Incubators may provide great solutions

Incubators can give start-ups a better chance

Communities and business incubators

Business incubators have a lot in common with a chicken incubator.  They both help and nurture the very young. Unfortunately, the inadequacy of business incubators and their infrastructure in regional areas has often been lacking.

Regional businesses and not-for-profit organisation’s growth and development are usually limited. By the cost of upgrading or gaining access to basic information, knowledge and infrastructure. The needs in relation to infrastructure are simply not being met. If incubators are good for chickens, why not for start-up businesses.

While businesses may come and go, communities need to preserve their business environments and the services they provide to the community. Business closures can lead to the decline of the community and allow surrounding centres to capture the local customers. Businesses are the engine room of all communities.

Local communities can benefit from a small business incubator

It is just one of many tools that communities can use to generate economic activity and create jobs. Incubators are widely recognised as an effective form of intensive assistance for new start-up businesses and not-for-profits. They can lead to much innovation being generated in a community.

Communities considering establishing a business incubator should be aware. They are not easy to operate as successful self-sustaining businesses in their own right. The bulk of the incubator’s management time and energy is devoted to developing, growing and graduating the participating businesses.

The first Business Incubator was created in New York in 1959. The concept evolved in the 1980’s and by the 1990’s they had grown across the world.  Incubators, when done well, are changing communities for the better. They are helping to nurture entrepreneurs, launch new viable businesses, generate and retain jobs. Incubators are diversifying local economies, creating export opportunities and expanding the market for professional services to support them.

Incubators of all types are a modern idea

When I was starting out in Business in 1963, incubators were not even heard of. Certainly not in small business circles anyway and certainly not in Australia. However, when I moved onto my next business I  could have used a Business Incubator once again. But even in the 198o’s, it was not something that still wasn’t being talked about. When I first came across the concept it was relating to very basic businesses which did not have any appeal for me.

One of the primary objectives of a business incubator is to facilitate economic development. They can do this by improving the entrepreneurial base in the local community. A new low-cost initiative has been required for some time and the concept of a ‘virtual incubator’ might well be the answer. They are required to reinvigorate the concept and support the start-up of small businesses, particularly in regional and remote communities.

The concept of business incubators

Business incubation is a dynamic process of business development. Incubators nurture young enterprises, helping them to survive and grow during the start-up period when they are most vulnerable. An incubation unit’s main purpose is to produce successful businesses, that are financially viable and freestanding when they leave the incubator. With this purpose in mind using a ‘mashup’ of the various types of incubators may well be the answer, providing the best of all worlds.

Federal, State and Local economic development departments, have spasmodically pushed the need to revitalise economically depressed communities. Universities have jumped to commercialise technology and venture capitalists, adopted the concept to make money from good emerging business ideas.

Vibrant communities are fundamental to our national economic health. To succeed and grow in today’s global environment, they must be able to connect with the rest of the world and produce goods and services efficiently.

The business incubator is a support system

It is intended to provide a source of information and practical management support of a business. It doesn’t matter therefore how this is done as long as it is effective. Nowadays, all new business ventures have to adapt their strategies to the global competitive environment and the associated technologies.

Information and less expensive infrastructure costs of commercialisation have broadened the possibilities. The most ambitious enterprises can reach new markets worldwide. The benefits of being able to work with other businesses in a single environment are replaced by a far wider network.

Generally, a virtual business incubation system can facilitate the reduction of start-up costs. The commercial utilisation of available community know-how by providing access to affordable knowledge and shared services is to be encouraged. In addition, the virtual incubator setting provides the opportunity to discuss problems and share experiences worldwide. They also present the opportunity to form business networks and contacts necessary to grow a business at a far cheaper cost.

The role of the business incubator while being multi-faceted generally responds to the needs of the local community. Bringing together the best business knowledge and resources to assist. Incubators offer another welcome solution to countering the two main causes of business failure. Lack of management skills and lack of financial and other resources. Facilitating the sharing of resources is to be encouraged.

