What does a modern R&D strategy look like?
Research and development (R&D) provides knowledge that leads to breakthrough inventions. But with innovation comes inherent financial and reputational risk.
In a business context, R&D is the “vehicle” that allows innovative companies to launch new products, processes or services. One way or another, it’s about taking the plunge in developing something never seen before.
In today's competitive world, businesses with an effective, evolving R&D strategy are simply more likely to succeed than those without it. The strategy will also help a business remain agile, competitive, adaptable, and profitable, whilst also balancing the risks.
“An R&D strategy is so important because it lays out your company’s growth plans like a roadmap. Get it right and you’ll be able to see exactly where your business is going.” - Myriad Associates Ireland.
However, managing innovation through a well-designed R&D strategy isn’t as easy as it sounds. Every company and every project is unique so one size certainly doesn’t fit all. Having said that, there are some practical tips that may help when you come to design a modern R&D strategy for your business.
Take a business-like approaching to managing R&D
First off, you need a full picture of your company’s day-to-day operations and profitability. A full cost-benefit analysis, revenue projections and capital investment analysis/net value projection are all required.
Understanding your organisation’s financial position will help you understand what R&D projects are realistic. It will also highlight any areas where efficiencies and cost savings can be prioritised.
Remember, treat your R&D projects as the crucial investments they are! Each piece of R&D work needs to make a measurable difference to your bottom line.
Decide what's actually needed
This part of the R&D strategy looks at what technology, skills and capabilities are needed to bring the new product, process or service to market. Although you don’t need to know the answers to everything in minute detail, the aim is to understand where the quick wins lie.
Make sure you have the right machinery and tools at your disposal too. This may involve investing in additional equipment or hiring it in from outside.
Get the right people in place
Putting R&D at the heart of your recruitment decisions is an ideal way to make it second nature. Recruiting internally wherever possible is also an effective way of reducing turnover and recruitment costs.
Give new (and existing) recruits the tools they need to grow in their role and the freedom to expand their capabilities.
Salaries, benefit packages, training and other incentives should also align with the strategic direction of your company.
Communicate the importance of R&D with your team
Successful R&D can only happen if your team understands what your plans are and why. Keep people up to speed and open your mind to their ideas. This is about helping staff to feel confident in bringing new ideas to the table without the fear of reprisals.
Your R&D strategy should therefore outline exactly how you’re going to do this. Will there be monthly team progress meetings for example, or regular all-staff workshops? It’s essential to refine this into a framework that makes sure the lines of communication and collaboration stay open. This should also help foster a company culture that’s more innovation focussed.
Understand R&D funding options
This all sounds great, but we’re just coming out of a global pandemic and costs are going through the roof. For many companies it’s simply a battle to survive, with R&D just an extra expense when fact, without R&D, survival is even harder. This is why it’s important to know what R&D tax incentives (and R&D grants) are available to help.
R&D Tax Credits is the main one. Offered by Revenue since 2004, it’s a tax incentive designed to encourage Irish company investment in scientific and technical research. This could be, for example, developing a brand new product, service or process from scratch for example. Or it could be taking something that already exists and using research to substantially modify and improve it.
Any company in Ireland that is registered for Corporation Tax can claim R&D Tax Credits, regardless of profitability. The scheme is also open to any size of company and in any industry.
There’s just one downside here; claiming R&D Tax Credits is difficult. Not only do the rules and guidelines change regularly, but knowing exactly which costs in each unique R&D project are eligible and which aren’t can be nigh-on impossible. It’s so easy to overclaim (potentially leading to a Revenue investigation) or underclaim, missing out on money your company’s entitled to.
This is where Tax Cloud comes in.
Accessible online 24/7, the Tax Cloud portal for businesses allows you to build your own R&D Tax Credits claim step by step. Our expert R&D tax team are also on hand to check your eligibility and your costs, and we’ll guide you along the way before your claim is submitted to Revenue.
“Tax Cloud makes the process of completing an R&D tax credit claim very straightforward and quick. It’s also a very cost effective route and you still get all the advice and guidance you need. We prepared our last claim from start to finish in about 2 weeks!” - Rob Lancashire, Co-Founder, Essencient Ltd.
The portal itself was created by the R&D tax and funding experts at Myriad Associates. With 10 years of R&D tax claims behind us, our diverse team of advisors and technical specialists know exactly how to tick all the boxes with Revenue for maximum success.
Why risk being rejected when your business could get thousands of euros to plough back into R&D work?drop us a message.
- Submitting R&D tax claims since 2017
- Strong track record delivering R&D tax credit claims
- Over €10m claimed and counting
- Industry leading specialists
- We employ technical, costing and tax experts
- Confident of delivering value to our clients, we offer our R&D tax services on a success fee-only basis.
Meet some of the team behind Tax Cloud