While examining a number of incubators in the U.S., a number of best practices emerge. While the following is not an exhaustive list, it presents the ones that seemed to have direct applicability.

• Identify A Champion - successful incubator operations often come from a vision of groups of forward thinking business people who have a commitment to supporting small business in their community. Often the champion and implementers are the economic development officers of states, counties, or cities. Financial and managerial support from the economic development offices provides the initial investment for physical facilities. Then the managing director, who is the visible champion, creates the environment to attract small businesses to the incubator and sets the tone for its successful operation.

• Establish A Network Of Partners - developing a network of alliances with successful small businesses, government agencies, foundations, and educational institutions provides a wealth of varied skills to support the needs of the incubator and its clients. From these partners and sponsors, advisory boards may be created to provide guidance to the managing director and to the incubator clients. Further, their financial support will assist in the sustainability of the incubator.

• Determine A Focus - for incubators to be most successful, an economic sector focus should be adopted based on an objective analysis of the needs of their community. In the U.S., common choices include: high technology, bio-technical, services, light manufacturing, agricultural products, consumer products, to name a few. This sector specialization helps to meet the local demand for assistance by entrepreneurs and small businesses, to know the extent of financing and other resources, to understand the markets available, and to be sure of the availability of technical advice.

• Provide Physical Space And Business Services - a physical structure for the incubator establishes an environment conducive to developing entrepreneurs and their enterprises. The incubator needs to establish an image and "look and feel" of a business location and offer quality, affordable space to attract start-ups and businesses with growth potential. Within the incubator a full range of business services is needed that can be provided at low cost through sharing. While in some cases, an incubator without walls can be appropriate, a physical location for provision of quality, low cost business services is a must – some forum for exchange of ideas among clients is also necessary.

• Include Formalized Business Education, Training, And Business Plan Development - providing formalized business training is not standard among the U.S. incubators reviewed. In many instances, it is informal, relying on individual entrepreneurs to seek assistance from the incubator or on the managing director detecting a need and suggesting the appropriate resources to the client firm. Still, the opportunity for success is enhanced where relationships with educational institutions or appropriate professional organizations, such as Service Corps of Retired Executives (SCORE), exist and regularly scheduled courses are offered. Integration of business plan development into training courses also seems to make a positive contribution.

• Provide On-going Business Counseling - one of the most valuable components of being associated with an incubator is the availability of on-going, in-depth business counseling. The opportunity for immediate feedback and assistance leaves the firm with more time for productive work and reduces the number of costly mistakes.

• Provide Access To Capital - incubators need to attract sufficient financial resources to ensure their sustainability. This can be a three to five year process. For sustainability of incubators, there are several models that have been implemented: (1) an up-front grant that covers the capital investment and operational expenses of the incubator for the start-up period; (2) an up-front grant that covers the capital investment with operating expenses being covered through delivery of services; and (3) sponsors make investments of 10 to 15 years in return for equity positions in the businesses with high growth potential and are willing to cover the expenses of the incubator until the positions are cashed. Incubator managing directors also need to attract financing for their clients. They do this through developing relationships with banking institutions, venture capitalists, foundations, and micro-enterprise loan institutions.

• Camaraderie - incubator clients share their experiences in dealing with business problems. These relationships provide new entrepreneurs the opportunity of benefiting from the experienced business owners. It is helpful to provide a forum for a mix of clients, such as: (1) start-ups that show signs of success, (2) successful fast-growing firms near graduation from the incubator, (3) established businesses that may provide business services to other clients in the incubator and have no intention of graduating, and (4) businesses that are candidates for the incubator, but are developing and the outlook for them is uncertain. Indeed one of the most useful services an incubator can provide is though its selection process, which can counsel prospective entrepreneurs that they should not proceed until they have a better business concept.