This is How to Do It Right! The Five Worst Mistakes When Applying for Grants

Anyone who needs money for research and development projects and first has to apply for it to be able to work runs the risk of making five of the most common mistakes ...

Funding for research and development (R&D) offers companies enormous opportunities to gain advantages. This is because the money reduces development risks, strengthens innovation, and creates financial leeway for technological advances. Nevertheless, many applications fail—often not due to a lack of innovation, but because of avoidable errors in the application process, as noted by Hentschel Funding Consultancy from Unterföhring. In particular, medium-sized companies underestimate the requirements of funding agencies or start strategic preparation too late. Therefore, one should be aware of the following quintet of common mistakes in order to safely avoid them...

Mistake 1: The Project is Underway, But the Funding Has Not Been Applied for

The idea is convincing, the budget approved, the first orders have been placed—and with this, the funding opportunity is usually already lost, note the experts. One of the most common and costly mistakes is starting a project too early. For most funding programs, there is a clear principle that one must apply first and then begin. What many companies are also unaware of is that already signed contracts, binding orders, or the commissioning of external service providers can be counted as the official project start. While the project may still be fundamentally eligible for funding, for formal reasons, not a cent will be provided. Particularly tricky is that the regulations vary depending on the funding program, it is further explained. While some programs allow a start at one's own risk after the application is submitted, others require waiting until the grant approval or an explicit permission for an early start. Those who plan investment or development projects early and consider funding possibilities from the beginning secure a significant financial advantage. This is because the process from selecting the appropriate program, to application, to approval often takes several months. Only the research allowance offers an important exception. Unlike traditional funding programs, it can be applied for retroactively. Companies can claim eligible research and development activities for up to four years after the fact for tax purposes. Up to 12 million euros (approximately US$14 million)  in funding can flow per year and per company.

Mistake 2: The Project Topic is Great, but the Application is Poor

Many funding applications fail not because of the project's quality but because the actual innovation is not clearly recognizable, according to the experts from Unterföhring. Companies often describe their projects as if they were writing a sales advertisement. While they present the advantages of the innovation, they do not sufficiently explain what the actual novelty is. For funding, however, it is not crucial how attractive the end result is, but rather which technical advancements are intended to be achieved and which challenges need to be overcome. Funding agencies therefore expect a comprehensible presentation of the technical baseline, the development goals, and the planned innovation. The technical uncertainties are especially important because R&D begins where it is not clear if and how a technical goal can be reached. These risks and open questions highlight the innovative and research-oriented nature of a project. If the application lacks technical depth, concrete development content, or a clear description of the level of innovation, even a promising project quickly seems like mere product development, resulting in the loss of funding. Therefore, every application should address these key questions: What is technologically new, why are existing systems insufficient, what insights are expected to be gained for the first time in the project, and what technical risks could cause the project to fail?