6 Tips To Spending Your Start-Up Money Wisely

Congratulations on your new position! All those hours and sacrifices have finally paid off. Now, though, welcome to the 'business' of academic research - something you were not likely trained to undertake. Funds awarded to new faculty hires will, in many cases, account for a significant portion of available financial resources throughout the first few years of operation. This means that it's vital that this money is spent responsibly, and is allocated appropriately to ensure an optimal working environment that can be maintaining long term. Unfortunately, new hires frequently aren't offered much - if any - guidance on how to spend their start-up money wisely, ultimately increasing the risk of a premature financial burnout.

In the United States, senior faculty members can be granted anywhere from $1.5 million to $3 million, but new hires are unlikely to successfully secure these higher amounts. The average for new hires is between $337,000 for those in public research establishments, and $475,000 for those in private research establishments, according to the Cornell Higher Education Research Institute, although it's not unheard of for new hires to be awarded much lower amounts, typically from $100,000. While this may seem like a lot, particularly if you have relatively low level initial requirements, remember that you could end up spending hundreds of dollars for sample filters for just a single analytic study! These funds are often provided for the purchase of equipment and consumables for the lab, but also to pay a part of your own salary, and the salary of any staff members, including students and postdocs.

Here are some of the most important areas where your start-up money may be best allocated:

1. Consumables

Surveys in the United States have found that consumables account for the majority of new lab spends, with faculty members allocating up to 60 percent of their budget for general supplies, chemicals, reagents, plasticware, glassware, and so on. Basic lab equipment such as pipette tips, tubes, and gloves can cost as much as $1000 per month depending upon the number of people working in the environment, and special areas of interest will increase the need for consumable spends. For cell culture, for example, media, serum, and disposables can cost around $5000 per year. It's well worth taking advantage of any start-up programs which offer special rates and discounts for new hires.

2. Human Resources

Starting salaries for research assistants working in the United States can be as little as $35,000 per year, although mid-level associates can earn $80,000 per year, or more. Human Resources is an area that should be be a major focus in terms of budget allocation. More experienced researchers may already have established relationships with vendors, may be able to successfully train students on the job, and should be able to work effectively and independently while you grow and develop your workspace. Stanford School of Medicine recommend regularly attending conferences and meetings to increase awareness of yourself, and your lab, or considering using overflow researchers from your colleagues.

3. Major Equipment

Major equipment is typically categorized as any equipment or instruments costing $5000 or more. This includes centrifuges, sequencers, analyzers, and so on. It is reported that up to 40 percent of available spends are allocated for the purchase of major lab equipment, with the average instrument budget totalling $82,000. To minimize costs, consider making use of used scientific equipment, or arranging an equipment sharing scheme with colleagues. When considering equipment for the lab, it's a good idea to do a little research into estimated lead times. For items with long lead times, you may need to place an order during the early days, even if you do not anticipate requiring niche equipment just yet.

4. Travel

Advice that is regularly given to new faculty hires is to weigh carefully the importance of niche equipment against the importance of travel. It is argued that the acquisition of niche equipment - that is, equipment that is currently not required for day-to-day laboratory operations, nor essential to current research - is best postponed while faculty members focus primarily upon boosting awareness of their research and notions. Funds that are allocated to travel can be used to enhance networking and collaboration opportunities, attend conferences, carry out fieldwork, and become closer with larger institutions which may potentially be interested in funding further research in the future.

5. Service Contracts

Service contracts provide peace of mind for new hires, particularly when it comes to the use of more costly equipment and instruments. A survey undertaken in the United States claims that 59 percent of researchers have arranged a manufacturer's service contract for lab instruments, and 30 percent have a current service contract for lab equipment. How much to allocate for service contracts ultimately depends upon the type, and value, of your equipment. It is estimated that service contracts cost between 10 and 15 percent of the purchase cost. For a large centrifuge, for example, you may be looking at around $5000 per year, while this could be significantly more for a cryoelectron microscope.

6. Indirect Costs/Overhead

Unfortunately, for many new hires, indirect costs or overhead' are not a choice - they're mandatory. Anywhere from 45 to 50 percent of start-up funds granted may be retained by the institution for what they call 'indirect costs'. This, of course, can be very frustrating, but it is important for your money to be spent in this way, and ultimately it's you, your research, and your colleagues that benefit. Indirect costs are often used to maintain the building in which you work, cover any general overheads the university may have, and provide you and your lab with departmental support as and when needed. The exact percentage of indirect costs will vary, but it's important to take these into account when budgeting and allocating funds.