Heating Up Oklahoma's Entrepreneurial Spirit
One problem many new home-based entrepreneurs and start-up business owners face is an overabundance of enthusiasm and a shortage of actual business know-how. That's where a dynamic process of business enterprise development known as business incubation comes in. It is one of the more effective and popular techniques to help entrepreneurs and start-up business firms survive and prosper during their early years -- when they are most vulnerable.
There are nearly 800 business incubators now throughout the United States and 49 certified incubators in Oklahoma. And the best news is they really work and deliver the desired end result! According to the National Business Incubation Association, the overall success rate for businesses that begin in an incubator is 80 percent.
When it comes to the subject of business incubators, we're just getting warm. Business incubators also …
- Provide a physical location in which a new business can commence, coupled with support services such as shared facilities and business advice;
- Are designed to produce healthy firms that create jobs and wealth, strengthen the economy, commercialize new technologies and revitalize communities;
- Are sponsored by local governments, economic development agencies, universities, community colleges and vocational schools, private sector firms, and combinations of these groups.
Oklahoma Certified Incubators
Sponsors of a certified incubator may be exempt from Oklahoma income taxes on income derived from services provided to the tenants, or for providing funding for an incubator site. This exemption is for ten years from the date of the tenant's occupancy within an incubator.
The tenant of a certified incubator is exempt from state tax liability on income earned as a result of activities conducted as an occupant in an incubator for up to ten years from the occupancy date in an incubator site in accordance with rules of the Oklahoma Tax Commission. The exemption remains in effect after the date the tenant is no longer an occupant in an incubator, but not to exceed a total of ten years. In order to qualify for the income tax exemption for the sixth through tenth year, the tenant must make at least seventy-five percent of its gross sales to buyers located outside the state or to the federal government .
Oklahoma Small Business Incubator Certification Program: Annual Report 2008
Oklahoma's Certified Business Incubators
How To Apply for Certification
Certification of business incubators may be obtained through the Oklahoma Department of Commerce. Details regarding the operation and range of services are required to be presented in a business plan.
Incubator Application and Business Plan Checklist
Is Your Business Ready for Incubation?
Small business incubators typically provide all or some of the following:
- hands-on management assistance
- access to financing
- business and technical support services
- shared office space, access to equipment on a pay-as-you-go basis
- warehousing and manufacturing space
- common loading docks
- breakroom facilities
- common reception area.
Here are answers to Frequently Asked Questions about business incubators.
How do I find a business incubator in my community?
There are more than 40 certified small business incubators operating in the State of Oklahoma.
Oklahoma's Certified Business Incubators
What does my start-up company need to do to join an incubator?
Small businesses are selected as tenants in a variety of ways, depending on the criteria set by the sponsoring organization. The selection process may be as simple as one interview or may be more detailed, involving filing an application, submitting a business plan, and undergoing a review by a screening panel.
At a minimum, prospective tenants should have a good understanding of their product and a business plan that includes their requirements for capital, labor, space, marketing and advertising. Firms most suited to getting a start in an incubator include those involved in research and development, assembly and light manufacturing, advanced technology, and services.
If my start-up company becomes an occupant of an incubator, will I receive a tax break?
Yes! In 1988, the Oklahoma Legislature passed the Oklahoma Small Business Incubators Incentives Act. The Act enables the tenants of a certified incubator facility to be exempt from state tax liability on income earned as a result of occupancy for up to five years.
In 2001, the legislature amended the Oklahoma Small Business Incubator Incentives Act to extend the tenant's tax exemption from five to ten years. The exemption remains in effect after the tenant is no longer an occupant in an incubator. To qualify for the tax exemption from the sixth through the tenth year, the tenant must make at least 75 percent of its gross sales to out-of-state buyers, to buyers located within the state if the product or service is resold to an out-of-state customer, or to the federal government. In addition, the Act enables the sponsor of a certified incubator facility to be exempt from Oklahoma income taxes for a period of ten years.
Related Content:
From time to time, we offer in-depth profiles of Oklahoma business incubators on this site. Click on one of the links below to learn more about these incubators.
OSU-Okmulgee/MAIP- Business Incubator
Center for Emerging Technology and Entrepreneurial Studies (CETES)
Rural Enterprises of Oklahoma - Business Incubator
Fred Jones Business Development Center - Business Incubator
Related Websites
Oklahoma Business Incubator Association
The Oklahoma Business Incubator Association gives you a one-stop, single location for information, referral and liaison services related to business incubators.
National Business Incubation Association
The National Business Incubation Association (NBIA) is a private, nonprofit 501(c)(3) membership association. NBIA comprises organizations and professionals from throughout the world who share an interest in advancing the business incubation industry's role as an effective tool that supports the process of developing entrepreneurs and their businesses.
Contact:
Business Solutions
405-815-5143
800-879-6552
