January 11, 2010 in SBIR/STTR News

The “S” Behind SBIR

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SBIR stands for Small Business Innovation Research, so the “S”= “Small”, but what really is “small”? The SBA (Small Business Administration) defines a company as “small” if they have less than 500 employees, so technically, a company is qualified for SBIR if they have at least one employee or as many as 499 employees. Does that mean that companies of both sizes would be equally qualified? No. As with many facets of SBIR, it depends on the sponsoring agency and their needs/requirements.

All agencies are looking for successful SBIR companies. If you can demonstrate that you are realistically capable of doing all the work necessary to complete your Phase I work, then you stand a good chance. “Realistically capable”, means you have the education, experience, facilities, equipment, and time to complete the work. If your company does not have all these appropriate elements, then you need to find partners, subcontractors, or hire additional full-time/part-time employees to complete the work. Remember though, with SBIR, you may only subcontract up to 33% of the work.

Looking at first-time SBIR award recipients across all agencies, 70% of the companies have less than 25 employees with 41% having between 2-9 employees. In other words, small companies DO receive government awards! Agencies individually, though, vary, so know your agency and what it expects. Agencies, which tend to have more broad or researcher-initiated topics, tend to be more willing to fund the smaller start-up companies (as long as you can demonstrate you can successfully do the proposed work), rather than the agencies that utilize SBIR in their procurement process; these agencies not only evaluate the initial research, but evaluate how well the company will then develop, produce, and deliver the end-product.

If you are a company with less than 25 employees, don’t dismiss SBIR because you think you are too small—small companies are driving innovation in the marketplace. If you are a company with say 400 employees, don’t dismiss SBIR because you think it is only for startups—in this tight economy, you might be able to create a new product line which can sustain your company.

Bottom line: when small, think BIG with SBIR!

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