5 steps to ...

Stuart Watson, Regeneration & Renewal, 13 June 2008

1. Choose a good location. The facility should be near a major centre of higher or further education. Alternatively, it can be in a cluster of established businesses with which the centre's small firms can trade and collaborate. Centres require different-sized units, so businesses have room to grow.

2. Pick the right financial model. Many centres receive some kind of grant funding at the outset, but with full business rates now being levied on empty office space it's vital to ensure high occupancy rates. "You have to be careful to get rents at the right level and be realistic about the speed of take-up," says Phil Stansfield, a director at business centre developer Basepoint Developments. Bringing in a private operator to run the centre may cut the financial risk.

3. Make life simple for firms. We lump all payments into one monthly sum, payable in advance, says Michelle Cantwell, a member of the fund management team at property consultancy Bidwells, which manages Cambridge Science Park. "That includes business rates, service charges and rent."

4. Be careful with the tenant mix. A centre with too many recruitment and marketing firms will nurture few new products, so controls on the types of business acceptable may be advisable. But remember that ancillary firms may provide essential services to their hi-tech neighbours: "Some of the best centres have quite a mix of companies," says Dr David Kingham, managing director of innovation centre operator Oxford Innovation.

5. Provide support services. "Growing companies need funding to develop their products and services," adds Kingham. "We offer access to three investment networks with a track record of helping innovative firms secure funding." Help with getting grants and business advice can make a huge difference to a start-up's chances of success.

- More information The Business Centre Association is at www.bca.uk.com; UK Business Incubation is at www.ukbi.co.uk; Oxford Innovation is at www.oxin.co.uk; and Basepoint is at www.basepoint.co.uk.