Good Practice

Pre-Incubation

For a Portuguese version, please see below.

Entry to an incubator, and acces to the business-building services it provides, usually requires an enterprise to have a properly constituted legal structure, a realistic business plan and a product or service that can be taken to market. The pre-incubation process is designed to help enterprises reach these entry criteria so that they can benefit fully from the incubation process.

Objectives

The main objective of the pre-incubation stage is to support entrepreneurs (see area ICT-enabled entrepreneurship) in transforming their ideas into legally constituted companies with marketable finished products. The main contribution from the pre-incubation process is that it guarantees that companies entering the incubation process are “ready to be developed”.

Entrepreneurs before the pre-incubation stage may not have legally constituted companies, approved business plans, marketable products and/or services to be offered.

The pre-incubation stage must be organized so that the three main objectives are addressed:

a legally constituted company
a duly approved coherent business plan
a product/service ready to be offered to the market (or at least a prototype).

The company will be ready to start up its incubation stage (see guideline Business Incubation) once these three objectives have been achieved. These two stages (pre-incubation and incubation) can be offered by the same entity (incubator) or by different entities (pre-incubator and incubator).

Pre-incubators are usually (but not always) located in universities and may be focused on supporting technological companies.

Several courses and consulting services can be offered during the pre-incubation stage that enable entrepreneurs to develop their business plans, incorporate their companies and develop their products or services. For further details about services offered, see guidelines Support Services, Operational Support Services, Management and Strategic Support Program and Technology Support Program.

Under this framework, a useful strategy is to use the preparation of the business plan as a catalyst for completion of the pre-incubation stage.

Key Issues

Development of a Business Plan

The business plan format and contents vary in accordance with the intended target (venture-capital investors, incubators, banks, etc). The business plan must contain at least the following information: executive summary, strategic business vision, company description, products and services, market analysis, marketing plan and financial plan.

The objective of the business plan is to function as a brief introductory tool covering the main characteristics of the business. The business plan then becomes an important guideline that will be used to implement every action taken by the company. Furthermore, it is an excellent company-marketing tool.

Some key business planning tasks:

Identify risks and propose plans to minimize/avoid them
Identify strong/weak points related to the competition
Get to know the market, define products/services and marketing strategies
Analyze business financial performance
Assess investments and estimate return on capital invested

Responsible Parties

Consultants and incubator managers

Indicators

Total number of projects already assisted at the pre-incubation stage
Number of projects at the pre-incubation stage
Total number of projects resulting from entrepreneurial programs
Number of projects assisted at the pre-incubation phase that moved on to the incubation stage
Level of success of the pre-incubation stage
Percentage of projects approved in relation to the total number presented
Number of companies, which conclude the pre-incubation stage each year
Increased demand of projects assisted at the pre-incubation stage
Increased demand of projects resulting from entrepreneurial programs
Increased demand of projects assisted at the pre-incubation stage that moved on to the incubation stage