What are business Incubators? A business incubator is a space designed to help young business leaders with the necessary guidance and financial and other support in the form of training and other resources.
The business incubator programs can be both private companies sponsored or public institutions or municipalities sponsored including colleges and universities.
As the start-up culture is pacing up, business incubators tend to become more important as they help the business at every stage to grow and they are collaborative programs that help people seek solutions to the problems associated with launching a new business.
An incubator provides the promoters of the business with the space to work and ensures that they meet potential investors with knowledge from the industry along with mentoring, training, and other benefits.
At its core, the role of a business incubator is to serve the country's socio-economic development, through the creation of companies that generate income and sources of employment. In a developing country like India, where employment and GDP are the two key problems, incubators do have a crucial part to play.
There are different types of incubators; however, most of them act as co-working spaces for member start-ups. Some incubators are industry-specific focusing on startups in that particular industries like education.
One can find the most suitable business incubators that are focused on particular industries or particular business models to earn the start-up a distinct name.
While the traditional incubator model requires a start-up venture to be set up at the incubator location, the virtual incubator provides the same support to a start-up business.
These incubators are suitable for entrepreneurs who want the guidance and advice offered by the incubators at the same time allow them to maintain their own offices, warehouses, etc.
These incubators are focused on healthcare innovation, healthcare technology, the internet of Things, cyber-security, and various other sectors in healthcare.
Kitchen incubators also known as culinary incubators are shared-use kitchen which is a licensed commercial space that is certified for food production.
Various food entrepreneurs, ranging from chefs, caterers, food truck proprietors, and bakers to value-added producers use the kitchen on an hourly or daily basis to avoid spending the capital on a permanent space.
Public incubators are focused on public welfare as they aim to provide social entrepreneurs with the tools to expand their businesses.
The challenging economic environment is changing the landscape of how the business world works; hence social businesses have to find ways to survive in the competitive environment that is offered by these incubators.
Seed Incubators are also known as accelerators as they make the process of startup fast-paced. They are usually the fixed-term, cohort-based programs that provide tailored mentorship, education, and training designed for early-stage start-ups to help further grow their business.
A corporate incubator is similar to a seed incubator as it supports early-stage start-ups through mentorship, office spaces, and often capital. In contrast to regular programs, corporate accelerators are formed with the objectives of the sponsoring organization.
The start-up studios are business incubators interacting with portfolio companies. A studio-like company that includes a Start-up factory (also known as a start-up foundry, or a venture builder) aims at building several companies in succession.
Start-up India -incubators:
A small example of state-based start-up incubators in India is Atal Innovation Mission.
Under the Atal Innovation Mission, the Government is setting up Atal Incubation Centres (AICs) in the public and private sectors as well as scaling up the Established Incubation Centres (EICs). 13 AICs that have been approved with a grant of INR 10 Crore each and a grant-in-aid of INR 10 crore has been provided to 6 EICs.
The state government has collaborated with various prime institutes including IIT-Kanpur, IIT-BHU, IIM Lucknow (Noida), and KNIT Sultanpur to establish Incubators. Uttar Pradesh will host India's biggest incubator. The government has provided grants to the host institutions for infrastructure, operational allowance and mentoring assistance.
The grants for incubators include setup grants, recurring expense grants, rental reimbursements, investment subsidies, registration fee reimbursement, and land allotment.
Incubators do ordo not charge any equity is a common query that entrepreneurs have when it comes to understanding how what incubators take in return for their services.
The incubators do does not fund their members or start-ups within their community, nor do they take equity stakes in their members' businesses. They, however, charge fees to ensure their work.
If an incubation program seems interesting, one should be prepared to get started with their fledged business plan. The plan is reviewed by the panel or a screening committee to determine whether or not one meets the criteria for admission into the program.