Innovation has been called the lifeblood of successful enterprises because organizations must adapt and evolve to meet the changing tastes or needs of customers, address the dynamics of economic and market trends, and deal with changes in the competitive climate. As Bill Gates, former CEO of Microsoft, said, “I believe in innovation and that the way you get innovation is you fund research, and you learn the basic facts.” There are a lot of believers in the need to invest in research and development. According to IBISWorld, U. S. businesses are projected to invest $452 billion in R&D in 2024.

What is Research and Development?

Research and development encompasses the investigative and development activities a business uses to create new products and services or improve existing products or services with additional features and benefits. Businesses large and small invest in research and development to achieve the benefits of those efforts.

Why You Should Invest in Research and Development 

Companies that invest in research and development receive these benefits

  1. Creating new products and services that meet customers’ changing needs and providing a way to attract new customers. Thus, innovation fosters adaptability. 
  2. Improving existing products and services will strengthen customer loyalty while improving the quality, reliability, and functionality of their current offerings. 
  3. Developing ways to be more productive and more efficient. 
  4. Finding ways to reduce costs, resulting in improved margins and increased profits. 
  5. Increasing revenues from existing and new customers. 
  6. Providing competitive advantages. 
  7. Protecting a company’s intellectual property. 
  8. Securing financial incentives. These include grants and subsidies available for R&D projects and receiving government tax credits and deductions. 
  9. Becoming more attractive for an acquisition or a merger. 
  10. Better positioning the enterprise for sustained profitability and long-term growth.   

The Keys to Successfully Invest in Research and Development 

The keys to successfully investing in research and development include defining clear R&D objectives and goals. Second, ensure that the R&D plan is well-aligned with the overall business strategy and strategic goals so that developmental efforts don’t meander off course. Third, establishing appropriate resources and allocating sufficient budgets. Fourth, ensuring that the business structure supports successful R&D. That requires creative and motivated people and avoiding excessive layers of bureaucracy. Fifth, carefully define the business problem to solve by listening to your customers. Sixth, include solid input from people who will assist in bringing the product or service to market including marketing, manufacturing, distribution, and sales. Seventh, only invent and innovate to meet the defined requirements. Don’t overcomplicate the work. Eighth, understand your product or service’s life cycle because the time to market can be sensitive and critical. Be urgent but realistic with developmental schedules. Ninth, don’t attempt more projects than your bandwidth will allow. Tenth, celebrate individual and team contributions and victories.

Get Expert Alternative Financing Assistance 

Contact Multiple Financial Solutions, with offices in Jacksonville, FL, and Houston, TX. We offer a portfolio of alternative funding solutions for companies that can’t get funding from banks including business lines of credit, merchant cash advances, and commercial real estate funding. We focus on businesses that have been active for 2+ years and are looking to grow to the next level. If you are facing a funding deficit, we are ready to help you.