We have been hearing about incubators around the Treasure Valley over the past several months: some starting, some expanding and others sharing their success stories. What are the reasons a company may consider incubating at one of the various sites available? The answers include:
1. Sites offer collaborative office space, broadband Internet and utilities, office and technology services and access to business mentoring, consulting and networking.
2. Small, prefunding startups known as foundry companies, and more advanced forge businesses that have not raised adequate capital to afford most commercial spaces, may be working out of their homes or garages, which is not conducive to disciplined focus, thinking business or meeting with clients. Providing location credibility, while raising funds to launch a company or idea, may accelerate growth and development.
3. Growth has to precede funding in todays tight credit markets. Banks will lend to businesses that have a good cash flow and can demonstrate that they can service the debt. Many start-up businesses need a solid history, and not just a good business plan, to get loans from financial institutions. An incubator supports developing a business concept through early testing to initial sales without having to go out and immediately raise money.
4. The incubator managers are not about keeping space occupied. They are about growing small businesses. Their reward is to see companies graduate to the next level. Tenants leaving is a milestone, not a loss.
5. Because of the relationships incubator managers have with universities, students may be engaged to do detailed research free on marketing, human resources, organizational and supply-chain management. Access to interns and special studies is also available, usually at no charge.
6. Pro bono resources for legal and financial advice are more accessible through the network of incubator supporters.
As companies in the Boise area downsize, leave or close, opportunities are created for undercover entrepreneurs to take their pent-up ideas to reality. Incubators strive to reduce barriers to entry for companies held back by lack of confidence or capital to invest in an idea. Mentoring, networking, and business training can be just what a company needs to get off the ground.
Some companies are in such early stages that they still need to grow a management team. Advisers can help fill holes on the team, such as marketing, sales, finance or operational logistics. With access to resources, matchmaking can help two small companies become one strong one. Knowing the personalities, ambitions, and skills of each group can reduce risk and uncertainty.
Incubators may cater to entrepreneurs in specific fields such as manufacturing, software, green energy or biotech. Others accept ideas from across the spectrum.
Both the incubator managers and the clients need to identify a fit between the objectives of both parties. The application and screening process focuses on assuring there is value provided and objectives met for both.
For advice about available resources and an assessment of what facilities might be the best fit, contact the Small Business Development Center at Boise State University at 426-3875.
ELIZABETH NEWBURN is Region III director for the Idaho Small Business Development Center. Contact her at firstname.lastname@example.org.