- SEC Crowdfunding Rules
- Judgment creditors
- Municipal Liability
- Consumer Debts
- Employment Law
- Small Business
- Equity Development
- Business Entities
- Sales and Dissolutions
- Mergers and Acquisitions
- Closely Held Businesses
- Business Formation and Planning
- Corporate and Business Tax
What Is a Business Incubator?
Business incubation programs can provide an array of benefits to start-up business owners. Think of them as a support service — they provide entrepreneurs with valuable resources. The goal of a business incubator is to "produce" a business that will exit the program and be able to successfully operate on its own.
Some incubators are located in a physical space, while others are of a virtual nature. If occupying a space, then the incubator can offer their location to businesses (often at below-market rates) and divvy up equipment, supplies, and even staff. Virtual business incubation programs allow for a business to maintain their own location and resources, but still receive the incubator's advice and expertise. Incubators can be owned or sponsored by different entities, including private companies, non-profit organizations, universities, venture capitalists or governments.
Incubation programs have grown substantially in recent years as a result of the poor economy and the resulting increase in the number of failing businesses. Many programs now focus on a specific industry, such as software development or medical technologies. It is important for an entrepreneur to do his work before joining a program; not all are created equally. If you are searching for a program, be sure to inquire about the program's "success stories." Find a program in which you and the incubator leaders connect — these people often become mentors and it is important to share the same goals and professional philosophies.
Incubators usually require a business to submit a well-established business plan before acceptance into the program. Because they are using their own resources and time to foster the business, they want only prospects that have a real chance of becoming prosperous. If you need help with constructing your business plan or want to discuss how your business can succeed, contact the corporate law attorneys at McBrayer.
Thomas D. Flanigan is a member of McBrayer, McGinnis, Leslie & Kirkland, PLLC in the Lexington, KY office. Mr. Flanigan specializes in the areas of entrepreneurial business, lending and commercial services and mergers and acquisitions. He can be reached at firstname.lastname@example.org or 859-231-8780.
This article does not constitute legal advice.