Overcoming The Challenges Facing Biotech Companies
The healthcare and biotech industries have always been a breeding ground for innovative, ambitious, and future-facing start-ups.
These sectors have grown at an astonishing speed in recent years, and the emergence of the COVID pandemic only accelerated investment in the market. New biotech companies are constantly appearing, developing solutions and technologies that have the potential to revolutionise modern healthcare.
However, despite the huge amount of excitement (and investment) surrounding biotech startups, growing a successful business is never easy.
These companies face a number of different challenges - some apply to every small business, while some are specific to the biotech industry. Fortunately, with the right business strategy and thorough preparation, biotech startups can anticipate these challenges and tackle them effectively.
Let’s take a look at some common obstacles that biotech companies encounter, and outline how startups can navigate these issues to generate consistent growth.
Overcoming The Challenges Facing Biotech Companies
The healthcare and biotech industries have always been a breeding ground for innovative, ambitious, and future-facing start-ups.
These sectors have grown at an astonishing speed in recent years, and the emergence of the COVID pandemic only accelerated investment in the market. New biotech companies are constantly appearing, developing solutions and technologies that have the potential to revolutionise modern healthcare.
However, despite the huge amount of excitement (and investment) surrounding biotech startups, growing a successful business is never easy.
These companies face a number of different challenges - some apply to every small business, while some are specific to the biotech industry. Fortunately, with the right business strategy and thorough preparation, biotech startups can anticipate these challenges and tackle them effectively.
Let’s take a look at some common obstacles that biotech companies encounter, and outline how startups can navigate these issues to generate consistent growth.
Challenge #1 - Maximising cost-effectiveness
Creating new healthcare treatments doesn’t just cost a significant amount of money - it also costs a significant amount of time.
There are no quick wins in the biotech industry, so start-ups need to ensure that they’re working effectively to make the most of their resources.
Individual firms can spend up to $1bn on research and development for a new drug, and the R&D process can be an arduous one. Beyond the monetary cost, it takes an average of 15 years for a new treatment to be developed, approved, and distributed to the market.
This means that companies can spend more than a decade on product development before seeing any returns on their investment. There’s no time to waste for biotech businesses - every aspect of an operation needs to be ultra-efficient in order to succeed.
Unsurprisingly, the majority of biotech startups view cost control and revenue loss as their biggest challenges.
However, challenges around cost-effectiveness aren’t just limited to new product development.
While investment in the biotech sector has continued to grow at a promising rate, several external factors may cause financial issues for growing businesses.
Drug pricing is a complex issue. Pressure is mounting around the globe for governments to restrict the amount that companies can charge for new products, which has a direct impact on profits. There are also indicators that biotech revenue may decrease annually, which would place increased stress on start-ups already struggling with margins and expenses.
Challenge #2 - Planning for long-term success
While many biotech startups may have an incredible product concept or a revolutionary treatment idea, this isn’t always enough to guarantee profitability.
Business planning is critical to building and maintaining a profitable company.
If a biotech startup is going to thrive, rigorous planning needs to be completed before any product development takes place.
This planning needs to cover fundamental areas like sales, recruitment, financing, and staff training. Without these foundations in place, businesses can quickly find themselves struggling to create new products, generate consistent revenue, and maintain healthy profits.
While a brilliant core product offering is key, it’s thorough business planning that provides startups with a stable platform for success.
These plans need to consider long-term and short-term goals, as well as ‘worst-case’ scenarios. The biotech market is a turbulent one, and so businesses must be prepared to handle tricky financial situations and product development issues.
Challenge #3 - Managing the biotech talent shortage
While the rapid growth of the biotech sector has been great for generating investment, it has highlighted a persistent problem for the industry - recruiting (and retaining) talented individuals.
Two core issues are exacerbating the biotech talent shortage.
The first issue is that the demand for qualified individuals outweighs the supply. Biotech startups are constantly emerging, and there isn’t enough talent in the market to fill every new role.
The second issue is the increasingly advanced skillset that biotech companies are searching for.
Businesses are now actively looking for professionals with specialist expertise in areas like engineering, analytics, and artificial intelligence. As the requirements for new candidates become more demanding, the talent pool naturally shrinks.
This talent shortage means that businesses are spending an increasing amount of time, money, and resource on finding new hires. However, recruitment isn’t the only challenge - high employee turnover can be incredibly costly for biotech companies, and so startups must hold onto their existing talent to maintain productivity.
These staffing issues can place a huge strain on HR departments, which need to balance ongoing recruitment efforts with employee retention strategies.
Challenge #4 - Finding the right people
The biotech talent shortage is a recurring problem for companies in this sector, but this isn’t the only headache related to recruitment and staffing.
Finding new hires isn’t the biggest challenge for biotech startups - it’s finding the right hires.
This is much easier said than done. Companies need to understand the exact skills they require to improve productivity and achieve long-term success.
Finding the right candidates quickly is also vital to avoid wasting resources that could be directed towards other areas of the business.
On the other hand, it’s important for startups not to rush the recruitment process.
Hiring the wrong individuals can be just as costly as failing to hire anyone - potentially even more so. Poor hires can quickly become exposed as a startup grows, and this can have serious ramifications for a business.
It’s much harder to replace key team members during a critical period of business growth as opposed to the early days of a startup, which is why establishing a clear and effective recruitment policy is so important.
How can biotech companies conquer these challenges?
It’s clear that modern biotech companies have a range of potential issues to contend with.
Thankfully, there’s a solution that can prevent, mitigate, and resolve these challenges as and when they occur.
It all comes down to hiring the perfect talent.
A wildly successful biotech venture always starts with the right employees. Hiring qualified individuals helps a company to create a positive work culture, achieve optimal results, and drive the business in the right direction.
The right hires can improve cost-effectiveness through efficient work, contribute to strategic business planning, and fill important gaps in a biotech operation. Once the perfect people are in place, many common problems can be resolved.
Harmonic can help businesses to run a highly effective recruitment process, identifying the best biotech talent to maximise employee retention and accelerate growth. We function as a full extension of the HR department, working closely alongside startups to source top-tier candidates with the perfect skill sets.
We specialise in hiring accounting and finance professionals for ambitious, fast-growing businesses.
For more information, don’t hesitate to get in touch with Fin ([email protected]) or call 617.861.2564 to discuss recruitment options.