Copyright 2010 – Bruce Madole

Seed Projects

Seed Projects Sometimes a claim is just too small, too weak, or too poorly supported to be worth the effort and cost of pursuing it. Occasionally, however, a small claim represents an opportunity that it could cost you dearly to overlook. When is a small claim not too small? When it’s a seed project. Every claim has a cost associated with preparing it. All of the staff engaged in the SR&ED process cost money– the in-house technical and financial people who have to be interviewed, who spend time looking for eligible work or in reviewing their own notes, records and files to find supporting evidence for work that is being claimed. Even where the claim preparation is being assisted by consultants on a purely contingency basis, there is still an up-front additional cost (i.e. the value of the time of internal staff) when meetings and interviews have to be arranged in defining and scoping claims. On any claim, there comes a point when certain opportunities are weighed against the effort and cost to prepare them, and the key words are then uttered: “too small to bother with” or “not worth it”. The decision is usually made based on the value of the claimable costs within the given fiscal period, relative to the effort and cost in preparing a defensible claim document for it, and sometimes, the amount of time you have left before filing deadlines. Before you make a final decision about such projects, you would be well-advised to take another look, and decide whether one of these small projects could represent the “seed” of something much larger and more important.

This document is the property of Bruce Madole, and is used by permission. All rights are reserved. The opinions expressed herein are personal, created for entertainment and information purposes, and are not intended to be relied on in place of professional counsel or advice. No part of this document may be re-used, transmitted or re-transmitted without the express prior written consent of the author, who can be contacted at: brucemadole@sympatico.ca

Copyright 2010 – Bruce Madole

Seed Projects

I call them seed projects because they represent, usually, the earliest opportunity to recognize key technological uncertainties (TU), and because the early identification of such uncertainties paves the way for SR&ED work to occur in seeking to resolve them. This is an important element in maximizing your ability to claim. How do you recognize a seed project? What do you look for? How can you recognize a seed project for the massive tree it may become, instead of the tiny seed of effort and cost it is now? Here are three early indicators of a seed project: Project is identified by your core technical primes: When the people you pay to be your best and brightest minds are poking away at a problem, even if it’s in something of a “skunkworks” mode, you should pay attention to that. The very definition of TU is that it occurs when the trained professionals cannot succeed with standard approaches. The key TU relates to an emerging, expanding or desired line of business: When the barrier or obstacle that is studied is related to something that the company really wants to pursue or is moving toward, then there is a prospect that the uncertainties and desired advancements will assume much greater importance, and may eventually even become mission-critical. The potential for downstream investment is much greater if the TU relates to a corporate priority. Early efforts or earliest explorations are technically failures, or unpromising: If people are working on a problem, and the approaches have

This document is the property of Bruce Madole, and is used by permission. All rights are reserved. The opinions expressed herein are personal, created for entertainment and information purposes, and are not intended to be relied on in place of professional counsel or advice. No part of this document may be re-used, transmitted or re-transmitted without the express prior written consent of the author, who can be contacted at: brucemadole@sympatico.ca

Copyright 2010 – Bruce Madole

Seed Projects

failed to some degree, then persistence is its own clue. You need to ask, what’s at the end of this rainbow? These factors don’t mean that you should always claim such small projects – only that you could lose (or diminish) tremendous opportunities in failing to do so. Early identification is about maximizing your potential claims. It’s a good thing to take a longer view of the process, and to avoid becoming a prisoner of one’s own cost-benefit analysis. ( http://www.sredunlimited.com )

This document is the property of Bruce Madole, and is used by permission. All rights are reserved. The opinions expressed herein are personal, created for entertainment and information purposes, and are not intended to be relied on in place of professional counsel or advice. No part of this document may be re-used, transmitted or re-transmitted without the express prior written consent of the author, who can be contacted at: brucemadole@sympatico.ca

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