Hungarian - Slovakian

Incubation Centre at Pócsmegyer

MSKIKP

HUSK/1101/1.1.1/0120 project

The role of Incubation Centre

in business development

Corvinus University of BudapestMáté Szabó

Leader of subproject

Bratislava 17th april 2015.

Thesis: 1. Out of 100 start-ups only 5-7 make it to the third year.

2. The survival rate of incubated businesses can reach up to 70-

75%.

Conclusion:Incubation can play a special role in the development of new

businesses

Start-up SWOT analysis

Strengths

• Enthusiasm,

• Commitment to new ideas, new business

• Co-operation

• Vocational Skills

• Spin-off/ Start-up

Weaknesses

• Over-optimism

• Lack of capital

• Market knowledge is incomplete

• Not well thought associations

• Lack of entrepreneurship

• Lack of managerial skills

Start-up SWOT analysis

Options

• New areas of activity expansion,

• Technological development, product development, R & D

• New Markets

• New Marketing Tools

• Training

• Organization Development

• Risk Management

• Change Management

• Capital attraction, investor search, tender support

Threats

• Funding problems

• Technology gap

• Strong competition

• Loss of market share

• Shortage of skilled labor

• Dependence on suppliers

• Customer payment discipline

• Unstable organization

• Change of ownership

• Recruitment and organizational

expansion needs

• Long-term capital deficiency, starter business is unattractive to investors

• Inability to apply for EU and government funds due to lack of history

• Adverse regulatory changes

Solution:

• Build on strengths

• Develop current weaknesses

• Use the possibilities

• Eliminate the threats

Thesis: Thriving businesses are the interest of each

municipality

Benefits:

• Increase local employment

• Maintain population

• Increase the standard of living

• Environmental improvements (decrease commuting)

• Improving quality of life

• Higher tax revenues (IPA and personal income tax and other local taxes)

• Urban development in collaboration with businesses

Conclusion:

All municipalities will benefit from supporting start-ups

Realistic Solution: Established Business Incubator

Kinds of Business Incubators

According to the strategic objective:

• Business Innovation Centres (BICS)

• independent private incubators (IPIs)

• organizational (related company) private incubators (CPIs).

• university business incubators (UBIS)

According to the 2002 EU survey:

• traditional incubator

• specialized incubator

• new business incubator

International and domestic Incubators

• USA: 1950 (West Philadelphia, warehouses)– Mixed traditional

– specialized

– Technology

– Virtual

• Europe: from 1970 – France

– United Kingdom: Programme to assist the unemployed to become entrepreneurs

– Central and Eastern Europe: after the transition

– Hungary: 1991 Nyíregyháza, Székesfehérvár, Ózd, Sátoraljaújhely

Business Incubators in USA

• Mixed-Use Incubator

• Technology Incubator

• Manufacturing Incubator

• Targeted incubator

• Service Incubator

• Empowerment Incubator

• Incubator Without Walls – virtual incubation by internet

Business Incubators in Numbers

According to a study prepared for the European Union,

today the average incubator

• Works for 8 years,

• 25 companies are placed in the incubator,

• tenants remain an average of 3-5 years.

• 6.6 new company will be out of business incubator per

year

• create approximately 30,000 new jobs per year.

Basic services of Business Incubator

(by definition of European Union)

Sevices:

• administrative services,

• financial services,

• support for start-ups

• networking opportunities

• providing incubation space,

Incubators have to provide at least four out of five services !!!

Targeted groups of Business

IncubatorsThe Incubator provides an opportunity for the first line of innovative firms that currently:

•Do not have their own workshop and / or office,

•Have no office and telecommunications equipment,

•Lack business skills,

•Lack sufficient income to employ professionals

•And for those foreign companies who wish to invest, and want learn about local opportunities

Services of Business IncubatorsFree services:

- looking for business partners,

- organization business-meetings

- 24-hour reception,

- parking,

- posting site,

- messaging,

- common areas

- social premises,

- observation of applications.

For a fee services are available:

-rental of premises,

-negotiating lease,

-furniture rental,

-The main phone line / extension,

-office services,

-Internet,

-Room rentals related equipment hire (projector, sound system, TV,

projector, etc).

Services of Business IncubatorsPremium services:

• business consulting,

• legal advice,

• marketing consulting,

• online Business Consulting

• market research

• entrepreneurship training,

• accounting,

• Preparing a business plan,

• loan application preparation,

• writing applications,

• technical advice,

• innovation consultancy,

• management of inventions,

• Investor search

• organizing exhibitions,

• caterers

Financial issues of the operation

of the incubator

• Prices of services

Lower than the market price, but not free!!

Discount depends on revenue for the company /

the age of company

• The financing of the operation

– Rental charges

– Support and Applications

– external partners

Benefits for companies working in

Incubator

• Office support services are available for the new

companies,

• they can start their business without office

tool/equipment costs.

• Lower risks for new ideas, new activities.

• Temporary protection from the market effects.

• Create strong foundations for future development.

• Develop business connections, start co-operations.

Who could be a partner?

Never mind!

Thank You for Your attention!

Corvinus University of Budapest