Serving Clients

This incubator offers a comprehensive program of business assistance services. [View]

This incubator helps companies build their management team. [View]

This incubator helps companies raise financing. [View]

This incubator has developed an effective service provider network. [View]

This incubator screens and regularly evaluates business service providers, company mentors and other client advisors to ensure high quality. [View]

This incubator’s management regularly meets with clients to assess their needs and offer advice, referrals and solutions to problems. [View]

This incubator actively facilitates networking (doing business, sharing contacts, equipment, expertise, etc.) among its clients and with the outside business community. [View]

This incubator helps clients establish milestones to measure the progress of their business and checks back regularly with them about meeting these milestones. [View]

This incubator gives highest priority to time spent directly serving clients and organizes its resources to ensure the incubator is devoted, above all, to growing companies. [View]

This incubator evaluates its program of services at least annually. [View]

This incubator adds, removes, or changes business assistance services as the result of systematic evaluation based on its mission statement, changes in client or business conditions, surveys of client needs, requests, and other factors. [View]

This incubator offers a comprehensive program of business assistance services.

Incubator managers seeking excellence in their programs put client services first. They know that providing start-up businesses with the tools they need to grow and succeed is the main goal of incubation programs and what separates them from simple real estate operations. That’s why NBIA recognizes as a best practice the need to “prioritize management time to place the greatest emphasis on client assistance, including proactive advising and guidance that results in company success and wealth creation.”

All too often, however, managers with the best intentions get derailed by the demands of daily operations—overseeing finances, keeping sponsors happy, and maintaining the building, to name just a few. Devoting ample time to serving clients while negotiating operational tasks requires dedication and real organizational savvy—especially for incubators that are staffed leanly. It also requires support from a board of directors that recognizes that client service comes first. To increase one-on-one time with clients, managers can implement strategies such as creating volunteer advisory and review boards and delegating administrative tasks to operational staff. (See the “Incubator Staffing” chapter.)

Common incubator offerings include help with business plan writing, assistance securing capital, and shared administrative services. But services vary depending on an incubator’s mission and focus as well as on individual clients’ needs. For example, a professor commercializing a university technology might need help creating a product or prototype, while a client developing a grilling sauce at a kitchen incubator might need access to bottling equipment. Services must be tailored to a company’s stage of development; the skills, personalities, and experience of its management team; access to funding; and many other factors. Determining which services clients need requires careful assessment during the admissions interview and ongoing assessment throughout the clients’ time in the incubator.

Part of an incubator manager’s assistance to clients is the development and administration of a service provider network. The network gives clients access to high-level (and often reduced-rate) legal, accounting, financing, and other types of business assistance that might not be available from the incubator staff. The manager’s goal in developing a service provider network should be to identify and recruit a group of experts who will be readily available and able to resolve most problems faced by client companies. By negotiating pro bono or reduced rates with service providers, incubator managers help their clients conserve much-needed capital. Beyond that, being able to tell potential clients that they’ll be able to call a lawyer, ask a question, and not get a $250 bill is a major selling point for the incubator.

Many incubators also offer services to affiliate clients who pay fees to participate in the incubator’s service program and activities but are not occupants of the incubation facility. An affiliate program sometimes is used to groom clients who aren’t ready for full incubation or to ease graduates’ transition to life outside the incubator. Affiliate programs also can generate revenue for the incubation program while expanding its community outreach.

Excerpted from Cammarata, Kathleen, Self-Evaluation Workbook for Business Incubators, NBIA Publications, 2003, p. 58. (Available from the NBIA Bookstore.)

Client services have evolved as the incubation industry has developed. In the industry’s early years, shared equipment and services such as fax, copying, conference rooms, and the like were a significant focus: “Shared office services” was its own category in NBIA’s 1989 State of the Business Incubation Industry report. That publication also listed only sixteen types of “management and technical assistance,” what we today consider true incubator services. Compare that with the 2006 State of the Business Incubation Industry report, which lists thirty-three distinct types of services offered by incubation programs.

To become a best practice incubator, however, a program must do more than offer a menu of client services. It must customize and effectively implement these services as part of a comprehensive business assistance program that meets the incubator’s mission and goals—whether it focuses on low-income clients, kitchen entrepreneurs, or biotechnology firms—and that aligns with the community’s economic development strategy.

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 99. Also see in this book: "Preincubation as a Taste of Incubation," "Coaching and Facilitation," "Meytav Incubator," "Outsourcing Coaching," "Entrepreneur Education," "CEO Strategy Forum," "Marketing Through Education," "Industry-Specific Training," "Joint Publicity Program," "Access to Professional Market Intelligence," "Mentors, Entrepreneurs-in-Residence and Advisory Boards," "Springboard," "An Entrepreneur-in-Residence Program," "Entrepreneurs-in-Residence," "Client Advisory Boards," "Kitchen Cabinet," "Client Advisory Committee, "Access to Capital," "In-House Loan Fund," "Coaching for Investor Presentations," and many more articles on specific services, pp. 99-131. (Available from the NBIA Bookstore.)

Some services with relatively high correlation to measures of success include: (1) linkages to educational resources; (2) providing networking opportunities for clients; (3) general legal services; (4) marketing assistance; and (5) assistance identifying a management team. Each of these five services is statistically significantly correlated with at least five outcome measures (such as revenue growth, graduation rate, etc.).  

Adapted from Lewis, David A., Elsie Harper-Anderson, and Lawrence A. Molnar, Incubating Success: Incubation Best Practices That Lead to Successful New Ventures, University of Michigan, 2011, p. 55.

The number of service providers is the best predictor in many positive incubator graduate company outcomes.

Adapted from Lewis, David A., Elsie Harper-Anderson, and Lawrence A. Molnar, Incubating Success: Incubation Best Practices That Lead to Successful New Ventures, University of Michigan, 2011, p. 63.

For further information on incubator client services, see:

• Walker, Brian, and Nan Kalis, “A Menu of Services,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, pp. 207-217. This chapter provides an overview of most basic incubator services. The publication also contains other potentially helpful chapters: “Incubators Without Walls," “Assisting Retail Clients,” “Kitchen Incubation Programs: Serving Food-Related Businesses,” “Incubating Arts Related Businesses,“ “Striving for Rural Incubation Success,” “Incubators and Specialty Farmers: A Value-Added Partnership,” and “Youth Programs: Growing the Next Generation of Entrepreneurs.” Other chapters focus on specific types of services, such as business planning, assisting clients to obtain financing, working with mentors and advisors, etc. Many of these chapters are available as Quick Reference PDF documents from the NBIA Bookstore ($5/members; $10/nonmembers).
  
