Measuring Impact

This incubator at least annually collects quantifiable data and information to ensure the incubation program is meeting its mission. [View]

This incubator at least annually collects impact data (revenue, employment, investment, etc.) from its current clients. [View]

This incubator collects impact data (revenue, employment and investment, etc.) from graduates on an annual basis for a minimum of at least five years. [View]

This incubator at least annually collects quantifiable data and information to ensure the incubation program is meeting its mission.

Do you know the magnitude of the impact your incubation program has on the local economy? Not just in terms of clients served, but the real meat of the matter: jobs created, salaries paid, revenues earned and other economic gains?

If you don’t have these figures handy, you might be missing opportunities to convince potential funders, champions, and the public in general of your program’s importance.

Additionally, if you aren’t tracking this information, you might be unwittingly contributing to feelings of doubt about the industry’s effectiveness.

Those of you who know your program’s impact understand the many good reasons for tracking outcomes. Of major importance to most incubator managers is that impact data is essential ammunition for fundraising. Secondly, it’s critical to have this data to prove your program’s contribution to the local economy. Finally, individual programs’ impacts contribute to building industry credibility. Unfortunately, many business incubators do not track outcome data about their client and graduate firms. And the problem doesn’t appear to be endemic to the incubation industry alone. A 2004 survey by the International City/County Management Association found that 66 percent of 726 responding local governments did not use performance measures to assess the effectiveness of their economic development efforts. The survey also found that 38 percent of responding local governments operated business incubation programs.

Previous research conducted by NBIA provided persuasive evidence for the impact of incubation on companies and local economies. NBIA’s Impact of Incubator Investments Study – the results of which were published in 1997 – found that among incubation programs responding, 87 percent of graduate firms were still in business. However, that same research also uncovered a wide variance in evaluation capacities and efforts of individual programs. That variance still exists. Some programs conduct fairly sophisticated process and outcome data collection; others use rudimentary systems. Many use nothing at all. One thing is certain: if the incubation industry is to effectively demonstrate the value of its services, individual programs must come to terms with the practice of program evaluation.

Excerpted from Erlewine, Meredith, Measuring Your Business Incubator’s Economic Impact – A Toolkit, NBIA Publications, 2007. This 26-page toolkit covering all aspects of tracking impacts from why to do it, what to collect, how to collect it, and analysis and reporting (and more) is available free to both members and nonmembers from NBIA. We developed this product with support from Southern California Edison and offer it to you at absolutely no cost because we believe collecting impact data and reporting on it is essential to best practices business incubation – and it’s seldom done right and perhaps not at all. To read this document in its entirety, see the link at the bottom of NBIA’s home page, or go to www.nbia.org/impact. Utilize this valuable free toolkit today.

One approach to incubator evaluations comes from the client’s perspective. An incubator manager must regularly gather feedback from clients about the usefulness and effectiveness of the incubator’s programs and services. Based on the feedback and keeping the incubator’s mission in mind, the manager then can eliminate or adjust ineffective services or add new programs that reflect client requests and changing needs.

Client surveys are a useful way to gather not only outcome data, but also client satisfaction data. Questions gauging client satisfaction might cover:

• Training and mentor programs
  
• Space and facility services
  
• Networking and social events
  
• Efforts to assist firms in obtaining financing
  
• Service provider programs
  
• Incubator staff performance

• Has this program been helpful to you? If so, how?
  
• How do you think the incubation program could be improved?
  
• Have any staff been particularly helpful or unhelpful? If so, how?

For further information on measuring incubation program performance, see:

• Cammarata, Kathleen, Self-Evaluation Workbook for Business Incubators, NBIA Publications, 2003. This spiral-bound workbook contains all the tools you need to conduct annual reviews of operations, including some 300 qualitative metrics and advice on why evaluating operational issues (mission, governance, staffing, selecting clients, servicing them, facilities management, graduation and more) is important; it also contains space for you to track your program’s progress, time frames, who’s responsible, etc.

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This incubator at least annually collects impact data (revenue, employment, investment, etc.) from its current clients.

Do you know the magnitude of the impact your incubation program has on the local economy? Not just in terms of clients served, but the real meat of the matter: jobs created, salaries paid, revenues earned and other economic gains?

If you don’t have these figures handy, you might be missing opportunities to convince potential funders, champions, and the public in general of your program’s importance.

Additionally, if you aren’t tracking this information, you might be unwittingly contributing to feelings of doubt about the industry’s effectiveness.

Those of you who know your program’s impact understand the many good reasons for tracking outcomes. Of major importance to most incubator managers is that impact data is essential ammunition for fundraising. Secondly, it’s critical to have this data to prove your program’s contribution to the local economy. Finally, individual programs’ impacts contribute to building industry credibility. Unfortunately, many business incubators do not track outcome data about their client and graduate firms. And the problem doesn’t appear to be endemic to the incubation industry alone. A 2004 survey by the International City/County Management Association found that 66 percent of 726 responding local governments did not use performance measures to assess the effectiveness of their economic development efforts. The survey also found that 38 percent of responding local governments operated business incubation programs.

