$2 billion pa - have you accessed your share?

By Brent Watts, Director, Inject Pty Ltd
Monday, 21 August, 2006

The Australian government provides a range of grants, tax concessions and venture capital to companies that are developing and commercialising innovative technologies. Approximately $2 billion is invested each year across 30 assistance programs to 10,000 businesses. The level of competition is high, but there are a few simple steps that you can take to improve your company's chances of funding success.

1. Planning

Taking a disciplined approach to business and project planning is a crucial first step in preparing for Australian government assistance. This allows you to crystallise both technical and commercial objectives, and to determine which assistance programs are the most appropriate for your circumstances. The most successful projects tend to be those that have a strong direction and are accelerated by government assistance rather than structured solely to attract it. If you have not planned well in advance and are simply looking for a financial saviour, then it is generally better to look elsewhere.

2. Self-assessment

It is important to take an objective view of your project and ask yourself if you would participate in it as an external investor. The Australian government typically seeks well rounded opportunities that have a proven management team, strong commercial potential, high levels of innovation and technical strength, and hard evidence of matching funds. It only differs from a private investor by having a preference for high levels of technical risk, appreciable national benefits (ie, exports, employment and environmental benefits) and a genuine need for funding.

3. Communication

The ability to clearly articulate your project is paramount when making contact with Australian government program representatives. They are, after all, only human and can be influenced positively or negatively on the basis of a first impression. Aim to create a good relationship and encourage them to visit your company or take your project to them. When preparing an application, do not expect an in-depth understanding of your industry, nor use emotional or overly enthusiastic language. Always make sure that you back up statements with evidence and ask for feedback where possible.

4. Endorsement

Generating interest in your project with potential manufacturers, distributors and/or customers can be an effective way to add credibility. It is best to capture this interest in the form of letters of support that can be attached to your application. There is a common misconception that letters of support from local members of parliament can also add value. The Industry Research and Development Board that is responsible for making many of the funding decisions comprises industry representatives that are independent of the Australian government. It is therefore better to allocate your time to attracting industry endorsement.

All in all, some form of Australian government assistance is usually in reach for most companies undertaking research and development, and commercialising new technologies. However, if you are unable to find a program that suits your project, that too can be a positive outcome. After all, if your circumstances are not targeted by the Australian government as requiring assistance, it more often than not means you are already better positioned than other companies to achieve commercial success.

Brent Watts is the director of business consulting firm Inject, a former manager of AusIndustry and a civil and environmental engineer.

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