Creating a realistic lab budget is essential for ensuring a smooth research operation or the success of an application. Whether you’re setting up a new laboratory or optimizing an existing one, careful financial planning helps allocate funds efficiently and avoid unnecessary expenses. In this guide, we’ll walk you through the best practices for putting together a lab budget, ensuring your scientific research is well-funded and resource-efficient.

What makes up a Lab Budget?

A lab budget is a financial plan outlining the necessary lab equipment, consumables, research reagents, personnel and administrative costs. It can be a snapshot that helps research teams manage expenses, maximize funding, and streamline purchasing decisions or one that outlines the required support to bring a scientific vision into reality. A well-structured budget ensures that all essential laboratory activities are accounted for while maintaining a keen eye on spending to provide an outlook on the future.

Step-by-Step Guide to Creating your Lab Budget

Step 1: (The set up) Categorize Your Lab Expenses

Here at EDC we like breaking down your lab costs into clear categories that help manage and track spending efficiently. The common lab budget categories we start with are the following:

• Capital Equipment: Large purchases like microscopes, centrifuges, and biosafety cabinets and anything over $5000.00.
• Subcapital Equipment: Mid-range lab tools such as pipettes, vortex mixers, and gel imaging systems, generally categorized as being under $5000.00.
• Consumables: Items that need regular replenishment and that are generally “one time use” plastic items, such as pipette tips, serological pipettes, tubes and gloves.
• Research Reagents: Specialty chemicals, enzymes, antibodies, and experimental kits.  Anything required to run an experiment.
• Core Facility Services: Inter-institutional cost of services like sequencing, imaging, or mass spectrometry.  We will typically use this section for shared resources if they can be averaged over a monthly period and commercially outsourced services like genotyping, oligos, etc.
• In Vivo Models: Purchase and maintenance costs for laboratory animals.  Please note that experiments performed as a service in the vivarium would be considered a Core facility service expense.

Here’s the sheet that we use if you don’t want to make it up yourself:

TEMPLATE WORKSHEET FILE: EDC Startup Budget worksheet TEMPLATE [GOOGLE DOC]

Step 2 (filling your sheet): List Your Required Lab Supplies and Equipment

For each category (tab in template), document essential items. We found that it’s easiest for most people to work one tab at a time and do the following procedure:

• Start by listing general items (column B)
• List any specific models you want or need (column C); buy in bulk or by case when possible
• Add quantity needed (column I); Add up to 1 year supply if applicable

Using a structured lab budgeting worksheet definitely ensures an organized development of your budget items but be mindful of what is actually needed for your budget goal. The other columns in our template are “nice to have” and make the document look very complete, but are not always necessary. For negotiations, you don’t need to submit every detail listed here and for operational budgets, unless this is going to become an internal resource document, additional details might also be unnecessary. Overall, be conscious of how much time you’re spending on each detail because we are typically only interested in the overall number result and general names.

If you’re not sure where to start for your items, go to your current lab or a lab that does similar work to what you’re proposing. Asking lab managers for the previous 2-3 months of purchases can be very helpful in determining the items needed and also the pricing and quantities needed.

For more information on being strategic about negotiation budgets, shared equipment, determining if you should purchase an instrument for your lab, etc. please go look at our negotiations budget development. 

LINK: Startup Negotiations and how to make a budget for negotiations

Step 3: Determine Lab Equipment Pricing (and Obtain Quotes)

After listing required lab items, the next step is cost estimation and price comparison:

Although this section applies more to proposals and applications, we use this section to price out Preventive maintenance (PM) packages for existing lab operational budgets. 

1. Research List Prices: Use list price for negotiations budgets and actual costs for operational budgets. Vendor websites will typically provide list pricing if no quote or previous purchase list is available to provide actual costs.
2. Request Vendor Quotes: Contact suppliers for bulk pricing, discounts, and special promotions can be a very lengthy process.  Only do this if you have time or if it’s required. We often don’t have access to quote for negotiations – conservative estimates are also acceptable.
3. Compare Costs Across Vendors: Only do this for large item purchases and there is no need to do more than 3 comparisons. Evaluate factors such as price, warranty, service agreements, and delivery timelines. 