Businesses in incubators tend to be more innovative

Businesses being incubated today tend to be at the forefront of developing new, innovative technologies, creating jobs and services. They can improve the quality of life in the communities in which you live. They can encourage the commercialisation of hobbies and the development of lifestyle businesses.

Innovation is the entire process by which ideas, discoveries of products and services are created, developed. Then taken successfully to the marketplace. The innovator is an entrepreneur and innovation implies both creativity and implementation.

The process of innovation in Australia takes place via a somewhat similar process to that in other countries. Someone has an idea, opportunity or improvement, that has to be researched and developed into a product or service and be commercialised. The mechanics of a business incubator is very different from most other approaches. Reversing the trend of spasmodic infrastructure investment poses some major challenges:

  • Do you attract new development and then establish, or expand the infrastructure to support it, or
  • Do you develop the infrastructure in the hope that new development will be attracted?

How do you support the businesses and not-for-profits development and growth in your community?

Incubators can help to revive regional and remote communities

Incubators can be a welcome solution to regional and remote areas where support services for the business community are lacking. Every business is in the information and knowledge business and an incubator can unlock the knowledge contained in your community.  Many businesses and communities are today being valued according to the knowledge they have, rather than their hard assets.

The goal of knowledge management is a practical one. Improving the businesses capabilities through better use of the individual and collective knowledge resources available.  Individuals find it hard to tap into the ‘flooded river’ of data, information and knowledge. Incubators can assist with this important work. This includes linking to external sources of reliable, practical and useful knowledge.

Incubators must be networked to external sources

  • Often you can help businesses double or even triple their business sales and profits which add considerably to their sustainability.
  • Giving people the confidence to create their own business, where encouragers are few and far between.
  • Isolation and loneliness are of great concern in regional and remote communities but can be minimised.
  • Most communities are desperately trying to create more jobs, particularly for their young people.

Businesses need to become fearless when it comes to the great unknown and incubators can help them. They need to become more productive by finding ways to keep moving and pushing ahead even when they are apprehensive about the final outcome.  Incubators can help communities to find alternatives and solutions to their problems, frustrations, wants and needs so as to forge ahead. Incubators can give them the drive to push forward even if things don’t go as planned.

The whole community gains something from everything the businesses experiences. It’s all about knowing the right path to take and most people are generally happy to spread the word. This is particularly so when there is a catalyst such as incubators, in the community.  People can start to identify and eliminate some of the things that are preventing the successful development of the community.

Incubators can comprehensively change the outlook for the whole community. Out of boredom and genuine need, your community can reinvent the incubator concept to suit their particular community needs. Before raising a large amount of money to reinvigorate your community you should first consider incubators programs.

Incubators improve the odds of building self-sustaining enterprises

With high unemployment, most governments in developed and developing countries alike, are giving the highest priority to job creation and self-employment. New business creation is at the heart of their strategies. At long last, they are recognising that small businesses are the engine-room of an economy. This is because small and medium business development is the heart of creating jobs and community growth in the future.

Small businesses are an important part of any economy. But more often than not small businesses fail because of the owner’s lack of management experience, or capital or both. Incubators help new businesses survive the critical early stages of their development,  lowering the failure rate. By using structured programs a business incubator can focus on what should be done next. Incubators should provide the things that are deficient but are essential to take a business to its next level of development.

Australians are innovative by nature. Many took the risk to come to Australia in the first place rather than stay put. As Australia is still a relatively new country there are fewer impediments to “having a go”, a more relaxed class structure and fewer old laws and restrictions.

Incubators help people create their own job.

Incubators can then can nurture businesses by providing services on a shared and affordable basis. They provide things such as finance, marketing, design support and managerial training for the emerging entrepreneur. It can be very hard trying to start and run a business in isolation.  View business incubators as you would putting on a set of flippers before you go for a swim, it assists you to swim faster and more smoothly.

Incubators are a proven method used for encouraging new ideas and new technology. Many are able to access resources that most start-up businesses have little or no knowledge of, let alone access to. Business incubators are designed to assist start-ups by developing entrepreneurial attributes. They help them to survive and grow when they are most vulnerable and brings satisfaction to all those involved. They are able to improve a business’s development through practical experience,  strategic partnerships and other networking arrangements.

