SITUATION
A business incubator rents space to a number of small fi rms that are just beginning operations or are fairly new. In addition to supplying space, the incubator provides a receptionist, computer, conference room, fax machine, and copy machine. It also offers management counseling and assists new businesses in getting reduced advertising rates and reduced legal fees.
One client of the incubator is a jewelry repair, cleaning, and remounting service that does work on a contract basis for pawn shops and jewelry stores. Another is a home health-care company that employs a staff of nurses to visit the homes of elderly people who need daily care but who cannot afford or are not yet ready to go to a nursing home.
Question 1 Evaluate each of the services offered by the incubator in terms of its usefulness to these two businesses. Which of the two businesses seems to be a better fit for the incubator? Why?
Question 2 If rental costs for incubator space were similar to rental costs for space outside the incubator, would the benefits of the services offered seem to favor location in the incubator? Why or why not?