• Knopp, Linda, 2006 State of the Business Incubation Industry, NBIA Publications, 2007, pp. 26-30. (Information on the types and prevalence of many client services, including the types of incubators that offer them.)
  
• Search the online NBIA bookstore for the keywords “client services – general” and "coaching clients" to find many other resources that address general incubator services as well as services at sector-specific incubators.

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This incubator helps companies build their management team.

The incubator plays a dual role in assisting clients with building management teams. Clients first need help deciding what type of skills to bring to their team; then they may need assistance with finding the right people and structuring the deal. For the incubator manager, this assistance requires extensive one-on-one work and no beating around the bush.

“It’s absolutely imperative that you be brutally honest with your clients about the skills they don’t have,” says Robert J. Calcaterra, former CEO and president of the Nidus Center for Scientific Enterprise in St. Louis, Missouri…who required that his clients attend mandatory one-on-one meetings at least once a month. “But 90 percent of the time we [met] almost weekly. And if there [were] critical issues, [it was] daily,” Calcaterra says.

According to Bonnie Herron, executive director of the Gwinnett Innovation Park in Norcross, Georgia, analyzing the founders’ skills is a subjective process that depends on the manager’s own expertise and experience in running a company. She and two of her colleagues at Intelligent Systems [now Gwinnett Innovation Park] help clients make these decisions, based on their own prior business experience.” The three of us have been involved in [a total of] sixty different companies as operating people,” Herron says. “We know what we weren’t good at and can discern what our clients are having trouble with. It’s mostly a gut feeling, but based on experience.”

Advising clients on team building goes beyond helping them create a team with the correct sum total of skills. It involves building a team that can work together. The significance of company culture is often new territory for the founder of a start-up. Managers might ask clients what kind of company atmosphere they envision, one with a fiercely competitive client or one that is familial and democratic.

Incubator managers often must serve as facilitators in this area, understanding the client’s values and finding people who are compatible. “One of the critical skills that an incubator manager must have is the ability to judge the proper chemistry between founders and potential new executives,” Calcaterra says. Once clients know precisely the type of person and skills they’re looking for, the incubator can help them find that person. Offering information and training to clients on the subject of recruiting can help. If clients are well-informed about the recruitment and hiring process, it will be less confusing when it comes time to bring someone on.

Excerpted from Erlewine, Meredith, “Building a Start-Up’s Management Team,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004, pp. 228-233. This chapter provides more information on how incubator staff can help, types of potential management team members and what start-ups can offer experienced team members. (Available from the NBIA Bookstore.)

For further information on building a company's management team, see:

• Harvard Business School
  Grooming Next-Generation Leaders
  Article about identifying talent and teaching leaders
  
• Entrepreneurship.org
  Tips for Hiring at the Top
  Advice for hiring good top executives
  

This incubator helps companies raise financing.

Access to capital is one of the most valuable services an incubation program can offer as part of its comprehensive business assistance services. Helping clients establish a sound management team, develop a viable product or service, identify market potential, and myriad other factors will influence their chances of success—but even if everything else is in place, lack of capital can force the most promising new ventures to stumble. Missed opportunities caused by delays in bringing their product or service to market or an inability to buy materials or hire staff to meet sales demands can take the competitive advantage away from an early-stage venture, particularly in the fast-paced technology marketplace.

Capital can come in the form of equity, debt, grants, or some hybrid of these. Regardless of the source, incubator management must understand—and facilitate access to—all sources that are available within the area by using personal contacts, venture forums, or other vehicles, such as business plan or state and federal grant competitions. In addition, it is important to understand and maintain information on each source (such as the approval process, information requirements, allowable uses of funds, amounts available, and time until the release of funds) and be prepared to assist clients in securing the capital they need at various stages of their development.

Incubation programs can secure equity and debt capital for clients through a number of approaches. Some incubators have been able to establish relationships with traditional equity and debt sources by extending incubator board seats to venture capitalists, angel investors, and bankers. Others have accessed outside resources and state funding programs or taken steps to establish their own in-house capital pools. (Note: Establishing incubator-specific capital programs is time-consuming and complicated and should be undertaken only if the program has sufficient expertise and support to manage them.)

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 121. Also see in this book, "Equity Capital, "Mid-America Angels," "Creative Venture Capital Matching," "Nova Scotia First Fund and HPI Microfund," "Debt Capital," "In-House Loan Fund," "Coaching for Investor Presentations," "Investment Readiness Assessment," and "Venture Roundtable," pp. 121-127. (Available from the NBIA Bookstore.)

Entrepreneurship literature has documented that start-up enterprises fail most often because they lack access to capital. Thus, is it no surprise that the top three services [incubators offer to their clients] are access to various sources of capital. These were in-house venture fund, access to commercial loans, and access to noncommercial loans. Access to angel investors and access to venture capitalists also correlated with success, though the correlations were not as significant for these two [perhaps because a relatively smaller number of incubators provide them].

Adapted from Lewis, David A., Elsie Harper-Anderson, and Lawrence A. Molnar, Incubating Success: Incubation Best Practices That Lead to Successful New Ventures, University of Michigan, 2011, p. 57.

Raising money can be a daunting process, particularly in challenging economic times. But entrepreneurs can find money – if they build a company that investors believe will earn them solid returns. “Entrepreneurs who are well-prepared and have a decent market and a decent team can rise over other persons who are ill-prepared,” says Joel Wiggins, former director of the University of Texas’ Austin Technology Incubator (ATI) in Austin, Texas. [Wiggins is now CEO and president of the Enterprise Center for Johnson County in Lenexa, Kansas.]

Incubator managers can give their clients an edge in the investment capital search by challenging entrepreneurs to think strategically and creatively about their businesses. Effective capital-raising processes evaluate early on what steps companies need to take to be well prepared to seek investors. As part of such a process, a company must sharpen its business strategy, focus on how it’s going to make money and make sure its management team can lead the company to its next stage. That team has to understand what customers want and have a plan for getting those customers to buy their product. Of course, the team also must know how much money it needs to raise and where to find it.

And when clients are ready to make a pitch to investors, incubator staff can give their clients another leg up on the competition by helping them perfect the presentation that investors will see. However, the initial investor presentation – most often a PowerPoint presentation – is only the show that grabs the investor’s attention. “You’ve got to have a lot of substance in the company to go behind it,” Wiggins says.

Excerpted from James, Carol, “Going After Capital,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004, pp. 234-239. Also see in this publication, ”Connecting Clients with Angel Investors,” “Business Valuation Basics,” “Helping Clients Navigate Cash Flow Waters,” and “Creating Loan Funds for Start-up Companies.” Some of these chapters are available as Quick Reference PDF documents from the NBIA Bookstore ($5/members; $10/nonmembers). Search the NBIA Bookstore for key words “capital access.”

