\r\n The Government is concerned about contingency fees paid to SR&ED consultants. It is understood that some consultants, particularly in the GTA, charge excessively. Firms looking at making SR&ED claims should obtain competitive quotes.

\r\n Conversely, some additions being put forward are:
\r\n • $110 million per year to the National Research Council to double support to companies through the Industrial Research Assistance Program.
\r\n • $14 million over two years to double the Industrial Research and Development Internship program.
\r\n • $95 million over three years, starting in 2013–14, and $40 million per year thereafter to make the Canadian Innovation Commercialization Program permanent and to add a military procurement component.

\r\n In regards to these changes, hopefully IRAP will use the additional monies to benefit more clients. In recent years, IRAP has increased the size of its funded projects and run out of money early in the fiscal year. Hopefully, the additional funds will be managed so that new projects can be initiated at any time in the Government’s Fiscal Year.

\r\n The additional internship funds should be good. We believe that the internships are a means to integrate new, high level talent and minimize R&D costs.

\r\n Making the CICP permanent is a good thing. At first pass fewer than 20% of the projects received support, largely due to lack of funds. It is important that the Government of Canada gets the first crack at implementing and adopting new technologies, especially where it’s related to our military needs.

\r\n Overall the FY 2012-3 budget is a conservative budget; not straying too far from previous budgets and not taking any sharp changes in directions.

\r\n In an earlier blog we asked “Are Internships the Way to Go?” and highlighted programs such as Connect Canada, Ryerson’s STEM program, and the Stiller Centre. Two new programs have been added: MITACS Enterprise and Venture Start. Both should help kick start the careers of new or recent STEM graduates.

\r\n MITACS is one of the most unfortunate sounding names for a self-described not-for-profit research organization. However, MITACS has a suite of programs intended to support “…the next generation of innovators with vital scientific and business skills.” The Enterprise program offers business skills training, mentorship, and experience for new graduates. MITACS will contribute a maximum of 50% towards internships providing between $15,000 and $30,000 depending on the level of the intern.

\r\n Venture Start is being offered by the Regional Innovation Centres (RICs) of which WEtech acts in Windsor and Essex County. Venture Start provides up to $30,000 for a STEM graduate planning to start a new business. Support is in two stages; Business Skills Development and Business Launch Support. We wish new entrepreneurs good fortune in their endeavours.

\r\n For assistance in tapping into these and other programs contact M-TEAMS at 519-419-0070 or by email at billmac@mteams.ca 

\r\n The Stiller Centre’s mandate with this program is to help Sarnia-Lambton and Middlesex but they have the flexibility to go outside of that geographic area and have done so in the past. The paperwork was straightforward and Stiller Centre personnel helpful, comparing favourably with the Yves Landry Foundation which is our current benchmark for model programs.

\r\n On March 22, our portion of Build and Grow Your Business titled Obtaining Resources for Product Development focused on how to find resources like the Stiller Centre and other great programs that most entrepreneurs never hear about. 

\r\n Additionally, I have received inquiries about the affordability of FundVantage.  I am pleased to announce that we have an introductory, limited time, 1-year offer of $19/mo. plus taxes for the Small Business Edition which is applicable to:
\r\n • Canadian Controlled Private Corporations, Partnerships, or Proprietorships
\r\n • Operations from one location in Canada with 50 employees or fewer

\r\n Contact M-TEAMS at 519-419-0070 or email billmac@mteams.ca for more details.

\r\n There are indeed many internship programs available.  In fact, FundVantage lists 41 programs that respond to internship as a key word with nearly 300 that have the key word intern.  Where to start?  The following programs all require at least a college diploma and are recommended as a first pass for companies that are developing new or improved technology:
\r\n 1. IRAP’s Youth Program- It’s had a number of acronyms over the years but now provides $30k for the first year of employment for new or recent graduates.  Money becomes available in April and runs out soon after.  Get your ducks in a row now!
\r\n 2. OCE First Job Program- $25k is awarded to a firm that is looking to hire a candidate for R&D activities. Currently, OCE is limiting applications to firms that have utilized the candidate for OCE sponsored projects.
\r\n 3. Ryerson University iSTEM- $30k is available for Ryerson STEM (Science, Technology, Engineering, Math) graduates.
\r\n 4. Connect Canada Internships Program- The firm pays $5k, all SR&EDable, for a 4-6 month project.  Connect Canada pays $5k.  It can be linked with an Engage grant so that the company gets $35k worth of R&D for less than $3k.  According to Giulio DeSando of Connect Canada the program is currently undersubscribed.  So there are opportunities.
\r\n 5. Small Business Internship.  Industry Canada will pay 75% of the costs of an internship to a maximum of $10k. The purpose is to develop e-business capability in the firm.

\r\n A number of other programs are available including Mitacs’ Accelerate and NRCan’s Science and Technology Internship Program.  Industrial Fellowships are available. These programs facilitate industrial research carried out at research institutions, typically universities.

