Taking advantage of funding opportunities

Innovative technology is one thing, but financial backing and business know how are the critical components in taking a concept from idea phase to successful end product.

The federal government, through AusIndustry, provides a range of incentives to support business innovation.

AustIndustry delivers more than 30 business products worth nearly $2 billion every year to 10,000 eligible businesses.

In Western Australia, the Depart-ment of Industry and Resources’ Western Australian Innovation Capability Development Scheme also plays a key role in assisting companies develop and commercialise innovative products and services.

The scheme aims to attract federal government and private sector invest-ment into innovation related activities.

With a wide range of potential funding options available and new technology continually emerging across most industry sectors, it is vital that businesses seeking grants or other financial assistance make the most of the application process.

According to Andrew Whitton of Centrix Management Services, the success rate for businesses applying for government innovation funding is now 50 per cent, up significantly from the 20 per cent of recent years.

Mr Whitton has 22 years’ experience in the area of business grants and funding. He has worked with business advisory majors Ernst and Young and KPMG, and started Centrix in July 2005 to work on formal funding proposals for businesses seeking to commercialise concepts.

In the past five years he has been involved in the preparation of 24 successful funding proposals, including WA companies Micromine, Rojan and Advanced Nanotechnology.

“There is a tremendous amount of effort involved, so from the outset we want to get things right and there is no point leading someone down the garden path,” Mr Whitton told WA Business News.

“If a company’s presentation is poor we can work with them and re-submit the proposal, but if there is a fundamental issue with their concept or their business it is hard for us to work with them.”

This point is particularly pertinent when it is considered that funding proposals can take anywhere from three to 12 months to complete, and businesses involved in formulating proposals typically work on a pay-on-success basis.

So if the grant application is not successful, the consultant or firm working on the proposal does not receive any payment for its input.

The first step Mr Whitton takes when commencing a proposal is to get the company involved to take a step back from the project.

“Because they are so immersed in their concept or product they may not have thought the whole thing through from a business perspective, and there is no point chasing a grant for the sake of it,” he told WA Business News.

“What we do is review the whole operation from a strategic business perspective to get a big picture of the business and from there we work with them on a business plan.”

With this top-down approach it is much easier to check the company and their concept against the grant’s eligibility criteria and there is then a natural progression to the final step of putting together a winning proposal.

A common challenge facing companies as they search for funding assistance is the need to focus on the business, not the project.

The selection panels in charge of allocating funding consider proposals largely from a venture capital point of view, so while the technology associated with a product or concept may be strong, there must be a commercial application for it to be successful.

The other important issue a proposal must address is how it plans to deal with weaknesses.

And according to Mr Whitton, there is no perfect project.

“You must be accept a project’s weaknesses and be open and honest about them, and demonstrate to the panel you will be able to deal with them, not talk around them or avoid them,” he said.

AusIndustry also provides field staff to help customers with product and eligibility information and this has contributed to an increase in the applicant success rate.

The organisation has customer service managers located in 26 offices across Australia, a national hotline and website, plus around 60 small business field officers in regional areas.