Calculation the costs of an incubator.

Business Models and Budgeting

As with the business plan, it is wise to start with question: “what goals do you want to reach”? The business plan needs a budget calculation and vice versa. Using a (lean) business model1Business Model Canvas (high res & open license): https://upload.wikimedia.org/wikipedia/commons/1/10/Business_Model_Canvas.png for defining your vision is certainly a good practice. Hence, this should be your first step which you will then break down if necessary. You can break it down into growth cycles and balance with what you estimate is a feasible spending capacity.

As an incubator you will need to plan your resources to be stretched out over a long period of time when working with new companies and start-ups. In contast, when working with established companies, you will most likely use resources more in a burst-like manner.

Staff, Offices and Overheads

Staff and offices (and related overheads) are core expenses. They are the largest expenses. They will drive the nature of the incubation model taken. Umbrella and integrated models have the advantage of premises, equipment and staff being available either at low or no cost.


In terms of growth cycles, with university-born incubators there is a stronger tendency to outsource the incubator than with the tech park context. The tendency is to make it more visible to people outside the university (both to incubatees and ecosystem stakeholders) and thus get closer to the “business” world. A good tactic is to reach out to an operating tech park or co-working environment while keeping close ties with the university2Skövde for example, but also LGIN.

Tech Park Umbrella Model

The growth path of the tech park umbrella model starts with short-term programmes, temporarily accommodated within the tech park. Again the incubator will be able to use their infrastructure, facilities, spaces and staff at low or no cost. Usually “growth” comes with more extended programmes and self-contained workspaces or a even building of their own. Still the incubator will remain within the tech park context.

Community-Born Models

With community-born models and unless there is a strong financial basis or a granted funding to build on, other ways to keep costs at a minimum in the initial phase will have certain requirements. There is a need for a creative business plan, relying from the start on volunteers, less sophisticated environments and equipment, support from industry organisations and financial contributions from the incubatees.

Growth Budgets

If your vision leads to growing into a self-sufficient model (incubator or hub with incubation propensities), then your budget planning will turn out to be a lot more complex. First, you’ll probably need all the help you can get: legal, tax, business, marketing advisors.

“Growth” can imply becoming a regional beacon and to hold an international reputation with publishers and investors. Then long-term strategies for enhanced marketing and visibility measures are as much to be planned for as offers for your incubatees to present at fairs and exhibitions, organise events to attract investors, etc.