Are you looking to realize a new business idea or invest in your R&D? You may encounter difficulties in arranging the finances of how to fund innovation. Financial failure is a real risk when research is self-funded. If research doesn't work out as planned and you have nothing to show for it, you've just invested a ton of money into something with no immediate return.
Research and innovation are rarely self-made. Most brands, companies, and entrepreneurs associated with research benefit greatly from government grants, like the Scientific Research & Experimental Development (SRED) program, saving themselves millions in funding. With a government grant, even if a project fails to provide a desirable result, your costs are covered by this financial support.
Let's learn the benefits of government grants for research.
Freedom to Pursue Innovation
A business does not have to not pursue R&D or innovation on account of a lack of funding. Government grants slanted toward research mean businesses are encouraged to innovate. Innovation leads to growth, expansion, and profits.
They're also a way to explore ideas and ultimately fund losses that may be encountered in the process. Any business can pursue innovation without hesitation so long as a project falls under the criteria of an available grant.
You Can Build New Revenue Streams
Entire businesses have been built off a single product or service. Suppose you're innovating with a government grant for R&D, and your project delivers reliable data tied to a new product, process, or service. In that case, a grant recipient can use this to build a new business or revenue stream.
Smart research projects have the potential to significantly increase revenues, although government grants are generally not tied in any way to the marketability of a research project.
You Don't Need to Compromise
Through an SR&ED grant or other government funding, you have the money required to hire the right people, get the right materials, and be able to fully flesh out an idea without having to compromise due to a limited budget.
Research equipment and materials are expensive. So are salaries and overhead. These expenditures can be either partially or fully covered by government grants, helping boost a business' spending power as they fund a research project.
You Enjoy Debt-Free Financing
A grant isn't a loan. It does not need to be repaid. There is no interest. You also don't need to give away any equity to your business or make an unfavourable deal to acquire financing. A government grant for research does not put you in debt and only provides a benefit.
Debt-free financing is rare, so businesses should take advantage when an opportunity comes along, such as the SR&ED program.
Anyone Can Apply
Every program is different, but with the SR&ED grant program, in particular, anyone can apply. Individuals, partnerships, trusts, small businesses, or corporations of any category of work. The grants are provided to the project, so if the project qualifies, this is all that matters.
If you intend to apply for a government grant, ensure that you have followed the criteria for what qualifies. You may want to consult an SR&ED consultant or professional grant writer for further assistance.
Economic Activity for the Country
If we didn't have government grants for research in Canada and other jurisdictions worldwide, research and innovation would happen much slower. There are real economic benefits to government grants that help nations like Canada have strong economies, support homegrown businesses, and improve conditions for companies involved in R&D, science, and technology. Government grants aren't just to treat corporations nicely. They help to fund economic activity.
You Do Better Research
What has been found with many government grants for research is that it improves project outcomes, scope, and the quality of the research. An initial project with limited funding awarded government grants for research can add additional activities, eliminate many bottlenecks, exclude inefficiencies, and ultimately lead to a better, more focused research project. A government grant recipient can do a lot more than a party that doesn't have that same backing.
In general, innovation doesn't make things worse. Innovation that works helps to improve things whether medically, scientifically, or technologically. This means better products, services, and processes. For businesses with the advantage of having developed innovations themselves, it provides them with a competitive advantage and the ability to offer their audience something more or something better.
You Gain Credibility
Acquiring government grants for research legitimizes your business in a way. It puts you in a position where you're more likely to receive future funding, whether in the form of another grant or a bank loan. After you receive your first government grant, it's an important detail, reinforcing that you are a reliable candidate for future financing and have projects or ideas worthy of investment and support.