“Nontechnology companies will spend more time searching and finding the right financing deal or deals,” says Rick Ritter, technology services consultant at the TECenter on Boise State University’s west camps in Nampa, Idaho, and former director of the Idaho Innovation Center in Idaho Falls. "They must work harder and smarter, and the result is less money.” Early stage non-technology companies may be looking for an equity investment to help them grow to a $10 million or $20 million company. To help these companies, managers should become knowledgeable about alternative financing opportunities, according to Ritter. These include Small Business Investment Corporations (SBIC), Business and Industrial Development Corporations (BIDCO), and Community Development Financial Institutions (CDFI), among others.

Excerpted from Erlewine, Meredith, “Beyond Loans: Where Nontechnology Start-Ups Find Cash,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA publications, 2004, pp. 259-264. This chapter provides an overview of these and other sources of financing available to start-up companies. This chapter is available as a Quick Reference PDF document from the NBIA Bookstore ($5/members; $10/nonmembers).

For further information on helping clients raise funding, see:

• Osnabrugge, Mark van, and Robert J. Robinson, Angel Investing: Matching Start-Up Funds With Start-Up Companies, Jossey-Bass, 2000. (Available from the NBIA Bookstore.)
  
• Hill, Brian E., and Dee Power, Attracting Capital From Angels: How Their Money – and Their Experience – Can Help You Build a Successful Company, John Wiley & Sons, 2002. (Available from the NBIA Bookstore.)
  
• Warwick, Mal, How to Write Successful Fundraising Letters, 2^nd Edition, Jossey-Bass, 2008. (Available from the NBIA Bookstore.)
  
• Abrams, Rhonda, The Successful Business Plan, 5^th Edition, The Planning Shop, 2003. (Available from the NBIA Bookstore.)
• U.S. Small Business Administration
  Loans, Grants & Funding
  Numerous links to information on financing, loans and funding
  
• Entrepreneurship.org
  Making a Good First Impression
  Tips for making a good impression on a potential investor
  
• Entrepreneurship.org
  Presenting Your Plan
  Information about how to pitch your plan to investors; includes a checklist
  
• www.entrepreneurship.org. Click on "accounting and finance" on the Resource Center Topics menu.
  
  

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This incubator has developed an effective service provider network.

Incubator clients can benefit from interacting with seasoned business owners and senior managers who have successfully piloted a new venture, introduced a new product or a new division for an established company, obtained equity funding, or successfully developed a new sales channel, and who have been in circumstances similar to theirs. Although the incubator can provide some of this support through its own coaching, it may not have the breadth of experience needed by a diverse client base or the time to be responsive when clients want a viewpoint right away. Besides, an outside, third-party perspective can enhance the effectiveness of the guidance provided. Incubation programs have several ways to offer that outside perspective — through mentors, entrepreneurs-in-residence, or advisory boards.

Mentors

Typical mentoring programs draw on a pool of experienced entrepreneurs or senior executives — even incubator graduates — who have been successful with their own ventures and who wish to share this experience with others. Because their interactions with clients are one-on-one, mentors learn the intricacies of the client’s business operations and develop trust at a level that may not be feasible for client advisory board members or incubator staff. Mentors also give clients what they may perceive to be a more realistic approach to handling an issue or to making a business decision.

Mentoring can be especially valuable to clients in specific industries (e.g., life sciences, advanced manufacturing, food processing) in which senior executives may bring technical information related to product development or product rollout in specific markets.

Mentoring programs can take different forms. There may be one mentor, an advisory board of three to five mentors, or both. They may meet once a month, once a quarter, or even on the phone. But the goal of these meetings remains the same. The entrepreneur discusses whatever business-related problems he or she may be experiencing. The mentor offers advice, assistance, and sometimes the most important thing of all, a sympathetic ear.

Managing mentor relationships, however, can be tricky. Mentors generally expect that clients will heed their advice (or at least strongly consider it). If a client ignores or dismisses the mentor’s guidance, incubator staff may need to step in to resolve the issue. And because mentors are privy to client secrets, it may be advisable to have them sign confidentiality agreements.

Most importantly, mentors must understand that they cannot take control of the business away from the entrepreneur. A dominant mentor can undermine the commitment of an entrepreneur going through challenging times, putting the venture at a higher risk of failure. Mentors may take a more active role in the business as an investor or board member, but mentors should be monitored carefully to ensure that they maintain their role as guides, not as principals.

Entrepreneurs-in-Residence

Unlike mentors, entrepreneurs-in-residence have a more immediate relationship with the incubator. Usually current or former CEOs of start-up companies, EIRs spend a set number of hours or days in the incubator. Most stay a year, although some residencies last longer, depending on the EIR’s availability. Some are paid stipends or full salaries. Some work with a very limited group of clients, while others take on a larger workload. Some incubators have only one EIR at a time; others have as many as five at once.

Although a rags-to-riches story may be appealing to clients, success shouldn’t be the only factor in choosing an EIR. In fact, entrepreneurs who have experienced failure may be more valuable because they can share lessons learned. Even if his or her company was a success, the EIR should be able to speak with authority about dealing with real challenges and failures. He or she should be good at interacting with young or inexperienced entrepreneurs. And, of course, the EIR’s business background should mesh with the fields in which your clients operate.

Client Advisory Boards

During the early stages of development, many new ventures lack an effective board of directors. An incubation program can provide value by helping clients form a temporary advisory or “shadow” board to serve in this function until they establish a formal board of directors.

Advisory boards can be a good, early substitute for a board of directors. They are easier to recruit because such boards have no fiduciary responsibility and are better suited for entrepreneurs who have yet to establish a corporate structure. In addition to a management board, some clients may also benefit from more specialized boards. For example, a customer advisory board can help with marketing, customer feedback, and customer image. A technical board can offer guidance on product development, market acceptance, or research.

The composition of the advisory board may change over time as the business develops, but for continuity’s sake, it’s a good idea to get a core group of members — say, three or four individuals — to commit to remain on the board over time.

The very thing that makes a client advisory board effective — the expertise and contacts of its constituent members — can also be a liability, however. Because the best advisory board members will tend to be active in the business community, they may be subject to conflicts of interest. For example, advisory board members may have access to information that they could (intentionally or not) use to the detriment of the client or other companies with whom they work.
Advisory board members who are incubator staff members or otherwise involved with the incubation program may find themselves in uncomfortable situations as well. To protect everyone involved (the incubator, the client, and the advisory board members), you should consult with an attorney to draft a conflict-of-interest policy and a nondisclosure agreement that addresses such concerns before you launch an advisory board program for your clients.

