By Elizabeth Gonzalez,
The Blueprint
Small businesses with big ideas often struggle to turn them into profits.
The hurdles can be high, the market is always tough, and they have fewer
resources to bring to every problem and challenge they face.
One equalizer is the Small Business Innovation Research (SBIR) grant program
administered by the U.S. Small Business Administration (SBA). The program
gives small businesses a chance to compete on even footing for massive
federal research and development (R&D) funds.
If you're developing cutting-edge solutions to challenges in your field,
SBIR grant opportunities could help you develop them into profitable
commercial ventures.
Keep in mind that science doesn't just mean rockets and robots. It also
includes social, behavioral, and economic (SBE) sciences. For example, the
Department of Defense has solicited proposals for research in statistical
modeling and software development for planning operations including
humanitarian aid and disaster relief.
If there's a strong research component in your work, there's probably an
SBIR grant worth exploring. Find out whether you qualify and how to compete
for SBIR funds.
Overview: What is an SBIR grant?
An SBIR grant is a federal research and development grant designed to help
small businesses explore innovative technological and scientific ideas and
take them to market. The SBIR program sits alongside a Small Business
Technology Transfer (STTR) program designed for businesses that partner with
nonprofit research institutions, such as universities.
Federal agencies participating in the SBIR program currently include:
- Department of Agriculture
- Department of Commerce -- National Institute of Standards and Technology
- Department of Commerce -- National Oceanographic and Atmospheric Administration
- Department of Defense (DOD)
- Department of Education (ED)
- Department of Energy (DOE)
- Department of Health and Human Services (HHS)
- Department of Homeland Security (DHS)
- Department of Transportation (DOT)
- Environmental Protection Agency (EPA)
- National Aeronautics and Space Administration (NASA)
- National Science Foundation (NSF)
Five agencies participate in STTR: DOD, ED, HHS, NASA, and NSF.
Each year, these federal agencies allocate more than $100 million apiece to
cutting-edge research. And 3.2% of those funds are set aside for small
business grants and contracts.
How much does that amount to? A minimum of $3.2 billion is set aside for
SBIR and $453 million for STTR each year.
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| © Provided by The Blueprint | Chart of federal agency SBIR grant awards. |
Receiving federal funding through SBIR/STTR provides the kind of working
capital that can transform your business. Grant awards range from $50,000 to
$250,000 for Phase I research completed over six months under SBIR or one
year under STTR. Grants for later phases are usually $750,000 for two years,
although they may run into the millions.
In addition to driving technological advancements across the U.S., the
SBIR/STTR program seeks to level the playing field for women and
historically disadvantaged groups. If you run a woman-owned or
minority-owned technology business, you're a prime candidate for the
program.
The SBIR doesn't accept unsolicited proposals for research. You must apply
in response to a solicitation. Solicitations may be called requests for
proposals, funding opportunity announcements, or broad agency announcements.
Who is eligible for an SBIR grant?
U.S. small businesses are eligible for SBIR/STTR grants. This includes
businesses that:
- Have no more than 500 employees, including affiliates
- Are for-profit businesses
- Are more than 50% owned and controlled by U.S. citizens or permanent resident aliens
- Have a place of business in the U.S.
You may have business partners and you may contract out a minor share of the
work, but the bulk of ownership and work will reside with the small business
grant recipient.
Some agencies may accept proposals from businesses that are owned by
multiple venture capital operating companies, private equity firms, or hedge
funds.
The main difference between SBIR and STTR grants is that STTR grants require
a nonprofit research partner. Each program has specific ownership
requirements beyond the basic small business qualifications. You can find
further details on the difference between the programs in this
program overview
from SBA.
Read the
full eligibility requirements
for both grant programs to see if you qualify.
What to consider before applying for SBIR grants
SBIR proposals are arduous. Just imagine a mashup of government paperwork,
peer-reviewed scientific paper, business proposal, and grant application. So
before you dig into a specific grant opportunity, you'll want to complete
these preliminary steps.
1. Confirm eligibility
Read the SBIR/STTR eligibility criteria carefully. If you have any
questions, call your
SBA district office
representative to confirm that you meet the basic requirements to
participate in SBIR or STTR.
2. Check relevant topics
Once you've researched the basic program parameters and requirements and you
know you're eligible, you can go search
SBIR funding opportunities. You can search open, future, and closed topics to see calls for
proposals. You can also filter by keyword to search topics that might apply
to your business.
For example, a search of current topics yields 240 open grants. Entering the
keywords "remote sensing" yields 36 solicitations.
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| © Provided by The Blueprint | The SBIR's Topic Search web page. |
Your searches should help you determine whether your work aligns with any
existing SBIR grant solicitations.
If you don't see a perfect fit, maybe you'll find one or two agencies that
are close. If so, keep an eye on future solicitations for government grants.