\r\n All of the above programs give employers the opportunity to test drive new, highly qualified talent while pursuing their R&D goals.  We encourage firms looking for assistance with R&D projects to consider one or more internships to achieve their goals.

\r\n There has definitely been no Cone of Silence as the Federal Government issued a press release on January 10.  The Honourable Gary Goodyear, Minister of State for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) , announced the funding  in Brampton, Ont.

\r\n Earlier SMART rounds were very popular with Ontario manufacturers.  Previously, SMART provided up to 50% and $50,000 for project costs which included capital items.  Normally, government programs do not contribute towards equipment purchases.  SMART did. In this round maximum funding has been increased to $75,000 although SMART will provide a maximum of just 33% for Productivity Enhancement projects.  Applicants should be able to identify quantifiable objectives such as increasing throughput, decreasing labour costs, reducing waste etc. Successful applicants in previous rounds were able to demonstrate short-term payback, generally less than one year.

\r\n Funding is also available for Productivity Assessment projects to a maximum of $5,000 using the old 50% funding trick. That’s the first time this year. We encourage firms to utilize these tools as well.

\r\n SMART’s website indicates that data entry screens will not be available until February.  It’s not clear if this is because they are revamping the application process or CME is not set up to handle applications yet.  We recommend using the time available to prepare the necessary information for the application.  Use the time wisely to Get SMART! 

\r\n Details on the new program have not been released but the current model in Eastern Ontario, “…will provide 15% of eligible project expenses for implementation of new technologies, new equipment or skills training for employees for projects valued at $500,000 or more.”  The translation is that for a project of $500,000 in total costs (the minimum) EODF will provide $75,000.  This may seem like incremental funding but the monies can be used to leverage additional investment from other government programs and private sector sources. (More about leveraging in a later newsletter)

\r\n Private sector firms looking for EODF support must have:
\r\n • A minimum of 10 employees
\r\n • At least 3 years of financial statements
\r\n • At least 50% of the total project costs from internal sources or private sector investment i.e. minimum $250,000 for the smallest project
\r\n • A project that will create 10 net jobs in 5 years

\r\n “Economic development offices, business associations, and regional or sector organizations” can apply to EODF and receive up to 50% of eligible project costs on projects of $100,000 or more.

\r\n The hurdles are fairly high for most private sector firms.  However, EODF is a grant program.  There have been examples of government programs in the past where potential applicants were led to believe that they were applying for grants only to find out that the funds were fully repayable.  We look forward to seeing the details.

\r\n For assistance with EODF, SODF when it is rolled out, or other government programs call 519-419-0070 or check out our website at www.mteams.ca

\r\n At M-TEAMS, we get you money! 

\r\n The National Research Council’s Industrial Research Assistance Program (IRAP) announced a new pilot program titled the Digital Technology Adoption Pilot Program (DTAPP).  The program will run to March 31, 2014 and is intended “…to help SMEs adopt digital technologies into their operations to improve productivity.”

\r\n IRAP will create DTAPP teams which will provide direct advisory services, funding (up to $100,000) and linkages to other expertise with the aim of improving the success of adopting a digital technology and consequently increasing client firms’ productivity.  The DTAPP team will develop an adoption plan which includes:

\r\n a. Analysis of firms’ current situations including baseline productivity measures, employment, and FYE financial information
\r\n b. Identifying changes needed in the firm. This may include implementing organizational changes, process changes, training employees, or adaptation of the scale or features of the digital technology to best meet requirements.
\r\n c. Reporting the outcomes of the technology adoption including lessons learnt and changes in productivity.

\r\n DTAPP services can include:

\r\n •     Supporting benchmarking and other diagnostic services.
\r\n •     Cost benefit analysis of various process and technology solutions
\r\n •      Access to expertise, facilities and workshops related to technology adoption, provided via colleges and other organisations.
\r\n •      Supporting feasibility and simulation studies
\r\n •      Identifying and sourcing appropriate technologies and supporting the adaptation of the technology to your operation’s needs.
\r\n •      Identifying and supporting training resources.
\r\n •      Providing independent review, quality assurance and feedback on the work performed by consultants

\r\n As always, when dealing with IRAP, contact your local Industrial Technology Advisor (ITA) first and see if he or she believes your situation warrants support.  Readers are referred to our website and encouraged to read “Tips for Successful IRAP Applications”.  If your firm decides to hire a consultant to contact IRAP on your behalf make sure that the consultant has registered as a Lobbyist .  M-TEAMS has registered and will be glad to assist your firm with its next IRAP or other government program applications.  For more information call 519-419-0070 or check out our website at www.mteams.ca

\r\n Tap into DTAPP! 

