Business Incubators: A Catalyst for Entrepreneurial Development
Business incubators are recognized by both developing and developed countries as analytical instruments for promoting entrepreneurial development and innovation in small business ventures. Currently, there are thousands of business incubators all over the world which are established to enable a steady flow of successful business ventures. They provide advisory as well as administrative sustenance services to small enterprises to facilitate their development. The critical purpose of business incubators according to the National Business Incubation Association is yielding small firms which are financially stable and thriving in the market to survive on their own. Some years ago, incubators focused more on the technology firms or service and industrial businesses compared to the new incubators who work with variant industries (Basu, n.d.). Business incubators are now the primary force that is reckoned to ensure small enterprises finances are utilized better, there is the smooth management of the business, synergy, and economic decisions are made wisely.
Role of Business Incubator
Business incubators provide a complete range of standard services such as product development and marketing, training employees and selling the enterprise, financing, and secretarial assistance. They further create an administration that is strict and exit rules that help in concentrating on innovative ideas to ensure benefits to the local economy. Incubators also assist in professional management by monitoring tenants’ firms in their business plans to prevent wrong decision making. Also, they are entitled to foreseeing small business activities by ensuring the use of technological innovation and effective adaptation as well as regional development (Basu, n.d.).
Roles and Benefits Small Business Development
Financing management
For a small business venture to succeed in a competitive market, the utilization of the finances would be critical. However, business incubators help these small ventures in saving the operational cost as they enable the enterprises to share overhead expenses and facilities, for instance, assisting in utilities and receptionist services. Likewise, these small enterprises can enjoy lower leasing rates if the incubator’s location is in low-rent industrial areas (Basu, n.d.). They also help small firms in identifying venture capitalist and investors by assisting them in their presentation.
Management of the business
Administration of any enterprise determines how a firm makes its decisions. Therefore, incubators help the small business in making set goals that are achievable and realistic which will enable to compete effectively with mature companies. Incubator has well-experienced advisors as well as retired executives who can provide fruitful guidance to these small ventures (Basu, n.d.).
Creation of synergies
Working with incubators creates connections and networks once the small firm leaves the incubator. At this stage, the incubator takes on the role of encouraging the small venture through motivation, solving problems, and sharing ideas (Basu, n.d.).
Assisting in economic growth
Incubators are tasked with enabling there is economic development in the areas that they operate. Through helping small ventures to grow, they create employment opportunities which in turn reduces the level of poverty (Basu, n.d.). Additionally, since this firm requires good transport networks for smooth flow of raw material and final products, they help in opening new areas which were inaccessible.
Conclusion
Firms incubation has become an essential factor within the local startup businesses. This initiative equips small ventures with adequate skills that will propel them to start and manage the business effectively. Some incubator can go an extra mile in providing this firms with capital for growing the business idea from the ground. These ensure that there are economic growth and development invariant regions.
References
Basu, Chirantan. (n.d.). The Importance of Business Incubators. Small Business - Chron.com. Retrieved from http://smallbusiness.chron.com/importance-business-incubators-34079.html
