Government helps startups:
How can an incubation center help a startup to grow? The government of India defines a startup as “an entity headquartered in India, which was opened less than 10 years ago, and has an annual turnover less than ₹100 crores”.
In other words, A startup is a company founded by one or more entrepreneurs looking to develop a unique product/service and bring it to market.
In a nutshell, you need an extraordinary idea and a group of enthusiastic people who are willing to take the risk of not knowing whether things would pan out in the future as planned. While this might not seem scary on the surface, you start to dive deep into what all an entrepreneur goes through in order to launch their product/service and get funding. You would be flabbergasted. And this is where incubators come to the rescue. A startup incubator is a collaborative program dedicated to helping new startups succeed. It allows entrepreneurs to solve some of the problems commonly associated with running a startup by providing workspace, seed funding, mentoring, and training.
The sole objective of a startup incubator is to help entrepreneurs grow their businesses. Usually, a non-profit organization, business incubation centers provide support to startup companies in office space, infrastructure, mentorship, and sometimes even funding.
All business incubators do not admit all companies – a startup that wishes to be incubated must apply to the incubation center with a viable business plan. Every incubator has a different criterion, and only startups with a workable business plan are usually admitted.
There are mere 200 incubation centers in India to cater to 4,500 odd startups.
Why a startup needs an Incubator?
When you’ve created a new business with a product or service that you know people want, you are likely to feel very confident about the success you’ve obtained so far. However, there’s a difference between your initial startup success and the scale of growth you want to achieve for your business. If you’re going to grow, it may not be enough to have a good product/service.
Networking is of paramount importance if you want to see both short-term and long-term growth. Networking is the process of exchanging information, and building sustainable relationships with other professionals, leaders, and startup entrepreneurs within your niche.
If you want to build a sustainable network among other leaders and entrepreneurs in your niche, incubators often provide the perfect method. Most incubators have space to accommodate dozens of different startups and companies looking to grow their business. When you join an incubator, you’ll have the opportunity to access all of these companies and individuals as you go about your workday, which makes networking simple and, up to some extent, an easy task.
Many incubators provide startups with access to investment opportunities through investor relations and programs that facilitate funds transfer. They typically have numerous partners that they work with to assist the startups that are using the incubator. These partners will frequently provide the startups with funding and other essential resources. The companies that oversee the incubator almost always can facilitate a transfer of funds by helping the startups discover funding opportunities and filling out any necessary applications for the funding.
If additional funding is essential for your startup’s growth, make sure that you look for incubators that offer investment programs, commonly referred to as angel networks. These programs bring investors from the surrounding area in which the incubator is situated.
When a startup partners with an incubator, it gains access to various professional resources that may have previously been unavailable, including everything from education to software and business tools. Generally, the professional help that a startup is provided with varies from incubator to incubator; the startup will likely obtain certain must-haves in the office like administrative support, internet access, and various necessary infrastructure.
Many of these incubators host regular webinars and seminars for the startup partners at the incubator. These sessions often focus on forecasting, business fundamentals, how to get investment, and legal requirements. These sessions are typically provided in one location, which means that the entrepreneur will not need to travel every time they think a workshop will benefit the company or team.
When a company works in an incubator, it will almost certainly gain exposure to industry leaders in a manner that will allow for a mentoring relationship. Getting advice from individuals who have already been successful can prove incomparable when the company grows. Learning from the experiences that other successful companies have had helps it to avoid some of the common mistakes that startups generally make.
Many incubators provide startups with access to business and industry leaders, which is another critical business opportunity for a startup that would have been difficult to otherwise obtain.
Incubators provide access to these industry leaders as many businesses sponsor incubators and provide critical insights and access to information, which otherwise is difficult to procure. These mentors also challenge the company to refine its business strategies, goals, and vision.
When you want to accelerate your startup’s growth and avoid the pitfalls which often occur while attempting to expand, incubators offer resources and benefits for startups like yours that will allow you to succeed and grow exponentially. The networking, investment, and mentorship opportunities that you can gain access to through an incubation center can pay rich dividends when you’re attempting to expand into a crowded industry. The connections you acquire when you get associated with an incubator, it helps you take your company to the next level. Because of the low investment and expenses associated with such incubation centers, you will not need to take high risks when trying to accelerate your startup’s growth. With state-of-the-art equipment in hand, the business opportunities that you thought were only possible with large corporations will now be available to your team.
When pondering if joining an incubator is the right decision, keep in mind that the 5-year survival rate of incubator clients has been estimated at being anywhere around an impressive 75-80 percent, which is especially impressive in the high-risk, high-reward industry of entrepreneurship!