\r\n In WWI our troops were equipped with the Ross rifle which did not withstand the rigours of trench warfare.  The Royal Canadian Navy barely survived between the wars and entered WWII with only 11 ships.  More recently, replacements for the aging Sea King helicopters were cancelled and our troops were sent to Afghanistan with Iltis jeeps and without appropriate uniforms.  In all instances our service people responded magnificently but at greater cost than was necessary.

\r\n Fortunately, Canadians recognize that our forces need the best equipment available and recent government decisions seem to be reflecting that recognition.  The F-35 contract is proceeding.  Our pilots will be able to fly with the best from our NATO allies.  The recent award of two shipbuilding contracts to the best yards in Canada is a model for non-politicized procurement.  We are also pleased that programs such as the Canadian Innovation Commercialization Program (CICP) and Defence Industrial Research Program (DIRP) are available.

\r\n CICP was the subject of an earlier newsletter and is on M-TEAMS’ Blog for reference.  It applies to procurements from all government departments.  However, DIRP is a specific program targeting the Department of National Defence.  Under DIRP DND will providing matching funds up to $500,000 for the development of leading edge technologies.  According to the DIRP website “ The primary objective of the DIRP is to support the strategic research interests of the Canadian Forces and to introduce new and innovative technologies into the Department of National Defence.”  This can only benefit our forces and the men and women who serve in them.

\r\n This Remembrance Day as we reflect on the human toll of more than 100 years of Canada’s wars and military commitments it’s good to know that there is a peacetime commitment to provide those who serve with the best that is available.  We should give them the best tools to do their jobs.  Lest we Forget. 

\r\n  

\r\n Titled “Innovation Canada: A Call to Action”, the Government’s Expert Panel chaired by Tom Jenkins released its report recommending sweeping changes to Canada’s R&D support programs.  Recommendations include:

\r\n 1. Creating an Industrial Research and Innovation Council (IRIC), with a clear business innovation mandate
\r\n 2. Simplifying the Scientific Research and Experimental Development (SR&ED) program by basing the tax credit for small and medium-sized enterprises (SMEs) on labour-related costs
\r\n 3. Making business innovation one of the core objectives of government procurement, with the supporting initiatives to achieve this objective
\r\n 4. Transforming the institutes of the National Research Council (NRC) into a constellation of large-scale, sectoral collaborative R&D centres involving business, the university sector and the provinces
\r\n 5. Help high-growth innovative firms access the risk capital they need through the establishment of new funds where gaps exist
\r\n 6. Establish a clear federal voice for innovation, and engage in a dialogue with the provinces to improve coordination and impact

\r\n Much as been written already about the report and this newsletter will offer only a few brief comments for now.

\r\n Simplifying the SR&ED program is a good idea.  However, eliminating materials will hurt our manufacturing base.  Manufacturing experiments can be extremely costly in materials consumed.  Hasn’t the manufacturing sector suffered enough?
\r\n Expanding the pilot Canadian Innovation Commercialization Program (CICP) is a good idea.  It’s a program that could benefit both Canadian innovators and taxpayers.
\r\n Transforming NRC makes sense.  The institutes have struggled (or maybe not struggled) to be relevant to industry.
\r\n Focusing on high-growth firms runs the risk of the Government trying to pick winners; something at which they are notoriously unsuccessful.

\r\n Hopefully, the Government will neither shelve this report nor legislate its contents verbatim.  If you are concerned obtain a copy of the report, read it, and address concerns to your MP and/or business/industrial association.  It’s too important to let this one slide. 

\r\n According to Wikipedia, “A value proposition is a promise of value to be delivered and a belief from the customer of value that will be experienced.” Furthermore, “Developing a value proposition is based on a review and analysis of the benefits, costs and value that an organization can deliver to its customers…”  To put it simply the product or service that you are providing has to be worth more to your customer than the money that they are paying you; AND they have to understand that.  Otherwise, they will not buy from you.

\r\n Generally, sellers know their prices.  Most can articulate benefits.  How many can establish the value?  The seller should be able to say, “If you buy this from me you will reduce costs by $X or increase sales by $Y.”  The buyer should be able to calculate the payback.

\r\n At M-TEAMS our Value Proposition is that we help our clients obtain funds for specific projects; funds that they would be unable to obtain otherwise or without much greater costs to themselves.  We attempt to ensure that the benefits outweigh the costs by a factor of 10:1 on an ongoing basis. i.e. For every $1 that our customers pay us we target getting them at least $10.  That’s a payback of 1.2 months!
\r\n
\r\n We're M-TEAMS.  We get you money!

