Business incubation in the oil and gas industry has been around for a while. However, there is increased interest especially as a tool to promote local content adoption.
The goal of the incubation is to help create and grow businesses by providing them with necessary support which includes financial and technical services.
Such a program would be considered successful when it produces firms that are viable and can survive on their own.
Example of a Business Incubation Program
An example of this is the Stanbic Program in Uganda, which is being carried out in conjunction with Uganda National Oil Company.
Benefits of Business Incubation
There are several benefits that incubation program provides to the oil and gas ecosystem. They include;
Business Incubation Provides Office Space
The program provides upstream companies with an office space. This includes all of the necessary office supplies to get the business up and running.
Having office space to be able to run your business is extremely important in the success of any business.
Business Incubation is Cheaper
Business incubation will help reduce the cost of launching and operating a business by between 40-50%.
More Funding Opportunities
These programs will offer you access to more funding opportunities from many different sources.
Some of these programs will allow you to meet potential private investors.
It is estimated that 40% of investment-seeking companies source their opportunities through a direct incubation program.
Ability to focus on core business
Having the basic business infrastructure in place allows your business to focus on what matters most – your core business product or service.
You will then be able to focus your time and energy on creating, evolving and testing your products or services.
It is very important to build your network. Business incubation programs will help you tap into a strong network of business partners and investors.
Business Incubation Provides Marketing Assistance
As a business, you will be able to reap the benefits of being promoted by the organization running the business incubation program.
This will help your firm gain traction and step into the spotlight. You get expert marketing advice for your brand.
Association with other enterprises
A business incubation program is home to many start-ups or enterprises. Being part of such a support system allows you to succeed.
You will also be able to learn from each other, create bonds and friendships that are ever-lasting.
You will get mentorship from entrepreneurs who have the successful credentials. They have first-hand street experience, and you will learn or hear from them
Access to Business Training
Business incubation programs usually have resources and staff that will provide you with training.
This can be from accounting, marketing, product development and customer management.
You get the knowledge from the best minds.
Using Business Incubation Increases Your Chance to Succeed
It has been reported that the five-year survival rate for incubation has been noted to be from 75% to as high as 87%.
By being part of such a program, you will increase your chance of business succeeding.
In conclusion, you will get all the above benefits of business support programs if you join one today.
As far as local content in oil and gas is concerned, taking deliberate efforts to build capacity by host governments, IOCs and other players will go along way in promoting local participation.