R&D isn't just for big corporations. Here's how you can use innovation to build your business, from selecting projects to tax advantages.

The objective of research and development (R&D) in a small or mid-sized business is to obtain new knowledge, applicable to your business' needs, which can eventually result in new or improved products, processes, systems, or services that can increase your business' sales and profits. R&D can be conducted in-house, under contract, or jointly with others. While in-house R&D commands a strategic advantage in that the business is the sole owner of the know-how created and can protect it from unauthorized use, the rise in popularity of outsourcing business functions in the last several years has increasingly included R&D.