To be a start-up, you need to be innovative. It’s just that simple. However, working in such a competitive market requires that your company does something truly new that places you in the spotlight beyond the masses.
If your work is innovative, you’re a likely candidate for Research and Development (R&D) Funding. And if you’re getting R&D Funding, you can keep a greater percentage of company turnover, forecast incomings and outgoings with greater accuracy and maintain a competitive advantage in your market.
Read on for the best insider tips for how to get your R&D funding.
The Aim of R&D
The long and short of it is, you need to be investigating or providing a new insight that enhances the industry that you work in.
Back in Ancient Iraq, 4000BC, a group of rather clever people focused their efforts towards a new invention and lo and behold… out rolled “The Wheel”. If these chaps had been told about R&D Funding, they could have claimed back money and been given tax breaks for all their working hours, as well as the resources they used.
They made something innovative and profoundly useful in both a business and leisure capacity and this is the focus of R&D.
The R&D Funding Criteria
Let’s have a look at the three aspects needed to get R&D credit:
#1. Competent professionals using a clear process.
This criterium filters out a few things. Firstly, accidental discoveries will not be counted as R&D related work and are therefore not eligible for funding. So, for example, if a pharmaceutical company is working on a corona vaccine but accidentally discovers a polio vaccine, this would fail to meet the standards for R&D funding because it was not the aim of the research. Secondly, to maximize the efficiency of government investment/tax credits in this area, the work must be carried out by trained professionals, not by amateurs.
- You won’t get funding for accidental discoveries.
- Companies must provide evidence of their process and how this process will lead them, or has already led them, to new discoveries in their field.
- Must be carried out by professionals who are trusted to work to a high standard.
#2. Technical Uncertainty.
This focus point is a precursor to the final criterium, “Technical Advancement”. The idea is that there must be some inherent uncertainty around the product/service being developed that makes your further research necessary. This also means that you will not receive any funding if what you are researching or developing is easily deducible from existing research/work. If the solution to your problem can be found on Google, there is no need for your research, meaning that you won’t get any support from the R&D office.
One important point here is that you can still receive funding for processes that have already been invented, as long as you have to (re)discover this process yourself. This is because a certain amount of secrecy is inherent to business to maintain a competitive advantage, which leads to some existing practices still requiring your own research to uncover the process. Continuing with the vaccine example earlier; if a company develops and discovers a corona vaccine, but patents their process to keep it a secret, other companies can still receive funding for their own research towards creating this same corona vaccine.
- It must be clear that what you are developing is currently a “hard-to-solve” issue.
- Your research and development must provide clarity in an area of commerce that is uncertain and in need of development.
- Your research must be necessary because there is no alternative, easily deducible solution.
#3. Technical Advancement.
Improve your field. With this sort of advancement, the R&D board will be looking for evidence that your work has made an appreciable enhancement to a specific process or area of knowledge. This could be anything from a code that improves the speed of business transactions to an agricultural fertilizer that allows farmers to yield higher crops. Either way, there must be a marked improvement to the field of your discovery.
- Your R&D must lead to something that makes a measurable improvement to your business field.
- This can be in the form of a process/technique, or an improvement to the knowledge field surrounding your business field
Consider the 3 principles as your guiding hand towards a successful Research and Development application. The best thing about R&D funding is that the government genuinely wants to help because you will be improving an area of commerce.
Your job is simply to provide the proof that you are. When you’re starting up, make sure to situate your efforts within a comprehensive business structure that enables you to measure the processes required for the 3 R&D funding criteria.