\r\n While there are programs with available funds, the above are representative.  Does this mean that an organization should forget about applying for government assistance in the fall?  Definitely not!  The fall is actually a good time to plan ahead for funding that will become available.  The following are some key reasons:
\r\n 1. Many government programs take time to prepare; business cases need to be developed and technology partnerships established.  Fall is a good time to do your homework and get in the pipeline.
\r\n 2. Often programs run on a First In, First Out (FIFO) basis.  i.e. If your application is at the head of the queue when funds become available then you are first to get approval,
\r\n 3. Government programs suffer from slippage.  Companies, often for very good reasons, are unable to complete the work in a timely manner.  Decommitted funds can be recommitted to your project.
\r\n 4. Government employees have more time.  No government employee is ever going to admit that they are not busy and for the most part they remain busy even when funds are gone.  However, you will have shorter delays in contacting them and they will have more time for your project.

\r\n So, while the fall seems like a good time to go dormant, it’s actually a good time to plant the seeds and work the ground for a spring harvest.  

\r\n The Canadian Innovation Commercialization (CICP) provides firms with the opportunity to make their first sale of a new innovation to the Government of Canada.  The Government will buy your product or service and test & evaluate it with a government department as a Beta test site.  CICP will even find the right government department that can assess your offering!  If it’s ready for market and hasn’t been sold yet, then your firm can now apply for CICP on MERX .  The second of three intake periods has been completed.  The third is anticipated within the next few months.  CICP should become an ongoing program after that. That would be consistent with the Jenkins report.
\r\n
\r\n
\r\n M-TEAMS rolled out its Triple-M service  in order to identify such opportunities for subscribers.  Subscribers to Triple-M receive targeted notifications of bidding opportunities that are of interest to their firm.  A basic subscription will include registering for MERX, monthly notification of up to 3 relevant bidding MERX opportunities from the public and private sector, monthly notification of relevant IMIN opportunities, and 1 detailed public sector RFQ per month as requested from the notifications received. Subscriptions will start at $50 per month.  At the time of writing there were more than 2000 public sector opportunities listed as well as more than 240 private sector opportunities.
\r\n For information on Triple-M or the current suite of M-TEAMS’ services check the website or call Bill MacArthur at 519-419-0070.  Triple your business with Triple-M! 

\r\n Recently, I an application for the Canadian Innovation Commercialization Program (CICP).  WE-tech was very helpful and the proposal wasstronger as a result.  WE-tech has assembled a strong entrepreneurial team in Karen Behune-Plunkett, Deborah Livneh, and Rob Whent.

\r\n Similarly, I prepared a preliminary proposal for FedDev’s Prosperity Initiative and received advice from their Kitchener office.  As with WE-tech the suggestions were solid and helpful.  It was very pleasing to see such a marked improvement from FedDev’s launch with the SODP program in 2009, when it was almost impossible to speak to anyone who knew anything.

\r\n It is a pleasure to be able to endorse the work of the people in these agencies as well as those working for other government and non-government organizations such as IRAP, MEDT, OCE, and the Yves Landry Foundation (hopefully they’ll get more money); to name only a few.  Certainly there are individual examples of organizations or individuals within organizations who just don’t get it but these organizations and their people do.  It’s a relief to be able to ask questions and not receive Rick’s answer, “I stick my neck out for nobody.” 

\r\n A Basic Triple-M subscription will provide subscribers with:
\r\n • Registration for MERX
\r\n • MERX checked minimum monthly for new RFPs, RFQs, and all related documents available from the public sector
\r\n • Up to 3 notifications per month forwarded to the subscriber
\r\n • 1 detailed RFP/Q per month forwarded upon request. 
\r\n • Additional RFPs documents are available upon request

\r\n Fees
\r\n • Fees $50/month plus 2% of any contracts secured:  $250 for a 6-month subscription. $500 for 14-month subscription. 
\r\n • $15 per additional RFP/Q requested
\r\n • Proposal fees are extra

\r\n At the time of publication there were more than 2.000 open Canadian opportunities as well as more than 260 Private Tenders. For the complete details and to begin your Triple-M service today, contact us as follows:

\r\n 519-419-0070  Office
\r\n 519-567-0918  Cell
\r\n Email billmac@mteams.ca  

\r\n  

\r\n There are two types of research known as Primary and Secondary research. To add further to the confusion, I’m going to start with Secondary research. Secondary research is essentially reading what somebody else has written about the subject. For example, if you go to the library or on the internet and look for articles on Wind Turbine Quality Assurance then you will be conducting Secondary research. This process can take a lot of time, especially if the field has been studied extensively. I have had clients say, “I spent hours on line researching the right grommet for our application.” They are right. They have been performing research. Unfortunately, it’s Secondary research which is not eligible . No new knowledge has been generated.

\r\n That leads to Primary research. In Primary research new knowledge is generated by analysis or experiments. This knowledge could not be generated through any amount of searching of libraries, the internet, or databases. No amount of reading will provide the answers required. New knowledge is generated in the process and that’s what the SR&ED incentive is all about.

\r\n So, searching online for the right grommet isn’t eligible for SR&ED. However, experimenting to determine the needed properties for a new grommet probably will be. New knowledge will be generated.

