Incubator Business Model for Local Governments Worldwide
Thoughts of author Prof. Dr. Thomas Fletcher Grooms
The Father of Market Intelligence – The Master of the Family Business
https://tomgrooms.com
Small Business Incubator Model
Copyright © 2026, 1998 Dr. Tom Grooms
Caveat : This is the American Incubator Model and Program I taught in America and Worldwide.
This incubator model addresses the much-needed Economic Small Business Incubator Program to promote Viable and Profitable New Industries for local governments worldwide. Local governments and companies in every country of the world can’t provide the needed jobs and employment paying enough to provide for a decent standard of living for its population.
The Direct Impact of the Success of Small Business Incubator Mission is to contribute to short-term and Long-term Job Creation and New Tax Revenue Sources.
The information presented herein is intended to consolidate New Research with successful Business Models birthed from the newly created Small Business Incubator for the benefit of people in every country.
There is no greater need in the world today.
BOTTOM-LINE : The Small Business Incubator Objective is to expand the creation of Small Business Development Profit Centers with Participating Local Governments … Tg
WHAT’S NEEDED TO START INCUBATOR CLIENT
*1 Incubators are for Profit.
*2 Incubators are Profitable.
*3 Incubators can make a Profit.
*4 Incubators raise the Standard of Living for an entire country.
*5 Incubators provide Jobs when companies & government can’t.
Achieve increasing returns, by providing both …:
Physical Resources.
Money capitalization on investments.
What Incubators provide under one roof …:
1.
*1 Flexible Space and Leases.
*2 How much space: 30,000 sq. ft. minimum for Incubator to Start.
*3 450 sq. ft. average Office space.
*4 600-700 sq. ft. Lab and Office for R&D.
*5 1200-1300 sq. ft. Manufacturing Bay and Dock Bumper.
*6 Lease is 1/2 market value rates.
2. Office Services and Equipment (on pay as you go basis).
Mailroom, Conference room on a fee basis, Loading dock , Lobby, Copy center, Receptionist.
3. Onsite Incubator Director as the main resource for advice.
Maintain 70% utilization to achieve the Break-Even Point (B.E.P.) and 80% to be Profitable.
4. VIP network of outside Business Mentors and Technical Consultants providing expert advice.
Mentor program of volunteers.
Volunteer Specialist Counselors.
5. Assistance with financing to incubator client.
Period of 2 1\2 to 5 years incubation period (set before startup) to independent launch.
In summary …:
Incubator Director screens and starts the business launch.
“Remember it is better to lead change, than manage change.” Tg
MAJOR PROBLEMS
1. Marketing Channels of Distribution:
(1) Understanding
(2) Implementation
2. Marketing Logistics:
(1) Infrastructure
(2) Efficiency
3. Achieve Profit Before 5 years or Incubator Client
4. Overhead fitting to Location and profitability for Incubator Client
5. Five (5) year debt-free paid startup capital objective for every Incubator Client, if possible.
Incubators make businesses more competitive in the marketplace. Tg
ACTION ITEMS & ANTICIPATED IMPACT
1. Business Plan study undertaken by Graduate Marketing Students at Colleges of Business | The Incubator Client Feasibility Study.
2. Students personally deliver the completed Master Business Plan Study to the Director of the Small Business Development Center.
3. The Incubator Client takes advisement the study outcomes and recommendations before start in conjunction with the Small Business Development Center Director.
STARTUP CAPTIAL & FINANCIALS
Program finances the Incubator Client startup program with Quarterly Review and Audit.
Program Director acts as Liasson between Businesses, Industries and Local Governments for Capital Support.
Program compensates the Director.
Provide Startup training assistance for 1-year to novice Directors.
Incubator Director may cancel an Incubator Client startup for cause, illegal conduct, unethical behavior or gross financial mismanagement.
SOURCES OF EXISTING FINANCING
1. Government – Regional Grant Programs.
2. Work Request Programs of Local Governments.
3. Venture Capital.
4. Private Financing.
5. Chamber of Commerce.
6. Big Business support.
7. Research Foundations.
8. Institution Trust Funds.
9. IPO (Initial Public Offerings).
10. Incubator Client Funds.
SATILITE INCUBATOR BUSINESS CENTERS IN SURROUNDING TOWNS & CITIES
1. 1,000 sq. ft. dedicated to Incubator Client programs.
