National Business Incubation Association; Your source for knowledge and networks in business incubation

Self-sustainability: How much is enough?

by Sally Hayhow

February 1999

The last two major research projects on business incubation returned results that certainly should shatter any lingering doubts about the industry's effectiveness. That goes double for NBIA member incubators, which made a better showing in the studies than nonmembers whenever the two were compared. NBIA members, it appears, have taken seriously the principles and best practices they drafted and adopted in 1996.

That may be true in general, but what about best practice No. 3? It states that incubation programs should "structure for financial sustainability by developing and implementing a realistic business plan." Yet in the 1997 Impact of Incubator Investments study, 32 percent could give their clients no service without subsidy, and no technology or empowerment incubator existed without some (and often substantial) outside support for operating expenses.

Do these stats point to poor performance of incubation programs or a misdirected best practice? Neither, really.

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Keywords: self-sustainability, sponsor

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