Incubators encourage entrepreneurial attributes and remove many of the obstacles associated with starting and growing a new business. The incubator facility usually houses (either virtually or physically) a number of new businesses, which share a range of services.

Shared services can include

  • Business advisers, mentors, coaches and counsellors.
  • Shared resources.
  • Meeting rooms, or chat rooms and video conferencing.
  • Discussion groups.
  • Shared networks.
  • Computer facilities and office equipment.
  • Research capability.
  • Access to practical information and knowledge.
  • Training programs.
  • Secretarial and accounting services.
  • Psychological support.


Sharing ideas, sharing resources and supporting each other is an important part of the incubator.

Types of incubators

The traditional business incubator

The traditional business incubator offers an office or laboratory space, shared services, access to shared equipment and flexible leases, all under one roof.  There are not-for-profit, as well as commercially operated incubators. Commercial incubators have tended to succeed where not-for-profits may have failed. This is because of the level and quality of support and infrastructure provided, along with the type of not-for-profit organisations involved.

The virtual incubator 

You are now seeing the emergence of the Virtual Incubator with its lower cost structure. If you need a “factory unit” for your business, then you may need to move towards the traditional incubator. However, with a virtual business incubator, it becomes possible to have the best of both worlds.  The virtual incubator supports your needs as well as the physical buildings and equipment.

Do not underestimate the virtual incubator’s capacity to find strategic partnership and alliances. They can also do some aggregated purchasing or marketing that could easily offset any cheap rent in a traditional incubator.

In some instances, people establish “incubators without walls”. Typically, these virtual incubators serve non-resident tenants, providing access to the same services and advantages as those offered in traditional incubators, except for the office space. The principle behind such a facility is that small business success is not so much a function of a facility. But the need for advice, encouragement, training, and networking opportunities.

The concept of the virtual business incubator has now become a reality with the new technologies that are available. A virtual incubator provides services where it is most appropriate, to whom it is most appropriate and when it is most appropriate.

The virtual incubator differs from traditional incubators in several ways

  • The virtual incubator facilitates the concept of mobility and providing flexible working conditions.
  • t offers resources and services from anywhere in the world.
  • Offers a choice of providers and methods of delivery.
  • For the first time opens up many more opportunities to service rural and remote communities
  • The over engineering of business advice is minimised.
  • Provide the necessary services without the expensive building infrastructure.
  • The expense of gathering source material and documentation becomes easier and cheaper.
  • Starting a new traditional incubator can take months or even years while a virtual incubator can be switched on today.

One-to-one advising, mentoring, coaching and counselling are expensive for small business, particularly in start-up mode, even in traditional incubators. Virtual incubators provide assistance over the telephone, the Internet or other electronic devices. This can cover such diverse subjects as market research, marketing, innovation, social media, finance and business planning. When assessing capital requirements and preparing business plans and loan applications the costs are significantly reduced.

Where there are concerns for business in rural or remote locations, or in distressed communities incubators can flourish. The start-up has greater opportunities to receive the right advice, faster, better and cheaper. Assistance can be more readily available to attract investment and promote employment opportunities in these communities.

Having a virtual incubator does not mean that you can do without personal contact, quite the contrary. As a result, the basics are delivered along with support in an inexpensive way and meetings become much shorter and very specific.  Because the business is connected to many providers more specialised and appropriate advice can be given.

The DIY Incubator

For those who think they can do it by themselves or are having trouble getting traction in their community, there is always the ‘do it yourself incubator’. This involves designing your own incubator facilities which could include your library of books and files and other self-help material.

Ideas, energy, creativity, knowledge and persistence are the drivers of a small business. While these drivers can be activated by the individual they generally lack power without the help and support of others.


DIY business management is much more complex and needs far more inputs. Mistakes can be very costly.


