How to Cut Expenses When Setting Up Your Biotech Firm in Singapore
Just because Singapore’s domestic biotech industry seems set for long-term success, it doesn’t mean that putting up a biotech firm in the city-state will be a walk in the park. While biotech startups can fully expect to benefit from Singapore’s startup synergy, public-private support systems, and the country’s key role as a linchpin in the wider Asian economic context, setting up a biotechnology startup and taking it to profitability will always be a challenge, regardless of where you choose to do it.
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Even among research-oriented businesses, biotech firms tend to have extremely long product development cycles, which complicates biotech founders’ abilities to secure funding from impatient or profit-oriented investors. Moreover, even if they manage to secure investments, research grants, and public funding, new biotech firms rarely have an existing patent portfolio from which to further subsidies the cost of current research, putting further pressure on founders to keep running costs low.
If you’re planning to set up a biotech firm in Singapore, you’ll need to make realistic decisions about your everyday expenditures. Fortunately, as you’ll see, Singapore does offer ways to cut expenses that will not impact your venture’s research capabilities.
1) Rent, Don’t Buy
The fixed costs associated with biotechnology research can be astronomical. The biosafety level 2 laboratory (BSL2) floorspace needed to conduct pharmaceutical or agricultural research can be several times more expensive than typical office space. Additionally, even used lab equipment can be expensive to acquire, particularly biotech-specific instruments like DNA sequencers, lab-grade incubators, mass spectrometers, and the like.
The high cost of these assets makes their ownership only viable for very large operations. Instead of outright ownership, smaller startups that want to keep costs low should consider renting lab space and equipment. Thankfully, Singapore’s thriving biotechnology scene has given rise to a number of BSL2 lab and equipment rental services that make cutting-edge laboratory resources available at modest rates.
2) Be Selective with Your Hires
The main roadblock to Singapore’s biotechnology scene—and every other international biotech hub—is a global shortage of qualified biotechnology experts. To put it simply, the demand for biotechnology research far outstrips the supply of people who can facilitate it at a high level. Moreover, startups tend to have very different requirements from large institutions with smaller teams, individual members will have to take on multiple responsibilities.
Most importantly, the consequences for getting things wrong in a lab setting are also much higher than at a typical startup office. This means that, in addition to research and management competencies, startup workers need to have the right work ethic, values, and attention to detail to make things work.
This all makes hiring for biotech a tall order, even for the best-funded startups. However, for all the reasons mentioned, going cheap and hiring someone simply to fill a role can be a potentially expensive mistake, especially in cases where they are part of a founding team and have equity in the venture.
Getting your startup’s initial team right might be difficult, but it will help you avoid costly mistakes and save you expensive recruitment costs down the line.
3) Stay on Top of Your Variable Costs
Fortunately for Singapore-based startups, the country is home to some of the finest logistics services in the world, helped in large part by the country’s highly favourable geography. Not only is it generally cheaper and easier to source materials, reagents, equipment, and labour in Singapore compared to other comparable Asian biotech hubs, but the country also benefits from having mature domestic high-tech and chemical manufacturing industries that serve to bring down costs even more.
Of course, just because a lot of variable costs are cheaper in Singapore, it doesn’t mean that these won’t take up a large proportion of your budget. Consumables like reagents, electricity, and other biotech research inputs typically take up a large proportion of monthly operating budgets in most biotech operations. Knowing how to control these expenses should not only help you stretch your budget but it should also help reassure your investors that you know how to handle their money.
4) Look Out for Favourable Discount, Warranty, and Return Policies
If there’s one underlying theme to all of this, it’s that running a biotechnology operation is extremely expensive. This means that you cannot afford to not shop around for suppliers who will give you a better deal on your research requirements. The cost of different inputs can vary widely, particularly chemicals and biological agents, so it’s a good idea to spend some time looking for suppliers who are willing to cut you some slack in return for steady business.
Fortunately, the high concentration of pharmaceutical, chemical, and biotechnology companies within Singapore means that you’ll often be able to score good deals if you look hard enough.
As advantageous as Singapore is for ambitious researchers and entrepreneurs, biotech is an expensive business, regardless of where you choose to set up. Maintaining a good grip on the nitty-gritty of the biotech expenses will not only ensure your firm’s initial survival but should also help create a more resilient internal culture that may help it navigate future challenges and opportunities in a booming global biotech market.
Best of all, knowing how to control your day-to-day expenses should put you in a much better position to pioneer breakthroughs and innovations over the long haul.