Adapted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, pp. 113-115, 118. For examples of how top-of-class incubation programs have created advisory and mentoring services, plus advice on coaching and facilitation, see "Coaching and Facilitation," "Springboard," "An Entrepreneur-in-Residence Program," "Client Advisory Boards," "Kitchen Cabinet," "Client Advisory Committee," and more articles from this book, pp. 101-102, 115-121. (Available from the NBIA Bookstore.)

Part of an incubator manager’s assistance to clients is the development and administration of a service provider network. The network gives clients access to high-level (and often reduced-rate) legal, accounting, financing, and other types of business assistance that might not be available from the incubator staff. The manager’s goal in developing a service provider network should be to identify and recruit a group of experts who will be readily available and able to resolve most problems faced by client companies. By negotiating pro bono or reduced rates with service providers, incubator managers help their clients conserve much-needed capital. Beyond that, being able to tell potential clients that they’ll be able to call a lawyer, ask a question, and not get a $250 bill is a major selling point for the incubator.

Excerpted from Cammarata, Kathleen, Self-Evaluation Workbook for Business Incubators, NBIA Publications, 2003, p. 58. (Available from the NBIA Bookstore.)

Although incubation professionals can and should be closely involved with incubator client companies, their time is also well spent finding, recruiting, and managing a strong network of service providers – consultants knowledgeable in specific subject areas who assist incubator clients on an as-needed basis, usually for free or at reduced rates. Incubator service provider networks often include accountants, lawyers, venture capitalists, scientific experts, and others who can assist new ventures. These high-level professionals typically are not affordable for early-stage companies, and without them, the value of an incubation program diminishes significantly.

But if you’re going to put your companies’ futures in the hands of outside consultants, they should be ones you trust. Service providers aren’t just the volunteers you settle for because you couldn’t afford staff to do the job. They have the potential to be the resource that makes your program exceptional.

Excerpted from Cammarata, Kathleen, and Hayhow, Sally, “Managing a Network of Service Providers,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004, p. 114-118. This chapter provides detailed information on finding top-notch professionals, screening consultants, compensation, communication and other issues. It is available as a Quick Reference PDF document from the NBIA Bookstore ($5/members; $10/nonmembers).

For further information on developing a service provider network, see:

• Amey, Herb, “Strength in Numbers: Incubators, SBDCs partner to help grow businesses,” NBIA Review, April 2007. This article is available free to members in the NBIA Archives or as a PDF Quick Reference document from the NBIA Bookstore ($5/members; $10/nonmembers).
  
• Walker, Brian, “How to Leverage Volunteer Assistance,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004, pp. 119-121. This chapter is available as a Quick Reference PDF document from the NBIA Bookstore ($5/members; $10/nonmembers).
• Colbert, Corinne, “Entrepreneurs in Residence Bring Street Cred to Client Counseling,” NBIA Review, February 2007. This article is available free to members in the NBIA Archives or as a PDF Quick Reference document from the NBIA Bookstore ($5/members; $10/nonmembers).
  
• Gerl, Ellen, and Nan Kalis, “How Mentors and Advisors Add Value,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004, pp. 222-227. This chapter is available as a Quick Reference PDF document from the NBIA Bookstore ($5/members; $10/nonmembers).

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This incubator screens and regularly evaluates business service providers, company mentors and other client advisors to ensure high quality.

Incubation professionals who expect a lot from their service providers choose them carefully. Careful screening will ensure you find talented people who understand the dynamics of early-stage companies. “Make sure you understand the capabilities, core competencies, and time availability of your service providers, says Bob Thomson, director of enterprise development at Ben Franklin Technology Partners of Northeastern Pennsylvania in Bethlehem, Pennsylvania. “The last thing you want to do is waste anybody’s time.” He also recommends checking references on service providers just as you would employees. “Certain consultants are very capable of embellishing their credentials,” he says.

Many incubation programs have a formal process for screening service providers, including the Nidus Center, which has more than one hundred high-level consultants. “We literally interview everyone personally,” says Robert J. Calcaterra, former incubator president & CEO.

Testing or trying out consultants on a trial project is another way to weed out those who are not a good match for your incubation program. Bruce Gjovig, director of the Center for Innovation in Grand Forks, North Dakota, looks for someone with particular expertise, then puts him or her on a single project. That gives incubator staff and clients a chance to see if they like the consultant’s “work, expertise, and attitude” and also if he or she rises to the challenge of working with entrepreneurs and small growth companies. “We let the entrepreneur know that it’s not somebody we’ve used before but somebody who’d very much like to work with entrepreneurs,” he says. “And then we ask them to keep us posted. If [the service provider] doesn’t do quality work, then we won’t use them again.”

The Nidus Center uses a similar strategy. “In many cases we assign them or introduce them to one of the companies and essentially test drive them to see if they are good, provide the needed time, have appropriate motivation, and so forth,” Calcaterra says.

Excerpted from Cammarata, Kathleen, and Sally Linder, “Managing a Network of Service Providers,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004, pp. 114-118. This chapter is available as a Quick Reference PDF document from the NBIA Bookstore ($5/members; $10/nonmembers).

An incubation professional must regularly gather feedback from clients about the perceived value they receive from the incubator and the usefulness and effectiveness of specific programs and services. Based on the feedback—and keeping the incubator’s mission in mind—incubator management can eliminate or adjust ineffective services or add new programs that better reflect what clients see as most valuable.

Client surveys are a useful way to gather not only outcome data but also information on the value clients place on a particular service and their level of satisfaction with service delivery. Questions gauging client satisfaction and loyalty might cover:

• Coaching services
• Training and mentor programs
• Space and facility services, including reception services
• Networking and social events
• Efforts to assist firms in obtaining financing
• Service provider programs
• Effectiveness of service delivery

The idea is to evaluate clients’ use of services and whether those services are making a difference in their businesses.

Clients will appreciate the opportunity to rate incubator programs and services as well as answer open-ended questions. They will also appreciate surveys that are easy to understand and do not take an unreasonable amount of time to complete. Consider using an online survey service that aggregates results and allows for anonymity. And be sure to include a question such as, “Would you recommend this program to a friend or colleague?” Since word-of-mouth is one of the most powerful marketing methods, it’s good to know whether clients would refer others to the program.

Another effective way to gather input is to organize focus groups. Used in combination with surveys, focus groups offer additional insights and can bring out more spontaneous reactions from participants. Some managers ask graduate companies to participate in focus group sessions because graduates often have a greater appreciation for what they gained from the incubation experience. Clients may not recognize all the benefits of the incubation program until they’ve been out on their own for a while. In addition to clients’ perceptions, incubator managers can evaluate what stakeholders think about the program.

