Principles and Best Practices of Successful Business Incubation
In 1996, NBIA’s board of directors developed a set of industry guidelines to help incubator managers better serve their clients. Since that time, NBIA research has consistently shown that incubation programs that adhere to the principles and best practices of successful business incubation generally outperform those that do not. The following industry guidelines are replicable and broadly applicable to incubation programs around the world, regardless of their focus or mission.
Two principles characterize effective business incubation:
- The incubator aspires to have a positive impact on its community’s
economic health by maximizing the success of emerging companies.
- The incubator itself is a dynamic model of a sustainable, efficient business operation.
Model business incubation programs are distinguished by a commitment to incorporate industry best practices. Management and boards of incubators should strive to:
- Commit to the two core principles of business incubation
- Obtain consensus on a mission that defines the incubator’s role in the community and develop a strategic plan containing quantifiable objectives to achieve the program mission
- Structure for financial sustainability by developing and implementing a realistic business plan
- Recruit and appropriately compensate management capable of achieving the mission of the incubator and having the ability to help companies grow
- Build an effective board of directors committed to the incubator’s mission and to maximizing management’s role in developing successful companies
- Prioritize management time to place the greatest emphasis on client assistance, including proactive advising and guidance that results in company success and wealth creation
- Develop an incubator facility, resources, methods and tools that contribute to the effective delivery of business assistance to client firms and that address the developmental needs of each company
- Seek to integrate the incubator program and activities into the fabric of the community and its broader economic development goals and strategies
- Develop stakeholder support, including a resource network, that helps the incubation program’s client companies and supports the incubator’s mission and operations
- Maintain a management information system and collect statistics and other information necessary for ongoing program evaluation, thus improving a program’s effectiveness and allowing it to evolve with the needs of the clients
Developed by NBIA, with credit to the book, Growing New Ventures, Creating New Jobs: Principles and Practices of Successful Business Incubation, Rice M. and Matthews J., 1995.