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What are Business Incubators?

By: Matthew Strawbridge - Updated: 7 Oct 2012 | comments*Discuss
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A business incubator is a support facility housing several start-up businesses, particularly in high-tech fields such as IT and life sciences (in the latter case, it may be called a bioincubator). Many business incubators are sponsored by academic institutions (particularly those primarily for businesses spun out of university research) and government schemes; others are privately funded incubators founded to make a profit.

As well as being a flexible commercial landlord, an incubator gives each small business help to establish itself in the market and to grow. Business incubators offer early-stage businesses access to their network of external contacts. These specialists can provide a small business information that could be difficult for them to obtain from other sources, as would be the case if the business were fending for itself outside the protective shelter provided by the business incubator.

Shared Resources

The major benefit to a small business of being in an incubator is the set of shared business assistance services that are available:

  • general infrastructure such as networking and IT support
  • experienced administrators who are able to offer a small business help with general processes such as applying for grants and seeking protection for their intellectual property
  • marketing and networking opportunities
  • existing relationships with financial institutions and help with your finances in general.

As well as the small business help offered by the parent incubator, there are benefits to being co-located with similar sibling businesses. You may find that being in a dynamic environment with a group of other entrepreneurs is useful. It can be good to have easy access to objective, creative people who are dedicated to building their own businesses, if only to exchange ideas.


A mentor can give a small business information and guidance. The oversight and advice offered by a business incubator to a small business help to guide it through the difficult early stages of its foundation, helping it to avoid common pitfalls. Once the business is established and has the size and profitability to thrive on its own, it can leave the incubator, making room for another start-up to take its place.

Virtual Business Incubators

Virtual incubators for a small business help it with advice and access to information and services without physically housing the business on its site. These incubators are useful for very small businesses and for businesses with established premises where they do not wish to relocate but still need access to the incubator's services to help them grow.

Is an Incubator Right For Your Business?

It's certainly worth considering applying to join a business incubator, whether virtual or “bricks and mortar”, to get the small business help you need in order to grow. Your application will be more likely to succeed if your business is in a field that the incubator specialises in and if you have a strong business plan. You will need to weigh up the finances: the fees charged by an incubator will be higher than commercial market rents in general, but then you are getting access to a wealth of small business information, guidance and facilities for the extra money.

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