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Ask About Business Incubators

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By | May 25, 2012

Dear Toolkit,

I recently heard about something called a "business incubator." Is this for real? It sounds too good to be true. Tell me more about this way to start and grow my business.

Cluck N. Gurgle

Dear Cluck N. Gurgle,

Business incubators are indeed for real! There are almost 1400 of them all over the U.S. and the idea is catching on elsewhere as well. There are now over 5,000 of them worldwide. These nurturing places provide affordable space and full support services for start-up and fledgling businesses.

Many incubators are sponsored by universities and many more by economic development organizations. As a rule, a building is divided up into several office and/or lab areas, which are rented to new businesses at very reasonable rates.

Tenants of an incubator center share common areas such as meeting rooms and, more importantly, share ideas. Isolation is not a problem in an incubator. Support in the form of telephones, photocopying, and clerical help are usually centralized and shared by all. The center's management is generally experienced in counseling and encouraging fledgling businesses on a host of fronts such as planning, marketing, and getting financing.

The National Business Incubation Association (NBIA) estimates that more than 27,000 businesses are currently incubating or have left the nest and gone on to greater success just since 1996. Along the way they've employed 100,000 workers and generated nearly $20 billion. Founded in 1985, the NBIA assists incubator developers and managers to contribute to the economic growth of the businesses and communities they serve. The success rate for incubator tenants is very high and the types of businesses range from hand crafts to high technology, specialized manufacturing to personal service. Minority-owned firms are especially encouraged to apply.

The only kind of business not well served by an incubator environment is retailing, as there's not always a lot of foot traffic in these locations, but exceptions exist. An incubator in Illinois has tenants ranging from software entrepreneurs to medical technology manufacturers to a greeting card business, but the main draw is the Plum Cafe. This little retail lunchroom was installed for the convenience of the building's occupants but is so popular that it has become a luncheon destination for the general public as well.

To get a list of business incubators near you, call the NBIA at 614-593-4331, write to them at 20 E. Circle Drive Suite 190, Athens, Ohio, or surf to their web site and scroll down their directory of member home pages. Click on one near you and get the details about that center and its tenants and management. Click on a few of them to see how many choices there are. And be sure to sample some of the enormous number of useful URLs they offer under the "links" section of their home page.

The NBIA directory will put you in touch with a center that may be just the place where your business can thrive. But the catch is, once you get big and strong, the mother hen management will gently nudge you out of the nest to make room for the next chick. Good luck in finding the right location for your business.

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