Is Business Incubation Right for Your Business?
Is necessity truly the mother of invention? It was certainly the case nearly 50 years ago with the unintended creation of the business incubation industry. The international business incubation movement began in New York with a businessman, an empty building and an idea of mentoring young companies through their early years—the most vulnerable period of their lives. That idea has grown worldwide to over 6,000 incubators, 1,400-plus of which are located in the United States.
The wisdom of incubating businesses in a centrally-located facility was not lost on economic development professionals throughout the years. Cities, states, and universities have jumped on the incubation bandwagon and have sponsored facilities that in North America alone have assisted more than 27,000 start-up companies. These companies provided full-time employment for more than 100,000 workers and generated annual revenue of more than $17 billion. As one of the United States’ greatest competitors, China now has city blocks of incubators growing internationally-competitive businesses.
Why should a young company consider incubation? Because it provides resources and solutions to help you over hurdles you may not know are ahead. Many years ago, I started my first company blissfully not knowing what I didn’t know. I knew nothing about insurance, sales and marketing, intellectual property, copyright, accounting, buy-sell agreements—you name it! But I did know what I knew and that was direct mail fundraising. If only I had started out in an incubator, my business would have been so much easier to manage and grow. As it was, my attention was constantly being diverted to overcoming issues unrelated to the sales and marketing of my business. That learning curve takes its toll on a young company.
Helping developing companies efficiently and effectively deal with the multitude of challenges that come up is where business incubation shines. It takes the most promising growth businesses from a community, houses them in an incubator in a collegial atmosphere, surrounds them with coaches and mentors from the community and polishes their management team and business plan to get them ready for the real business world.
Albuquerque is set to open a $10M+ business incubator, the WESST Enterprise Center, in the fall of 2008. Operated by the non-profit group WESST and sponsored by the City of Albuquerque, the State of New Mexico, the federal Economic Development Administration, and private donors, the 37,000 square feet state-of-the-art incubator will house early-stage companies looking to get an advantage over their competition.
The WESST Enterprise Center will provide real-world, “gray hair” experience through a host of Strategic Partner companies and private mentors. Incubation is certainly not about office space. It’s about the education that accompanies incubation and the ensuing successes experienced by entrepreneurs. Worldwide, approximately 87% of companies completing a business incubation program are still in business 5 years following their graduation. Compare that to 80% of businesses who don’t incubate and fail in a comparable period of time.
Do you think business incubation may be right for your young business? You have only to pick up the phone and call WESST or any of the other incubators in the state. Each has its own particular expertise and talent bank to assist your company’s growth.
In addition to the WESST Enterprise Center, Farmington, Santa Fe and the South Valley of Albuquerque all have established business incubation programs that are certified by the State of New Mexico. I have listed the contact information for these programs and the WESST Enterprise Center below. In addition, more and more cities across New Mexico are in various stages of starting and developing their own incubation programs. If you have a new business or are considering starting one, you owe it to yourself to check out these programs dedicated to helping you succeed. If you are in the Albuquerque area, I look forward to talking with you soon!