\r\n To summarize, Secondary research is the process of finding out what other people have done. Primary research is the process of finding out new stuff for yourself. Contact M-TEAMS for help with either Primary or Secondary research. 

As always, one never knows how well a new program is going to be delivered when it’s announced. On one hand the Yves Landry Foundation delivered training funds seamlessly and on the other hand the FedDev SODP launch was absolute chaos . Hopefully, the Connect Canada internship will emulate YLF’s delivery. Their Program Guide indicates that they need six (6) weeks for approval and, hopefully, that will be the maximum. The good news is that there is little odious paperwork required on the part of the company.

Another internship program being offered by Industry Canada through the Community Futures agencies is the Small Business Internship Program . “The Small Business Internship Program provides small and medium-sized enterprises (SMEs) financial support to hire a post secondary student intern to assist them in their adoption of e-business strategies to increase their productivity and competitiveness.” SBIP has been around for more than a year now and we are not familiar with anyone who uses it. On the surface it seems like a valuable program. The intern has to spend 420 hours on the job and the government will pay up to 75% to a maximum of $10,000 . Most SME’s e-business could use a boost. There should be a fit here. We await feedback.

Internships may or not be the way to go to solve a specific problem. They are definitely a low-risk option that can reap huge rewards while providing real-world opportunities for elite level students. Internships can also lead to the development of new talent. M-TEAMS recommends that SMEs consider internships on a regular basis.
 

The National Research Council through IRAP has assisted small firms with market studies for a long time. Currently, they will pay up to 50% of the cost of a consultant and some internal salaries. Since a basic market study for a small business will generally cost between $10-15,000 and could cost a lot more, IRAP’s assistance is very helpful for small firms. However, IRAP is under a tight budget leash this year and their Industrial Technology Advisors are not being allotted many projects. What else is out there?

The Export Market Access  program, which is being delivered by the Ontario Chamber of Commerce, can provide 50% to a maximum of $5,000 for a market study focused on export sales. The paperwork is excessive for this program based on our experience but the old adage “He who pays the piper calls the tune” applies.

In Windsor and Essex County Optic is being delivered by the Odette School of Business at the University of Windsor. Up to $5,000 is available for start-up firms for start-up expenses that include:
“…legal (incorporation, patent development and application), R & D (testing, design validation, prototyping), market development, (market assessment or feasibility studies, website development, trade show booth acquisition, literature), financial consulting (development of financial plan or investor prospectus), due diligence and specialized or expert advisors.” It’s our view that the market assessment portion is the most critical. Without some unbiased, positive market information there isn’t much point in doing any of the other activities. Optic is a new program and the initial word is that the requirements are opaque but we expect that the Odette team will work out the bugs and be delivering a good working program shortly.

If none of the above programs are a fit for your business, we still strongly recommend completing a market study before proceeding. Bite the bullet! Otherwise you won’t know if you have another Jai Alai on your hands. 

Several years ago when I worked in the automotive parts industry, the CAW’s Plant Chairman returned from a conference in which team work had been discussed. According to his newsletter to the general membership “…nobody had anything good to say about team work.” Most of us found this ironic as the union’s Plant Committee consisted of 5 people plus Union Stewards, all of whom seemed to work quite well as a team. They also had broader support from National CAW team members. There are teams within in any organization. The question is, “Are they the right teams?”

At one time larger firms had engineering, purchasing, manufacturing, production, accounting, quality assurance, and sales departments. All of these departments would work as teams amongst themselves. This structure was good at fostering expertise within given areas. However, it didn’t serve the needs of the overall organization. The switch to cross-functional teams helped to address this problem with teams built on product lines or product platforms. However, there are much broader problems than simple organizational structure issues that can lead to the wrong teams.

The key point is that there will be teams in any organization. These teams can be counter-functional, distracting focus from achieving the organization’s mission. Counter-functional teams will be formed in the absence of management or as the result of poor or dated management direction. It is the duty of management to organize and structure teams so that they are focused on the objectives, goals, and tasks of the organization. Management has to define, establish, and maintain the teams it wants. Otherwise they will have to deal with the teams they get. What teams do you have at your work place?
  

There are many techniques that have been developed by reliability engineers. These techniques generally require the use of prior experience to predict what can go wrong, assigning some likelihood of that happening, and determining what to do if it does happen. In the case of the Japanese Tsunami much of this was done. Japanese engineers just didn’t predict that an earthquake which would shut down a nuclear reactor would be followed by a Tsunami that would flood the auxiliary diesel generators. Perhaps they did and just rated the probability so low as to not be a concern. How could they have prevented this Godzilla from striking them down?

One of the techniques that I learned in my engineering career was Failure Mode and Effects Analysis (FMEA). FMEA is a systematic approach to identify potential failure modes and design them out. The technique was developed in the 1940s and has been adapted to the food industry in HACCP. Ford promoted FMEAs heavily in the automotive industry beginning in the 1970s. FMEAs have been very successful at identifying potential failures based on past experience, enabling designers to design them out.

