The reauthorization of the SBIR/STTR programs in December 2011 legislated changes that require the Small Business Administration (SBA) to update its policy directives for the programs. The SBA has now published the first of these draft changes and is inviting comments from interested stakeholders until July 16, 2012. We urge you to review the changes and make your opinions known.
These proposed rule changes cover issues of size determination of the applicant small business, ownership and control, and affiliation, in addition to other related items, and provides examples of how these new rules would be applied. Here are some of the highlights:
- The same rules would cover both the SBIR and the STTR programs.
- Applicants must have fewer than 500 employees and be:
- More than 50% owned and controlled by U.S. citizens, permanent resident aliens, or domestic business concerns; or
- Majority-owned by multiple domestic venture capital operating companies (VCOCs), hedge funds or private equity firms.
- A small business that is more than 50% owned by a single VCOC, hedge fund or private equity firm would not be eligible.
- However, for example, a small business owned 49% by a domestic VCOC, 2% by an individual U.S. citizen, and 49% by a non-domestic corporation, would be eligible because it is more than 50% owned by a U.S. citizen and a domestic business concern.
- Under the proposed rules an applicant’s size and eligibility would be determined both at the time of application (that is, at proposal submission) and at the time of award. The current rule requires determination only at the time of award.
“Affiliation” is a complicated issue because it involves control (or the power to control) of the small business that might not be reflected in the ownership structure. Control may be exercised through managment or through other relationships or interactions between one or more parties. Affiliation is important because SBA counts all employees of any domestic and foreign affiliates in determining the size of a small business.
The proposed new rules might affect your company’s eligibility for SBIR/STTR or might simply offend your idea of fairness. Whatever the motivation, please make your voice heard by posting your comments before July 16,2012.
A special thanks to Rick Shindell of SBIR Insider for keeping the community so well informed of the happenings at the SBA and in Washington DC in general.
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Michael Kurek, PhD, MBA, is a partner with BBC.
Part 4: Tips on Collecting Market Intelligence
Whether you’re writing a business plan for an unfamiliar market or simply keeping abreast of the markets you already live in, you should routinely monitor selected information sources for the latest developments. Here are some of BBC’s favorite sources of market intelligence.
- Trade Publications/Trade Associations are invaluable for getting a feel for a particular market, and especially for identifying the companies and the individuals that are the trendsetters. The articles in publications can help you understand how the market defines itself and how it’s segmented, and the advertisements suggest how various vendors position themselves strategically. Check these sites for trade publications in your market [internet.tradepub.com; www.biotechmedia.com; www.freetrademagazines.com]. Many publications also make archive issues available on the web.Trade associations collect and publish data on their members and the markets they serve. Much of this information is available on their websites. In addition, the U.S. government publishes an Index of Trade Associations.
- Company Documents. When you’ve identified the key companies in your space, you can monitor company documents to glean valuable intelligence. Press releases [samples at these and other sites: www.genomeweb.com/; www.prnewswire.com/news] and annual reports (available from the company’s website) are worth a look. However, the most detailed data can be found in the filings to the Securities and Exchange Commission (SEC) required of public companies. Frequently, you’ll find updates on new products in development, as well as sales numbers broken down by product, market segment, and geography. Trends in quarterly revenues for individual companies are often characteristic of seasonal fluctuations in the general market. Look for 10Q (quarterly report) and 10K (annual report) documents for specific companies at www.sec.gov/edgar.shtml.Presentations that executives of public corporations deliver at investor conferences are also a valuable source of data. These can often be found in the Investor Relations section of the company’s website.
- Demographic information. To really understand a market you must have answers to basic questions, such as: How many potential customers are there? How prevalent is this disease? What is the annual growth rate for these surgical procedures?Disease prevalence statistics, often broken down by ethnic group and geography, are available online from U.S. government agencies and patient advocacy groups, such as the American Diabetes Association and the American Cancer Society. Start your search at sites such as www.seer.cancer.gov and www.cdc.gov/nchs/about.htm.
One final tip: when it comes to market research past and current trends can definitely help you predict future events. So, when you find those “dead-on” data sources, sample them on a regular basis. A well-supported trend analysis will go a long way to earning you the title of “market seer.”
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Michael Kurek, PhD, MBA, is a partner with BBC. Over his career, Dr. Kurek has demonstrated success on an international scale in defining new product opportunities, developing sales and marketing strategies, and recruiting and managing teams to deliver growth. He advises BBC clients in evaluating commercialization alternatives for their technology, product, or service.
I recently met a business owner who admitted that after several years in operation he sensed his company had drifted from its original mission and goals. Although the business was still financially successful, the spark was gone.
This prompted him to pause and evaluate the firm’s goals, why they existed, and whether they were delivering for their stakeholders.
