Business Incubator: Definition, Functions, Purpose, Advantages, Disadvantages, and Examples of Business Incubators in Indonesia

What is a business incubator? Simply put, a business incubator is a service for starting and growing a business. Starting a startup is not easy, it requires sufficient knowledge and resources. This is where the role of business incubators is, namely to support entrepreneurs in setting up businesses.

Here, DailySocial.id has summarized various information about business incubators that is relevant for you. Read more information below.

Understanding Business Incubator

According to Entrepreneur Asia Pacific, a business incubator is a program or organization that offers sponsorship with the aim of accelerating the growth and success of a startup or company.

This program helps new startups in their early stages by connecting with angel investors, governments, business development groups and other investors so that new companies have enough capital to build their businesses. In fact, the incubator itself can provide capital loans to companies.

Apart from capital support, this program also helps startups with job opportunities, training, mentoring and more. Simply put, incubators help run small businesses with good organizational and financial management. The hope is that the company can operate sustainably and develop further and generate the desired profits.

If you are interested in working with an incubator, you must commit to participating in all the programs offered. First, you must register, wait for approval information, and attend ongoing incubator meetings. Initial programs usually last one to two years.

Business Incubator Functions and Objectives

After knowing the importance of incubators, it is important for you to understand the operation and purpose of the incubator itself. The role of incubators is important for business development and branding.

The functions and objectives of business incubators are as follows:

• Fostering start-up businesses regarding business networks

• Providing space for capital assistance

• Introducing investment management

• Provide support in the form of mentoring

• Sharing important information about business

• Develop business ideas and strategies

• Provide information about business policies

One form of incubator support for creative businesses is by providing opportunities for independent business development. This is aimed at companies that can contribute with innovations that will benefit society in the future.

The objectives of the business incubator are as follows:

• Provides growth opportunities for small business companies

• Introducing company owners to online investors

• Opening job opportunities

• Marketing a business from small ideas

Business Incubator Working System

Business incubators also have working systems, such as training laboratories, dedicated to budding entrepreneurs and their business ideas. There are several steps or work stages that entrepreneurs must go through at this startup center. The stages of the work system include the following.

1. Pre-incubation

This pre-incubation phase is the most difficult point for entrepreneurs. The reason is, a novice entrepreneur must have a mature business idea plan before registering in the incubator.

This registration process also takes quite a long time, because the proposal not only contains administrative matters such as documents, but also an explanation of the start-up or business plan and detailed information about company management. This is also followed by the incubator interview process and the decision whether startup entrepreneurs are eligible to enter the incubator or not.

2. Incubation

If you have passed the pre-incubation stage and have been accepted into the business incubator, entrepreneurs will get various good business financing opportunities for their business ideas.

3. Post-Incubation

Entrepreneurs must have the ability to develop further after the incubation period. At the startup center, different experiences and insights should flow into the startup and startup development.

This is because not all incubators accept all registered companies initially. When a budding entrepreneur is accepted into an incubator program, they receive an “investment” from the institution that manages the incubator. Generally, institutions or companies that offer startup activities take capital participation in pilot companies as a reward for the startup program. And, of course, companies and startups are also related to each other in different industries.

Advantages and Disadvantages of Business Incubator Programs

Using an incubator sounds pretty good. But of course registering a business with an incubator program has advantages and disadvantages that will help YOU start a business.

profit

There are several advantages to using an incubation program. The first is that you will probably get your first job to use when running your business. This can really help you save on upfront costs. Apart from that, you also don't need to bother looking for important things that can boost the development of your business.

The business incubator will help you find everything you need to start a business. As long as you are guided, you can easily learn and talk to experienced people.

So avoid mistakes when starting a business. With the help of an incubator, of course it is also easier to find the right investor. If you participate in this program, your progress over the first few years will also be monitored to see if you are on the right track.

Loss

A common disadvantage of incubators is that it is difficult to participate in the incubator program. The application process can be very competitive. Before registering your company in the incubation program, make sure you have a detailed and detailed business plan.

Once you accept the program, it will take some time before you can walk completely independently. Joining this program for a year or two can be difficult. In addition, working with an incubator means learning to be a professional.

Once you decide to register your business plan in the incubator, you must be able to adapt and follow the instructions given. Even if it is your company, you must establish a good relationship with the incubator provider who will guide you on your business journey. Sometimes some people find this limiting and difficult.

Examples of Business Incubators in Indonesia

If you have studied about incubators and their role, you should also know examples of incubators in Indonesia. As already mentioned, one form of Incubator support for creative businesses is the development of startup companies.

An example of an Indonesian incubator is an independent institution that offers young startups. An example is the image below:

• Universitas

• Private agency

• Independent institution

This is a summary of the business incubators that we have successfully summarized. By providing various resources through incubator services, start-up businesses can be supported in the early stages of the process. Hope it is useful!