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In 2006, the National Business Incubation Association (NBIA)
reported approximately 5,000 incubators operating around
the world with 1,000 in North America alone.

But do business incubators actually work? Entrepreneur,
Business Week, Inc., and USA TODAY say ‘yes, they do.’


What is a business incubator?

Business incubators are programs established in communities
to assist young and startup businesses get off the ground by
offering a physical office space, shared amenities, networking
opportunities and business consulting at an affordable cost.
“The incubator is more than just a place that offers cheap rent,”
says USA TODAY, “ it is a multipurpose entity intended to do
nothing less than birth new businesses.”

In a study conducted by the University of Michigan and the NBIA
entitled Business Incubation Works, it was reported that 87% of
business incubation graduates stay in business, a startling statistic
when the Small Business Association reported in 2010 that only
50% of all businesses survive through their first five years.

What are the benefits of being in a business incubator?

The primary benefit is the shared operating cost. You have access
to all of the necessities of an office space office equipment,
conference room, computer services, and receptionist services
at a manageable cost geared to foster startup businesses.

Another benefit is the business consulting services. Incubator
managers can provide insightful information on a broad range of
business issues from marketing and branding to business
development and expansion financing. Incubators offer group
workshops and seminars on a myriad of business topics that
provide ongoing education for startup business owners.

Having a physical office location can make all the difference
to investors and clients alike. A major benefit of being a
part of a business incubator is the credibility and legitimacy
that is established simply by having a bricks and mortar location
that is not the kitchen table.

Also provided, by virtue of tenancy in a business incubator,
are networking and business community relationships. Working
in an office among other entrepreneurs provides an automatic
support system, an automatic outlet for sharing business related
items and ideas, and an avenue for business connections that can
serve a business well for years to come.


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