Qualitative data help frame the program’s performance, but it is important to understand how various stakeholders view this data relative to how they perceive the program. In some cases, graduating ten clients in five years may be considered stellar; in others, it may be viewed as a failure. To see how stakeholders perceive the program’s progress, reach out with surveys or focus groups, just as with clients.

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 61. (Available from the NBIA Bookstore.)

Funders and incubation practitioners should evaluate incubation programs periodically through two different – though interdependent – units of analysis: outcomes and processes. Client first performance (outcome analysis), as measured by various proxies (survival rates, jobs created, revenues, taxes paid, intellectual property created, etc.), is the first level of program evaluation. While data collection should occur at least annually, the analysis can be conducted every three to five years. Analysis of incubator processes should be conducted more frequently and cover a wide variety of systems. Services offered, advisory board composition, service providers, budgets, entry/exit criteria, and program effectiveness all should be reviewed periodically, although some more often than others.

The analysis provides evidence of the relationship between business incubation practices and client outcomes. Having entry and exit policies, conducting regular budget evaluations, evaluating service providers, analyzing program effectiveness, and formalizing incubator policies in writing have positive relationships with multiple client success measures.

Excerpted from Lewis, David A., Elsie Harper-Anderson, and Lawrence A. Molnar, Incubating Success: Incubation Best Practices That Lead to Successful New Ventures, University of Michigan, 2011, p. 12, 60.

For further information on ensuring the quality of client advisors, see:

• Colbert, Corinne , Dinah Adkins, Chuck Wolfe and Karl LaPan, "Client Satisfaction Survey and Gap Analysis," Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, pp. 61-62. (Available from the NBIA Bookstore.)
• Amey, Herb, “Strength in Numbers: Incubators, SBDCs partner to help grow businesses,” NBIA Review, April 2007. This article is available free to members in the NBIA Archives or as a PDF Quick Reference document from the NBIA Bookstore ($5/members; $10/nonmembers).

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This incubator’s management regularly meets with clients to assess their needs and offer advice, referrals and solutions to problems.

Clients have needs that depend on a number of factors, such as their stage of development, their founders’ experience, the presence (or absence) of an advisory board, or their industry sector. Some of those needs may be urgent and require immediate attention; others may be ongoing.

Just as each client’s needs are unique, so are the incubators that serve them. Incubation is not a one-size-fits-all process. Because not all clients will have the same needs, an important part of the application and screening process is determining exactly what an individual client needs and then deciding how the program can fulfill those needs.

Identifying client needs is a continuing process. When a company applies for acceptance to the program, incubator staff must clarify the prospect’s needs to determine whether program services adequately fulfill those needs. The application and screening process should help with that.

Once the company has entered the incubation program, management must continue to assess its needs to make sure that the program is providing what the company requires to grow and succeed. At first, check-ins with the client’s management team, whether formally or by e-mail, should occur weekly; as the team matures, the schedule probably can be cut back to monthly or even quarterly meetings. The frequency of these meetings may be spelled out in the client service agreement.

Regardless of the situation, needs identification provides the platform from which incubator staff can take action to assist their clients.

Needs identification:

• Provides a benchmarking framework for screening new applicants, allowing staff to assess whether the ventures are ready for incubation and whether the incubation program has adequate value-added services to fill the applicants’ needs
• Increases clients’ perception of the incubator’s value
• Differentiates the incubation program from a traditional multitenant landlord
• Clarifies actions to be taken and resources to be mobilized by clients and incubator staff during comprehensive business assistance, including coaching and facilitation activities

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 72. Also see in this book: "Methodology for Determining Mentoring Needs," "100-Point System," and "Self-Assessment Checklist," pp. 73-78. (Available from the NBIA Bookstore.)

If an incubator doesn’t track client progress formally or on a regular basis, neither the incubator nor the start-up might recognize the problem until it’s too late.

That’s why the staff of the Emerging Technology Centers meet with the executive teams of client companies as they enter the Baltimore incubation program and every six months afterward. During the initial meeting, they establish a set of goals the client hopes to achieve during its tenure as an incubator client. Incubator staff use these milestones, which are based in part on each company’s business plan, to gauge a client’s development and growth over time. Typically, the initial goals address four basic areas of business development: product/service development; marketing and sales; management and staff growth; and funding/financing.

After the initial meeting, a review panel comprising the incubator’s four professional staff members and a number of business mentors meets with each client every six months. “We look at the client’s overall progress and movement toward business-plan-stated goals,” says ETC Executive Director Ann Lansinger. “We step back and define and measure growth.” At those meetings, the incubator staff and clients also agree on milestones the company should be able to meet over the next six months.

Why does ETC make such a concerted effort to track clients’ progress when the staff also meet regularly with clients through its mentoring program and other informal interactions around the office? Lansinger says the formal review process is designed to help the staff and the clients focus on the “big picture” of helping companies succeed. “It’s helpful to keep tabs on how well the companies are developing overall and where they might be experiencing problems,” she says. “The objective is to make sure companies are making progress and to help them access the resources they need to fill in any holes.

Excerpted from Knopp, Linda, “Keeping Things in Check: Tracking Progress Can Help Ensure Clients Become Graduates,” NBIA Review, June 2006. This article covers how incubator manager track clients, what they track and incentives they use. This article is available free to members in the NBIA Archives or as a PDF Quick Reference document from the NBIA Bookstore ($5/members; $10/nonmembers).

For further information on monitoring client progress, see:

• Lohr, David, “Creating and Managing a Client Mentor Program,” and Schmidt, Booker, “Helping Early-Stage Entrepreneurs Avoid Common Mistakes.” These NBIA Webinar archives are available through the NBIA Bookstore ($29/members; $49 nonmembers); search on “coaching clients.”
  
• Erlewine, Meredith, et al., “Serving the Inexperienced Entrepreneur,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004, pp. 307-312. This chapter is available as a Quick Reference PDF document from the NBIA Bookstore ($5/members; $10/nonmembers).
  
• Entrepreneurship.org
  Nurturing Entrepreneurship at Every Level
  Tips for running an organization that encourages entrepreneurship
  

This incubator actively facilitates networking (doing business, sharing contacts, equipment, expertise, etc.) among its clients and with the outside business community.

If a program doesn’t promote client networking in some way, it’s in the minority. In NBIA’s 2006 State of the Business Incubation Industry report, 96 percent of North American incubation programs said they provided networking opportunities for their clients.

The reason for their popularity is simple: Who you know really can make a difference, especially for start-up businesses. Networking—whether with fellow incubator clients, representatives of the larger business community, or potential customers or funders—gives fledgling entrepreneurs a host of benefits, from helping them develop needed business skills and relationships to providing vital emotional support. Such help can mean the difference between success and failure.

