Micro firms struggling to access proof of concept financial support

Keeping up to date with the complex variety of available funding sources is a significant problem for those UK micro business owners looking for financial support to prove that new products work, according to a new report from Innovate UK.

The study which was carried out by IP pragmatics on behalf of the government body found that the owners of Britain’s smallest firms predominantly have negative or neutral attitudes to support for this sort of innovation, in contrast to the positive opinion of the landscape held by the managers of large companies.

Understanding what funding is available and how to apply for it is seen as the biggest impediment to funding proof of concept projects, with owners of the youngest firms also struggling with matched funding requirements. The majority of micro firm owners spend less than 10, 000 on proof of concept projects.

The research also revealed that micro firm owners face lower success rates when applying for such funding than those in charge of larger companies and many find fewer than one in every ten applications they make are successful.

Almost half of those micro business bosses surveyed strongly disagreed with the statement that accessing proof of concept funding is not a problem. Those small firm owners not working in partnership with universities struggle the most when it comes to proving new ideas.

The report’s authors argued that focusing government funding for proof of concept in fewer longer term funding sources would significantly reduce the struggles experienced by small companies.

They also recommended that small firm owners look for opportunities for joint projects, in order to harness the expertise of people working for businesses that have previously been successful at receiving funding.