How to innovate and get paid for it.
“You must be innovative!” That’s what entrepreneurs and start-up businesses hear all the time. Stay ahead of the curve, develop new products, improve the ones you have, invest in your next revenue stream etc. To be honest, I have never met an entrepreneur or business leader who is not innovative and who is not automatically driven in an innovative way. In this fast paced ever changing technology superhighway that we are all on, we have no choice but to problem solve, create, innovate and discover new ways of doing, well, everything. It’s the world we live in.
The term innovation is kicked around a lot. To me innovation = creative endeavours. Essentially, we take our entrepreneurship (aka a person who is creative, a problem solver, determined, a risk taker), add in knowledge (aka previous experience, curiosity, a craving to gain answers), mix this with our innate inner drive to achieve, (or make things better) and we have “innovation”. In more recent times we have add technology into the mix (the application of scientific knowledge for practical purposes, especially in industry to attempt to solve problems of matter, energy, space, or time,) Hey presto, we have modern innovation!
So, who does this term “innovation” apply to? Well, anyone developing, problem-solving, creating, inventing, discovering or improving in any area. That is most businesses across most industries. You probably see yourself in this.
The challenge with “innovation” is that it is an expensive endeavour. You are taking a risk and spending cash to hopefully (not always) come up with a solution. It takes lots of time, resources, pain and money. It is a massive investment of you, your team and potentially your company. Not for the faint of heart.
It’s nice to know that there are some initiatives and incentives out there to help you along this treacherous path. There are countless places to go to get help from experts, mentors, accelerator programmes etc. Lots of this help being free. There are also incentives from the government such as grants and R&D tax credits. I see people switch off when they hear “R&D” assuming it’s not for them. However, R&D is a broad definition, essentially “Activities that overcome Uncertainties.” I.E. “Innovation”.
The list of inclusions is actually quite broad and most companies are eligible, regardless of their industry. Plus, if you can get up to 46p back for every pound spent on “innovation”, then it’s a bit of a no brainer to try.
You qualify if you are in any way:
- Problem solving – Do you have to solve problems for your clients or overcome issues for them, rather than simply taking an order or brief? If your work is more than simply delivering a ready-made solution to a standard problem, then R&D Tax Credits can absolutely apply to you.
- Exploring alternative methods – Do you ever wonder ‘What if’ and spend more time and money exploring alternatives to the status quo? Exploring alternatives is simply good practice, but also comes under the innovation definition.
- Looking for better, faster, more efficient solutions – Do you encourage your team to find better, faster, more efficient, or more effective solutions to your customer’ day-to-day problems? Then you are an innovator first and foremost, and the R&D Tax Credit scheme applies.
- Advancing knowledge or capability – If your work is focused on or around exploring new options for doing something new in your area, new processes, or simply new thinking then there’s a great chance that you’ll qualify for R&D Tax Credits.
- Trialling new materials or code – Software development, improvement, scientific endeavours etc.
- Testing your solutions after you’ve designed them
As you can see, the inclusion is wide and most companies can get at least some cash back, even if you are making a loss. You can claim back your expenses on staff costs, externally provided workers and sub-contractors, consumable items, software, utility costs etc. That’s a lot of the cost of running your company, particularly if you are an entrepreneurial firm where innovation is just what you do.
Want to know more about how you can get cash back from the government? We are holding a FREE Master Class on how to claim money back from the government for the cash you spend in innovation. SIGN UP HERE