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Modeling a Business Incubator

For a Portuguese version, please see below.

Incubators operate under many different models, and this article shows how to determine the most suitable operational model for a new incubator. It highlights the strategic and tactical decisions that will inform the choice of model used.

  • Objectives

Defining the incubator model means answering the strategic and tactical questions that provide the basis for planning the Incubator (See Guideline “Planning a Business Incubator”). Defining the incubator model is an intermediate topic, as it uses the information collected from the “Initiating a Business Incubator Project” phase and defines the aspects that will be used in planning the incubator, as demonstrated in the following diagram:

Defining the incubator model

Defining an incubator model helps deal with decisions such as the deciding the focus of the incubator, the locality, purpose and any other issues.

Key Issues

In the process of defining the incubator model, several decisions depend on others. This process consists of two phases:

Phase 1 – Strategic Decisions
  • Purpose: define whether the incubator will be a profit-seeking group or a nonprofit association. For details, see the guideline Definition of the Purpose of the Incubator.
  • Focus: define what the supported companies’ activities are: traditional, technological, etc. For greater details, see the guideline Definition of the focus of the Incubator
  • Operational Model: according to Aranha (2003), the operational model “determines the way in which the incubator will be organized and operate”. As Lavrow and Sample stress, the operational model of an incubator “dictates its structure, its scope of services it provides, its funding opportunities, and its level of external alliances”. For details, see the guideline Definition of the Operational Model of the Incubator.
  • Locality: locality choice for the incubator depends on which focus is chosen and the operational model to be implemented. For details, see the guideline Definition of the Purpose of the Incubator.
  • Stage of the Enterprises: the support and services offered to the incubated companies depend directly on the development stage of these businesses (or what they are). For details, see the guideline Definition of the Stage of the Enterprises.
Phase 2 – Tactical Decisions
  • Legal Status: the incubator may have its own legal status or may be tied to an existing institution. For details, see the guideline Definition of the Legal Status of the Incubator. For details, see the guideline Definition of the Legal Status of the Incubator.
  • Documents: For an incubator to be operable depends on a number of different documents, such as statutes, internal bylaws, contracts with the different companies, etc. For details, see the guideline Elaboration of Documents.
  • Organizational Structure: must define the authority and duties of the different functions that exist within the incubator. For details, see the guideline Definition of the Organizational Structure of the Incubator.

Responsible Parties

The incubator model should be defined by the team that is elaborating the project. At least one representative of each institution should be involved in this stage of the project. This guarantees that all interests and all points of view are considered.

The team responsible for the project should use professionals who are specialists in technical areas, such as evaluation of the locality where the incubator is to be installed, definition of the legal status of the incubator and others.

Results

At the conclusion of this phase of the project, the team responsible for it will have the basic information required for planning the incubator, including:

  • Purpose
  • Focus
  • Operational Model
  • State of the Enterprises
  • Legal Status
  • Documents
  • Organizational Structure


For a Portuguese version, please click on the link below:

Learn more:  Start an incubator

Last updated 19 Nov 2008

 
 
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