How To Set Up An Incubation Centre?


A premature neonatal baby which comes into this world out of its mother’s womb needs incubators for special care. It is in incubators until it attains its maturity. In the same manner, startup companies also need Incubation centers to support their full-fledged growth and existence. So, How to set up an incubation center?

Although when I speak about Incubation centers, I didn’t mean those intensive cares for babies. I meant the private companies and public institutions such as colleges and universities, which play an integral role in growing startups.

Like a baby is nurtured, Incubation centers (established firms, colleges, and universities) provide facilities to nurture young firms (startup) during their early months or years of growth. Further, this collaborative program designed helps new startups to succeed.

What are Incubation centers?

Incubation centers help entrepreneurs to solve some of the problems commonly associated with running a startup. This is carried out by providing them a few basic needs. Some of the most common services provided by Incubation centers are:

  • Workspace
  • Marketing assistance
  • Mentoring assistance
  • High-speed internet access
  • Accounting / Financial management access
  • Connections to higher education resources
  • Comprehensive business training programs
  • Links to higher education resources
  • Comprehensive business training programs
  • Help with business etiquette

Why Incubation Centres?

They’re often a good path to capital from angel investors, state governments, economic-development coalitions, and other investors. Hence, we can say these Incubation centers are organizations geared toward speeding up the growth and success of startup and early-stage companies.

Incubation centers tend to draw on the resources and expertise of their staff, external consultants, existing entrepreneurs, peer-to-peer networks, and external enterprise support. They tend to operate using mixed revenue streams from rental income and fees or funds. These may be obtained from other private and public sources.

There are different types of financing options that are available for startups during the different stages of the firm life cycle. The financing types are based upon the level of growth of the startups from the first stage of the firm life cycle to the final stages. It is carried out along with their growth and production scale. The figure below shows the stages of business and sources of funds:

What CEO of Infosys Mr. Narayana Murthy has aptly said about Entrepreneurship?

“Entrepreneurship is all about deferred gratification’’. He truly believes that India needs to have more and more entrepreneurs than employees for its advance growth. If we talk about recent scenario entrepreneurship in India is on the verge of explosive growth. And one important cog in the wheel is the Incubation centers – the place where startups are born.

With this overview as to what Incubation is, how to set up an incubation center and how Incubation centers work let us come to the mechanism of initiating an Incubation center.

6 major steps as in how to set up an Incubation center


Primarily assess market conditions and entrepreneurs’ requirements have a significant say before setting up an Incubation center. We need to have a proper check whether there is a demand for Incubators, where will incubates come from, what are the capital costs and operating costs of setting up an Incubator.

Therefore, awareness of the market conditions before starting up an Incubation center is very important. Above all, what do entrepreneurs want from Incubation centers is also very important like is its access to cheap office space, internet, electricity, chance to meet investors, get access to quality manpower and experienced advisors.


After having serious market research next step is to identify a set of advisors- preferably a set of heterogeneous industry veterans, faculty, and investors who all can guide the incubation managers.

The question, how to set up an Incubation center, looks easy for entrepreneurs but real toiling comes at the time of execution. Thus, the team that manages Incubation centers has to be experienced enough.


An Incubation center needs to have proper resources at the time of settling up their operations like, space, internet, telephone, electricity, data center, maintenance and security, furnishing (chair, table, cubicles), IT infra and support(software, LAN, leased lines, wifi, printer, scanner, copier, access control system), boardrooms, meeting rooms, coffee machines, restraints, etc.

All of these come at a specific and genuine price so Incubation centers need to manage and generate capital and manpower for the same. They can do their funding as well as they can also take government support in the form of subsidies.


Contact and connections have to be made with local entrepreneurs, lawyers, CAs, industry associations like CII, FICCI, Nasscom, etc. or media(TV, print, etc.) and it is not mandatory to establish links after setting up the Incubation centers even before the company starts its operations linkages can be established to not remain self-centered and internally focussed.


Making programs means drawing out a calendar of activities which is very important because it keeps Incubation centers always charged. For example, conducting training programs, mentor meets, talks from experts, job fairs, product showcases, technology demonstrations, etc. from time to time helps the community to grow and brings in a great network effect.


After making good market research, identifying team and service providers, allocating resources, establishing links and drawing out a calendar of activities finally at the last but not the least Incubation centers need to attract, select, retain and manage start-ups.

Business Incubators are established mainly to assist entrepreneurs significantly. Therefore, they need to think about the ways to attract, select, retain and manage startups that inhabit their planets. Different Incubation centers have distinguished stated criteria for the selection process. Thus, it is important to communicate the same in advance to avoid any sort of disappointments and chaos.

What is an INCUBATOR?

I – Innovation & Entrepreneurship

N – Networks & collaboration

C – Competitiveness

U – Understanding the roles (Public/ Private sector)

B – Buy-in

A – Access to resources

T – Technologies

O – Outreach

R – Review: Monitoring & Evaluation

More about Incubation Centers

There are so many Business incubators functioning all over the country and even overseas.

For entrepreneurs, the startup stage can be treacherous and exhausting. Business incubators are there to help with the growing pains by providing them with seed money office space, supplies, technologies, office spaces, offer professional services (such as marketing and accounting) and connect company founders with mentors, clients, and venture capital firms.

All I can enlighten the above mentioned is by saying that timely assistance and wise outside counsel can make or break any starting concern, and Incubator firms can serve as one-stop shops for coaching, mentoring, networking, structural support and the formulation of business plans. Competition for their support can be fierce with several hurdles to clear even.

How does it benefit?

Incubation centers make sure that a startup survives all sorts of economic perils that come across its way. Of course, we can’t expect miracles. The success of our business will ultimately depend upon our company’s developing products and services people care about, and our ability to adapt and innovate.

Also, if we as entrepreneurs are joining an Incubation center, we can’t necessarily take all advice at its face value because people are people. Some have great insight than others. And not all Incubation centers i.e., Business incubators attract the best talent. But if we are starting to know how to set up an incubation center, that’s a good place to initiate.

Do you need support in setting up your Incubator? Let us know at [email protected] or call at +91-95.5511.5533.


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