But if networking is something nearly everyone promotes, the ways incubators try to make it happen and the benefits they see from it vary in important ways. Many incubators offer regularly scheduled brown-bag lunches aimed at keeping clients in touch with each other. Some go in for more ambitious public events that draw in the local business community or for tightly focused problem-solving sessions with selected clients. Others facilitate joint projects among several clients, which not only help these companies generate revenue but also give them experience in working with other small businesses.

Events can aim at making deals, attracting investors, and launching spin-off companies, or at giving entrepreneurs and experts a chance to swap news and tips. They can be big or small, formal or casual, indoors or out. Not surprisingly, given the Internet’s power as a networking tool, they are moving online as well.

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 106. Also see in this book: "Entrepreneur's Happy Hour," "Miniature Golf Tournament," and "CEO Roundtable," pp. 107-108. (Available from the NBIA Bookstore.)

Some services with relatively high correlation to measures of success include: (1) linkages to educational resources; (2) providing networking opportunities for clients; (3) general legal services; (4) marketing assistance; and (5) assistance identifying a management team. Each of these five services is statistically significantly correlated with at least five outcome measures (such as revenue growth, graduation rate, etc.).  

Adapted from Lewis, David A., Elsie Harper-Anderson, and Lawrence A. Molnar, Incubating Success: Incubation Best Practices That Lead to Successful New Ventures, University of Michigan, 2011, p. 55.

For further information on encouraging client networking, see:

• Adkins, Dinah, and Gregg Lichtenstein, “How to Encourage Networking,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004, pp. 288-291. This chapter is available as a Quick Reference PDF document from the NBIA Bookstore ($5/members; $10/nonmembers).
• Phillips, Jim. Who you know really CAN make a difference, NBIA Review, February 2008. This article is available free to members in the NBIA Archives or as a PDF Quick Reference document from the NBIA Bookstore ($5/members; $10/nonmembers).
• Contacts Count newsletter, www.contactscount.com/newslettersubscription.html
  
• About.com: Entrepreneurs
  Business Networking for Entrepreneurs
  Overview of the importance of networking and links to articles with further information
  
• Business Know How
  10 Tips for Successful Business Networking
  Advice on how to network effectively
  
• Entrepreneurship.org
  Human Capital Pays Dividends for Entrepreneurs
  Article about the benefits of building support networks of peers and business acquaintances
  
• Entrepreneurship.org
  Networking – Targeting Organizations and Groups
  Worksheet to help assess current networking and identify new opportunities

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This incubator helps clients establish milestones to measure the progress of their business and checks back regularly with them about meeting these milestones.

It can be easy to overlook a client’s evolution through the various stages of venture development when one is responding to its specific daily, weekly, or monthly needs. But it is vital that incubator staff periodically take an objective look at the client’s progress through the incubation program to assess its stage of development and determine how best to position the company for potential graduation—and whether it is likely to graduate. Staff can measure progress in terms of specific milestones that reflect the evolution of an emerging venture as well as the client’s alignment with the incubator’s mission. Examples of such milestones include completing or refining the business plan, solidifying the management team, completing proof of concept activities, successfully selling products, securing capital (e.g., grants, loans, angel investment), establishing strategic partnerships, and reaching a certain threshold number of employees or revenue level.

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 76. Also see in this book: "100-Point System" and "Self-Assessment Checklist," pp. 76-78. (Available from the NBIA Bookstore.)

Springboard is San Diego CONNECT’s flagship program. It offers free mentoring for one to six months to companies in all stages of development, from concept to start-ups to firms that have reached a significant point in their growth and strategy development. CONNECT says that in 2008 “more than one hundred scientific and technological breakthroughs [were] guided by CONNECT through the process of innovation to commercialization” in high technology, including semiconductors, software, e-commerce/Web 2.0, and communications technology; wireless health, cyber security, and autonomous robotics; clean technology; action and sport innovation; biopharma, medical devices, and diagnostics; and outsourcing.

Via Springboard, CONNECT works with 180 entrepreneurs-in-residence and two hundred “domain experts.” The former have experience growing companies and raising equity investments, while the latter have expertise in a specific field such as intellectual property law or an industry sector. Two EIRs and relevant domain experts work with each company during the mentoring period. “The coaching process is focused on the development of a compelling business proposition that can be presented to investors,” CONNECT’s Web site explains. The process ends with a company presentation to a panel of investors, business service providers, and industry experts.

According to the CONNECT Web site, potential outcomes of the Springboard program may include getting feedback on the firm’s progress and progress toward the achievement of various benchmarks (to name only a few):

• Getting feedback on the commercial potential of technology
• Developing a compelling business presentation
• Constructing a cohesive financial model
• Evaluating the management team
• Creating a go-to-market strategy
• Developing a stronger strategic plan
• Developing a realistic funding strategy and readiness for investment
• Getting feedback on a specific business challenge
• Expanding the company’s network of prospective advisors and potential clients

Adapted from a longer article published in Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, pp. 114-115. The book also provides a case study of the CONNECT program and describes several other CONNECT entrepreneur support resources. (Available from the NBIA Bookstore.)

Regular conversations between clients of the Advanced Technology Development Center and its business development staff have long been a staple of the Atlanta-based incubation program. Former ATDC General Manager Tony Antoniades says keeping tabs on clients’ progress – whether through informal hallway discussions or regularly scheduled reviews – alerts the staff when a company might need assistance with developing a pitch to investors or lining up customers and lets the clients know how the incubator might be able to help.

Each of ATDC’s 43 clients sits down monthly with one staff member to talk informally about their progress and quarterly with two incubator staff members to review financials. (ATDC has a business development staff of 6.5 full-time workers.) “During these conversations, both the clients and the incubator can be held accountable,” Antoniades says. “We can look each other in the eyes and say, ‘This is what you said you’d do when we last met. Have you done it?’”

If an incubator doesn’t track client progress formally or on a regular basis, neither the incubator nor the start-up might recognize the problem until it’s too late.

That’s why the staff of the Emerging Technology Centers in Baltimore, Md., meet with the executive teams of client companies as they enter the Baltimore incubation program and every six months afterward. During the initial meeting, they establish a set of goals the client hopes to achieve during its tenure as an incubator client. Incubator staff use these milestones, which are based in part on each company’s business plan, to gauge a client’s development and growth over time. Typically, the initial goals address four basic areas of business development: product/service development; marketing and sales; management and staff growth; and funding/financing.

