Mar 2015

Business Incubation

Posted by / in B4Blessing News, Strategies That Bless / 1 comment

When I was a kid growing up in Montana, we raised chickens and sold both eggs and fryers to Safeway, a grocery store. Sometimes our hens would lay an egg and decide to sit on it so my brother and I couldn’t gather it in the morning because the bird would peck at us. She was incubating it – protecting it, taking care of itbecause, in time, it would hatch into a baby chick.

A business I work with in the Philippines has an incubator – a heated box that holds duck eggs. When the eggs have been in the incubator for 18 days, he takes them, cooks them, and they become the Philippine delicacy called Balut. Not that I’ve eaten it, you understand . . . you will have to google Balut to learn about it. This business provides jobs for local people who sell the Balut.

Both are methods of incubation. But, when we talk about incubating a business, what do we mean? A mother hen, protecting her hoped for young? An egg that gets cooked before it hatches? Not exactly, although we have seen both happen when businesses start.

At B4B we help businesses to start well – and RUN well. We’ve identified 6 stages of incubation. It’s not just a quick look at a business plan, a pat on the back, and a “be ye warmed and filled.” We become friends and trusted advisors. We’re the listening ear when it doesn’t go well, and the cheering squad when it does.

We like to begin the conversation when the person first has the idea. Because we believe the businesses should be a blessing, we start with the purpose of the business and the theologies of work, business and mission. How do they fit together in THIS business, where is the blessing created. We follow the business from idea and missional plan, through business plan, registration, day one, first and second years.

We often find that the initial idea isn’t really the business that is eventually started. Perhaps there are not customers, or perhaps it is too narrow an idea. As we dialogue together new ideas emerge and we find God’s better way.

Of course the business plan contains the numbers and the research; What will this cost to start? Who are the customers? What do they want? What will they pay?

Over the years I have found that very few of my clients understand their competitors. Even the big companies! Microsoft doesn’t understand Apple; Intel doesn’t get AMD. When I’m working with a existing business I have them outline the strategy of their competitor, their strengths and weaknesses. Most often it’s a hard exercise. I think we humans want to believe that what we are doing is completely unique and then we get blindsided by our competition. So with a business plan we do our best to research the competitor. Some prospective MB owners have wondered if it is somehow unfair to check out the competition. We don’t want anyone being deceitful, but to find out the competitors’ public pricing and services, to get a read on how they are perceived in the community, etc. is just good business intelligence. We have to take a look at how we will be perceived coming into that marketplace. Can we compete, is our product or service different enough, do we serve a segment of the market that is untapped. We often ask a business to do some market research. This is part of what we consider incubation.

While we are not attorneys and we firmly believe that each business should have local legal advice, we know how things generally work and have done business research on the places where we incubate businesses. We want to help people ask the right questions. One misconception that we find is that if the attorney does the work, they are responsible. Well, that did not turn out to be the case for a business we worked with in SE Asia. The attorney accidentally missed something, but the registered owner had to pay the fine. We want to make sure that people ask the right questions and understand their responsibility if something goes wrong.

As we grow B4B we intend to have a crowd-sourcing type funding arm, but that’s not in place as yet. We feel that because we are working with the business as it starts, it has a better chance of success and therefore will be a lower risk for an investor. However, we currently put out the need in the newsletter and let people know of business opportunities.

Business plans, as in battle plans, change once the first bullet is fired, or the first customer comes in the door. Then you realize what you didn’t know and have to begin to tweak the business. We see that all the time. Deciding when to pivot and when to hold is sometimes excruciating. Its good to have an ear to listen and ask wise questions as you make those decisions. That is also part of incubation.

As a business begins to grow different skill sets are needed. B4B has consultants that can provide those different skill sets – or help you find what you need. That’s the Connecting You part. Just recently we connected a group that wanted to build a medical business in Asia with an expert both in the technology and the country.

As time goes on we stay engaged. The market changes, a new strategy is needed, because we know and care for the business owner, we are a trusted advisor. Not a mother hen protecting her young, nor the incubator that cooks and sells off the eggs before they hatch. But people who know and understand, are willing to listen. We Skype chat with people frequently, we are there when they need us, but don’t interfere when they don’t.

Business Incubation. It’s core for us at B4B.

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1 comment
  • Linda Lo

    March 12, 2015, pm31 6:10 PM

    I have a chance to help people in a Central Asian country to start their own business. The business is not big, but good enough to see how they start from no idea what a business is like, how to do marketing research, how to think through the business plan, to the point of explaining to investors their practical actions to reduce all kinds of perceivable risks, and to implement their business plan.

    One of the best examples is a milk cow farm. It is a family business, with the youngest daughter as the entrepreneur, with the knowledge in finance and marketing a bit, because she had a degree in hotel management. However, she is not the one who can actually know how to choose a good cow, what kind of food and how much it is to feed the cows well in order to produce good quality and quantity of milk. When she had an idea to let her family to live properly in her village, her brother went to learn the practical details from a farm in China. After several months of coaching her to write out her business plan, finding an investor to give her a loan of reasonable interest rate, she started the business last November.

    Her brother tried to hire people in his village to help him to build a comfortable barn for 10 cows. However, all his villagers laughed on him as they usually just have a roughly built tent for cows. “Cows do not need a house” was their thought. They don’t know that because of that, their cows are thin and weak, easily die during the cold winter when the outdoor temperature can be down to -30⁰C. He then built a barn by himself using bricks, hays, wood, and cement. He managed to buy more than sufficient amount of hay and dried energy food (fine grounded corn, etc.) for his future cows. After 2 months’ work, winter came. Most of the villagers did not have enough hay for their cows, so they pleaded him for his hay, and finally he bought 2 cows with 2 calves in a much cheaper cost than what they have budgeted. His mother milked the cows cleanly and tenderly everyday, and they get bigger amount of milk than they expected from the cows.

    The mother, who was just a housewife at home, never had any business before, but has a good relationship with the neighbours. She went to her neighbours and presented a liter of her first milked milk to them as a celebration and gift, which turned out to be a good promotion method to sell their milk. So now, they do not need to worry how to find buyers, for they come to their home to buy the tasty and fresh milk.

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