More than 90% of new businesses fail for one of three reasons :
Lack of training of the entrepreneur in key issues (taxes, laws, human resources),
lack of administrative experience (sales, marketing , administration, accounts receivable and payable)
and lack of access to capital .
Joining an incubator can reduce these gaps and help you become aware of the weak points in your entrepreneurial initiative, train you and strengthen them yourself or with the help of external professionals.
What is a business incubator?
It is a place or organization designed with the objective of helping to create young companies, accelerate them and support entrepreneurs in all technical and financial areas involved in creating a business. Many statistics in the sector indicate that companies survive well until the second year of life, mainly due to initial capital. However, the mortality rate of new companies begins to grow from that moment on. That is, many businesses die in their third year of life.
This is one of the main reasons why a business incubator is dedicated to advising entrepreneurs, seeking precisely to lower this mortality rate. One of the most important activities that you can find in a business incubator is the evaluation of the idea and the plan to follow for the consolidation of the project. Thus, those people who launch into entrepreneurship for the first time do so with the help of professionals and with resources for their activity.
Incubators are typically sponsored by different types of organizations, such as private companies, government economic development agencies, and universities.
What types of business incubators exist?
Some incubators focus on certain types of companies, for example : financial technology startups, others on vertical markets (such as the energy market) or on specific geographic areas (for example, all companies in Mexico City).
Looking at another way of classifying incubators , we can find other classes according to the institutions that support them: private, university and government incubators.
Considering incubators according to their specialization, we find the following:
Traditional: These are usually aimed at service businesses or shops.
Mid-tech: These are incubators that specifically support technology companies.
High-tech: Like the previous incubators, they focus on technology companies, but give priority to information technology and other innovative technologies.
It is important to note that the incubation period is determined by the need or obligation of your company and the capabilities of the incubator. One of the most valuable advantages of business incubators is that it creates a shared learning experience and supports the model of collaboration between various work teams to enhance the success of a project.
Another detail to consider with a business gambling data japan incubator is to what extent ownership of your project is compromised. For example, at this business incubator in Mexico , they say you don't have to give up ownership of your idea to join them.
The business incubation process
Although this may vary depending on each type of incubator, the phases of the process are generally:
Selection : at this point, entrepreneurs apply for their project or business idea and a group of specialized advisors analyze the entrepreneur's profile, the potential team that will accompany him, among other features, and then report whether he has been selected and the date on which the incubation begins.
Pre-incubation : In this phase of the process, the entrepreneurial team is informed of the requirements necessary to get started. In general, the business plan is defined here and a work plan is generated that will support the project throughout the incubation process.
Incubation : This is the actual phase where the new company or social project is supported or advised within the incubator. At this stage, commercial activities begin (in the case of a business) until the project is ready to be launched. During incubation, specialized advice, networking in support networks and access to financing plans are provided.
Monitoring : Once the new company or project graduates or passes the incubation stage, the business incubator monitors the progress of this initiative that is operational in the market. After this, new advice and even new access to financing may occur.
Benefits of connecting with a business incubator
Although we have mentioned the most relevant ones throughout this article, we do not want to overlook the fact that in addition to validating your idea and training you, it is also possible to find:
Access to physical offices
Some business incubators may offer free or low-cost coworking-style office space where entrepreneurs can meet with their team, work professionally, and even sit down with other players in the process. This can be ideal for early-stage projects that aren't ready to commit to renting an office.
Specialized team
Some very pro incubators offer, for example, access to 3D printers, prototyping equipment or software development labs. This can be vital for startups that do not have access to technology to help them grow or accelerate at the start.
Expert advice
Although we always learn from mistakes, for many entrepreneurs it is vital to mitigate the failure of their project. Elements such as the creation of a business plan, or a minimum viable product (MVP) are crucial and this can be possible with the advice of professionals who are within the business incubator.
Training and events
Most business incubators offer training and coaching relevant to the business area: from legal advice for company documentation to training on solving general business challenges; for example, packaging a product for shipping, creating a quality culture or establishing functional sales and marketing processes. In addition, free or paid events where you can connect with other entrepreneurs to improve networking.
Shared expenses
As well as reducing the cost of renting an office, many incubators offer accounting, finance, marketing and manufacturing services to help companies scale their growth and development. And the associated costs and expenses are shared, which can be very attractive in the early stages of a business.
Now it's your turn.
From our own experience, we know that the path of an entrepreneur is often a very lonely one, full of great challenges. For this reason, choosing the right business incubator is a very important decision, which we should not take lightly. We hope that this article is very useful to you and helps you as much as possible, so that you can start on the path to success with a firm footing.