He contemplated pursuing other interests and allowing his partners to take over. While it may have been easier – perhaps even tempting – to take this path he chose instead to re-invigorate the business. He chose to give it his best energy, time, and abilities. Giving up was not his style!
He began by asking his team: “On our best day, who are we?” It’s a great question! Only seven words, but packed with meaning. And worth asking.
Every day may not be your best, and maybe you don’t have them as often as you’d like. But when you do, what does it look like?
- How healthy are your customer relationships?
- Are your products and processes excellent?
- Are your employees engaged and operating at their potential?
- Are you accomplishing something meaningful?
Then he asked a second question: “How can we have our Best Day more frequently?” The first question was fantastic but the second one may be even better. It is one thing to identify who you are under ideal, sunny conditions, but routinely replicating those ideal conditions is quite another.
Or, more to the point, how do you have your Best Day under non-ideal conditions. Certainly, the sun doesn’t always shine, processes don’t always run smoothly, and customers are sometimes disappointed.
Having your Best Day under these conditions is a little more difficult. Actually, it’s a lot more difficult. It takes discipline, focus, and effort. But then rarely does anything valuable come easy.
- Pursue excellence while performing in the real world.
- Build a plan that enables you to be more likely to have your Best Day.
Simply stated, anticipate reality. When processes hiccup fix them quickly. When customers are disappointed, immediately make it right and reward their loyalty. When an employee isn’t performing to expectations help them to grow or to move on.
Just as a Space Shuttle mission requires planning, intelligence, and fuel so does running a business. This is the story of one business that re-focused their flight plan. And their trajectory looks good!
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Don Beery is Principal of Blendon Group Consulting which advises businesses in strategy, technology marketing and product commercialization.
The Department of Defense (DoD) has pre-released SBIR 2012.2 solicitation with 11 participating components, including Army, Navy, and Chemical and Biological Defense (CBD) among others. The number of topics issued by each component varies.
How does a small business successfully submit a competitive DoD SBIR proposal? Here are five steps to get you started off right:
1. Find the right topic: A simple keyword search on available topics will help you identify the best fit for your project. Just visit the DoD SBIR website, add keywords that best describe the technology you’re working on now – or want to work on – and look for relevant matches.
2. Read the selected topic details: Scour through the topic description(s) making note of the Acquisition Program, the Technical Point of Contact (TPOC) or Topic Author, the Objective of the topic, and Phase I and Phase II descriptions.
3. Contact the listed TPOC: Act fast on this. You only have until the solicitation is opened for submission (May 24th) to contact the TPOC, introduce your company and discuss any questions that you may have.
4. Get registered with DoD: Registration is simple, and instructions are available on the DoD SBIR website.
5. Work on your proposal: Each DoD component has its own solicitation descriptions, so you’ll want to circle back to the DoD site, find the component and read up before you start preparing your proposal.
For additional assistance, check out the DoD SBIR tutorial and don’t hesitate to give us a call at BBC. We can assist you through the entire process and be sure you submit a complete, compelling proposal. Reach us at info@bbcetc.com or 734.930.9741.
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Bhramara Tirupati, PhD, Principal Consultant, BBC
Start exploring the entrepreneurial landscape and you’ll cross paths with a number of business plan competitions. They’re ubiquitous — middle schools and high schools, college and universities, business organizations and economic development agencies — everyone’s getting into the act.
I love ‘em all — they give the much-needed incentives (cash prizes, investor face time, free rent, and more!) for entrepreneurs to get off the dime and write a business plan.
Yeah, okay, but does having a written business plan really matter? Believe it or not — I’ve had entrepreneurs tell me that they weren’t writing a business plan, because they heard or read somewhere that “investors don’t invest based on what they read in the business plan –they invest in the people”. That’s right… They invest in the people that have A GREAT PLAN!
I think what gets confused in that message is that a solid business plan is “a given” and that investors look for more than the sum of the parts (excellent idea, stellar technology, great market) — they also need to see that a credible and experienced entrepreneur will be executing the plan. And that brings us full circle…because a credible entrepreneur wouldn’t be out selling an idea that isn’t thoroughly researched and documented.
If you’re starting a business, you need a business plan. A written-down business plan. Period.
You can get help writing a business plan through BBC. If yours is a Michigan company, you can tap the Michigan Small Business Technology and Development Centers (MI-SBTDC), among others. Check out the MI-SBTDC calendar of workshops and seminars at www.misbtdc.org. Also, learn more about the GLEQ Business Plan Competitions in both fall and spring at www.GLEQ.org. You’ll be offered a business coach for advice and support during the competition. In the meantime, keep these wise words in mind:
“Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.” - Vincent van Gogh
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Diane Durance is the executive director of Great Lakes Entrepreneur’s Quest. GLEQ is Michigan-based statewide organization that offers entrepreneurial education and a technology-focused business plan competition for new ventures in alternative energy, life sciences, advanced manufacturing, homeland security and information technology.
