Lab Startup Playbook: Is Your Biotech Startup Business-Ready?

Most biotech founders might assume the hardest part of starting a lab is finding the right centrifuge. The hard part is almost never the equipment.

The mistakes that cost early-stage labs the most time and money aren't scientific, they're operational. When operations infrastructure is missing, every order becomes a fire drill. A missing tax form holds up a shipment, invoices sit in inboxes with no clear owner, or, your accountant or investors ask for a PO history that doesn't exist. Each of these gaps costs days, and the days compound.

Getting business infrastructure right before your first order ships is one of the highest-leverage investments you can make in your lab's operational velocity. It's also the part of the lab setup that most founders underinvest in, because it doesn't feel like science.

This is the first post in the Lab Startup Playbook series, built on first-hand experience from the Science Exchange Virtual Lab Manager™ (VLM) team. They're practitioners who have helped to stand up dozens of labs and have seen these same patterns repeatedly. Here's what to get right before you set foot in the lab.

Documentation

What documentation do you need to have ready to go?

Your suppliers (CROs, core facilities, lab supply companies, and more) will ask for the same set of documents repeatedly. Have these on file and ready to share before you place your first purchase:

• W-9: Requested by nearly every vendor. Delays here hold up account setup, not just payments. W-9s should be renewed annually and re-shared with relevant vendors when updated.
• Business license: Required by many supplier accounts before they'll transact with a new organization.
• Lease agreement: Distributors frequently request this when you're establishing credit and as verification of your business's shipping address.
• Credit reference letter: Useful when opening accounts with major distributors (Thermo Fisher, VWR) before you have a payment history. Your credit reference letter should have your lab's banking information and three trade references. Ask your bank or an established business partner for assistance.

If you are based in an incubator, confirm what goods and services are provided by the incubator and what are your responsibilities to cover. The answer matters when a supplier asks and you need it the same day.

Purchasing Operations

What operational planning do you need to do now?

Procurement takes real, dedicated time, and at most early-stage labs, no one has been formally assigned to own it yet. That gap is fine at first, but it needs to close before your first order ships.

Three things need to be in place: a clear inbox, a clear paper trail, and a clear owner. Set all three up before that first order goes out. Reconstructing them later is much harder than maintaining them as habits.

• Dedicated inboxes. Create a purchasing inbox (something like labmanager@ or orders@), separate from any personal address. Use that email to create online accounts with vendors you want to purchase from. This inbox will hold every order confirmation, supplier communication, and shipping update in one accessible place. Create a second inbox for invoicing and accounts payable (ap@ works) and loop in your accounting contact (if you have one) from day one. These inboxes can be managed by your lab manager or accountant, or easily forwarded to whoever is covering these responsibilities initially and transferred later. When your lab manager is out and someone needs to locate a delivery confirmation, the answer shouldn't be buried in their personal inbox, out of your reach. When finance needs a complete order history for an audit or due diligence, it should be in one place.
• A purchase order for every order, from order one. A PO system does two things: it creates accountability (who authorized what purchase, at what cost) and it creates data (what was ordered, when, from whom). Both become essential faster than most early-stage founders expect. Auditors, investors, new hires, and finance teams will all need this history. It's especially important to track purchases of capital equipment and assets. If your organization doesn't yet have a formal procurement system, a structured spreadsheet with sequential PO numbers is a strong starting point, even if many of your early entries will be for payments made with a credit card.
• A named owner. Procurement doesn't run itself, and the gaps show up fast when no one is clearly responsible for responding to supplier questions, tracking down missing packages, and setting up new accounts. Before your first order ships, decide who owns procurement. These aren't complex systems, but they need to exist before you need them.

Who needs to approve purchases?

If the answer to "who approves this purchase?" is "whoever is available" or "we'll figure it out," that's a delay waiting to happen.

Approval bottlenecks are one of the most common causes of ordering delays in early-stage labs. What happens if a founder is traveling, a finance lead wasn't looped in, or a contract is progressing at a much higher price than anticipated? Define thresholds, assign roles, and document the process before you're in a situation where an order or contract is waiting on it.

For labs just getting started, this doesn't need to be complicated; it may be as simple as assigning one person the responsibility for keeping the budget on track. The goal isn't bureaucracy, it's for operations to continue even when key people are unavailable.

Finances

What budgets do you need to set?

An operating budget tells you what you have to work with overall. Project-level budgets tell you whether a specific experiment or study is on track or consuming more than it should.

Labs that only track the top line lose visibility into which projects are driving disproportionate spend. Labs that only track at the project level can miss overall burn signals until it's too late to course-correct.

Set your operating budget before your first major procurement cycle. For any experiment or CRO engagement with material cost, assign a project-level budget before work begins.

What tax exemptions do you qualify for?

Many states offer sales tax exemptions for equipment and supplies used in R&D activities, and early-stage biotech organizations are frequently eligible, particularly in states with established life sciences industries like California, New York, Massachusetts, Texas, and New Jersey. Whether your organization qualifies depends on your state, your entity type, and how the purchases are used. Confirm eligibility with your accountant or finance lead before placing orders.

Exemption certificates generally cannot be applied retroactively. Orders placed before your certificates are on file are typically charged at full tax, money you won't automatically recover. Work with your accountant to file state exemption certificates before placing orders, then register your exemption status with each major distributor.

If you've already placed orders without exemption certificates in place, ask your accountant whether a refund claim is available. Some states allow this for qualifying past purchases, but it varies.

What new lab discounts can you take advantage of?

Major distributors including Thermo Fisher and VWR run new lab and startup discount programs that offer real savings on initial orders and are a fast path to establishing your primary distributor relationship. Most early-stage teams either apply too late or miss this opportunity completely.

Apply as soon as your business documents are in order. Applications are easy and typically only take a minute of your time. Also worth exploring: trade group memberships affiliated with major distributors, which can unlock additional pricing and benefits.

The application process is straightforward. The window to qualify as a "new" account is finite. Apply early.

The Operational Foundation That Lets You Run Science Faster

The infrastructure that enables fast science isn't glamorous. It is, however, what determines whether your first experiment runs in week four or week twelve.

The Science Exchange Virtual Lab Manager team builds this foundation for every lab they stand up, because the cost of not having it in place is measured in weeks. VLM is an embedded operations service for early-stage biotech teams covering procurement setup, vendor relationships, and lab operations so founders can stay focused on the science. If you're establishing a lab and want experienced hands on the operational side, learn more about VLM.

The full Lab Startup Playbook — all four chapters plus the checklist and worksheet — publishes in early July.

The VLM team is hosting a live discussion of the Playbook on July 9; save the date if you'd like to bring your own questions to the people who built it. Stay tuned! We'll share the registration link in future installments of this series.

Next in this series: Lab Space Setup: what to assess, arrange, and confirm before your equipment arrives. Publishing May 28.