After the initial meeting, a review panel comprising the incubator’s four professional staff members and a number of business mentors meets with each client every six months. “We look at the client’s overall progress and movement toward business-plan-stated goals,” says ETC Executive Director Ann Lansinger. “We step back and define and measure growth.” At those meetings, the incubator staff and clients also agree on milestones the company should be able to meet over the next six months.

Why does ETC make such a concerted effort to track clients’ progress when the staff also meet regularly with clients through its mentoring program and other informal interactions around the office? Lansinger says the formal review process is designed to help the staff and the clients focus on the “big picture” of helping companies succeed. “It’s helpful to keep tabs on how well the companies are developing overall and where they might be experiencing problems,” she says. “The objective is to make sure companies are making progress and to help them access the resources they need to fill in any holes.

Excerpted from Knopp, Linda, “Keeping Things in Check: Tracking Progress Can Help Ensure Clients Become Graduates,” NBIA Review, June 2006. This article covers how incubator managers track clients, what they track and incentives they use. This article is available free to members in the NBIA Archives or as a PDF Quick Reference document from the NBIA Bookstore ($5/members; $10/nonmembers).

For further information on monitoring client progress, see:

• From A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004: Gerl, Ellen, ‘Warning Signs of Clients in Distress,”, pp. 321-326; Erlewine, Meredith, et al., “Serving the Inexperienced Entrepreneur,” pp. 307-312; Gerl, Ellen, “Encouraging Clients to Plan for Graduation,” pp. 317-320. All of these chapters are available as a Quick Reference PDF document from the NBIA Bookstore ($5/members; $10/nonmembers).
  
• Entrepreneurship.org
  Measuring Performance
  Article about how to measure success
  
• Entrepreneurship.org
  Success Measurement Worksheet
  Chart for setting success measurements and goals
  
• BNET Business Network
  A New Approach to Assessing Benchmarking Progress
  Article about how to conduct successful organizational benchmarking
  
• PHS Management Training
  Steps in Benchmarking: Five Key Stages
  Outline of steps involved in the benchmarking process
• AuroraWDC.com
  Seven Steps to Effective Competitor Benchmarking
  Outline of a seven-step process for benchmarking
  
• Business.com
  Benchmarking Your Business Financials
  Links to resources to help with the benchmarking process and also tips and tactics
  
• Gaebler.com
  www.gaebler.com/Business-Milestones-that-Matter.htm
  Article describing most important business plan milestones
  
• Bplans.com
  Milestones Make Your Business Plan a Real Plan
  Article about how to set milestones with a sample chart
  

This incubator gives highest priority to time spent directly serving clients and organizes its resources to ensure the incubator is devoted, above all, to growing companies.

Incubator managers seeking excellence in their programs put client services first. They know that providing start-up businesses with the tools they need to grow and succeed is the main goal of incubation programs and what separates them from simple real estate operations. That’s why NBIA recognizes as a best practice the need to “prioritize management time to place the greatest emphasis on client assistance, including proactive advising and guidance that results in company success and wealth creation.”

All too often, however, managers with the best intentions get derailed by the demands of daily operations—overseeing finances, keeping sponsors happy, and maintaining the building, to name just a few. Devoting ample time to serving clients while negotiating operational tasks requires dedication and real organizational savvy—especially for incubators that are staffed leanly. It also requires support from a board of directors that recognizes that client service comes first. To increase one-on-one time with clients, managers can implement strategies such as creating volunteer advisory and review boards and delegating administrative tasks to operational staff.

Common incubator offerings include help with business plan writing, assistance securing capital, and shared administrative services. But services vary depending on an incubator’s mission and focus as well as on individual clients’ needs. For example, a professor commercializing a university technology might need help creating a product or prototype, while a client developing a grilling sauce at a kitchen incubator might need access to bottling equipment. Services must be tailored to a company’s stage of development; the skills, personalities, and experience of its management team; access to funding; and many other factors. Determining which services clients need requires careful assessment during the admissions interview and ongoing assessment throughout the clients’ time in the incubator.

Part of an incubator manager’s assistance to clients is the development and administration of a service provider network. The network gives clients access to high-level (and often reduced-rate) legal, accounting, financing, and other types of business assistance that might not be available from the incubator staff. The manager’s goal in developing a service provider network should be to identify and recruit a group of experts who will be readily available and able to resolve most problems faced by client companies. By negotiating pro bono or reduced rates with service providers, incubator managers help their clients conserve much-needed capital. Beyond that, being able to tell potential clients that they’ll be able to call a lawyer, ask a question, and not get a $250 bill is a major selling point for the incubator.

Excerpted from Cammarata, Kathleen, Self-Evaluation Workbook for Business Incubators, NBIA Publications, 2003, p. 58. (Available from the NBIA Bookstore.)

Except for facilities, the single largest expense for most incubation programs is payroll—which should be no surprise. Staff are the incubator’s most important asset and can make or break its success with clients and stakeholders. In addition to regular full- or part-time staff are myriad individuals who interact with clients and enhance incubator services, such as volunteers, interns, and service providers from the community. Although they are not staff per se, the quality and qualifications of these supporters are almost as vital to your program’s success as those of your paid staff.

Often the first staff member hired—typically early in the incubator’s development—is an executive director, manager, or CEO who hires and supervises other incubator staff and oversees the incubator’s operations and finances. (In some cases, the incubator is managed by an outside firm that contracts with the incubator’s board.) No matter what the title, this individual must be dynamic and have business experience in the industries the incubator will support. Other desirable characteristics include:

• Ability to effectively market the incubator to potential clients, sponsors, and stakeholders
• Ability to identify clients’ needs, coach clients effectively, and facilitate their access to outside resources
• Ability to work with the board to impart the incubator’s vision and mission to the general public and, through the selling of that vision, enlist support

It’s unlikely that a single individual will be fully knowledgeable in all aspects of entrepreneurship. Therefore, the director must recognize his or her own weaknesses and be able to bring in outside assistance when needed and, if necessary, to enlist mentors to help build capacity. Additional staff may be hired as the incubator develops, depending on the program’s budget, the level of services provided, the number of clients served, and the support provided by the board and stakeholders.

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 106. Also see in this book: "Entrepreneur's Happy Hour," "Miniature Golf Tournament," and "CEO Roundtable," pp. 20-21. (Available from the NBIA Bookstore.)

Manager’s hours, experience, time with the program, and client-to-staff ratio are the best predictors of graduate firm outcomes.

Excerpted from Lewis, David A., Elsie Harper-Anderson, and Lawrence A. Molnar, Incubating Success: Incubation Best Practices That Lead to Successful New Ventures, University of Michigan, 2011, p. 65.