When you are trying to drive it by yourself verbalise your ideas to as many people as you can. If you have no one, then try talking to your dog, dogs are excellent listeners and they don’t argue. The fact that you are talking out loud makes all the difference, just try it, it works. When you only think about things, they rarely come to pass, not quickly anyway.

What start-ups need to do before applying to an incubator

Don’t just want to fill out an application, send it in and hope for the best. There’s a lot riding on your application, so you’ll want to prepare for it as best as you can before you send it to the incubator of your choice. Here are a few things you can do as you prepare your application and approach:

Understand how they will go about helping you

What processes will they use to move you to where you want to go. Are they able to provide financial help? Support your ideas with fresh thinking and innovation? Will they regard the relationship as a partnership where both parties win?

Know everything you can about the incubator

Every incubator is unique, so you want to do your research before you apply. The incubator wants to know why you’re right for it, and you want to make sure it’s right for you as well. Look at the incubator’s offerings before you decide if you’re going to apply for it. While money is important, incubators offer so much more than that. Specifically, look at the mentorship afforded to you and the opportunities you’ll get if you need to move to the incubator’s physical location.

Have the basics in place before you apply

While every incubator will take a chance. You’ll stand the greatest chance of getting into one of your choices if you have everything they’re looking for in an early-stage startup already. Consider the concept of being ‘investor ready’, A well-prepared approach can make up for any shortcomings in your business idea. In good ideas can be refined and honed to make them better.

Polish your approach

Before you apply, you need to know what you want to say and how you want to say it. Whoever is involved in the approach needs to be well rehearsed in the key points and confident of a positive outcome. Ultimately, the incubator will want to know that you’re someone who is action orientated and can execute.

Incubators can become true business partnerships

Good incubators do act as true business partners, with the businesses in the incubator as well as the community. They are far more involved in the business than regular investors, but not as involved as the business’s own management. An incubator must bring experienced parties to the table. They must have strong practical knowledge and experience gained from operating similar businesses to the start-ups. People running the incubator must also have good communication skills in order to be successful.

Over the years, incubators have played an increasingly important role in the development and launch of new businesses across the world. While the services that each individual incubator offers varies. These organisations provide resources and services that can accelerate the growth of a new business. Usually beyond what that fledgeling business would be able to do on its own.

They can also bring valuable networks and contacts who can help accelerate a start-up’s growth. An incubator has to know the trends in the market. And they have to constantly improve their efforts and adapt their programs and practices to suit today’s start-ups. They need to keep evolving themselves with an approach that links new thinking with innovation.

Working with an incubator is no guarantee of success. But it does significantly increase your chances of getting your start-up from an idea to an investor-backed growth-stage business. Maximising this opportunity will be accelerated if you look at the relationship as an important partnership.

The down-side to any incubator

Prospective incubator advocates and supporters must be aware of:

  • Business incubators requiring commitment over a long period of time. The lead time to establish without support can be lengthy sometimes (1-4 years).
  • Business incubators are not normally commercially viable if they have to pay commercial rent and lack community support.
  • Too many incubators struggle as they don’t have enough tenants. Marketing concept to the community is important.
  • Much depends on having a committed and enthusiastic ‘champion’ with adequate local support.
  • Their focus should be on adding value to tenant businesses first, the community second.
  • Incubators cannot help all businesses or business people. Businesses can be fiercely independent.
  • There must be a demand for incubator services in the local area. Virtual incubators start to shine when they can be supplemented from a wider area.
  • Incubators need to be integrated with other economic development services in their area as it is difficult to operate in a vacuum.
  • Incubators are not likely to be viable in areas where affordable buildings and other facilities are not available.
  • Managing the incubator as a business will make it more sustainable into the future.
  • Incubators require a higher level of interpersonal skills and the ability to network across a range of settings.
  • Staff with broad practical business experience are not easy to find and do not come cheaply.

Quotable quotes

“If you want something you’ve never had in your community. You have to do something you’ve never done before”.  Peter Sergeant

“An entrepreneur always searches for change, responds to it and exploits it as an opportunity”. Peter Drucker 

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