2. Need is efficiency of space utilization.
CAPITAL FUNDS FROM LIMITED PARTNERS FOR 10-12 YEAR PERIOD
40-60%% temporary stock ownership before going public.
1. International Investors.
2. Wealthy Individuals.
3. Trust funds.
4. Banks.
5. Financial Institutions.
6. Insurance Companies.
7. Government Offices.
8. Banking Merchants.
9. Private Pooled Investor Groups.
10. Universities and Colleges.
IDENTIFYING INCUBATOR CLIENTS FOR CAPITAL INVESTORS
1. High growth potential.
2. Highly innovative product or service.
3. Solid marketing and management team.
4. Attractive target market.
5. Faith and trust in all of the above.
HOW BEST TO PROCEED 5-STEPS
Step 1: Is there a Need ?
Step 2: Is there Financial support?
Step 3: Is there Community support?
Step 4: Self-sufficiency of Incubator Client to start and graduate in allotted time?
Step 5: Measure of Incubator Client, Incubator and Economic Contribution?
FACTORS
Incubator Clients have an 87% success rate.
Incubator Clients offer to investors less than a 13% failure rate compared to 90% historical rate.
All-100%- of the Fortune 500 Companies started as a small business.
Governments cannot provide enough jobs for population of workforce.
Big business cannot provide enough jobs for population of workforce.
Those who create their own business have synergy. 1+1=3. 2+2=5.
College Incubators fail and whereas Independent Incubators have the success rate.
Marketing research shows that 85% of all businesses fail for a lack of planning.
75% of all businesses fail in the first year, 20% fail in 5-years, and 5% are successful (Grooms Rule of 5).
INCUBATOR START REQUIREMENT
Entry classes of 1 – 3 Incubator Clients to begin with, moving up to 5 per entry class.
1. Establish a goal if money, staff, and facilities can support a daily class entry of 5 incubator clients per day, 25 per week, 100 per month, 1,200 per year.
2. Recognize that every entry Incubator Client may not have the same goals, requirements, objectives.
3. Recognize that every priority should not be given to technological businesses, but a variety of businesses that will contribute to the overall improvement and economic health of the local, state, nation and international market economy.
4. Recognize that the 6-month and various period start up program is a separate distinct program with entirely different capitalization than the full funding launch of the 5-year Incubator Client
5. Provide office space at a discount rate to the Incubator Client during the first 6-months startup phase with advisory services by the staff, business mentors, and weekly training sessions for continuous improvement and monitoring each Incubator Client’s progress where unacceptable progress results in immediate termination.
HARDEST JOB OF THE INCUBATOR DIRECTOR
Helping the Incubator Client to determine if they are a Capital Candidate.
On average 1% to 10% of all Incubator Clients are capital candidates meaning only the few, best and brightest get financed.
The program can be expanded to open assist new business startups, not in the Incubator Client program.
It is the responsibility of the Incubator Director to …
Identify key Incubator Clients early on who have the potential to attract capital venture funding.
Help devise a game plan (strategic business and marketing plan) for the specific Incubator Client.
Help devise the plan specifically to the needs of the capital funding.
Incubator Director is responsible for making sure the Incubator Client …:
1. Understands surrender equity.
2. Understands there are no free lunches, as they will be giving up something to get something.
3. Understands there are no excuses since there is no blame on somebody else for failure.
4. Willing to listen.
5. Takes every available opportunity to conserve and protect cash.
Incubator Director is responsible …:
1. For getting the Incubator Client ready to meet the venture capitalists for a business plan presentation.
2. For getting other experts to participate in the presentation.
3. For a second presentation preparation if the capital group says the marketing strategy is weak, it needs more research, a better channels of distribution plan, or create new graphs or photos.
4. For setting up damage control or an in-depth planning session with the Incubator Client before every meeting with the venture capitalists.
5. For reviewing the plan and plan presentation to be sure that each detail has been covered.
Remember: Venture capital is very active money and all capital seeks the highest return … Tg
Incubator Director is responsible the independent Incubator Client …:
1. For guiding the Incubator Client to launch their business and exit the program who don’t seek or require venture capital financing.
2. An independent entrepreneur support program is made available to existing local businesses, as time and money allows.
IDEAL OUTCOME
The ultimate success of the Incubator Client is to enter the program and exit the Incubator Client contract at the end of 5-years or Less with a fully-operational profitable business in place and active. Tg