Research and development is a process where a business looks to improve upon its existing services, products, and processes through innovation. The goal is to improve the product or service in an ever-changing market to keep the business relevant and competitive.
Research and development could be anything from improving existing materials to adopting new technologies. In our post today, we will look at why research and development is important for your business.
By the end of the article, you will have a better understanding of what R&D is and why it’s important for your business.
R & D Makes Your Company Unique
In a market where everyone looks the same, R&D can make your business stand out.
Research and development can take the industry normal and turn it on its head or it can simply improve it by a tiny amount to put you in front of your competitors. For example, research and development on the materials your company uses could make it outperform your competitors. Take an epoxy additive for example. Research and development into epoxies have allowed manufacturers to create materials that are more suitable for the job they are intended to be used for.
Some epoxies need to be more conductive while others need to be made to be more durable. Through R&D companies can do this and as a result, can produce more competitive products for the market.
Increased Income
R&D may help you either cut down costs or improve efficiency. Doing either is going to help you to become more competitive in the market and allow your company to be more profitable. Generally, companies invest in research and development to add to their bottom line so an obvious benefit is that your company will make more money if you invest wisely.
Investing in the right research will not only allow you to sell more but it will also allow you to attract more investment opportunities and also be able to explore new markets or industries.
R&D Gives You Access to Funding
When you perform research and development you create innovations that could lead to new jobs. With this in mind, you are far more likely to receive funding from the government and other investors. There are also grants available in certain sectors if a business is to carry out research and development.
Tax Deductible and Tax Relief
The cost of research and development can be written off as tax-deductible, but you can also get cashback from the government by using an R&D accountant.
Only certain activities can be considered research and development so it’s worth checking with your accountant to make sure you qualify for tax relief.
Research and Development Is Good for Networking
When you carry out research and development for your business you will often collaborate with others. This could be other businesses, government bodies, universities and so on. Opening your business up to collaboration allows you to network with these businesses which could lead to more sales down the line.
It also allows you to recruit well-trained graduates in your space if you end up working with universities. This can cut down on hiring costs along with training costs. It also gives people the opportunity to be trained in a way that is suitable for industry.
Advertising Benefits
Standing out in a crowded market is difficult.
Having invested in research and development will give you the chance to be the “purple cow” in your industry. Having a unique edge will allow all areas of your business to flourish. Marketing and advertising campaigns will also be an easier sell when you have a unique product.
Innovative products can increase your market share by showing off features that your customers have never seen before.
Improved Productivity
Sometimes you may not be able to innovate a product that the market hasn’t seen, but that’s ok. Not all research and development has to be groundbreaking. Sometimes all it takes is an improvement in the process to make your company more profitable.
Researching and developing more products will allow you to focus on all areas of your business processes and as a result, you will improve your productivity.
Final Thoughts on Research and Development
Research and development are often put off by companies because they think it is too expensive or that their company won’t benefit from it. This isn’t true.
Research and development can benefit your business in many of the ways highlighted above. Even if you are a small business, research and development could benefit you. From innovation to productivity increases, R&D can help. It can also help cut down on your tax bill at the end of the year too so there is always that.
If you do want to start research and development within your business we recommend talking to an accountant who understands the R&D industry. This way you can get your tax relief while innovating new products for the market.
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