Tips from a USDA grant reviewer
by Dr. John Mann, Michigan State University
Ever thought about applying to the USDA Small Business Innovation Research Program (SBIR)? I ask this to question to small business owners every chance I get. If you’re not familiar with the program, here’s a quick overview.
There are 12 different government entities that manage their own SBIR programs—including the USDA, and each has specific research goals, objectives and budgets. All the different SBIR programs include three phases. In Phase I, small businesses receive funding (for the USDA it’s a maximum of $100,000) and have up to 12 months to accomplish the work. For example, a small business may develop “proof of concept” type research to determine if an idea will work or not. For Phase II, firms have two years and funding (for USDA, it’s up to $600,000) to complete their objectives, for example, scaling up the concept they developed in Phase I. While Phase III is not funded, each program provides support and resources to help the small business move their innovation into the market place. To get Phase II funding, a small business has to successfully complete the phase I project, so the program phases are sequential.
I have been on review panels for the Phase I and II review process for USDA’s SBIR program. Last year, I worked with a national team sponsored by the USDA to help promote and encourage participation, especially by women-owned and socially and economically disadvantaged small businesses. Through that experience, I learned three lessons about the SBIR program.
Lesson 1: A lot of small businesses out there could be a good fit for the program, but they never apply. Why? Most of the entrepreneurs I meet don’t think they have a very good chance of getting a SBIR grant so they never apply. Big mistake! The chances are better than you know. On average SBIR funds about 1 in 7 proposals it receives. Those are great odds, especially when you learn what the reviewers are looking for.
Lesson 2: Reach out to stakeholders and get their feedback. During the idea and proposal development it is a good idea to reach out to stakeholders (aka potential or future customers—or organizations that can speak for future customers) and get their feedback. Many proposals fail here, including those with great ideas, because they don’t demonstrate how they connected their solutions (innovations) to the challenges faced by potential customers.
- Lesson 3: Work with a good team to pull together your proposal. It is important to have the right resources and ask for help when needed. While small business owners wear many hats out of necessity, the most successful proposals are from teams—two or more people with complementary sets of skills.
Finally, consider this: in 2015 there were 2,786 small businesses that received 5,216 SBIR awards worth $2.2 billion. The USDA program makes up only a small share of these, but it often gets overlooked by small business owners who may have great ideas but, for whatever their reasons, never apply. I realize that the SBIR program isn’t for everyone and assembling all the necessary pieces of information takes a lot of time. If successful, however, the payoff can be a game changer for your small business and your community.
The Request for Proposals (RFP) for the USDA SBIR grant for Phase I will be posted in June, and proposals will be due in October. Check out the USDA SBIR program website to access webinars and other information about the program.
Dr. John Mann is an agricultural economist and assistant professor at Michigan State University and the North Central Regional Center for Rural Development. His research is focused on rural development opportunities related to rural entrepreneurship, agricultural innovations, and university developed technologies. You can connect with Dr. Mann on LinkedIn or email him.