At its basic level a designer will use FMEA techniques to rate each potential failure mode based on the Severity, probability of Occurrence, and probability of Detection if it does occur. These ratings, generally on a scale of 1 to 10 are then multiplied to obtain a Risk Priority Number or RPN. An RPN of 1 means that the failure mode is harmless, will never occur, and will always be detected in time. Conversely, an RPN of 1,000 means that the failure is lethal, will happen frequently, and will never be detected. If used properly FMEAs can help prevent those potential Godzillas from striking down your new product or process.
  

The Japanese know that they live on the ‘ring of fire’ and have a long history of earthquakes and tsunamis. They have perhaps the most advanced technological society in the world and have prepared for disasters. The Japanese have built their buildings to withstand earthquakes, have installed tsunami warning sirens , and have breakwaters to minimize flooding. They have plans, evacuation routes, and shelters. Their people and response teams have been trained for disasters like this one. Although the scale is undoubtedly much larger than they had expected, without all this planning the situation would have been much worse.

How well are we prepared in our businesses for a catastrophic event? It wouldn’t take a Japanese-sized tsunami to put many of us out of business. Most of us live in areas where there are some natural risks; tornados, hurricanes, floods, earthquakes, forest fires, or tsunamis. There are also some manmade ones. Something as simple as a computer virus hit me last week, shutting my laptop down for a day. This fiasco was the simply result of me pushing the wrong button.

Anticipating a disaster is the first step and developing a Disaster Recovery Plan is essential for any business. Such a plan consists of three (3) elements:

1. Preventative Measures
2. Detective Measures
3. Corrective Measures

Preventative Measures in the case of a computer virus include having and updating security software, running regular scans, and having an offsite backup. Detective Measures include security software. They also include recognizing when your computer acts up. Corrective Measures include cleaning up your PC, upgrading your software if necessary, and replacing your PC if you have to. Also, recognize the time to call in the pros.

Does your business have a plan? Remember it won’t take a tsunami or a tornado to stop you. It might take a lot to get you going again. Plan for the worst, be prepared, and hope that you never have to use your plan. 

Morgan Freeman also won an Oscar for his portrayal of Nelson Mandela in Invictus. Mandela convinces South Africa's rugby captain François Pienaar, also a formdable leader as portrayed by Matt Damon, that the Springboks can win the Rugby World Cup .  Mandela believes that a victory will unite a nation divided on colour lines.  In the process both groups overcome fears and prejudices. 

Russell Crowe’s performance as Jack Aubry in Master and Commander presents us with a leader who exhibits concern for those he has to lead while focusing on getting the job done. Crowe's Aubry has to lead men into battle knowing that many will killed or severely injured but he doesn't let his concerns stop him from doing his duty.

A real life example of military leadership is a sober Mel Gibson in We Were Soldiers. Gibson portrays Hal Moore who commanded troops in a terrible battle in Vietnam . There are many examples of fine leadership in the movie with my favourite occurring when Moore has to pull a soldier together after he mistakenly called in an air strike on some of his own men. Moore reassures the horrified soldier that he was doing a great job. One got away from him but he had to keep doing what he was doing.

In Apollo 13 Ed Harris plays Gene Kranz who was responsible for directing the activities that were necessary to get the marooned astronauts back. Kranz keeps his team focused on the job at hand while remaining calm in an emergency.

My favourite is Michigan’s Jeff Daniels as Joshua Chamberlain in Gettysburg . Daniels has a number of memorable scenes but the one that sticks is Chamberlain trying to convince a group of mutineers to fight again. He makes sure that the men are fed before he tries to convince them to do anything. He displays uncertainty but doesn’t show it to the men.

So on the silver screen we have seen leaders who lead by example overcoming hardship, are able to unite people for a common cause, balance the concern for their subordinates with the needs of the job, get subordinates to put past mistakes behind them, keep everybody calm and focused in an emergency, and exhibit confidence even when they feel uncertain. Maybe the Oscars aren’t a total waste of time after all!
 

Why do these books sell? There are three obvious reasons:
1. People who buy the books are unaware that there are Government sources that will provide the information.
2. Buyers think that any Government publications are impenetrable.
3. There is a view that Governments want to hide some programs for whatever reason that theymay have.

None of these reasons hold water. First, numerous Government sources are available to provide the information to you. The first pass is to go online and look at the website Canada Business Services for Entrepreneurs. There’s a Main Topic titled Grants and Finances. With very modest web navigation skills it’s fairly straightforward to find whatever programs that suit your firm’s needs.

Second, Government representatives attempt to stay on top of these programs and provide the information if you ask. IRAP personnel or, in Ontario MEDT and OCE personnel, are generally very knowledgeable. Additionally, your local Development Commission or Community Futures Development Corporation can help.

