Whether you’re a software startup or a manufacturing company, R&D projects are vital for developing products your target audience needs and positioning yourself as a major player in your market.
The phases of R&D projects can vary greatly from one company or industry to another, but every R&D project goes through a few essential phases: strategy and planning, research, development, testing, and launch.
- Strategy and Planning
Before launching an R&D project, your company needs to define a clear R&D strategy. Without strategic planning, your R&D projects may not align with your overall business goals or may miss out on opportunities that could drive your growth.
During this phase, your company should connect its corporate strategy to its R&D strategy. For example, if one of your business goals is to increase market share, your R&D projects should directly support that objective to ensure you’re investing your time and resources wisely.
You should also consider how your R&D projects will help you meet your customers’ needs. Leverage your commercial team’s insights into customer pain points to spark new ideas. As you brainstorm, pay attention to how many ideas are focused on incremental improvements versus breakthrough innovations. While incremental projects are less risky, innovation-driven projects are key for long-term growth and staying ahead of competitors.
Your R&D plan should also account for any external partnerships, such as collaborations with universities or other companies whose expertise complements yours. At this phase, you should also identify the equipment and supplies you’ll need for the research phase.
- Research
Once your strategy is set, you can move on to the research phase. Research is essential for gathering the data you’ll need for the next steps, identifying market opportunities, and figuring out how to take advantage of them.
The research phase is broad. Your R&D team may conduct several types of research to pinpoint a market need and find a solution, including:
- Basic research
In basic research, R&D teams aren’t focused on a specific application. The goal is to deepen your understanding of a particular issue, not to develop a solution right away. For example, a company might study how vaping affects skin aging.
- Applied research
Applied research aims to generate knowledge that will be used to create a solution. For instance, a company might use applied research to explore how new skincare ingredients could counteract the effects of vaping on skin aging. Based on these findings, they could then develop and test a new skincare product.
- Development
Development is the stage where your team puts the knowledge gained during research into action to design your product or solution. During development, you’ll learn even more about the product you’re creating.
If you’re developing a sponge that’s more durable and absorbent than anything else on the market, the research phase would focus on identifying materials that boost absorbency and durability. In the development phase, you’d test how those materials work together, gather new data on their performance, and create different prototypes to see how each one performs.
With new insights about your product, you’re ready for the next R&D phase: testing.
- Testing
In the testing phase, your new product will go through a series of evaluations, such as:
- Laboratory testing: Verifies that your product meets all quality standards
- Usability testing: Identifies any issues or areas for improvement in the product
- Performance testing: Checks if your product works as expected in various situations
- Security testing: Ensures your product doesn’t have vulnerabilities that cybercriminals could exploit
- Accessibility testing: Finds any barriers that users with disabilities might face when using your product
The length of the testing phase depends on how complex your product is and its impact on customers. For example, in the pharmaceutical industry, new drugs go through years of clinical trials before they’re approved for patients. In software, testing might last anywhere from three to six weeks.
- Launch
The launch marks the end of your R&D project. However, your R&D team may keep improving the product based on market trends or customer feedback. For example, a pharmaceutical company might run additional clinical trials on the same drug to see if it can treat other conditions.
To ensure a successful product launch, give your sales, marketing, and customer success teams enough time to prepare—especially if your product is complex and requires training. Avoid delaying the launch by adding last-minute features; you can always build those in later.
The Final R&D Phase: Claiming Tax Credits
Tax credits are a valuable source of funding that you can reinvest in developing new products or adding new features.
If your business is based in the US or Canada, the final stage of your R&D project should be filing for a tax credit. Canada’s SR&ED tax program lets you claim up to 15% of eligible expenses. In the US, small businesses can claim 6% of R&D costs, while larger companies can claim up to 14%.
If you plan to claim tax credits, doing it the old-fashioned way—by manually gathering all the paperwork—can eat up valuable time and resources.
Boast’s AI platform simplifies the tax claim process by automatically collecting and organizing the data you need. Startups and other companies using Boast save an average of 60 hours a year on tax claims. Our platform connects securely to your payroll, accounting, and project management systems, so you can spend less time on paperwork and maximize your tax credits.
Learn more about Boast’s intelligent software for automating R&D tax claims.
