Small Business Incubators: Growth and Innovation for Your Startup 

Want to start a small business but worried you don’t know enough about the entrepreneurial journey? Or, did you recently start a new venture and feel … stuck? You might be interested in a small business incubator. Small business incubators provide tools, resources, and support for startups.

Learn how a small business incubator can help you launch your business, reduce overhead costs, increase connections, and more. 

What is a business incubator?

A small business incubator is an organization or program whose goal is to help startups and other small businesses succeed. Incubators offer new small businesses a helping hand to get started and become established businesses. 

Incubators offer services and resources such as:

  • Training programs
  • Mentorship
  • Networking opportunities
  • Office space
  • Financial assistance

Business incubators aren’t the only type of program available to businesses wanting to grow. There are also accelerator programs. So, what’s the difference? 

Incubator vs. accelerator 

Again, a business incubator is an organization that focuses on helping startups build their foundation for long-term growth. Incubators provide a range of tools and resources for businesses to create sustainable operations. Companies may enroll in incubator programs for an open-ended period, such as a few months to several years. 

A business accelerator is an organization that focuses on quickly scaling more established businesses. Accelerators set aggressive goals and milestones for companies to meet by the end of the program. A small business accelerator program typically requires capital in exchange for a share of equity (e.g., 7% of your business). 

Do you need an incubator or accelerator program? The program you choose depends on several factors, including your:

  • Business stage (i.e., startup or established)
  • Desired support level
  • Goals for growth 

Keep in mind that many organizations offer both incubator and accelerator programs. 

What do small business incubators do?

Companies enrolled in a small business incubator program gain access to the following tools, resources, and support. 

1. Training programs

Incubators may provide business management training on everything from marketing to accounting to payroll. 

2. Mentorship 

Need business advice? Legal advice? Financial advice? Incubators offer mentorship opportunities that connect you to veteran mentors and advisors. 

3. Networking opportunities 

You can get connections to professionals in several industries, including legal and financial experts, investors, and other business owners.

4. Office space

Some incubators offer affordable office space, reducing overhead costs and giving you more money to grow your startup.  

5. Financial assistance

Small business financing is necessary for many startups. Incubators can help you find and secure venture capital or angel investments.  

What is an example of a business incubator?

There are many incubator programs to choose from. Again, many organizations offer both incubator and accelerator programs.

Here are some examples of popular incubator/accelerator programs:

Several successful companies have used business incubator programs, including Airbnb, Dropbox, and Reddit.  

How much does a small business incubator cost?

Incubators can cost several hundred or thousand dollars per month. The average incubator in the United States charges $25,000 per year (about $2,083 per month). 

The cost of a small business incubator varies depending on what services you’re receiving. For example, programs with office space generally cost more than programs providing only mentorship.

You typically pay a membership fee, which might be a monthly or annual expense. You may need to pay higher fees if you add more services, such as office space or legal advice. 

Should you enroll in an incubator program?

Business incubators can reduce overhead costs, increase survival rates, and provide access to mentoring and networking opportunities. However, you should consider your company’s needs, budget, and trajectory before enrolling. 

New startups might opt for an incubator program while established businesses may choose an accelerator program. 

Research potential incubator programs before deciding. Weigh the tools, resources, and support offered against the cost and commitment.  

This is not intended as legal advice; for more information, please click here.

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