Third, MP’s and MPP’s office staff will provide information if requested. Remember, there’s nothing that a politician likes better than a photo op with a company in their riding receiving government funds.

As noted above, obtaining information about Government programs is not impenetrable. For some programs the application process requires a lot of company information, expertise with application processes, and persistence. None of this is available through a grant book.

Finally, politicians have no reason to hide government programs. Similarly, government agencies and bureaucracies have no reason to hold their lights under a basket. They are given a certain amount of funds to deliver within a limited time frame. It’s easier for them if more firms apply. Allotted funds will get spent. If the programs are ongoing they can go back to politicians citing the high demand as a reason for more funds.

In conclusion, grant books are great fundraisers for the publishers but they provide information that is readily available elsewhere. Utilize the sources you know and apply for the programs that make sense for your business.
 

The first thing to realize before approaching Dragons, Angel Investors, or Venture Capitalists is that theirs is the most costly money. If you can get money by borrowing from conventional lenders then you are better off going that route. People generally find themselves in front of fire-breathing dragons only when they have exhausted other routes. Dragons are prepared to take more risks but will want considerably more in the way of rewards.

Second, Dragons are interested in their own financial reward first and most definitely foremost. Therefore, your proposal has to present a business case that provides them with a high reward to risk ratio. Do everything up front to minimize the risks and maximize the rewards. That means that you should have good, unbiased marketing information. The target market should be identified. The costs to market should be realistic. A good Market Study and Business Plan will do a lot more to slay Dragons than any showmanship.

Third, make sure that you have your intellectual property protected. The four main categories of IP are patents, trademarks, industrial designs, and copyrights. The fifth is your ‘know how’ i.e. your trade secrets in terms of product features or means to produce. By going on shows like Dragon’s Den, you are disclosing your intellectual property to the world. If it’s not protected then somebody else can knock it off.

Fourth, maintain some emotional detachment from your idea. Present it as objectively as you can from a business perspective. You are asking for money to make money. The only reason that Dragons will provide money to you is if they can make substantially more money than they invest. Present your idea as a money-maker with facts to back you up.

Finally, it’s best to remember that Governments are Dragons as well. Generally government employees won’t send you packing in 30 seconds or less before the commercial break. More likely they will ask you for more and more information until you have missed the funding deadline. Government Dragons will want many of the same things that private sector Dragons want; a good, perhaps spectacular return on their investment. Even if you have something that will solve Global Warming and Cure Cancer at the same time, you will need to be able show that your investors will make money . If you can’t, expect a Dragon’s Fiery Breath to descend on you. 

Often, I referred to my years in Quality Assurance in the 1980s as “doing time”. Arguing with General Foreman and Production Supervisors about whether or not they could ship the defective parts they had made was draining. However, the QA techniques that I learned during that period were invaluable and some of them can be applied to document eligible SR&ED work. For example, the 8 Discipline approach promoted by Ford does provide an excellent means to document problem solving. If those problems are not of a routine nature then they could be eligible for SR&ED tax credits.

First, there is a caveat. Quality Control work is strictly excluded from SR&ED claims. However, the 8 D approach as part of a continuous improvement program will often result in non-routine solutions. The problem solution must require overcoming a technological obstacle that requires a technological advancement. In those cases you will have some good documentation.

What are the 8 D steps?

D1: Establish a team: People with product/process knowledge.

D2: Define and describe the Problem: Specify the problem by identifying in quantifiable terms the who, what, where, when, why, how and how many (5W2H) for the problem.

D3: Develop Interim Containment Plan Implement and verify Interim Actions: Define and implement containment actions to isolate the problem from any customer.

D4: Determine, Identify, Verify Root Causes, and Escape Points: Identify all potential causes that could explain why the problem occurred. Also identify why the problem has not been noticed at the time it occurred. All causes shall be verified or proved.

D5: Choose and Verify Permanent Corrective Actions (PCAs) for root cause and Escape point: Quantitatively confirm that the selected corrective actions will resolve the problem for the customer.

D6: Implement and Validate PCAs: Define and Implement the best corrective actions.

D7: Prevent Recurrence: Modify the management systems, operation systems, practices and procedures to prevent recurrence of this and all similar problems.

D8: Congratulate your Team: Recognize the collective efforts of the team. The team needs to be formally thanked by the organization

Steps D1, D2, D4, & D5 can be used to support SR&ED claims as follows. Establishing the team (D1) will help provide documentation; in particular for those poor documenters in the organization- generally Senior Managers and Shop Floor technicians. There’s an old adage that a well-defined problem is half solved. Defining the problem (D2) properly will help establish systematic methodology which is the third leg of the SR&ED stool. Determining the root cause(s) (D4) also supports systematic methodology. If the problem is technological, then it’s also SR&EDable. Experiments to verify the resolution of technological problems (D5) are also SR&EDable.

