One of the largest disconnects between small entrepreneurial businesses and all levels of government is over the issue of project documentation as work progresses.
It is our experience that when it comes to providing government funding support for various innovative projects, government representatives more often than not expect a higher level of documentation than almost all small businesses seem to maintain. As a consequence, when the documentation expectation of the government is explained to them, many small businesses feel that the effort to comply with governmental rules and regulations isn’t worth the amount of funding that they could receive.
This is illogical, unproductive and potentially extremely costly thinking. Today, with a host of simple documentation methods including email communications, smartphone picture taking (stills and videos) with date/time stamping, dictation software, and many inexpensive apps, it is no longer overly time-consuming to document work in progress, and the Court of Canada agrees. As far back as 1992 in Northwest Hydraulic Consultants Ltd. v. Her Majesty The Queen, the Court stated that “it seems self-evident that a detailed record of the hypotheses, tests and results be kept, and that it be kept as the work progresses.” Then, in 2012, in the case of Airmax Technologies v. Her Majesty The Queen, the Court more strongly stated that documentation was an integral part to performing innovative projects. While the government lost the Airmax case, it has used that ruling to support its expectation that government supported projects require documentation “as the work progresses”.
When small businesses think of documentation, they think of massive notebooks with voluminous words putting up road blocks against timely completion of important projects with already tight deadlines. This is not what is required. On the contrary, the Court has continuously stated, including as recently as March, 2015 in R&D Pro-Innovations Inc. v. Her Majesty The Queen, that while innovation requires work to be carried out utilizing systematic investigation, it has always accepted a myriad of small businesses’ methods of project documentation, as opposed to a government prescribed methodology.
While the Court has avoided prescribing an all-encompassing methodology of documentation, in April, 2015, in Highweb & Page Group Inc. v. Her Majesty The Queen, the Court did state that the onus lies with small business to show documentary evidence that more likely than not, that the work undertaken was performed in a systematic manner. In the Highweb case, for example, the government asserted that the business was unable to present any documentary evidence supporting the systematic investigative process which was the basis of the claim, and thus, the Court denied the claim.
There are two important reasons why you should consider documenting the work done on the shop floor. First, is the “hit by a bus” scenario. While it is true that statistically speaking, your shop floor manager will show up for work tomorrow, there is always a worst case scenario where if the work done by your team is not documented, but exists only in the memory of your staff, it is vulnerable to loss along with your employees should a catastrophic event occur (i.e. employee resigns with minimal notice, or a family crisis prevents the employee from continuing the project).
Second, a government grant to subsidize projects such as process improvement or new or improved product development goes straight to your bottom line. If your business operates on a 15% profit margin, then a $75,000 grant from the government is the equivalent of a $500,000 gross sale. Further, your cost of sales is negligible. You can even contract a company such as Teeger Schiller Inc., (see details below) to handle the “administrivia” including the task of confirming or even documenting the work in progress, and we have state of the art software to simplify the task.
The benefit of a government grant can be something that is very good for your business with respect to improving your competitiveness, your product quality, your margins, your product offerings, and thus, the overall worth of your business.
As my firm knows from personal experience, it is very likely that your competitors are taking advantage of every potential form of business support and subsidy that the government has to offer. Shouldn’t you be doing so too?