For further information on the time incubator management spends with clients, see:

• Knopp, Linda,2009 Incubation Industry Compensation Survey, NBIA Publications, 2010, and Knopp, Linda, 2012 State of the Business Incubation Industry, NBIA Publications, 2012. (Available from the NBIA Bookstore.)

This incubator evaluates its program of services at least annually.

Incubator managers must regularly evaluate services to ensure relevancy and effectiveness. A manager can gather input via annual client surveys and focus groups, and through informal interactions with clients and graduates. Based on the feedback, incubator staff members then can eliminate or adjust ineffective programs or add new programs that reflect client requests and changes in business conditions.

Excerpted from Cammarata, Kathleen, Self-Evaluation Workbook for Business Incubators, NBIA Publications, 2003, p. 59.(Available from the NBIA Bookstore.)

One approach to incubator evaluation comes from the client’s perspective. An incubator manager must regularly gather feedback from clients about the usefulness and effectiveness of the incubator’s program 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?

Innovacorp (of Halifax, Nova Scotia, Canada) is strongly committed to systematic and rigorous self-assessments of its performance, not only in economic impact measures and leading indicators but also in client satisfaction. In its performance measures, Innovacorp uses an objective third party to solicit client feedback on performance and value and to pinpoint specific areas that require enhancement or focus.

Since 2006, Innovacorp has contracted with an independent third party (for about C$5,000 each year) to conduct a telephone survey of clients’ perceptions of Innovacorp and its services in seven areas:

1. General awareness of Innovacorp’s products and services (e.g., business advice and mentoring, incubation services, shared equipment) and the degree to which clients used those products and services.
2. The specific assistance (business strategy and planning, product positioning, identification of outside resources or expertise to solve key problems) the client received and the client’s level of satisfaction with the quality of those services.
3. Whether clients would recommend the organization to others in the future and the likelihood of their recommending Innovacorp to business colleagues.
4. The level of satisfaction with services and resources that clients identified as being “very important.” In addition, incubation clients are asked satisfaction questions related to the cost of space and the cost of services.
5. Clients’ perception of the importance of and satisfaction with Innovacorp’s business advisory services (knowledge, professionalism, timeliness of service), as well as their uniqueness (depth, ties to other services, unique level of quality).
6. Whether the client has ever approached Innovacorp for investment or financing and how satisfied the client was in its contact with the Innovacorp staff; the timeliness of service; staff’s understanding of the clients’ business; whether Innovacorp provided quality work; and how defined the investment process was.
7. Clients’ satisfaction with seminars, events, and networking opportunities provided by Innovacorp, as well as their importance to the clients.

Innovacorp measures both satisfaction with and importance of key services of the incubator. The gap analysis examines the percentage of clients who both view a service as “very important” and are less than “very satisfied” with the delivery of that service. On the basis of survey results, Innovacorp establishes operational objectives and identifies service offerings that can be enhanced to increase client satisfaction.

Excerpted from a longer and more detailed article on "Client Satisfaction Survey and Gap Analysis," Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, pp. 61-62. (Available from the NBIA Bookstore.)

For further information on surveying clients, see:

• Colbert, Corinne, A Practical Guide to Business Incubator Marketing, NBIA Publications, 2007: "Primary market research," pp. 8-14, "Survey design tips," p. 9, and "Fine-tuning your services," pp. 23-24. (Available from the NBIA Bookstore.)
  
• Free Management Library
  Basic Guide to Program Evaluation
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This incubator adds, removes, or changes business assistance services as the result of systematic evaluation based on its mission statement, changes in client or business conditions, surveys of client needs, requests, and other factors.

One approach to incubator evaluation comes from the client’s perspective. An incubator manager must regularly gather feedback from clients about the usefulness and effectiveness of the incubator’s program 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?

Program evaluation:

• Provides evidence of success to incubator management, stakeholders, and investors
• Allows incubator management to compare program effectiveness with other, similar incubators
• Provides evidence of incubation program and service quality
• Presents information necessary to ensure that programs provide value to clients and evolve as necessary
• Identifies areas for continuous improvement
• Serves as a sales and marketing document for client recruitment.

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 55. (Available from the NBIA Bookstore.)

Clients of the Amoskeag Business Incubator of Manchester, New Hampshire, complete an annual written review, which includes a request for program feedback and suggestions. In one such survey, clients asked for regular all-incubator meetings, something executive director Julie Gustafson had resisted. “I had always felt like I didn’t have time for it,” she says. But she acquiesced and began offering a monthly breakfast meeting in which she talks about incubator news and policies and clients take turns making presentations about their businesses. They also talk about their successes, challenges, and various business topics; sometimes Gustafson invites an outside presenter.

The meetings created a more collegial feel within the incubator and fostered greater cooperation among clients, Gustafson says. “They’ve been more inclined to [work] with each other and they talk more in the hallway,” she says. “It took some of those businesses that stick more to themselves and got them out there. It’s definitely had a positive impact.”

As part of an overall market survey conducted in 2000, researchers for the University of Florida Sid Martin Biotechnology Incubator in Alachua, Florida, asked clients to rank the importance of various incubator services and benefits. They then compared those ratings with the incubator’s perception of their importance. The differences were sometimes startling, says Incubator Manager Patti Breedlove.

“These are generally scientist-founded companies,” she says. “The biggest challenge is getting business leadership in these companies, and until then, they don’t recognize the value of certain things.” For example, the clients interviewed for the survey placed far less importance on some services – such as the incubator’s assistance with business and financial planning, help in finding funding sources, and collaboration with the University of Florida’s Office of Technology Licensing – than the incubator staff did.

Part of the job of incubating such companies is ensuring that the scientists in charge understand that they need to develop their business skills – or recruit other individuals who have them. “These findings reinforced our commitment to make sure that incubator management delivered that message at every turn, and to provide activities which give our start-up scientists a chance to mingle and meet with business leadership of other companies in our incubator,” Breedlove says.

As a result, the incubator now hosts monthly networking socials for clients and graduates. It also does more to promote matchmaking between researchers and entrepreneurs, such a sponsoring a program through the Office of Technology Licensing that will, in some cases, pay entrepreneurs to write business plans and market assessments for scientists interested in starting a company. “The hope is that the business person and the scientist will work well together and end up starting a company together,” Breedlove says.

Adapted from Colbert, Corinne, A Practical Guide to Business Incubator Marketing, NBIA Publications, 2007, pp. 23-24. (Available from the NBIA Bookstore.)

For further information on surveying clients, see:

• Colbert, Corinne, A Practical Guide to Business Incubator Marketing, NBIA Publications, 2007: "Primary market research," pp. 8-14, "Survey design tips," p. 9, and "Fine-tuning your services," pp. 23-24.
  
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  Basic Guide to Program Evaluations
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