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Small Business Incubators are sites where young businesses
are assisted through the early start up stages, when they
are most likely to fail. The main goal of the program is to
see that the new business will be financially stable and
ready to leave the incubator in a period of two to three
years. Many new businesses find them attractive because they
allow them to rent small units of space at a lower than
market rate. In addition, businesses residing in these sites
are offered development services such as management
assistance, access to financing, technical support services,
etc. Oftentimes, these small companies can gain access to
group health insurance rates and insurance plans that they
typically would not be eligible to receive, have the
opportunity to network with other entrepreneurs much like
themselves, and gain credibility through their association
with the incubator facility. When it is time for the small
business to relocate out of the incubator, the program
assists the business in securing a new site.
While some incubator facilities are mixed in terms of the
kind of businesses housed in the facility, often they
specialize in one industry, such as technology or
manufacturing. The trend seems to be moving towards
technology, with an estimated 25% of incubator facilities
across the United States catering to this industry. There
are standard entry and exit policies for incubators, and
admittance is often selective. Studies indicate that
business completing the incubation program have a much
greater long-term success rate than businesses working
through the early stages independently.
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