What makes an incubator different is a program. Suppose a community builds a facility specifically to be used for a business incubator. The building itself will not make an incubator. It would be no different from any other rental space. It takes a plan and someone to make the plan work. Here are seven essential objectives that should be included in an incubator plan to make it successful.
Use a coordinator
It takes a person with relevant academic credentials, background in business, and the ability to understand what the tenants will experience. A coordinator with familiarity with as many facets of business as possible will increases the likelihood of success. They should be familiar with manufacturing, product development, finance, sales, marketing, and management. Someone who invents or produces something of commercial value of their own would be a good example.
Notify the press
Before the doors open, the media should be notified. Incubators are inherently places of change, and that is what journalists are looking for. Businesses in the building change. They start. They create. They grow. They provide personal fulfillment. Some make interesting gadgets. Some do fascinating things. Some make it and move on, others close. This is what stories are made of. The local papers will be most likely to publish a story. But, notify them all. It is a symbiotic relationship. Keeping people informed is key.
Inform the public
A story or two will get the word out. The subject of starting a business will be of strong interest to a fraction of the population. These people’s jobs may have gone overseas. Some have skills or a trade. People who have thought about inventing or producing something of their own will be interested in stories about personal business ventures, whether they are of success or failure. These are the kind of people who call to inquire about the availability of space. And they do it for the best reason; their own volition.
Create a milieu
Depending on the size and distance of the surrounding population, there may be enough applicants for the coordinator to pick and choose between entrepreneurs involved with various business activities. Attempt to create a milieu. Make a variety of entrepreneurs with crosscutting disciplines available within the building, so that there is an aggregate core of know-how from invention to collection. Encourage entrepreneurs to converse with each other while passing in the halls. Communication facilitates cross-pollination and the sharing of ideas. This could reduce the mystery of production and marketing. A manufacturer might be inspired to get more involved with marketing their own product, and a marketing person could become less inhibited about producing something tangible to add to their product line.
Each company allowed into the incubator should be in the process of developing a product, starting a business, or taking it to the next level. One quarter to one half of the companies should be using three phase manufacturing equipment, such as computer driven lathes and milling machines. That is where most tangible products are cut into shape. The incubator should have power connections ready to accommodate these machines. The rest of the tenants should be involved with marketing and distribution. Internet marketing people, tenants grounded in science or design, and possibly an inventor would be assets to the community within the incubator.
Let tenants invest
When entrepreneurs move in, they invest hundred of dollars to make their incubator space suitable for their particular floor plan, lights and electrical outlets at a minimum. From tenant to tenant, these things are never in the right place for the next tenant. They spend savings or what they would otherwise put on the stock market, where the money often builds factories overseas. Others make the choice between taking a vacation and investing in their business. When they work at the incubator, they patronize the local community for everything from tools to lunch. This spending adds to the local economy.
Reinvest in the program
Each year, awareness in the community grows. The waiting list gets longer, the selection for the milieu a little better. The incubator covers its costs, makes payments on its debts, and develops a surplus. A fraction of the surplus can be matched with grant money to do an incubator related project, or it can be reinvested back into the facility. If a percentage of the reserves is applied to a matching grant project, the money is doubled. When a project is completed make a plaque for the wall, and another story is made.
Success begets success. The assumption is that if the cycle goes on, eventually one company and then another will make it. Success is partly dependent upon numbers. The more attempts that are made to make successful businesses, the more should succeed. Creating a situation where know-how is available and transferable between small business within an incubator improves the potency of the milieu and the chances of success among tenants. Success and public awareness creates a high level of occupancy within the incubator, reducing the worry of the incubator operator.