The last best practice quality of a good business incubator is that it is dedicated to proving that its programs are relevant and add value to its stakeholders. After all, it's one thing to say that an incubator program has significant impact and another thing to actually prove it. Being able to measure impact data is important for several reasons. First, it helps with fundraising efforts. Does your incubator need a new roof, would you like to start an incubator revolving loan fund, or do you just need some additional sponsors for an annual entrepreneurial event? People want to give to a successful program, so tracking results and reporting them will make solicitation calls much easier. Next, regular evaluation of impact data will tell you which parts of your program are achieving results and which should be dropped. Continuous improvement is a hallmark of any effective program. Lastly, regularly evaluating impact allows the business incubator to become part of the larger community story, tying it to other community endeavors. When a business incubator is able to document that its client companies employ a specific number of people, this becomes part of the community's employment story.
So, if tracking impact data is important, what, exactly, should be tracked? Each business incubator will track specific client data based upon its mission and goals, but some base stats should include employment numbers, both part time and full time, as well as total wages. Practically every incubator will also track revenue/financing data--gross revenues, debt capital, equity investment, and grant funding. Other things that can be tracked might include number of patents applied for and issued, number of students participating in company internship opportunities, or total amount of taxes paid. The key is to look at the mission of the incubator and figure out what data you can measure and collect that will prove if the program is achieving its goals or not. Whatever you decide to track, it needs to be measurable in hard numbers, it needs to be collectable, and it needs to be relevant.
You can use impact data as a marketing tool, too. Nothing attracts success like success, so if your impact numbers look good, get out there and crow about them. Use impact data to inform stakeholders, perhaps in the form of an annual report. Your board of directors, local politicians, civic leaders, and the local business community will all be interested in hearing about your business incubator's successes. Another benefit is that those stakeholders will often help spread your good news to others, thus potentially helping your recruiting efforts. Use the fact that your client companies are experiencing significant growth in a down economy to encourage other companies to join your incubator. And don't underestimate the ability of impact data to raise the profile of your incubation program in your area. Positive impact data will get people's attention and hopefully cause them to speak highly of the program. At the very least, it will make people aware of the fact that a business incubator exists and it is doing good work. This awareness may lead to yet another benefit--helping your incubator program successfully compete for resources. Winning a state or foundation grant is much easier if you can show how successful your program has been in achieving results.
Measuring impact data isn't terribly difficult yet it is very important. If you spent a lot of time and effort setting up your incubator's programs, doesn't it make sense to regularly evaluate whether or not they are working? Take time, at least once a year, to collect impact data and I'm sure you'll find the effort well worth it.