Turning Your SBIR/STTR Into Real Business Growth

This post is the seventh and final part of the “SBIR/STTR 101 for New Entrants” series. You can find links to all installments below.

1 — What Are SBIR & STTR? (The Beginner Breakdown)

2 — How the SBIR/STTR Process Works: The Three Phases

3 — Understanding SBIR/STTR Topics and Finding the Right Opportunity

4 – What You Need to Prepare Before Applying For an SBIR/STTR

5 – Writing a Strong SBIR/STTR Proposal

6 – What to Do After You Submit (And If You Don’t Win)

Introduction

Winning an SBIR or STTR award is a notable achievement, but the companies that realize the greatest value are those that treat the award as the beginning of a longer business strategy, not an endpoint. The SBIR/STTR program is intentionally structured to support the full lifecycle of innovation, from early feasibility to operational deployment and commercial adoption.

For small and mid-sized businesses, the program can serve as both a financial resource and a market-entry mechanism. This section explains how companies can turn funded R&D into sustainable revenue, deeper agency relationships, and expanded commercial opportunities.

SBIR/STTR as a Gateway

The SBIR/STTR program provides a level of access to federal stakeholders that is rare for small businesses. Throughout Phase I and Phase II, companies interact directly with technical program managers, end-users, and acquisition personnel, who influence future procurement decisions.

How to Leverage This Access Effectively:

• Engage consistently and professionally:
  Provide timely progress updates, respond to inquiries promptly, and demonstrate reliability. These seemingly small actions build trust and familiarity, which are crucial when entering the government market.
• Learn the mission context:
  Understand not only the technical problem but also how it fits within the agency’s broader operational environment. This insight strengthens your transition message and helps shape future development.
• Identify potential transition sponsors:
  These are individuals who see value in your solution and can advocate for its adoption within the agency. Building these relationships early significantly increases your likelihood of reaching Phase III.

By treating agency personnel as long-term partners rather than short-term reviewers, companies set the foundation for stability and growth within the federal market.

Building Toward Phase III and Beyond

Phase III represents the commercialization authority of the SBIR/STTR program. Although no SBIR dollars fund this phase, agencies can issue sole-source contracts to procure technologies developed in Phases I and II. This makes Phase III one of the most powerful features of the program for small businesses.

Key Preparation Steps Include:

• Documenting technical progress thoroughly:
  Clear reports, test data, and milestone updates demonstrate reliability and reduce friction when transitioning into acquisition channels.
• Engaging acquisition offices early:
  Many companies wait until late Phase II to speak with acquisition teams, but early discussions help you understand program needs, budget cycles, and procurement pathways.
• Identifying end-users and pilot opportunities:
  Demonstrations or pilot evaluations help build evidence of operational value—an essential element for transition.
• Assessing delivery and production capacity:
  Even if scaling is not immediate, agencies expect companies to have a credible plan for manufacturing, deployment, and support.

Companies that build Phase III planning into their workflow from the beginning often move more smoothly into follow-on contracts and full-scale adoption.

Strengthening Commercial Market Potential

Many agencies expect companies to pursue commercial markets alongside federal pathways, especially organizations like NSF, NIH, NASA, and DOE. Even within defense, dual-use commercialization is becoming increasingly important as agencies look for technologies that strengthen both national security and the private sector.

To Strengthen Commercial Viability:

• Conduct early customer discovery:
  Engaging prospective buyers or end-users helps validate need, refine features, and build market insight before the technology is fully developed.
• Gather feedback from potential partners:
  Manufacturers, distributors, integrators, or sector-specific partners can provide perspective on market fit and potential barriers to adoption.
• Analyze competitors:
  Understanding existing solutions—and clearly differentiating your technology—helps strengthen your commercialization narrative and pricing strategy.
• Develop a clear go-to-market roadmap:
  Consider production requirements, pricing strategies, regulatory needs, distribution channels, and early adopters.

A solid commercial strategy strengthens your credibility with reviewers and investors and positions your company for sustainable growth beyond the SBIR/STTR program.

Expanding Through Partnerships

Partnerships serve as catalysts for both technical advancement and market expansion. They can accelerate product development, open new pathways for adoption, and provide access to resources that smaller companies may not have internally.

Examples include:

• Prime contractors:
  Large federal contractors often seek innovative technologies to integrate into broader systems. Alignment with a prime can significantly increase your visibility and pathway to procurement.
• Universities or research institutions:
  These relationships support advanced R&D, access to specialized facilities, and credibility for complex technical work—especially for STTR projects.
• Systems integrators:
  This can enhance real-world applicability and help ensure your product fits into existing architectures.
• Commercial distributors or industry partners:
  These partnerships can expedite market entry, customer exposure, and revenue generation.

Effective partnerships help companies scale faster and diversify revenue streams, making SBIR/STTR investments more impactful over time.

Using SBIR/STTR to Build Organizational Capability

Beyond technology development, participation in SBIR/STTR helps companies build internal capacity across multiple operational areas.

This includes:

• Structured project management across technical and administrative tasks
• Formal documentation and reporting processes, which strengthen future submissions
• Enhanced customer engagement practices, grounded in federal expectations
• Improved internal processes for budgeting, compliance, and milestone execution
• A repeatable proposal development framework, which reduces time and increases success rates for future opportunities

Companies that approach SBIR/STTR as an opportunity to refine their internal capabilities position themselves for stronger long-term performance in both government and commercial sectors.

Key Considerations for Businesses

• SBIR/STTR should be integrated into broader strategic planning, not treated as isolated funding.
• Transition success requires early relationship building and structured communication.
• Phase III Authority can be granted after a Phase I award. You do not have to win a Phase II to continue with commercialization.
• Dual-use opportunities strengthen both federal and commercial viability.
• Organizational capability developed through SBIR/STTR increases competitiveness in future awards and contracts.

Conclusion

The SBIR and STTR programs provide a structured pathway for innovation, customer engagement, and long-term growth. Small and mid-sized businesses that leverage these programs effectively gain significant advantages, including early access to federal customers, structured R&D support, and a clear transition pathway toward commercialization and procurement.

Throughout this guide, we have outlined:

• How the programs work
• What companies need to prepare
• How to write a competitive proposal
• What to do after submission
• How to convert funded R&D into sustainable business growth

Success in SBIR/STTR comes from preparation, clarity, strategic planning, and consistent engagement. Companies that approach each phase deliberately and adapt based on feedback and opportunity position themselves for stronger performance, higher transition rates, and deeper market penetration.

For businesses looking to expand into the government sector or strengthen their innovation pipeline, SBIR and STTR offer a clear, proven pathway. With the right structure and support, these programs can help transform ideas into deployable solutions and emerging companies into strategic industry players.

If your business is ready to move from potential to performance in the SBIR/STTR ecosystem, Agility can help you get there. Our team brings proven experience in opportunity identification, proposal development, transition planning, and long-term growth strategies that align with federal expectations and commercial goals.

Whether you’re preparing your first submission, refining a previous attempt, or planning how to scale beyond Phase II, Agility provides the structure, clarity, and expert guidance you need to compete with confidence.

Partner with Agility to strengthen your SBIR/STTR strategy and accelerate your path to federal and commercial success.