Average predictions say that if a company stays in business its first two years, it’s there to stay. Successful completion of a business incubation program increases the likelihood that a start-up company will stay in business for the long term: older studies found 87% of incubator graduates stayed in business, in contrast to 44% of all firms. A business incubator is an organization designed to assist start-up companies, generally with respect to providing knowledge and technical assistance and therefore to accelerate the successful development of entrepreneurial companies.
Macedonia obtained its independence after 1991, and had to face the big challenge of switching from a communist economy to a capitalist economy. A very hard privatisation process took place and hardly any new entrepreneur projects were undertaken. The economy was striken by a 40% of unemployment and corruption was widespread. From the total number of business entities in Macedonia, 99% falls on micro and small companies.
In this context, YesIncubator was created in 2006 in Skopje, the capital of Macedonia. Before the creation of YesIncubator, there existed 5 World Bank incubators with production companies, but only one was kept operative. Yes Incubator detected the need for a new entrepreneurial impulse.
Yes mission has a very social approach, as it is an entrepreneurial project in a society that suffers from a lack of it. It is also a double mission:
1. To provide entrepreneurs with the means to survive the first two years of their endeavour, thus creating a network of new companies in Macedonia.
2. To increase the awareness of society concerning the need for entrepreneurial projects, by reaching those people who might be interested in it in general, and schools and young children specifically.
YesIncubator project helps companies to be created and to be successful afterwards in the free competition market. It focuses on three aspects:
· Facilities: They are located in a commercial area in Skopje, and they give a workspace to every project with common services. Every tenant is granted a discount in the rental of its facilities: first 6 months 20% of commercial cost, second 50%, third 80%, and forth 100%. This reduces the economical pressure on the project the first years, but it also pushes the company to grow rapidly.
· Training: Mentorship from bigger successful companies in the same sector and also workshops that are carried out in the same facilities in a monthly basis. This counterbalances the lack of experience an entrepreneur may have, thus reducing the risk of failure.
· Network: Tenants are granted a very wide network of contacts and colleagues: with other tenants in the same facilities; with mentors (successful industry managers, local, regional and EU); with governmental institutions providing support; with micro-credit institutions and banks for loans with a low interest rate; with international donor organizations; with regional and international incubators.
The process of creating a new enterprise is divided into 4 Incubation phases:
1. Business plan application: where a competition between different applicants is launched.
2. Business Incubator tenant: with the services described above.
3. Virtual tenant: a pre-detachment phase.
4. Mature company: the company is ultimately placed in the free competition market without monitory.
It can be stated that YesIncubator has been so far successful in its undertaking from an economical perspective. It stands for more than 50 incubated companies with an 80% success rate (total turnover of 800.000 Euros). It has 20 implemented projects for SMEs support, and other business development, innovation and entrepreneurship stimulation programs.
On the other hand, from the goal of increasing awareness, Yesincubator has also had a big impact on society, as more than 6000 young people attended different trainings; they implemented programs such as the Global Entrepreneurship Week and the Start-up Weekend simultaneously with developed countries all over the world.
YesIncubator underwent a series of incubation steps itself. It started with donation money from SINTEF (a Norwegian Foundation, the largest independent research organisation in Scandinavia) and Foundation Open Society Institute Macedonia in 2005. The facilities were a renovated building donated by the most economically developed municipality in the capital, Skopje.
After the first step, YesIncubator reached a self-sustainable state in which it covered operational costs with rents and offerings of specialized trainings. In order to further develop this goal, they established partnerships with government institutions on bringing global initiatives to Macedonia and implementation of EU/IPA programmes.
YesIncubator is a very good initiative that concerns the actual needs of the Macedonian society. However, improvements can be made in order to increase the impact and the quality of the service. We suggest that a new partnership with a local university could be established in order to provide innovative talents and cheap workforce to the companies of the Incubator, and more working experience to the students, in what we could describe as a win-win situation. Also, new partnership or close relationships could be settled with other local or regional business Incubators in order to exchange managerial expertise, new ideas and to bring together their incubated companies. Furthermore, tenant companies could commercially collaborate between themselves in establishing consortiums/partnerships and easier marketing their services, as a bigger entity. With a well organized structure it’s easier to approach external financiers for ex. business angels and invite them on Investment day – networking for potential collaboration.