Some agencies put out more than one call per year, while others release
solicitations annually.
3. Zero in on the opportunity
If you find a match, congratulations! You're ready to move on to explore the
application or proposal phase. Once again, you'll want to do preliminary
research to see if you're a viable candidate because each agency publishes
its own eligibility criteria.
Make sure to thoroughly review the solicitation, including:
Amendments
Notices
Specific requirements
Points of contact
Submissions timeline
You can find detailed information by going to the relevant
agency SBIR portal. You can also try
contacting the agency
directly for more information. Most participating agencies welcome emails
and calls regarding submissions.
How to apply for an SBIR grant
Once you've confirmed that a solicitation is a good match, you're ready to
dig into the application process. Preparing an application requires
extensive financial projections and technical documentation. The paperwork
can take as much as 200 hours of work spread over six to eight weeks, so
you'll want to start early and carve out time for each phase of the
application process.
Here's an overview of the major steps you'll need to complete.
1. Name a principal investigator
Every SBIR or STTR project must have a lead researcher, called the principal
investigator (PI). The PI is responsible for the scientific and technical
direction of the project. The PI must:
Be primarily employed with the small business
Have the skills, knowledge, and resources to conduct the proposed research
Be available to perform the research throughout the project period
Legally reside in the U.S.
At a minimum, "primarily employed" means the PI cannot be employed full-time
in another business at any time during the award period. Some agencies
provide further stipulations, so be sure to review your agency's specific
requirements.
2. Register your company
All applicants must complete three registrations to participate in the
SBIR/STTR programs:
You'll need a federal employer identification number (EIN) for these
registrations. The registrations should be completed in this order since you
need a DUNS number for the other registrations.
It's best to tackle registrations right away, as it may take a few weeks for
some of them (SAMS in particular) to be verified.
Each agency has further systems you will have to register with as part of
the application process. Some agencies may require you to certify that your
company meets size and ownership requirements for the SBIR program. You may
also need to affirm that the research will be performed in the U.S. unless
your solicitation states otherwise.
3. Complete prerequisites
Some agencies have pre-application processes to complete. For example, in
2019, the NSF began piloting a process requiring potential applicants to
submit a three-page pitch before proceeding to a full proposal. The agency
reviews the pitch and, if approved, invites the business to submit a full
proposal. The pitch outlines the project's objectives, technical innovation,
and technical risks.
The goal of the pitch approach is to vet projects and provide feedback
before businesses invest time in a full proposal.
Check your agency's instructions to see if you have any preliminary steps
before moving on to the proposal.
4. Submit a Phase I proposal
Once you're registered and all prerequisites are complete, it's time to
draft your proposal. Read the grant solicitation carefully, since every
project has specific instructions and criteria.
Generally, proposals include standard grant application elements such as:
- Business plan
- Executive summary
- Cost proposal including detailed operating expenses
- Technical proposal
SBIR and STTR grants also focus on:
- Innovation: How does your proposal stand out from the state of the art in your field?
- Experience, qualifications, and facilities: What qualifies your team to carry out this project?
- Commercialization (Phase II): What is the pain point or market opportunity your project addresses?
A good way to ensure that your proposal ticks all the boxes is to
chart all the criteria
and provide evidence showing how you meet each one.
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| © Provided by The Blueprint | Sample chart of criteria, evidence, and how the business stacks up. |
5. Get feedback
If it's your first SBIR or STTR application, you should get some expert
feedback before submitting your proposal. Ask your contacts at SBA or the
participating agency to recommend mentors who can work with you to ensure
your proposal is ready for submission.
6. Evaluate the results
If your proposal is rejected, the agency will give you feedback detailing
why it was not selected. It is common for applicants to be rejected several
times before succeeding, so don't be discouraged. Consider this a long play
and use the feedback to hone your approach. With each application, your work
will be lighter and your application will be stronger.
No need to fly solo
The SBA understands that this is a challenging process and is eager to help
you create a successful proposal. The agency provides extensive resources
including online tutorials, training through
partner organizations, and live and online
SBIR boot camps.
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| © Provided by The Blueprint | Calendar of January 2021 SBIR events. |
Take advantage of these resources at each phase in the application process
to lessen your workload and increase the odds of success.
If you aren't a fit for an SBIR grant, you might also find alternative
government funding through SBA such as rural small business loans,
microloans, and other SBA grants including business grants for women.
3… 2...1… blastoff
SBIR grants are big awards set aside expressly for small businesses, and
they're funding much more than rocket science. If you're doing innovative
technical work, whether it's a statistical model for identifying at-risk
youth or a novel encryption technique, you should explore SBIR
opportunities.
You can learn a lot just by reading the proposals. And if you find the right
opportunity, it could take your business to heights you never dreamed
possible.
See more at
The Blueprint