Previous research conducted by NBIA provided persuasive evidence for the impact of incubation on companies and local economies. NBIA’s Impact of Incubator Investments Study – the results of which were published in 1997 – found that among incubation programs responding, 87 percent of graduate firms were still in business. However, that same research also uncovered a wide variance in evaluation capacities and efforts of individual programs. That variance still exists. Some programs conduct fairly sophisticated process and outcome data collection; others use rudimentary systems. Many use nothing at all. One thing is certain: if the incubation industry is to effectively demonstrate the value of its services, individual programs must come to terms with the practice of program evaluation.

Excerpted from Erlewine, Meredith, Measuring Your Business Incubator’s Economic Impact – A Toolkit, NBIA Publications, 2007. This 26-page toolkit covering all aspects of tracking impacts from why to do it, what to collect, how to collect it, and analysis and reporting (and more) is available free to both members and nonmembers from NBIA. We developed this product with support from Southern California Edison and offer it to you at absolutely no cost because we believe collecting impact data and reporting on it is essential to best practices business incubation – and it’s seldom done right and perhaps not at all. To read this document in its entirety, see the link at the bottom of NBIA’s home page, or go to www.nbia.org/impact. Utilize this valuable free toolkit today.

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This incubator collects impact data (revenue, employment and investment, etc.) from graduates on an annual basis for a minimum of at least five years.

Some incubator managers don’t track graduate data because they believe they can’t take credit for accomplishments (or mistakes) of firms after they’re out on their own. How is an incubator manager to know if a series of decisions that led to a company’s ultimate success or failure is due to its former association with the incubator? How can an incubator say it had a hand in creating jobs that come into existence after a company leaves the program?

Skip Farrar, business development manager at Southern California Edison, a public utility in California, says it’s important for incubators to continue to track and report this data. “It’s a but/for argument,” he says. “But for the incubator, this business might never have existed, and the persistency wouldn’t be there.” In Farrar’s opinion, the role the incubator plays in getting a business off the ground is extremely important. “Therefore, the incubator gets to claim results over time,” he says.

But what about those who say the business might have started on its own? Or that its success might have nothing to do with services provided by the incubator long ago? “Think about it this way,” Farrar says. “But for the contributions of Steve Wozniak, Apple Computer never would have existed. So does he get to keep claiming responsibility for Apple Computer’s success over time? Absolutely.” Farrar notes that this line of thinking is prevalent in the academic realm as well, with universities taking credit for the wage-earning capabilities of graduates.

Do you know the magnitude of the impact your incubation program has on the local economy? Not just in terms of clients served, but the real meat of the matter: jobs created, salaries paid, revenues earned and other economic gains?

If you don’t have these figures handy, you might be missing opportunities to convince potential funders, champions, and the public in general of your program’s importance.
Additionally, if you aren’t tracking this information, you might be unwittingly contributing to feelings of doubt about the industry’s effectiveness.

Those of you who know your program’s impact understand the many good reasons for tracking outcomes. Of major importance to most incubator managers is that impact data is essential ammunition for fundraising. Secondly, it’s critical to have this data to prove your program’s contribution to the local economy. Finally, individual programs’ impacts contribute to building industry credibility. Unfortunately, many business incubators do not track outcome data about their client and graduate firms. And the problem doesn’t appear to be endemic to the incubation industry alone. A 2004 survey by the International City/County Management Association found that 66 percent of 726 responding local governments did not use performance measures to assess the effectiveness of their economic development efforts. The survey also found that 38 percent of responding local governments operated business incubation programs.

Previous research conducted by NBIA provided persuasive evidence for the impact of incubation on companies and local economies. NBIA’s Impact of Incubator Investments Study – the results of which were published in 1997 – found that among incubation programs responding, 87 percent of graduate firms were still in business. However, that same research also uncovered a wide variance in evaluation capacities and efforts of individual programs. That variance still exists. Some programs conduct fairly sophisticated process and outcome data collection; others use rudimentary systems. Many use nothing at all. One thing is certain: if the incubation industry is to effectively demonstrate the value of its services, individual programs must come to terms with the practice of program evaluation.

Excerpted from Erlewine, Meredith, Measuring Your Business Incubator’s Economic Impact – A Toolkit, NBIA Publications, 2007. This 26-page toolkit covering all aspects of tracking impacts from why to do it, what to collect, how to collect it, and analysis and reporting (and more) is available free to both members and nonmembers from NBIA. We developed this product with support from Southern California Edison and offer it to you at absolutely no cost because we believe collecting impact data and reporting on it is essential to best practices business incubation – and it’s seldom done right and perhaps not at all. To read this document in its entirety, see the link at the bottom of NBIA’s home page, or go to www.nbia.org/impact. Utilize this valuable free toolkit today.

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