How beneficial is joining a business incubator?

In the country, ambitious, creative and motivated new entrepreneurs are plentiful. So, thousands of business incubators have wind in their sails. The federal government also offers grants to these organizations to promote innovation and entrepreneurship. In this article, Éric Labelle, director of the start-ups, technology and innovation group at National Bank, explains why start-ups have every interest in joining an incubator.

Services and resources

In a sense, a “business incubator” is an organization that helps entrepreneurs who want to start a business. It provides a variety of services to support them, such as mentoring and training. It also offers tools for developing their project and, possibly, make it a reality. “Any entrepreneur can join an incubator that will offer him or her services that are specific to his or her universe, his or her type of start-up and the type of idea he or she wants to put in place,” explains Éric Labelle.

In addition, the partnership of an entrepreneur with an incubator can increase the confidence of investors and banks in it. Therefore, this passage may allow him to obtain financing or access credit more easily.

Incubator or accelerator

Many are confused with incubators and business accelerators, which is understandable, because some organizations combine the two concepts. In other words, the incubator helps the entrepreneur launch his project. The accelerator, in part, allows him to implement what he thought during his time in the incubator.

Generally, the accelerator offers a program of one to three months. During the latter, the trader can talk to influential players in his field. This will help him create links with key stakeholders to advance his project faster.

Note: all programs (incubators and accelerators) offer their participants a wide range of innovative material resources. We are talking, for example, laboratories for conducting tests, sophisticated printers (e.g. 3D) and special software. Entrepreneurs can also access shared workspaces, or participate in brainstorming sessions. These stimulating exchanges help enrich their thinking.

Trainings and relationships

From the moment an entrepreneur joins an incubator, he or she can choose to register for relevant training in entrepreneurship, finance, marketing, etc. He also interacts with inspiring entrepreneurs who will tell him about their journey and give him great advice. “In an incubator, the entrepreneur will be challenged to push him to rethink his idea with the right support, so that he knows exactly the efforts to deploy and the strategy to put in place,” Éric Labelle stressed.

Expert and network

Because there are countless incubators, it can be difficult to choose one that will meet your needs. Some things to consider, including:

• Type of support: most incubators offer advice, mentoring and funding for start-ups, but some only provide affordable workspace.

• The price of services: the cost of an area in an incubator can vary according to the formulas recommended. Those located at some universities, for example, offer completely free services. Some organizations provide space free of charge to depressing companies, but withdraw equity capital or have services charged (e.g. packages). In other words, to avoid unpleasant surprises, it is up to the trader to find out whether the prospective incubator charges for its services or offers them at no charge.

Furthermore, it is important to know that each incubator has capabilities and a niche specific to a particular sector. “For example, an innovation or health company can’t go to an incubator that specializes in culture, it won’t benefit from it,” Éric Labelle points out.

One thing is certain, entrepreneurs should choose their incubator based on their needs and objectives, but also on the offer, expertise and network of the organization concerned.

When an entrepreneur believes he or she has found the perfect incubator, he or she should gather valuable information by asking the right questions. Does the organization require you to submit your idea to a jury? Is it possible to access the incubator at all times or only at certain times? This important step lets you confirm your choice.

Investments and partnerships

For Éric Labelle, what a company can look for from these organizations is very varied: “No company will enter an incubator and come out of it in the same situation as when it came back. In his experience, many companies have launched a project that is somewhat different from what they thought before using the incubator.

The investment and partner finance side will certainly be decided, but businesses will also have the ability to establish, perfect and validate their strategy, whether in marketing, development or conceptualization. Start-ups will also have access to an extensive network of professionals, coaches and even lawyers. “Entrepreneurs can meet people they will never have the opportunity to meet and they can work on their strategy, find partners for marketing and advertising,” Mr. Labelle underlined.

Adaptation and transition

The pandemic situation has forced many businesses to reinvent themselves, and incubators are no exception. “It’s complicated for incubators; because their beauty lies in the fact of talking in person with the people who will provide mentoring and coaching, they need to quickly make sure it becomes virtual,” recalled Éric Labelle.

However, it must be recognized that this move has a positive point; to greatly expand the group of companies participating in various programs outside of their geographical area. Companies and start-ups located in Europe or the United States are generally affiliated with very localized incubators, while Quebec companies are affiliated with overseas incubators.

National Bank experts are wholeheartedly involved in numerous business incubators in Montreal, Quebec and elsewhere in Canada. Ready to go into business? Check out this guide to make starting your business easier.

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