Image by Pete Linforth from Pixabay

By Henry Brown

It’s tough out there for businesses right now. Many are hunkering down, doing what they can to survive, trying to see it through.

Executives, however, shouldn’t lose sight of the primary task of their enterprise: to innovate. The more they can refine their products and push the envelope, the better they will differentiate themselves. If they can do that, they will have a good chance of remaining profitable, even in tough times.

R&D is critical for the long-term success of your business, but are you doing it right? Here’s how to tell.

You need to create a culture of innovation

Business professionals often talk about the importance of creating a culture of innovation in an organization. The idea here is to get everyone on board with the idea that they are agents of change. Each employee has a responsibility to improve the frontiers of knowledge at the firm and come up with new ideas. They then have the authority to present them and carry them out.

Remember, R&D isn’t just something that happens in laboratories. It is something that occurs in practically all areas of business. Coming up with new services that haven’t hit the market yet, for instance, is a form of R&D. So too are new business models and organizational structures.

You should regularly assess your tax position

R&D is not an inexpensive activity. It can take up a large chunk of your company’s resources. Pushing the envelope is difficult. If it weren’t, then progress would be easy and more firms would be doing it.

Governments all over the world know that engaging in R&D is a challenge, but also vital for the furthering of their national economies. The more dynamic and innovative companies are, the better society will be.

As Tri-merit.com points out, many tax authorities now provide relief for firms engaged in R&D. In essence, when you participate in R&D, you can deduct the expense as a regular expense and an additional sum from your profits. Thus, the more you spend on R&D, the less corporation tax you have to pay. You can then plow this extra money back into the business to boost revenues further. It’s a win-win.

You need to adapt your R&D for income

Many companies engage in R&D for their long-term viability. They know that if they don’t keep pace with the rest of the industry, they’ll stagnate, and customers will go elsewhere. At nibusinessinfo.co.uk, they call this your “competitive edge.”

Adapting your R&D to provide income in the here and now, therefore, is essential.

Obviously, there will often be a delay between your basic product research and the revenue it will produce. But the common thread throughout the research should be to find ways to add more value. When you do this, customers will part with additional cash, allowing you to make back the original investments and more.

______

Henry Brown is an online marketing executive. When he isn’t talking shop, he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.