Even for biotech startups, business resources are essential tools for organizing the non-scientific parts of your business.
Business resources include the tools, software, vendors, and skillsets that startups require to keep finances, operations, human resources, and more running smoothly. Depending on the company, some may choose to do as much as possible in-house, while others may outsource everything they can. One business might use apps for everything and another might use consultants and independent contractors. The variety of business resources that biotech startups can choose from is enormous.Startups have the challenge of finding which types of resources they need and then choosing the ones they think will be the most beneficial for their companies. These choices are important because with many systems it can be difficult to switch later on. Here we will cover the major categories of business resources that biotech startups need:
Read on to learn more about these resources and how startups can cover all their bases for each.
Financial business resources are one of the most broadly recognized as important by even first-time entrepreneurs. The ability to keep track of your company’s money, understand spending, pay taxes correctly, and pay bills is essential to any type of business. Scientific founders don’t often have expertise in business finance, so although they might know they need to keep track of their funds, they may not know how. This is where services come in, in the form of software, contractors, and consultants.
Accounting is a basic need for startups. Keeping track of everyday business spending, making sure bills are paid, being able to generate reports for investors, etc., are all broadly understood as necessary. Scientist-founders generally lack accounting experience, and therefore look into these services early on. The major types of accounting resources are software, bookkeeping, and certified public accountants (CPAs).
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Accounting software both assists founders to empower themselves to manage their own books and external bookkeepers to keep the startup organized with limited input from founders. When choosing an accounting software, there are different aspects to consider depending who will be interacting with it the most. If the founder will be doing their own accounting, some softwares are designed for those who are not professional accountants. Bookkeepers generally have software that they prefer to use, but they’ll usually be happy to work with any software. Another facet to consider is an eventual need to generate reports for grant funding agencies. Some grant funding agencies have experience with reports from certain softwares which can make interacting with them much easier.
Bookkeepers can be a fantastic resource for startups. Their services are generally not very expensive, but that depends highly on the individual provider. Bookkeeping services are in addition to accounting software, not instead of. The benefit that bookkeepers provide is having someone whose job it is to keep your finances organized. A good bookkeeper will tell you what information they need, when you owe money, when deadlines for certain tax forms are coming up, and more. They can generate PO’s, invoices, and reports for you as-needed. Usually, payment is on a per-hour basis.
Certified public accountants, or CPAs, are indispensable when it comes to doing your company’s taxes. From keeping track of deadlines to determining which forms you need to fill out to calculating your actual tax payments, a good CPA will keep a startup out of trouble with the IRS. In an ideal situation, your CPA and bookkeeper will communicate so very little input is required on the part of the startup founder. If you are so inclined you could certainly learn to do your company’s taxes yourself, but that may not be the best use of your time.
When a biotech startup needs to buy consumables and reagents, there are a number of options in the marketplace. For founders from academia, they are often familiar with the large distributors and may just go directly to those companies’ websites for purchasing. Other options include software that allows you to access catalogs from multiple distributors in order to find the best price and order from the same platform. Some such softwares are free while others can cost between hundreds and thousands of dollars per month depending on the selection available, the additional functionality of the software, and the amount of one-on-one service that comes with it.
These softwares are designed to save a company time when purchasing, so whether or not to use one depends greatly on the amount of time a startup currently spends on this task. For a startup that only buys a few items each week or re-orders the same things regularly, they might only spend a couple of hours per week on purchasing. In contrast, some small startups can spend over 10 hours per week just ordering supplies.
The benefit of using a software for purchasing can be multifold. They can help a company to be organized in their buying so they don’t accidentally order multiples of the same thing. If the software has inventory management built-in, it can also prevent running out of things. The purchasing softwares that come with customer service can also help to manage supply chains and determine when a product will arrive.
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Because a startup’s team is so important, taking care of that team is also essential. Human resources manages the legal aspects of employing people. Labor and employment laws are extensive at both the federal and state levels, so having some kind of system in place to be sure you are compliant is important. From hiring to termination, business tools for human resources can be especially helpful.
Finding the right employee for a job opening can present particular challenges at a startup. It’s common for a startup to need someone who can do many jobs, or “wear many hats” at the company. Therefore, finding just the right person (who is also comfortable with the risk that a startup presents), can be difficult. Business services that assist in hiring include job posting websites and recruiters. Job posting sites like Indeed can generate a huge number of applicants in a short period for low cost. However, getting a large volume of applicants that are not the right fit just means that the person doing the hiring will need to spend a long time sifting through resumes. Recruiters, on the other hand, will do much of the work for you to find just the right applicants. However, they charge for their services--usually related to the salary the new employee will receive.
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Once a startup hires its first employees, they have to be paid, taxes have to be withheld, and a host of other regulations must be followed. There are softwares available that handle this for companies of all sizes. Sometimes, payroll might be included as part of a human resources software package. These packages usually include onboarding of the employee, during which the employee fills out their tax paperwork, signs any contracts required by the employer, receives the employee handbook, and selects their benefits from whatever options the company provides.
Business development involves many different aspects of a company, but strategy is always central. From the first idea for a biotech startup, the founders must consider how their technology will become a product or service that generates revenue. Therefore they must develop a strategy.
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This strategy is most clearly seen through a company’s pitch deck and/or business plan. Although writing out a complete business plan has become less common in recent years, the concept is still essential. A business plan is the method by which a company will generate revenue and eventually profit from their activities. The main points from a business plan are captured in a pitch deck. The deck is designed to provide potential investors with the information they need to decide whether or not to invest.
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Part of the pitch deck should address the market the company is targeting. Therefore, the startup must engage in market research in order to find out whether or not their proposed market is interested in their proposed product or service. Some of this information can be obtained from online sources, but often the only way to know what the market wants is to go out and ask them.
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Business resources are not always things that you have to pay for--sometimes they amount to knowledge and skills. Granted, acquiring that knowledge and skills can often cost money. For example, there are many books on different ways to run a startup, how to manage a team, and other important skills for an entrepreneur. There are consultants who can coach a new executive on how to lead. Courses for entrepreneurs abound at universities, online, and as paid seminars. Resources such as these that are a one-time expense but lead to an improvement in the business can be invaluable, but experience often teaches the same lessons over time. An entrepreneur must decide which skills they need to learn now, which they can make sure others in their team have, and which they can wait to learn as they build their business.
🔬 Read: Business Services Every Life Sciences Startup Needs
This is by no means an exhaustive list of the resources that a startup biotech company may need. Rather, it is a starting point that will hopefully help founders to ask more questions about what tools they don’t know they do or will require.
Do you have a great company in the bioscience or medtech industry? Do you need wet-lab and/or fabrication space to develop and test your product?
