The US National Business Incubation Association defines the business incubator as "an economic development tool designed to accelerate the growth and success of entrepreneurial companies through an array of business support resources and services. A business incubator`s main goal is to produce successful firms that will leave the program financially viable and freestanding."

The incubator will impact client businesses by:
• Increasing the likelihood of success during the first critical years
• Significantly reducing “time to launch” for many companies
• Enabling business owners to focus on their core product development and growth of their business

Madison County will benefit through the creation and improvement of jobs. Existing businesses in the community will benefit from the increased demands of goods and services, and the working age members of our community will have opportunity to remain herek and enjoy the quality of life that residents currently enjoy.

Research on incubators supports the HSBI goals. A study of 126 incubator companies across the U.S. during the period 1990 through 1996 reports impressive results:
  • High returns - In 1996, incubators showed a return of $4.96 for every $1 in subsidies;
  • High Survival Rates - In 1996, 87 percent of incubator graduates were still in business;
  • Community Contributions - In 1996, 84 percent of graduates were still in the samecommunity as their incubators;
  • Increase in Economy: Businesses in incubator programs produced substantial increases in average annual sales and full-time jobs. According to the Impact of Incubator Investments Study, 1997, 87% of incubator graduates remain in business. Less than one in four businesses that start outside of an incubator survive for five years.

Incubator graduates create jobs, revitalize neighborhoods and commercialize new technologies, thus strengthening local, regional and even national economies.

NBIA estimates that North American incubator client and graduate companies have created about half a million jobs since 1980. That is enough jobs to employ every person living in Denver, Colo.

Every 50 jobs created by an incubator client generate approximately 25 more jobs in the same community.

In 2001 alone, North American incubators assisted more than 21,000 start-up companies that provided full-time employment for nearly 82,000 workers and generated annual revenue of more than $7 billion.

Business incubators reduce the risk of small business failures. Historically, NBIA member incubators have reported that 87 percent of all firms that have graduated from their incubators are still in business.

12 Benefits of a Business Incubator

  1. The business incubator helps in changing attitudes towards personal initiative, innovation, risk-taking and entrepreneurship.
  2. The business incubator helps entrepreneurs to start their own businesses and gives them an advantage over non-incubator member new firms.
  3. The business incubator creates job opportunities.
  4. The business incubator greatly increases the likelihood of business survival for new small and medium sized start-up firms.
  5. The business incubator allows tenants to participate in exchanging information and discussing mutual commercial interests.
  6. The business incubator helps retain individuals who would otherwise leave the area due to the lack of job opportunities.
  7. The business incubator helps to rehabilitate and reuse existing buildings.
  8. The business incubator helps to enhance the community`s image as a centre for innovation and entrepreneurship.
  9. The business incubator encourages the development and transfer of new technology.
  10. The business incubator promotes the clustering of SMEs, which helps to overcome their major weaknesses - isolation and powerlessness - and raise their competitive potential through the emergence of linkages between firms providing economies of scale and scope.
  11. The business incubator is itself a dynamic model of a sustainable, efficient business operation.
  12. The business incubator provides additional jobs and income beyond those directly employed and paid through the incubator`s tenants. Thanks to the assistance of the business incubator, the tenants are able to employ a larger workforce and increase their own revenues. This increase has a direct consequence in state revenue growth through the taxes an enterprise has to pay. The extra income means more capital that the local government can contribute to the funding of business incubators.

Huntsville Small Business Incubator (HSBI) is the only one of its kind in Huntsville and operates out of the North Huntsville area. The main thrust of this operation is to contribute to the economic prosperity and growth of small businesses within this locale.