How an incubator boosts startups’ success
What is a business incubator? According to Lynne Keller, executive director of the Center for Unique Business Enterprises (CUBE) northern Nevada’s business incubator, “It is an ideal place for ideas and companies to grow.” According to the National Business Incubation Association, it is a place where you can improve your chances of survival from a mere 5 percent to an astounding 85 percent success rate.
Still it doesn’t answer the key question, “What is an Incubator?” Wikipedia defines an incubator as:
“Business incubators are programs designed to accelerate the successful development of entrepreneurial companies through an array of business support resources and services, developed and orchestrated by incubator management and offered both in the incubator and through its network of contacts. Incubators vary in the way they deliver their services, in their organizational structure, and in the types of clients they serve. Successful completion of a business incubation program increases the likelihood that a start-up company will stay in business for the long term: Historically, 87 percent of incubator graduates stay in business.”
Besides a clear definition, the answer is found most clearly in the question of “Why should I care that an incubator exists? Can’t I get the same service from reading a book, or going down to the SBDC or taking a class at the community college?” Maybe, but you will face challenges that the CUBE is designed to help you through.
Challenge: Guidance and Access to Resources
* Help with business basics: You were an engineer and now you are the chief executive officer of a startup. Does being a good engineer make you capable of successfully running your new company?
* Help with presentation skills: You get one chance to make a great first impression. What does an investor need to hear?
* Links to strategic partners: If General Electric knows about your idea, will they help you develop it or will they take it away and do it themselves? How do you know find the “right” strategic partner?
* Access to angel investors or venture capitalists: You will need to meet potential investors who understand your business before you can raise significant capital. How do you meet them and are they the right ones?
* Introduction to potential advisors and mentors: Who should be on your board? What can they do for you? How do you pay them?
* Identifying management candidates and recruiting: You are a great engineer. But it’s not a business if you do not sell anything. How do you find the right person to sell your product? How do you find a chief technology officer?
* Help with business etiquette: What to do when you are in Japan or China. What not to do when calling on Costco.
* Managing intellectual property: I spent three years working on it. How do I protect it? How much should I pay to file a patent? Can I do it myself? Where should I file? What is patentable? When do I use trade secrets?
* Assistance in marketing: I need to run some ads. I need an SEO effort. Can I make an infomercial? How much? With my limited funds, what marketing tools give me the most return?
* Help with accounting and financial management: Can’t I just use QuickBooks? What is a chart of accounts? Why do I care about accrual versus cash when I have no cash coming in?
* Access to bank loans, loan funds and guarantee programs: What financing programs are out there? Which do I qualify to participate in? What is an SBIR grant?
These are all questions that the CUBE has experience and can offer guidance. Will all of them become issues in your business? We don’t know, but it is historically clear that the primary service of an incubator is to provide assistance in helping entrepreneurs and innovators build sound businesses.
The CUBE allows selected clients to be residential or virtual tenants, attending the many public and private events at no charge. Clients can take advantage of weekly mentoring and have ready access to experts-in-residence that support the clients of the CUBE in key areas of legal, accounting, manufacturing, finance, patents, and technology. But there is a hidden benefit in having an office at the facility. It’s discipline the driving force to motivate you, to separate work and life, and to hold you accountable.
Too often we decide on a course of action and get distracted. Too often we fail to complete a key step in laying the foundation of our business. If you are alone in your house or garage, the slight misstep may go unnoticed until it is too late. Successful incubator graduates all recount the frustration of the required discipline and the relief when the unpleasant tasks are accomplished.
The last challenge facing every startup is the isolation. Starting a new business is hard! Being an entrepreneur can be lonely. Who do you talk to when things go wrong? And even when things are going well, who do you go to when you have a quick question about the law or the market or about social media, if you are alone in your garage?
The incubator exists to help you succeed. It provides mentors, discipline and peer support in an environment that respects you and your business. It is a place where you can find what you need just down the hall. It is a place where you can discuss your hopes, fears and questions without someone stealing your idea, charging you outrageous fees, or making your feel foolish. You can find direction, resources and support.
The best way to discover what an incubator is and what it can do for you is to come by and see for yourself. We are a 501(c) 3 organization a non profit. We invite you to check out what we do and how we do it. Visit us at http://www.c4cube.com or call Lynne Keller at 622 -9900 to make an appointment.
We want you to succeed!
Norman A. Smith is managing director of C4CUBE, a business incubator in downtown Reno. Contact him at 622-9900 or through http://www.c4cube.com.
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