Startup incubator programs have a huge role to play for small businesses and this is evident in what is currently happing with African startups. For some time, these programs have been considered to be critical to the success of most startups.
A huge percentage of entrepreneurs find it appealing to associate their businesses with a group that can help them build the business with ease. Considering the number of startups that fail shortly after commencing business operations, an incubator program can be pivotal to the success of most small businesses.
What are startup incubators?
A business incubator is a program that exists to provide support to new startups. This is done through offering mentorship, education, and funding geared towards helping the business take off safely and move to the next level.
In most cases, businesses are involved in a certain program as a part of other startups seeking to achieve growth. Usually, this happens for a predetermined period. This duration is characterized by an in intense and integrated learning process that can ensure the time taken to achieve important milestones is low.
In a nutshell, the most important role of a business incubator is ensuring they’ve provided critical support to startups to increase their chances of survival. Besides, most startups don’t survive their first five years.
Easier product development
Incubator programs are on the rise in many parts of the world and Africa hasn’t been left behind. Basically, they are quite effective in offering small businesses the necessary guidance and support resources.
They also provide a good environment for venture capitalists, angel investors as well as other partners who can offer mentorship. Some programs will go a step farther and provide office space, accounting services, and legal expertise. When a startup up has all the necessary support, it becomes easy to concentrate on developing the product or service they want to offer the market.
Support from experienced mentors
The best mentors for startups are individuals who have been active entrepreneurs for a long time. This makes them ideal to challenge you as you work on your idea. Their acumen isn’t derived from multiple college degrees but it comes from engaging in the business sector for a long time.
However, this doesn’t mean that you won’t be learning some things on your own. There are some aspects of the business that requires more exploration beyond what your mentors can provide. For instance, if your idea is relatively new on the market, it’s likely that there won’t be many startups in your area of specialization. As such, you need to chart the way as you grow the business.
Access to critical networks
When your business in participating in an incubator program, you stand the chance to benefit from a network of several businesses in the niche you are operating in. at the same time, you build a network of important business partners who can help your business succeed.
The networks may include pivotal mentorship opportunities as well as a great introduction to industry players who can offer highly profitable deals. Whether your business is in its infant stages or is a few years old, you can certainly reap from an expanded network.
For instance, young startups can find it quite difficult finding great partners in the media and tech sector. But when the introduction comes from a reputable incubator, this process can be easy and very rewarding. Otherwise, the financial requirements before the partners agree to work with a young business can be discouraging.
Most importantly, when you are working with a network of companies, you get huge benefits as far as public relations are concerned. Generally, startups tend to have limited budgets to fuel the PR and marketing campaigns. But when they’ve linked with a group of active players who can help them appear in the spotlight, landing on lucrative opportunities becomes quite easy.
Access to business funding
When you want to raise funds for your startup, you have to go out there and meet some investors. When these meetings are happening, they tend to be more fruitful when you’ve been introduced by a reputable firm. Most incubators have already created important connections with players in the banking sector as well as other investors. As such, they can contact a venture capitalist or angel investor who may be interested in making investments in your business.
This is quite beneficial since you won’t have to go through several investors who don’t have a history of investing a startup. Given their network of potential investors, you can get connected to a source that matches your criteria. When the incubator program has great connections, you will have a head start since you won’t have to spend valuable time searching for the best match.
In addition, most investment banks, as well as some alternative intermediary organizations, will charge you about 10% of the total amount you will raise. Considering that some of these partners will charge hefty monthly fees, going through an incubator can help you save a lot of money.
Unlike in the past when getting access to funds was a nightmare for startup founders, nation 21 loans are now available thanks to innovative financial startups. Most of these organizations offer their services from an online platform and this makes it convenient for businesses. Whether your business requires an installment loan or a line of credit, the underwriting process is quite flexible.
A good entrepreneur will always be seeking learning opportunities and an incubator is a great place to get the necessary education. Most incubators will organize several meet-ups and workshops where participants can grow their skills. At times, they can provide tickets to critical conferences that can equip you with outstanding knowledge. When an incubator is situated in a university, the startup owners can get a boost from the various learning resources available.
Irrespective of the educational resources available in an incubator, they are aimed at helping you improve your skills. The more exposed you are as an entrepreneur, the higher the odds of success for your business. Besides, the market is competitive and being informed gives you an edge.
When you are part of a startup incubator, you have a better opportunity of growing your business. It jumpstarts your growth and you quickly reach a point where you can walk with minimal support. Getting critical connections is quite easy since they are initiated by an organization with an impressive track record. Most importantly, some mentors can bring immense value that can facilitate fast growth.