Business incubators are often touted as a great way to get a business idea off the ground, or to really commercialise your solution.
This article explores what the typical incubator offers.
By its very nature, an incubator is an organisation – typically made up of companies but sometimes also government representatives. These organisations aim to help startup and early-stage companies grow at a quicker pace.
Incubators offer networking opportunities so you can pick the brain of someone else who may have already dealt with a challenge you’re facing, and also often provide easier access to investors. Other opportunities include a quicker route to tools and prospects within government and your relevant market.
MTN Group's GM for Small and Medium Enterprise Channels, Omotayo Ojutalayo says, "The beauty of incubation programmes lie in the ability to get SME's to learn from other businesses. That way, some experiences gained by bigger businesses are shared without the upcoming SME's having to go through them."
In South Africa, there are a range of incubators – the best known among technology companies being Silicon Cape. Other incubators include Awethu and Black Shanduka Umbrellas, as well as Riversands.
As Riversands Incubation Hub puts it: “Some incubators focus on being that bridge from the big idea to execution, while others work with existing businesses to help them accelerate their progress.”
Often the benefits of signing up with an incubator means that the entrepreneur has access to training and skills. There is no point in having a great idea and not knowing how to commercialise it, or how to budget and develop a business plan.
These are often the obstacles preventing a startup from accessing venture capital and moving to the next phase of growth.
Riversands explains that most new business owners would benefit to some degree from being in an incubator environment, yet only a few really take full advantage of everything on offer. Those who will benefit the most are those with the guts to succeed, not those who want a comfortable lifestyle.
To take part, you need to want coaching, and have the grit and determination to push through. “Entrepreneurs need to realise that this is their business; they can’t sit back and wait for incubator personnel to do all the hard work for them.”
Shanduka Black Umbrellas explains some of the benefits could include:
• A nurturing environment to develop and grow a business.
• Virtual support
• Marketing assistance
• Access to hands on intensive business support
• Access to industry experts and to other entrepreneurs and suppliers which can be great for collaboration
Riversands adds that other benefits include:
• Increased market visibility and the ability to tap into a broader, business network.
• Having some business infrastructure in place allows the business to focus on growing the core business
• Access to experienced mentors and business advisors that wouldn’t normally be available to a small business owner
• Robust feedback on business performance which is incredibly valuable to an ambitious business owner
• Synergies with other entrepreneurs in the incubator can unlock new opportunities
However, it appears that these incubators need a company to have moved beyond an idea and into a company that has a business plan and is already ticking along. Match your company’s life stage with what the incubator offers, and choose wisely so you get the most out of it.