Key services of Business Incubation Program (Part 3 of 3)

Two previous posts were devoted to key services of any business incubation program. In the first post we talked about 7 key service categories of any business incubation program (Key Services of Business Incubation Program (Part 1 of 3)). Second one was about what are those particular services (the full list), what are top 15 services (Key Services of Business Incubation Program – Part 2 of 3). This last part is about mapping those services along the life cycle of incubation process.

BI services according to stages of a life cycle of a venture

Important assumption was made before – we didn’t consider real needs and demand of a venture according to its position in a life cycle. By the life cycle of a venture I mean “the evolution of a system, product, service, project (venture[1] in our case) or other human-made entity from conception through retirement” (Source: ISO/IEC 2008). Again life cycle of a venture could be described from different viewpoints. We will analyze this issue later in detail (see Life Cycle of a Venture). Now we will use classification proposed by EBN team in “The Smart Guide to Innovation-Based Incubators (2010)[2]”. It considers a life cycle from the business incubation program point of view:

  • pre-incubation stage (relates to the overall activities needed to support the potential entrepreneur  in developing his business idea, business model and business plan, to boost the chances to arrive to aneffective start‐up creation),
  • incubation stage (support given to the entrepreneur from the startup to the expansion phase),
  • post-incubation stage or SME (relates  to  the  activities  to  be  carried  out  when  the  company  has  reached  he maturity phase, and therefore is ready to walk on its own feet).

Why is it important to analyze which services should incubator focus in every stage of a life cycle? Clearly, needs of venture are different in every stage. Thus, these needs cant be satisfied with the same set of services. Business incubators should adapt their proposals accordingly in the pre-incubation stage, incubation stage, and post incubation stage. Furthermore, later on we will describe a Model for Virtual Business Incubation Program which builds upon current premises. From now on I will quote almost everything from the EBN paper.

 Services in the pre-incubation stage

Pre-incubation goes from the definition on the innovative idea to the elaboration of the Business Plan. It is typically an engineering process which starts a first appointment with the business development staff of the IBI where the idea is analyzed and initially assessed, and a very first filter is applied.

Pre-incubation stage services

Pre-incubation stage services

Figure 1 – The pre-incubation stage

Subsequently the incubator could offer a pre-incubation space, typically a workstation with the main facilities (printing, internet connectivity, etc.), and should offer a series of appointments to help the entrepreneur in better defining their business idea up to the full elaboration of the business plan covering all the aspects needed to understand the full feasibility of the project idea.

During the process at a certain point, the IBI should assess the degree of innovation of the business idea. It is advisable to manage this task through a committee of external experts in the related economic sector, although some IBIs prefer to internalize this function. If the idea results innovative then further support should be provided, if it doesn`t the IBI will revert the idea to other business support organization not exclusively devoted to innovation.

There may be the need to undertake training activities, mainly on managerial topics, since the would-be entrepreneurs do not always have a business education background.

 Services in the incubation stage

The incubation stage goes from the start-up creation, through the expansion phase, up to the initial maturity of the company. It is delicate phase in which the entrepreneur will undertake the activities needed to realize the business plan, and the services delivered by an IBI will differ according to the phase in which the new company is positioned within the terms identified by the business plan itself.

Incubation stage services

Incubation stage services

Figure 2 – The incubation stage

Services for existing SMEs

It might be the role of an IBI, and this sometimes can be preponderant the regional tissue of SMEs through services meant to increase within them the degree of innovation.

Post-incubation stage services (Main services for SMEs)

Post-incubation stage services (Main services for SMEs)

Figure 3 – Main services for SMEs

 (Source: The Smart Guide to Innovation-Based Incubators (IBI), 2010)

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