Why Incubation

Most small businesses that go it alone don’t make it to their fifth anniversary. In fact, according to the U.S. Small Business Administration, only 44 percent make it past four years.

Business incubators work to help businesses do better than that by offering facilities, services and counseling specifically focused on the needs of start-ups and existing small businesses.

It works! The NBIA (National Business Incubation Association) tracks the success of member incubators and has determined that 87 percent of Clients that graduate are still in business after five years.

This shouldn’t be surprising. Incubator Client companies have many advantages that account for their success. First, they have gone through a rigorous qualification and selection process which includes developing a solid business plan, having an experienced core management team, and having the ability to fund a full year of start-up operations.

If accepted into the Incubator, they are required to continually sharpen their knowledge and skills by attending presentations, workshops, seminars, and conferences given by experienced professionals on a wide variety of topics. And, most importantly, incubator Clients are held accountable for meeting their business growth expectations by committing to ongoing counseling and mentoring with incubator management, advisors and partner organizations. Progress Reviews are held quarterly, where the Client opens up the accounting books with an advisor to determine how the business is performing to plan and what course corrections may need to be made.

These requirements for admission and accountability are critical success factors because they effectively separate and differentiate small businesses with a high probability for success from many others that may lack some of the fundamental elements that tend to result in long-term success. In addition, banks and private investors tend to look very favorably on companies that have made it through an incubator selection process and then demonstrated the ability and commitment to take advantage of the resources, facilities, and advice offered through a professional operated incubator environment.

Why Incubation? Because the process works and has a proven record for helping new companies get established, accelerate growth, access capital, and build a successful and sustainable business.         

 
 

© 2014 UCPBDC