Issue 0062 Innovation is Important for SMEs
Today I want to talk to you about innovation. Innovation is important in Australia. The Australian government has recognised this by introducing an Innovation Statement and a range of legislation to support innovation.
The first new law to be introduced related to Early Stage Innovation Companies. That will apply to:
- and business people who are developing new products, processes or services and other new types of products.
This legislation commenced from 1st July 2016; yes, it's already operating. Unfortunately, the government, for whatever reason, has not fully promoted and publicised that this new, exciting legislation is now operational. That's unfortunate, because this legislation will give many small/medium enterprise operators, inventors and entrepreneurs the opportunity to present your business to potential investors who, hopefully, will then be encouraged to make investments in your types of companies.
Why don't you undertake some research to see whether you fit some of the key characteristics that are going to be required to be deemed to be an ESIC?
- Was your company incorporated in the last three years? There are some rules that allow companies incorporated up to six years ago to be eligible for ESIC, but the main emphasis is on companies that are under three years of age.
- Does your company undertake research and development expenditure?
- Have you participated in the Accelerating Commercialisation Grant Programme?
- Have you been a participant in an Accelerator Programme?
- Was your company's total expenditure for your company and any wholly owned subsidiaries in 2015/16 under $1M?
- Was your company's income, including any wholly owned subsidiaries, in 2015/16 under $200,000?
- Has your company developed a registered patent or a plant breeder's right that has been registered anywhere in the World?
- Has your company processed an innovation patent or a registered design anywhere in the World?
- Have you already raised more than $50,000 from "arms-length" investors in 2015/16?
- Have you developed a new product, process, service, organisational or marketing methodology for your business?
If you have undertaken these types of activities (not all of them by any stretch of the imagination) then you are potentially eligible to be deemed to be an Early Stage Innovation Company.
Our recommendation is that, if you're going to be able to satisfy the requirements of investors, you will require professional assistance to complete the various statements and to assemble all of the supporting documentation to be presented to investors.
If you'd like to talk to an accountant who is able to assist you to determine whether you're an Early Stage Innovation Company, why not go to our website - www.esssmallbusiness.com.au - and then click on "Find an Accountant/Adviser" and then all you have to do is to insert your postcode and you will then be able to read the names and a summary of the services that those firms offer, who are subscribers to ESS BIZTOOLS (our other major product) and who are able to deliver you advice and assistance on the due diligence process to assist you to become an Early Stage Innovation Company.
Australia really needs companies that are committed to the innovation process.
The team at ESS BIZTOOLS and ESS Small Business look forward to supporting you on your endeavours.
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Episode 0062 Innovation is Important
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