Step 4: Choose the Best Lab Equipment and Supplies

If you don’t already know what item you want to purchase you will need to make a cost-effective purchasing decision and consider these criteria:

1. Brand Preference: If a specific brand is known or reliable for your research, stick to it for data consistency and/or operational ease.
2. Vendor Relationships: Institutions often get better deals from preferred suppliers and better service from companies with whom a relationship already exists. We often suggest going with a preferred vendor due to the relationship and responsiveness to your needs.
3. Cost-Effectiveness: If brand and vendor are not a concern, choose based on the best price-to-quality ratio.

QUICK TIP: For certain proposals, a single piece of large Capital equipment ($50k+) is chosen and other preliminary selections are used as comparisons and justification for the selected item.  Most instrument suppliers will also have “justification sheets” for their larger instrument, which can accompany a quote for department approvals, which sometimes includes these comparisons. Don’t be shy to ask you rep for help in putting together any type of justification either.

Step 5: Calculate Your Total Experimental Operations Expenses

Once all your items have been selected and you’ve outlined your CORE & SERVICES, IN VIVO and ADMINISTRATIVE costs, you can sum all totals to determine your experimental lab expenses. This result outlines what is required to run experiments and analyze data. Organizing these costs in a spreadsheet helps compile expenses and projects costs for an operational budget (over 1 year, if you followed the protocol in here). For applications or negotiations budgets, it outlines the portion of the support you’ll need to support your science for 1 year, with personnel costs.

TEMPLATE NOTE: Core and commercial services should be calculated by average annual cost and in vivo models should be calculated by project/genetic line (unless you are sustaining genetic lines in perpetuity). 

Step 6: Finalize and Review Your Lab Operational Expenses

• Organize your budget in a Google Sheet or Excel file for easy updates.
• Prioritize purchases based on urgency and available funding.
• Plan for unexpected costs by setting aside contingency funds.

We like creating a 1 year plan so that budget projections can easily be expanded over as long as you need. Most lab expenses are also separated from personnel costs as well, so we do the same in our budget development.

Step 7: Personnel

The most expensive portion of your budget will be personnel.  From Students to Post-docs, all your current and future trainees will need to be accounted for, in addition to any additional staff you wish to include.

• Salary comparisons can be obtained from your current institution or online via services such as glassdoor.com or LinkedIn.  AI LLMs, such as ChatGPT, can also provide a great source of information but make sure to double check everything.
• We typically also apply a 34.5% rate on all lab employees to account for the various types of benefits unless a more specific rate is available.
• Staff justification can be important for negotiation budgets and useful for determining how much staff you need and when. Being mindful of when staff starts can effect you budget a lot.

QUICK TIP:  If you’ve never seen a lab budget calculated for multiple years, it might be a little bit (or a lot) overwhelming.  This is normal.  Keep in mind that the cost of science can be quite high, and different types of science cost different amounts, so be mindful where you are looking for advice.  You can feel free to contact EDC, no engagement needed, to gut check us about your budget if you have any concerns.  We’ll be happy to give you a quick answer.

Step 8: Submit or Implement Your Lab Budget

Once finalized, review your lab budget numbers and if everything looks good use it or submit it. Key actions include:

• Reviewing the budget with financial officers, lab managers, colleagues, etc.
• Adjustments to a negotiations budget should only be made if the change is OVER $250k. and only if a submission has not already been made. Amendments of most sizes should be made to operational budgets.   
• If including this budget with a proposal, please follow this budget format – How to make a negotiations budget
• If using this budget for optimizing your operations, please continue with this protocol – How to make a lab Operational Budget

Final Thoughts: Building a Lab Budget for Success

Creating a detailed and optimized lab budget is a critical step in setting up a research facility or maintaining efficient lab operations because it allows you to see what is required to support your research vision. By categorizing expenses, obtaining pricing, selecting the best supplies for your science, and reviewing your finances strategically, you will ensure that your research will run as smoothly as possible and be ready for any new ideas you might come up with along the way.

Most importantly, this budget will help you determine whether your focus should be on generating more data or securing more funding. Striking that balance of effort is a fundamental challenge for every lab leader and if you want to learn more about managing this check out this article: — TBD —

For a customized lab budget or help with negotiations/applications, reach out to Experimental Designs Consulting (EDC) for expert guidance in lab setup, funding optimization, lab operations and application/negotiations support.