The following steps and tips are an overview of what is required to start a business in the life sciences sector, which includes biotechnology, biomedical, and all other life sciences. These lists are also an overview of what is described in further detail in this section.
What Is Involved in Starting a Business?
- Research the market.
- Develop a business plan.
- Find funding.
- Select your environment (location).
- Choose your business structure.
- Select a business name.
- Register your business.
- Get federal and state tax IDs.
- Apply for licenses and permits.
- Open a business bank account.
Source: Small Business Administration. 10 steps to start your business.
Tips for Starting a Small Business
- Decide who will be the founders and key personnel.
- Obtain a good lawyer.
- Consider incorporating once you have investors interested.
- Develop a marketing strategy.
- Operate virtually at first to reduce costs.
- Develop the technology through milestones.
Differences Between a Biotechnology Startup and a Typical Startup
- Biotech products and some services typically have. . .
- A longer development time frame.
- Higher development costs.
- More regulatory requirements. For example, you may need to obtain FDA approval.
- A need for diversely skilled staff.
- A more significant impact on public well-being.
- You can raise money to get started (SEED funding) through the US government’s agencies, such as through the NIH or the NSF’s SBIR and STTR grant award programs.
Did you know?
- Fewer than 1% of startups stem from a university (Marcus, 2020).
- Science disciplines vary in the extent of commercialization, with biotechnology, mathematics, physics, and chemistry having the most (Lawton Smith, 2015; Polkowska, 2012).
Approach to Starting a Business: Things can move quickly in business startups. You must move quickly, too, to succeed. Act when opportunities are available rather than being a slow perfectionist.
Consider the Impact on Your Family: Have a frank conversation with your family. Make sure family members who will be impacted by your commitment to starting this business are on board with the decision. Be sure to explain the long hours and need for capital that may require delaying purchases and may interfere with your engaging in other activities.
Chitale S, Lawler C, Klausner A. So you want to start a biotech company. Nat Biotechnol. March 2022;40(3):296–300. doi:10.1038/s41587-022-01239-9.
Small Business Administration. 10 Steps to Start Your Business.
Tajonar A. How to start a biotech company. Mol Biol Cell. November 1, 2014;25(21):3280–83. doi:10.1091/mbc.E14-06-1162. PMCID: PMC4214775. PMID: 25360051.
Lawton Smith H, Henry C, Etzkowitz H, et al. Female academic entrepreneurship: Reviewing the evidence and identifying the challenges. ResearchGate. May 2015.
Marcus J. Think universities are making lots of money from inventions? Think again. The Hechinger Report. January 17, 2020.
Polkowska D. Women Scientists in the Leaking Pipeline: Barriers to the Commercialisation of Scientific Knowledge by Women. Journal of Technology Management & Innovation. 2013;8(2):156–65. doi:10.4067/S0718-27242013000200013.