Companies that are planning to claim their research and development tax refund or who have just made this claim are in the same category with those that use this as an opportunity to better their business.
Research and development are broad, but for a manufacturing company, this could entail product development, an improvement of production processes, general innovation, etc. Regardless of what you classify under this umbrella of R and D, any business will expect to get a return on the investment at one point or the other.
So as a business, what is the ROI of your new investments? What return do you get for every pound you spend on R and D? Or what returns do you expect to receive? Irrespective of your current ROI, you should yearn and strive to increase your current returns by even the smallest margin.
Here is how to do it.
Claim your tax credit
The first step towards increasing your ROI is to claim your R and D tax credits. The HMRC website has guidelines for taxpayers to follow in the claiming process. Just ensure that you follow the right procedure and that you meet all the requirements set by the law to claim this credit.
Lower your cost of development
As a business, there more gains to your ROI if you decrease your development costs. One way to do this is by reducing the lead time of the product to market. You must understand that time is everything, and time lost cannot be recovered. Therefore, you need to cut the costs spent on engineers and designers working on your development projects.
Also, development costs can be reduced by improving the innovation process. By this, I mean that you should be quick at making decagons and coming up with solutions (smart solutions).
Increase the retail value of your new product
If you expect to get a higher return on your investments, you also need to increase the sales value of your development product. For this, you will again have to consider reducing its lead time to the market. Avoid wasting time finding ways on how to develop the product or on the development process itself. Instead, you should try to find ways on how to launch the product into the market sooner. This is because the sooner you release the product to the market, the sooner you will start getting returns.
You should also focus on increasing your product’s value to the market. Smart marketing techniques are the only way to bring in better returns on your investments. You should focus on developing a specific instead of one product for a particular market and not a one-fits-all kind of product.
Research and development processes can be quite expensive for business. But then again it is only constant innovation that will ensure steady growth and competitiveness of the business. Therefore, do not only regard R and D as an expense but also see it as a strategic link to business success.