Objectives

Planning is the process of establishing objectives and deciding what should be done in order to attain them. It allows the performance of the incubator to be overseen through analyzing the targets, objectives, strategies, and paths that an organization should follow in order to achieve positive results. The planning process should provide answers to three basic questions:

• Why will the business be successful?
• What is the objective to be attained?
• When will the incubator achieve self-sustainability?

Planning is essential for the incubator, with the following purposes in mind:

• Underpinning decisions on the implementation of the incubator;
• Providing a technical plan for establishing the incubator and bringing it into operation;
• Setting the course for the incubator, with its current and future strategies;
• Publicizing and promoting the incubator;
• Attracting entrepreneurs;
• Attracting partner institutions;
• Obtaining financial support.

Is there a need for incubators?

Yes, according to Chinsomboon in the Incubators in the New Economy (1990), there is a need for business incubators because they play many roles. In their building process, incubators can provide a subset of services to their own organization including:

• Capture potentially successful deals missed by venture capitalists
• Facilitate idea creation (“ideation”)
• Enhance products and services
• Accelerate implementation speed
• Provide supplemental management
• Offer more “hand holding” than a typical venture capitalist
• Give access to expertise in marketing, operations, human resources, technical, management, strategy, business development, financial, and others
• Facilitate business development and partnerships
• Help in finding clients
• Facilitate sources of funding, now and at later stages
• Set up a portfolio of seed-stage ventures
• Provide additional deal-flow and vetting of deals for later-stage investors

According to Lalkaka & Abetti, in Business Incubation and Enterprise Support Systems in Restructuring Countries (1999), “the key success factors that contribute to the ultimate economic, social and political success of a new business incubator”, are divided into four phases: preparing the incubator’s plan; the implementation phase; the onset of incubator operations; and a sustainability scheme. The summary of these necessary [success] factors is:

Preparatory Process:

• Reconnaissance surveys to selected locations
• Local consultants who are familiar with local conditions
• Careful identification of a strong sponsor to take local implementation responsibility
• Resolution of issues concerning feasibility, particularly analyses of the entrepreneurial pool of potential tenants, linkages to universities, the support services network, the availability of suitable (vacant) building space, and financial cash flow estimates
• Commitment by governmental agencies

The Implementation Process:

• A strong management board with advisory groups
• Appropriate legal status for the incubator
• Careful selection, training at home and abroad, proper remuneration of managers
• Screening of the technical business and market potential of tenants
• Prudent capital expenditures on building renovation and furnishing
• A promotional campaign to mobilize community support
• Sound international technical assistance to supplement local skills

The Start of Initial Operations requires:

• Access to equity, credit and royalty facilities by tenants
• Involvement of the private sector
• Continuing programs for improving management skills of incubator staff and tenants
• Links to other SME programs
• Exchanges of information and bench marking

The Sustainability of Incubator Operations needs:

• Proactive pursuit of business opportunities
• Imaginative ways of raising income
• An objective evaluation of the incubator experience, and replication as warranted
• Political stability, macro-economic policy structure and regulatory framework that encourage entrepreneurship

Responsible Parties

• Leaders involved with the initial idea of the incubator

Indicators

• Time and costs for the development of the Business Plan and the Strategic Plan
• Funds brought in and political support built up through incubator planning

Results

• Business plan and strategic plan drawn up in a clear and straightforward manner

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