academic nature, the incubator
facilitates the flow of knowledge through its own established
channels of exchange.
Capital Acquisition
Over time, your business may encounter the need for further
investment and financial support. Incubators help facilitate
capital acquisition to assist client companies as they
grow. They often actively participate in the deal-makings
of their clients. Many incubators help their clients build
relationships with local banks and assist in securing
loans. Some even assist in securing private funds. Incubators
also help their clients gain access to government programs
that sponsor research and development. Thus, during the
process of incubation and commercialization, you may need
to secure additional capital on several more occasions.
You will already be in a good position with respect to
having access to professionals who can help you.
Networking
Incubators provide access to extensive networks of expertise
specifically cultivated to develop small, rapidly expanding
enterprises. As a result, many clients acquire skills
in networking and partnership that extend long past their
involvement in the incubator. Incubators also facilitate
business relationships between tenants and local businesses
in the community. By co-locating with other entrepreneurs,
client companies often find themselves in a culture of
innovation and creativity that is preferred to the loneliness
of an isolated work environment.
Student Services
Incubators with academic sponsors have the added advantage
of student intern programs. In these settings, client
companies provide academic credits as well as hands-on
education and training for students (typically on the
graduate level) in exchange for work services. These programs
usually draw upon a variety of disciplines such as communications,
engineering, science, information technology, law, and
business specializations.
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