Now 2021 is here, it could be tempting to take a wait-and-see approach. After all, the pandemic and COVID-19 are still around. New, more contagious strains of the virus are causing infection rates to skyrocket globally. Yet, there is cause for optimism for the R&D industry.
A vaccine-led recovery should see global GDP rebound by mid-2021 according to Capital Economics. And the Australian economy has weathered the economic fallout from the pandemic better than most. That means Australian businesses with R&D could find themselves in the box seat when it comes to new opportunities this year. So what essential steps can innovation businesses take to chart their course to success this year?
See your strategy.
The challenges of the pandemic may have caused strategic planning to drop off your priority list. If that’s the case, early in the New Year is a great time to devote some energy to remedy this. Even if you had a strategy that worked in 2020, it’s still worth reviewing it for the year ahead.
- Take a candid look at your products, services, channels and processes.
- Ask how relevant they’re likely to be this year.
- Don’t shy away from dropping elements of your business that aren’t adding value.
- If your company had to pivot last year, accept that you may have to pivot back, or in an entirely new direction this year.
- Consider what type of growth your business needs.
Reviewing your business and refreshing your strategy holds the key to unlocking new opportunities and future growth. If you can pinpoint whether your business needs new skills, new investors or new products, then you’ll be able to deploy your R&D investment more effectively.
Plan for success.
Benjamin Franklin was a founding father of the USA. But he was also an impressive inventor. With innovations such as the lightning rod and bifocal lenses to his name, he is also credited with saying: ‘…failing to plan is planning to fail’. This insight holds as true for innovators today, as it did in the 18th century.
Planning how you’ll deliver your R&D growth strategy will set you on the path to R&D success this year.
- Start by identifying and actioning any research you need to inform your planning.
- Cover off any marketing and competitor research that needs updating in the light of the COVID-19 crisis and post-pandemic era ahead.
- Ensure your operating plans, including your supply chains, are still fit for purpose.
- Reviewing your products and services; revising your sales and marketing plans to ensure they are COVID-safe and relevant; and getting a handle on your business finances are vital steps too.
This will make clear which milestones to grow your R&D you need to hit and when. Armed with a well-defined road map, you and your team will have greater visibility of your business and the risks and opportunities this year will bring. Importantly, it will also make it easier to show investors why they should back your company.
Get in great shape financially.
It’s a good idea to give your finances the once-over in the early months of the year. That way your capital and cash flow will be in good shape for the rest of 2021.
Don’t forget about the R&D tax incentive (RDTI). It received a $2 billion boost in last year’s Federal Budget. Some of the administrative changes occurred on 1 January, but the majority of the updates will kick in from July 2021. If you haven’t already checked whether you’re eligible for this important tax offset, now is the time.
If your business has an aggregated turnover of $20 million or less each year, the tax refund for your R&D spend will be your company tax rate, plus a premium of 18.5 percentage points. And there’s now no maximum on the amount you can receive as a cash refund on your R&D.
Want to know more, or are you ready to get started?
If you need any help with the R&D tax incentive, or have questions about whether you’re eligible, our team can help you. We can also support you with an advance on your expected R&D refund through our partner Radium Capital. We’re here to support you to put your best foot forward in 2021. Get in touch with our R&D experts today.