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The 10 common mistakes of the SME Instrument funding scheme.

SME instrument is the European funding scheme dedicated to innovative, high-flying small or medium-sized business with European and global ambitions.

Until 2020 small companies based in the EU can apply but only the most convincing and excellent proposals will be selected for funding after a thorough evaluation by multinational panels of technology, business and finance experts. How to avoid mistakes, gain money and reach your place among the SME instrument beneficiaries? NCP Brussels and Enterprise Europe Brussels can provide you with some tips to avoid very common mistakes.

The SME Instrument aims at accelerating the route to the market of disruptive innovations and this funding program is very popular with SMEs; as a result, the application process is very competitive with a success rate of 10%,

What is in SME Instrument?

It has three phases, including a coaching and mentoring service and there are no set topics.

Considering the maturity of the proposed projects, companies can apply for a Feasibility study -  Phase 1 or a “from concept to market”proposal - Phase 2.

Beneficiaries of Phase 1 receive a lump sum of €50 000 and the project should last around 6 months.

Phase 2 helps companies develop their business concept further into a market-ready product, service or process aligned with company's growth strategy. Beneficiaries receive between € 0.5 and € 2.5 million but you can request a higher or lower amount. Projects should normally take 12 to 24 months to complete.

What went wrong with my proposal?

More than 2000 proposals are submitted by every cut-off date and most of them fail because important aspects of the projects are not valorized.

Here are some of the common mistakes to avoid if a company wants to submit an excellent proposal: 

1) No European added value: very often companies miss to underline the relevance of the project at European and international level. The project should help to solve EU challenges, enhance competitiveness in strategic sectors, selling EU technologies and products overseas

2) clear description of the disruptive aspect of the innovation the project should present to the evaluators a Market Creating Innovation, Sustaining Innovation, Efficiency Innovation, the proposal should show that the innovation is Different from existing solutions

3) No Intellectual Property Strategy.  A proposal without a solid strategy is not retained for funding. A good strategy should include a “freedom to operate” assurance.

4) Not having a focused commercialization strategy – The commercialization strategy needs to explain how the company plans to reach the target customers: whether directly through own sales channels, indirectly through distributors or through licensing agreements.

5) No clear description of Business impact Evaluators consider the impact the most important selection criterion.  Company should show in the proposal what are the International market opportunities, a credible ‘go to market’ strategy and let the evaluator understand the context and the value chain. The proposal should show not only impact for SME but also for EU (economic and social)

6) Business plan not ambitious enough. EU is looking for companies with global ambitions, the project proposal should include a Scalable Business Model, (high risk-high growth)

7) Poor competitor analysis – A lack of competitors will raise red flags for evaluators – perhaps there is no market for the product or perhaps the applying company hasn’t done enough market research to identify potential competitors. Always include a competitor comparison table that quantifies the advantages vs. competitors’ products.

8) Not enough customer validation – in particular phase 2 proposals often fail to convincingly present that the solution was validated with the target customers: whether through market research, pilot studies or from letters of support from potential customers or partners.

9) Unrealistic financial projections –. Always explain how you arrived at estimates your financial projections both from a bottom-up approach (number of contracts/ customers you expect to close) as well as a top-down approach (market share %) to show the validity of these estimates

10) No clear customer segmentation – This is a common mistake, where a proposal does not clearly present the target customers (including those who are early adopters) or the total addressable market size. Always aim at being as specific as possible on the segment that you are targeting rather than using general statements.


Despite the competition and the time consuming application procedure, SME instrument remains a very interesting opportunity for small business to innovate and grow,  and this is the main reason to apply.

for more information about SME instrument you can contact your National Contact Point  http://www.ncpbrussels.be/help/contact and Enterprise Europe Network https://www.brusselsnetwork.be/about/innovation/ services hosted by hub.brussels


For further info please contact Elena Angiolini This email address is being protected from spambots. You need JavaScript enabled to view it.

Tel : +3228000842

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