Would a Niche Incubator Help Your Business Grow?

By Carol Tice

Lots of startups would love to land a deal to set up shop in a business incubator. But it turns out entrepreneurs ought to be a little more picky about the incubator they choose.

For the uninitiated, an incubator provides concentrated help to a new business -- often including office space, business services such as Internet access, training, and camaraderie with other incubator companies.

A key question to ask is: Who's running this incubator, and what do they know about my type of business?

As the Wall Street Journal recently reported, an emerging trend amongst business incubators is to have a niche focus. Currently, only about 5 percent of our nation's 1,200 or so business incubators concentrate on a single industry -- say, fashion or technology -- according to the National Business Incubation Association. But the number of niche incubators is growing.

Examples of niche incubators include Sparkseed in San Francisco, which focuses on companies that address environmental or social problems. Advantages include better-quality connections from mentors to appropriate industry contacts. Running a manufacturing firm is different from a retailer or a service business -- it makes sense to seek out mentors who have relevant expertise to share.

Sure, any incubator can help you with some business basics and provide office space and broadband. They're considered a highly effective way of assisting companies in getting launched -- some people think federal money should go straight to incubators instead of to banks for small-business lending.

But your company could reap bigger dividends picking an incubator that's a perfect fit for what you do.

Some questions to ask before you choose a business incubator:

• What services are available?
• What sort of space will my company be able to use (ie does it include conference rooms)?
• What other companies are in the incubator?
• How long can my company stay in the incubator? (Ideally, the answer would be a year to 18 months.)

Have you participated in a business incubator? If so, did they know your business type? How did the incubator help your business? Leave a comment and tell us about your experience.

Photo via stock.xchng user truemitra