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Starting a business can be a big step, and you may feel unsure how to go about it. A startup incubator can help your startup succeed and grow in the competitive market. In addition, they can provide services to help establish your idea in the market and build a business. This article will outline some services a startup incubator may provide at the various phases of your business.

What is a Startup Incubator?

A startup incubator is a collaborative program to help your startup succeed. Often, an incubator will provide ad-hoc help and mentor you over time. Therefore, an incubator is not an intense program like a startup accelerator. Instead, they will provide an environment of collaboration and support when you need it. 

To use an incubator, you will need to apply to their program and be accepted. Incubators will look for businesses that show potential but may not necessarily grow hugely in a short amount of time. Therefore, the application process may be highly competitive, depending on the incubator program.

Incubators provide many services to help validate your idea and develop it into a business. Depending on the incubator program or organisation you choose, each will provide its own services. For example, the services incubators may provide include:

  • market validation;
  • business development and planning;
  • acquiring investments;
  • networking with industry experts;
  • access to capital sources, including loans, business grants and investors;
  • advisory services;
  • mentoring and management training;
  • assistance with business operations, such as accounting, supply chain management, etc.;
  • help with operation resources, including hardware, software and cloud services;
  • capability building; and
  • shared office spaces.

Advantages of a Startup Incubator

An incubator’s services can hugely benefit you and your early-stage startup. Some of these advantages include:

  • mentorship: you gain critical entrepreneurial skills that will help you grow your business;
  • saving time and money – an incubator may fund some day-to-day operations such as accounting and finance;
  • access to industry experts;
  • access to funding opportunities;
  • low-cost access to equipment and office space; and
  • growth acceleration through business development.

Phases of an Incubator

An incubator will provide support across the different phases your startup will go through. Therefore, they may provide various services at different stages so that you can take full advantage of their support. There are five key stages that an incubator may provide help in.

  1. ideation and concept: the incubator may help prepare an effective business plan, conduct feasibility and profitability analyses of your product or service, and educate you on essential skills needed;
  2. company foundation: they can help you prepare for and then obtain external investment;
  3. co-operative identity: they may provide services to help you design business cards, logos, and the company brand while focusing on how the business looks to customers from a design perspective;
  4. product development: the incubator may focus on improving the functionality of your product or service while responding to feedback on the proposed product. The product will be tested and optimally designed for the highest level of customer satisfaction; and
  5. market launch: you may work with the incubator to devise a marketing strategy plan, identify the target market and form an action plan before launching your product or service into the market.

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Is an Incubator Suitable for Your Startup?

Business incubation is suitable for early-stage startups that need help getting past the ideation stage. The incubator can help solve technical and design issues while educating you on building and leading a successful team. Thus, an incubator will be suitable if you do not have experience in operating a business and do not have extensive knowledge of legal and operational issues. 

An incubator will look for potential companies that show promise and growth potential. Therefore, it is a suitable option if you want to gradually grow your startup over one to five years and need a lenient and less robust program. Suppose you do not know what business model to choose or do not have a rigid business plan. In this case, then an incubator will be appropriate for you.

However, an incubator usually will not offer capital. Instead, they will provide office space, mentorship, and networking opportunities. Consequently, using an incubator is an excellent choice if you are not keen on giving an organisation a slice of your equity in return for its services. 

Key Takeaways

An incubator can help early-stage startups develop and grow their business in the market. You will have access to a supportive environment, office space, and a mentor network to help strengthen your brand and company. Furthermore, an incubator will guide you through all five stages of developing your startup, from ideas to a market launch. Therefore, utilising an incubator is an excellent idea if you are stuck in the idea phase, want to grow your business gradually, and want access to perks such as office space, mentorship, and potential investors.

If you need help with understanding the role of a startup incubator, our experienced startup lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page

Frequently Asked Questions

What is a startup incubator?

A startup incubator is a collaborative program that will help you develop and grow your business and launch your products or services into the market. They will offer various services such as mentorship, accounting, and loans to help you establish your startup. 

Will an incubator provide me with capital?

An incubator will not provide you with capital to help run your business in most instances. Instead, they will help you get in touch with potential investors and provide you with low-cost access to office space, equipment and help with daily operations. 

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