In an effort to reduce the time from review to award, the National Institutes of Health (NIH) has announced that, effective April 20, 2012, anyone receiving an impact score* of 40 or less on a grant application will receive a notice requesting submission of JIT information. JIT is an acronym for Just-In-Time and refers to the process during which applicants are asked to provide more information. (*The impact score is the peer reviewers’ assessment of the likelihood for the project to exert “a sustained, powerful influence” on the research field(s) involved. The lower the score, the better.)
The JIT notice will be sent via email from eCommons to the Principal Investigator two weeks after scores are released. This is not an email you want to miss, so watch for it.
In eCommons, the JIT link will be activated 24 hours after the scores are released. Do not respond to the JIT until you have received your email request!
What do you need for JIT?
First-time awardees will be asked to complete a Financial Questionnaire. To complete the questionnaire, you will need to be able to answer questions about your organization’s accounting and timekeeping systems, misconduct and conflict of interest policies, and financial policies and procedures. In addition, all potential awardees will be asked to supply a statement of “Other Current and Pending Support” as well as certifications, including:
- IACUC Approval date
- IRB approval date
- Human Subjects education
Additional JIT information, such as revised budgets, or changes to the human subjects/animals studies, etc., may be requested by the Institutes or Centers. Each case is different, and each Institute or Center has different requirements.
A final note: This does not take into consideration the various institutes’ paylines, and it should not be considered a confirmation of funding, but it is a positive sign. Never miss a chance to celebrate the fruits of your labor along the way!
BBC provides assistance with JIT requests and can also help with tips for managing your award. Contact us for more information.
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Kris Bergman is a BBC’s Consultant for Grants and Contract Management. She assists clients in preparing to receive and manage federal grant and contract funds. This includes advice on financial policies and procedures, DCAA compliance, budget development, indirect cost negotiation, Just-in-Time response, using QuickBooks and preparing for government audits. Email Kris
Part 3: Understand the Buying Process to Identify Customers
Who is your customer? It’s a deceptively simple question … but many entrepreneurs we work with at BBC have no ready answer.
Perhaps, the more relevant question is: what is a customer? Is the customer the end-user of your product, the person that makes the buying decision, or the actual purchaser? In many cases these are one-and-the-same individual. But often it’s not that simple. So you need to carefully analyze the market environment in which your product or service will exist.
For example, if you’re selling a new pain medication to a health maintenance organization (HMO) the end-user is obviously the patient. However, the physician makes the prescribing (i.e., buying) decision, and the purchasing department places the order. But that’s not all. The critical “influencer” or gatekeeper in the buying decision is the HMO’s formulary committee. If they don’t add your medication to their list of approved drugs, there is no sale. So who really is the customer?
What we’re actually talking about here is the buying process, and critical marketing decisions will need to be made based upon, first, a thorough understanding of that process, and second, getting your planning in step with the process. Always be guided by customer behavior, not your thoughts about how the customer should be behaving.
The more you know about the steps leading up to a “buy” decision and the better you understand the roles and players along that path, the more adept you will become in anticipating customer needs and tailoring your product or service to meet them. It turns out that “The customer always comes first” is not a cliché, but a sage piece of timeless advice.
Next up: Matching Product Features to Customer Needs
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Michael Kurek, PhD, MBA, is a partner with BBC. Over his career, Dr. Kurek has demonstrated success on an international scale in defining new product opportunities, developing sales and marketing strategies, and recruiting and managing teams to deliver growth. He advises BBC clients in evaluating commercialization alternatives for their technology, product, or service.
With the upcoming April 5 NIH SBIR/STTR submission deadline, in last week’s blog I stressed the importance of submitting early. Even with our warnings (and pleadings), we still find clients who choose to submit on the last day, and even in the last hour of the last day. As a result, every cycle we see clients whose applications are rejected by NIH because they are unable to get their proposals successfully through to NIH in time.
In talking to our clients, we have found that there is some misunderstanding of the rules, and of how strictly they are interpreted by NIH. To make matters more confusing, some of the rules have changed in the last 12 months, so what may have worked previously, may now mean your proposal is late!
Rule #1 of the NIH’s Late Policy is that applications that are required to use electronic submission are on time if an error-free application is successfully submitted to Grants.gov, and received and compiled by NIH by 5 p.m. local time on the due date. (This means that a corrected application addressing any errors found by Grants.gov or NIH’s eRA system must be received error free by 5 p.m. your local time on the due date.)
The important phrase here is error-free. It is no longer enough just to get your proposal into Grants.gov before 5 p.m. on the day of the deadline. Previously all you needed was the Grants.gov ‘stamp’ to show that you had pressed the button before 5 p.m. Now your proposal has to successfully get through two validations (at Grants.gov and NIH) before it can be compiled error-free at NIH.
