How to Start a Laboratory Business from Scratch
Here are the top ten questions you need to ask before launching a new laboratory startup.
1. What Is The Business Case For Your New Laboratory Startup?
Take the time to create a detailed business plan upfront — one that addresses the difficult questions — before expending scarce financial and human resources.
A good place to start is by researching the market demand and identifying the business case for your new venture.
Here are a couple of business case examples – but yours will need to be more detailed, backed up by solid technical and market research.
a) To take advantage of new research/testing opportunities, such as those created by the Covid pandemic.
b) Use new lab technologies to serve unmet demand in the market by out-competing/
2. Who Needs Your Laboratory Services, E.G. Who Is The Customer?
The next step in creating a solid laboratory business plan is to identify "who is the customer?"
In reality, there are often multiple answers to this question, so perhaps we should rephrase the question as "who are the stakeholders?"
Startup laboratories will need to identify what products and services they are offering to prospective customers in the market place.
But they will also need to treat their investors (e.g. the angel and VC firms making substantial upfront investments)
3. What Is The Funding Model And Return On Investment (ROI) For Your New Laboratory Project?
In normal times, commercial laboratories with a recurring revenue stream would find answering questions about funding sources and return on investment (ROI) to be fairly straightforward.
However, the current Covid pandemic has shifted demand across many sectors of the economy, including the lab sector, which makes these economic models and investment calculations more difficult.
For example, demand for clinical healthcare testing (including Covid virus and vaccine trials testing) is up, while demand in other areas (such as petroleum well testing) is down.
This puts additional pressure on lab startups to identify viable funding sources to support the business after the initial funding runs out — by signing long-term customer contracts, obtaining multi-phase government research grants, or pursuing direct sales opportunities.
4. Which Regulatory Regimes Will Govern Your Laboratory Operations?
Every business is subject to some form of federal, state, or local regulations.