In recent years, interest in entrepreneurship has spiked across all age groups in the country regardless of employment status. We have both the economy (which has reduced the number of jobs which can guarantee any kind of financial security) and the likes of Robert Kiyosaki and his ilk to thank for this. Unfortunately, many of us often realise a little too late that there is more to starting and running a business than having a product, idea, some start-up capital and enthusiasm. There are far more people interested in entrepreneurship than those who have the skill and knowledge set to hack it. All that this means is that Zimbabwe is in severe need of things like business incubators.
Business incubators are companies that provide the services and resources needed to develop and grow businesses which are just starting up. They often serve to promote entrepreneurship, make the process of starting a business easier for novices and improve the success rates of businesses which pass through them. If you are passionate about entrepreneurship and would like to make a career out of helping budding business people and their fledgeling ventures along, starting an incubator might be the perfect business idea for you.
Come up with acceptance criteria
The number of ways in which money can be made is practically infinite so are the number of forms which businesses can take. Your prospective incubator cannot cater to every kind of business. You must, therefore, limit the kind and type of businesses which you accept into your incubation program. Such limitations can be based on any number of criteria such as resource constraints, your interests and are usually industry-specific. For instance, a lot of the incubators which are setup nowadays are meant to specifically cater to technology and e-commerce based ventures. Specialising in a single industry or line of business will also allow your incubator to improve over time i.e. more businesses which go through it will succeed.
Choose a roster of services to offer
As mentioned earlier, an incubator is a company whose primary purpose is that of handholding inexperienced entrepreneurs through the early days of their new businesses. This is done through the provision of many services and resources. The most obvious of these resources would be office space but there also exist virtual incubators whose resources are meant to be accessed remotely.
Services which you can offer to the startups which you accept into your incubation programs include (professional) legal advice, funding, high-speed internet, website and app development, accounting, assistance with writing business plans, consulting, mentoring, management training, networking, assistance with business registration, teaching presentation skills, higher education resources, access to investors, business etiquette and help with regulatory compliance. Some services will depend on the nature of the startups which you accept e.g. a kitchen for food entrepreneurs and a prototyping lab for product-centric startups.
Choose a business model
A business incubator can either be a for-profit or non-profit operation. Non-profit incubators can seek funding from the government, international organisations or any other potential donors who may appreciate what you are trying to achieve. There are several ways in which for-profit incubators can make money. One of the most common in developed countries is the requirement that the founders of the businesses which you accept into your fold cede part of their company to you. Having skin in the game will make your incubator better at what it does as you will choose who you accept into your program with more care and you will be genuinely invested in their success. Alternatively, you can charge program participants a periodic fee for any or all the resources you provide—not every startup is completely cash strapped.
Find the premises
Unless yours is a virtual incubator you will need premises to provide startups under your wing with operating, meeting, networking or seminar space. The best incubator locations are centralised or busy areas like central business districts or even malls. There must be enough space for your incubators’ offices and for sharing among the various startups in your program.
Decide on activities
A major part of incubating businesses involves running several regular programmes. For instance, now and then you can hold events which allow participants to meet experienced and successful business people (other than yourself). You can also invite the government (both national and local) officials to make presentations on issues such as procurement and regulation—these people are not that difficult to get hold of, especially in their capacities.
Look for potential funders
For a lot of your startups, especially the scalable ones, the end goal of your incubation programme should be there getting external funding and be well on their way to profitability. This is especially important if your incubator’s business model depends on the equity you hold in the companies which pass through it. You must, therefore, play a more active role in getting investors on board.
After everything is in place you can register your operation. If you want to make a profit from your incubator you must register it as a limited company. Non-profit ones can be registered as non-governmental organisations. After registration, you can get the word out about your operation via channels like social media. Remember that your success stories will be your best marketing, so offer real value (not just imported jargon and buzzwords) to the startups which come to you for assistance.