Grants.gov warns that it can take up to 48 hours to get through their validation process. At peak times, NIH’s eRA Commons can also be slow. Once you receive back any errors from either set of validations, you will have to fix your proposal and submit a changed/corrected version which has to go through the process again. Unless you are able to fix all errors and can finally view your compiled proposal at eRA Commons before 5 p.m. on the deadline, your proposal is LATE and will be rejected.
Remember our admonishment to submit early? Early does not mean at 3 p.m. on the day of the deadline, it means several days early! There is almost no error that can’t be fixed if you have 2 or 3 days to do it, but a lot of things can go wrong that you will struggle to fix at 4:55 p.m. on April 5!
There are some acceptable reasons for a late submission:
- Death or sudden acute severe illness of the PD/PI or immediate family member
- Large scale natural disasters
- Genuine Grants.gov system errors
Definitely not acceptable:
- Failure to complete required registrations in advance of the due date
- Heavy teaching or administrative responsibilities
- Personal events
- Correction of errors or addressing warnings after the due date
BBC’s strong recommendation is therefore that you plan to submit your proposal on the 1st of the month: April 1, August 1, December 1. You can also read what NIH has to say in The Dangers in Delay, where the first line reads: As the electronic submission process has improved, so have the potential dangers when submitting an application near the deadline. And the last reads: Please, we want your applications. Submit early.
They’re not kidding.
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Andrea Johanson, PhD, Principal Consultant, BBC
That’s not quite a trick question. If you have been preparing a National Institutes of Health (NIH) SBIR/STTR grant submission, you are obviously aware that the deadline is 5 p.m. your local time on Thursday, April 5. However, since January 2011 there have been some important changes in the electronic submission process, so please read the rest of this email closely.
BBC has always advised that you submit your proposals well in advance of the deadline, and we highly encourage you to submit your SBIR/STTR to Grants.gov by April 1. This has always been a good strategy, but now it is essential. The Error Correction Window, which was implemented in December 2005 to facilitate the transition from paper to electronic submission of grant applications, has now been removed. The window had allowed applicants an opportunity after the deadline to correct missing or incorrect aspects of their applications, identified by NIH system-generated errors and warnings displayed to the applicant after submission.
What does this mean?
It means that you can no longer press the submit button at 4:59 p.m. on April 5 and hope to get your application through successfully.
- It means that you must have an error-corrected, perfectly-compiled pdf of your proposal visible in your NIH eRA Commons account at 5 p.m. on April 5.
- And, it means that if you do not fix all of the electronic submission errors and get your proposal safely through to NIH by 5 p.m. on the deadline, then your proposal may not proceed to review.
For further details, click here to see the NIH notice.
Clients of BBC can count on us to look through their completed Application Packages before submission, but even so, proposals may still have errors on a first attempt. It can take up to 48 hours to get a description of these errors back from Grants.gov, and they are sometimes hard to decipher and fix.
If you take our advice, and submit by Sunday, April 1 or first thing on Monday, April 2, you will have three more days to address any errors you may have. So take our advice and get ahead of the game to improve your chances of success!
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Andrea Johanson, PhD, Principal Consultant, BBC
A six-part journey through the process of product commercialization.
Part 2: The Solution – Your Product
Business plans and commercialization plans are different.
A business plan is the story of a company … past, present, and future. Because a company is commonly built around a unique capability, expertise, or technology, it’s natural that its story begins with a description of that capability.
A commercialization plan is the story of a solution, or more specifically, a product or service. However, because a solution cannot exist without a problem, the natural beginning for a commercialization plan is a description of the problem.
Confusing their technology with their product can certainly lead entrepreneurs astray. At the most basic level it sometimes makes the very definition of the product incomprehensible. As a reviewer I’m often frustrated when a commercialization plan describes the solution as a “platform,” a “system,” or a “methodology.” Two pages later I might finally figure out we’re talking about software, or a medical device, or a web-based service, but the confusion lingers. [Remember, readers appreciate labels that allow them to visualize. Familiar product categories provide just that.]
However, a more valuable context for understanding your product is provided by the problem being solved. If I first understand the problem I can more easily grasp not only what your product is but how it solves the problem and why it’s valuable. That information is key to another important concept, the product’s value proposition. As Dr. Seuss said, all that’s missing is the who … and we’ll get to that in our post #3 of our Commercialization Series: The Customer.
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Michael Kurek, PhD, MBA, is a partner with BBC. Over his career, Dr. Kurek has demonstrated success on an international scale in defining new product opportunities, developing sales and marketing strategies, and recruiting and managing teams to deliver growth. He advises BBC clients in evaluating commercialization alternatives for their technology, product, or service.
