Incubators can be excellent ‘starter homes’ for embryonic creative consultancies, but what exactly do they offer and how can entrepreneurs use them?
When I set up The Watermark business incubator unit in 2001, I wanted to create a place where designers, artists and other individuals and small creative businesses can start and grow their business within a positive, supportive and fun environment.
The attractions to creative individuals of initially basing themselves within an incubator environment are many. Geared to meeting the needs of start-ups and micro-businesses, incubators offer flexible, competitively priced space, advice and support to help budding entrepreneurs.
As well as keeping running and operational costs to a minimum by providing the option of sharing business facilities and equipment, incubators generally have a range of spaces businesses can rent to suit their needs.
Being able to learn from the experiences of others, rather than through one’s own mistakes, has always been my preferred option. Within a business incubator there are always other people facing similar challenges. This makes it an ideal environment to base yourself when starting out, in particular in the early stages.
From individual artists, sculptors, jewellery, fashion, furniture, lighting and graphic designers, through to video production, exhibition design, Web and print businesses, incubators can be flourishing, fertile places to work.
If you are surrounded by like-minded individuals who offer complementary skills, there is great opportunity to form alliances and strategic partnerships to pitch for contracts that would otherwise be out of your reach. Designers frequently collaborate with fellow tenants, such as video production companies, photographers, artists, sculptors, marketers and PR people, on contracts that might have been beyond their scope.
Realising the opportunities that exist for partnership with other incubator residents doesn’t happen automatically, though, and making them work requires even more effort. Networking is crucial for making the most of being in an incubator environment.
To meet the needs of residents, incubator units tend to have a broad selection – in terms of size, cost and term – of space. The types of financial terms available differ, but it is worth noting that when you apply to take space you can expect to be asked for/ • References – from your bank and a couple of businesses with which you have worked • A deposit/bond – this can be up to six weeks’ of the rent • To sign a contract – these can vary greatly from a simple, Tenancy at Will document to a detailed contract.
Additional items you may be asked for include a business plan and even, sometimes, a share of your business.
Start-ups represent a higher risk for landlords, which may ask to see a business plan to help them determine how committed the individuals are. Where a start-up is considered extremely speculative, it has been known for the landlord – in this instance a venture capital firm – to ask for a small share of the business.
In contrast, there are incubator owners which have a philanthropic side and might, once a year, be prepared to offer a rent-free period.
When you start out in business, it is important to keep a tight rein on your office costs and to retain as much flexibility as possible, so that you can expand – or contract – should the opportunity arise.
Office rental rates within incubators vary throughout the country, but you may be able to find space for as little as £35 a week inclusive of bills.
Look out for incubators where the rent automatically escalates after six months (a rental review after 12 months is common). It’s also a good idea to check if the rental sum is inclusive or not.
Charles Hadcock is a sculptor and founder of The Watermark. He is also a 2007 Queen’s Award for Enterprise Promotion
BENEFITS OF INCUBATORS
• Flexible, competitively priced space and practical support
• Business development and management advice
• Share learnings with similar businesses at similar stages in their life cycles – excellent networking opportunities
• Reduced running costs •
For further information, see www.ukbi.co.uk
NOMINATIONS FOR ROYAL RECOGNITION
• Queen’s Award for Enterprise Promotion recipients rely on nominations from their colleagues or friends
• Nominations close on 31 October
• For a nomination form, visit www.queensawards.org.uk