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Business incubators are organisations that help the development of a new business by avoiding its early failure and collaborating with its strengthening within the market. Digital Transformation has brought many opportunities for entrepreneurs, whether online or for companies. Considering that Latin America is an entrepreneurial territory by nature, why not take the help of a business incubator to create a successful business?
The most varied businesses arise daily in all Spanish-speaking countries. Many create out of necessity, others materialise an excellent idea, and some “try something new”. Regardless of the initial reason, an entrepreneur must know that a good business plan is necessary for the success of any company.
What is a Business Incubator?
We can define a business incubator as a program that gives the necessary support to businesses in their initial stages to develop, strengthen and grow. Incubators offer consultancy from the project’s initial phase when the business idea’s developed. However, its function goes much further.
Business incubators can be public or private entities; for a business to be part of one. It is necessary to participate in the selection process.
What are the Objectives of a Business Incubator?
The main objectives of an incubator are:
- support the emergence of new companies;
- minimize the risk of failure of a new business;
- ensure the success of innovative projects;
- collaborate with its growth.
How is a Business Incubator Structured?
A business incubator structure following an incubation model in which we can consider three stages:
It is at this stage that the business idea is analysed. At this instant, the statement evaluates, checks whether it is viable, and determines the best way to implement it.
The business plan creates preincubation; if one already exists, it optimises to the maximum. In addition, the best type of business for the idea and how to execute the action plan will determine. The approximate duration of this stage is about six months.
It is the stage of launching the project and developing the business plan with all the advice necessary for its success. Throughout the incubation process, the company will have the necessary support for its proper functioning; those responsible receive constant training to develop their business with increasing independence.
Incubation lasts approximately between 1 and 2 years. This period may vary since the characteristics and needs of each of the companies will influence the duration, depending on the type of enterprise.
Once the incubation period is over, and the company has reached the expected degree of maturity, the time has come for the business to become independent.
The company receives all the advice and support necessary to continue its development outside the physical space of the incubator. Post-incubation usually lasts between 6 months and a year, depending on the needs of each business.
What Advantages do Incubators bring to Entrepreneurs?
Having a qualified and prepared team in all areas of your business is one of the most significant advantages an incubator can offer any entrepreneur.
In this way, your business can achieve the expected results and strengthen the brand necessary for the success of any business.
Access to facilities at a low cost and the authority it can give you in the event of the need for financing or external capital contribution are other advantages of this type of program.
The probability of success of a business that goes through the incubation process is much greater than any other. It also offers you complete learning for the proper development of your brand.
Types of Business Incubators
Some incubators focus on a specific type of company (for example, fintech startups) and vertical markets. (such as the energy market), or specific geographic areas (for example, all companies in Cordova).
Considering other classifications, we can find different classes of incubators according to the institutions that support them—private, university and government incubators.
But if we consider the incubators according to their specialisation, we find the following:
Traditional: they usually go to service businesses or shops.
Intermediate technology: they are incubators that support technology companies.
High-tech: Like previous incubators, they focus on technology companies but prioritise information technology and other innovative technologies.
It is essential to point out that the duration period determines by the need or obligation of your company and the capabilities of the incubator. One of the most valuable advantages of incubators is that they create a shared learning experience. Support the collaboration model between various work teams to enhance the success of a project.
Being part of a business incubator is an experience that can allow any entrepreneur to start and grow their business due to the support and advice they provide. Likewise, it will enable us not to take significant risks and constantly test. In short, business incubators have become the choice of many entrepreneurs when starting an idea.
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