So, Discipline is required to solve production problems and 8 Disciplines can be used to document the process.
  

Let’s look at some key government programs; SR&ED, IRAP, NSERC, OCE, and FEDDEV/SODP . Will they face significant cuts? In the case of the SR&ED tax credit program, the answer is No. There have been no changes in legislation and there is no ceiling on the program. So, as long as the claims meet eligibility requirements and are well documented the funding will be available.

IRAP is another matter. Preliminary word is that IRAP is being hit hard with the latest budget round. Some of that hit is due to carry-over demands from multi-year projects i.e. the money was already committed for the beginning of the fiscal year. Another contributing factor is that IRAP greatly expanded its contributions in the past two years which makes the reduction to pre-stimulus levels seem like a major blow. On a positive note, it’s unlikely that funds for new graduate hires will be cut. Demand is expected to be high so it’s best to apply early in the new Fiscal Year. Also, IRAP has a long track record of receiving funds from other government departments or receiving funding boosts for specific project objectives. Nevertheless, it’s likely that IRAP contributions will be sparse this year.

Conversely, if NSERC takes a hit, there might be a positive effect on businesses. University researchers will need to be competitive and pro-active in order to get NSERC funds which are increasingly tied to industry partnerships. Also, one of the cornerstones of government policy, regardless of the party in power, is innovation. The focus of the government during budget tightening is not likely to change. Look for NSERC cuts to be modest and targeted at ‘pure research’, not industry programs.

OCE will take a hit. How much and how deep is uncertain. However, given the Ontario government’s fiscal straightjacket it’s doubtful that OCE will have much in the way of funds to work with over the coming year. However, like IRAP, their superb field personnel will be available for advice, direction, and mentoring.

Launched in the middle of the recession FEDDEV/SODP has been a wild card. The initial SODP launch was bungled with concerns about inadequate timetables, poor response, and favouritism being noted. More recent FEDEV announcements cite delivering funds through non-profits. This change will be positive and will provide alternatives to businesses. 

The session began with Director General Helene Dompierre and staff outlining the priorities update with three (3) goals identified:
1. Consolidation of various policies
2. Clarification with reference to the Income Tax Act and jurisprudence
3. Presentation of information on user-friendly websites

Headquarter staff discussed the policy review methodology and extensive consultations. Public Information Sessions are planned for January through May of 2011. No major changes in operating procedures and interpretations are included in the CRM. It was stated that:
1. CRA’s Review Plan is an internal document not to be shared with clients and practitioners
2. Procedures in the CRM are not a checklist but items for discussion
3. The CRM is not a ‘Game Changer’

However, several practitioners expressed concerns that the introduction of the CRM has led to a shift from project discussions with CRA personnel to it being used as a basis to deny claims that would have been accepted in prior years. Practitioners who had such experiences were invited to submit names to the Regional Assistance Directors. It is hoped that the Financial CRM currently being developed as a companion will not generate the same problems. Roll out is scheduled for 2012.

CRA also raised a number of issues in relation to SR&ED claims submitted. Assistant Directors from 10 regions were asked to submit their top 3 problem areas. Common issues included:
• Poor linkage of expenditures to actual SR&ED work
• Inadequate supporting information
• Misunderstanding of SR&ED requirements
• Client delays in providing information to complete reviews
Perhaps the most glaring problem was the behaviour of some who have entered the SR&ED Practitioner field. Apparently, there have been instances where individuals have submitted SR&ED claims for businesses that do no R&D.  When contacted for a review by CRA these firms then withdraw the claims.  Withdrawal will not be allowed in future and if fraudulent claims have been submitted then CRA will assess penalties.  In our view this approach is welcomed. 

On a happy/sad note Assistant Director Bill McKerrall of the Hamilton Region, which covers most of Southwest Ontario, will be retiring after 38 years with CRA. Bill has been a leader in promoting the program and ensuring that is applied fairly and consistently. He began the Practitioner Sessions 14 years ago in order to improve communications and the quality of the SR&ED claims. He will be sorely missed. Good luck on your retirement! 

1. Apply for SR&ED tax credits.  If your firm is performing development work on any products or processes, don’t ignore the SR&ED program. Your firm can get refunds up to 55% of monies spent using SR&ED and related programs.  SR&ED has literally saved many businesses from going under.
2. Make current SR&ED filings. Your firm has the option to file up to 18 months after your Fiscal Year End.  Don’t wait!  Get the money as soon as possible!
3. Make your SR&ED management ongoing.  Keep track of what you’re doing and what you’re spending as you go along.
4. Identify any new R&D programs for the year. If you plan to do R&D then you should plan the activities and plan to apply for funding above and beyond SR&ED.
5. Evaluate your Hiring plans. The spring is the time when many new graduates become available. Plan to apply for funds to support your new hire(s).

• Your firm meets their criteria
• You exhibit a willingness to work with them
• They have the money