Incubators play viable role in business development

BY DWAINE CHAPEL

Starting a new business is not an easy task.

The innovator most certainly knows the details of his/her idea, product or service, but may lack some of the essential skills needed to turn the idea into a successful business. A community with a one-stop shop for inquiring entrepreneurs eases the difficulty of getting started. The use of incubators as an economic development tool has become an effective way to spark job creation and provide a place for entrepreneurs to turn their ideas into a viable business. These facilities promote innovation and job creation by providing essential resources and services to early-stage companies in an attempt to increase their success rate.

Incubators commonly provide market research of the idea, product or service, business plan assistance, financial assistance in the form of a small business development representative or licensed certified public accountant, and intellectual property expertise in the form of a licensed attorney.

Entrepreneurs play an important role in developing economies. Developing home-grown businesses balances economic development efforts. Communities do not need to rely solely on recruiting existing businesses from other locations. They can assist in a ground-up venture by using a business incubator.

A successful incubator understands the entrepreneurial temperature of its community and educational systems, is able to match the needs of local talent to appropriate resources, identifies potential projects and understands what entrepreneurs are talking about.

In smaller communities it is difficult to specialize in a specific niche such as culinary arts, science and technology, retail, or arts and crafts. In these instances it would be more appropriate to provide essential needs through broad services and resources. An incubator needs to be flexible and willing to take on community projects and entrepreneurial needs.

Incubators are community successes. Success rests on the shoulders of many, not a few. Mentors and coaches need to be identified as well. These people may have specific success in an industry cluster, but can provide initial knowledge to get an entrepreneur started on the right path to success.

The incubator staff works with all facets of the community to recruit the aforementioned mentors, coaches, business leaders, attorneys, accountants, and more to create the team. The incubator staff and team should be trained to provide a unique and positive experience to the entrepreneur. The incubator needs to have a business plan, financial plan and growth strategy to be successful. It needs to be a successful business as well.

Staff should also work to set up networking events to provide entrepreneurs with opportunities to meet business leaders and other successful innovators. If possible, set up speaking engagements for successful entrepreneurs to share their experiences. What did they do right? What did they do wrong? What might they suggest to expedite the problem?

The use of an incubator as an economic development tool for a community is a viable way to develop the next generation of entrepreneurs. They create jobs and assist in developing innovative ideas into sound businesses. PB

Dwaine Chapel Executive director Research Park at South Dakota State University Dwaine@researchparkatsdstate.com