SBIR & Innovation Programs
SBIR for Manufacturers: What It Is
If you're a small to mid-sized manufacturer in the U.S., you’ve probably heard about different ways to fund new projects or develop innovative products. One of those options is the SBIR program — but what is it, exactly? And how can it help your business? Let’s break it down in straightforward terms.
What Is SBIR?
SBIR stands for Small Business Innovation Research. It’s a federal program designed to encourage small businesses to engage in research and development with the potential for commercialization. In simple terms, SBIR gives eligible small companies the chance to get federal funding — a grant or contract — for developing new ideas, technologies, or products that meet the government’s needs.
Who Runs the SBIR Program?
The SBIR program is run by 11 federal agencies, including:
Department of Defense (DoD)
Department of Energy (DOE)
National Science Foundation (NSF)
National Aeronautics and Space Administration (NASA)
Each agency has its own areas of interest, but all share the goal of fostering innovation among small businesses.
Why Should Manufacturers Care?
If your company makes specialized equipment or develops new manufacturing processes, SBIR can be a game-changer for you. It provides resources to help turn ideas into prototypes, products, or processes that the government may need — and eventually, you can sell or commercialize these innovations outside government contracts too.
How Does SBIR Work?
The SBIR program is divided into phases:
Phase 1: Idea Proof-of-Concept — This is the testing ground. Funding is usually <$150,000 for 6 months to a year. The goal? Show that your idea has potential.
Phase 2: Development & Prototype — Building on Phase 1 results, you get more funding, often up to $1 million, for up to 2 years. This phase focuses on developing a working prototype or product.
Phase 3: Commercialization — No SBIR funds are provided here. The goal is to bring your product to market, possibly through contracts with government agencies or private sales.
Am I Eligible?
To qualify, your business must:
Be a for-profit small business (generally 500 employees or fewer)
Operate mainly in the U.S.
Spend most of your work time in the U.S.
Meet the specific agency’s cost-share requirements (usually you contribute 10-30%)
How Can Manufacturers Apply?
Start by identifying agencies that fund work relevant to your business. Each agency has its own application process, but generally, you’ll need:
A clear project idea aligned with the agency’s mission
A concise proposal describing your plan, objectives, and how you'll use the funds
Evidence of your company’s capabilities and experience
Resources such as SBIR.gov provide detailed guidance, deadlines, and contact info for each agency. It’s worth consulting with a grant or proposal expert if you’re new to the process.
Benefits for Manufacturers
Funding Support: Get the resources needed to mature your ideas without giving up equity or taking on debt.
Market Validation: Having a government contract adds credibility and opens doors for private sector sales.
Partnership Opportunities: Collaborate with government agencies or larger contractors.
Long-term Growth: Use SBIR projects as a stepping stone to expand your innovation capabilities and market reach.
In Summary
The SBIR program is a valuable resource for hands-on manufacturers looking to innovate and grow. It provides expert funding to develop your ideas, demonstrate proof-of-concept, and eventually bring new products to market — whether for government use or beyond. If you have a promising idea that aligns with federal needs, exploring SBIR could open new doors for your business.
For more practical guidance, visit SBIR.gov and start the conversation about turning your innovations into real-world success.