Business incubators are (overwhelmingly, but not exclusively) non-profit organizations charged with helping to "hatch" new small businesses. The concept is to provide all the basic support services a new business needs but cannot afford: secretarial, receptionist, copier, fax, internet connection, consultants, lectures, peers at the same stage to compare experiences with, and so forth. Many of these organizations are sponsored by governments with the goal of creating jobs locally. A state or local government may sponsor the incubator either directly, through a college or university, or in conjunction with a chamber of commerce.

Incubator sponsors rarely provide ongoing financial support to the incubator. The incubator is expected to be financially self-supporting and somewhat removed from political pressures (via the non-profit organization), although in practice most are highly focused on job creation, not wealth creation.

There are two approaches to making an incubator self-supporting. The more common model is a rental based model. Small business tenants pay a monthly rent that covers their pro-rata share of the support services and the director's compensation. This works fine at some centers, but it can lead to a director treating small business owners as simply tenants of the landlord rather than clients of the organization that is supposed to help them build their businesses.

The other approach is an equity model. A few incubators will provide office space and support services in the first year in exchange for stock in the new company. This approach gives the incubator more incentive to help the business succeed.

Incubators have the big advantage of offering a forum for the free exchange of ideas among entrepreneurs. The support service helps at first, although there are now commercial companies that supply these services also - some for almost as low as incubators charge. The incubators often have government offices in them, such as SCORE, SBA, SBTDC, and other small business counseling centers. Tax and regulatory agents will also give lectures in incubators.

The disadvantages to incubators often revolve around what the business really needs. Because of the government motivation to create jobs rather than help establish healthy, profitable businesses, many incubators tend to be most helpful to high tech startups that plan for rapid growth. More traditional businesses and retail or warehousing operations will find business incubators to be too cumbersome.

Still, overall, business incubators can be a very helpful boost to starting your own business. For additional information you may want to look at www.nbia.org.