How To Start Your Own Medical Company
The medical industry is a space in which your entrepreneurial ambitions can help make a tangible difference in people’s lives. It’s also worth noting that starting a healthcare business can be a lucrative focus for your efforts.
This certainly doesn’t mean it’s an easy road to success, though. The medical industry presents significant challenges to navigate and overcome. The regulatory, ethical, and service components make building a medical business an experience like no other.
We’ve put together a guide on how to start a medical company so you can better understand the challenges and make positive steps in the right direction.
Enter the Healthcare Industry
The first aspect to acknowledge is that starting a medical business can’t just be a quick way to make a profit. To be effective and successful in this field, you need to be committed to improving patients’ quality of life. As such, it makes more sense to engage with a healthcare business if you have medical industry skills, knowledge, and passions.
This begins with gaining relevant knowledge and experience. If you want to provide or develop treatments, you should gain a degree in your specialist area. However, if your ambitions are more administrative or technical, you should pursue practical opportunities to understand how a medical company functions.
Choose a Type of Medical Business
Before you head to school or seek experience, it’s important to identify what part of the industry you want to focus on. Some of your options include:
- Medical Technology (Medtech) and Healthcare Information Technology (IT)
Medtech and healthcare IT are forecasted to be among the fastest-growing fields in the industry over the next few years. A medical tech business could include the development of technology and applications. You could also build a company to maintain and protect facility IT systems.
- Pharmaceutical Dispensary
Running a pharmaceutical dispensary is in many ways part medicine and part retail. There are opportunities for brick-and-mortar and online dispensaries in this sector. In some states, you could also operate a medical marijuana facility.
- General Practice
Running a general practice isn’t just about facilitating doctors to receive patients. It’s an administratively complex business involving maintaining records, providing telemedicine services, and liaising with insurers.
- Medical Supply Store
A medical supply store provides disposable goods to medical facilities. This could include diagnostic tools, testing items, and scrubs, among others. Again, you could operate both in-person and online with this type of medical business.
Starting a Business
After gaining the relevant education and experience in your chosen medical field, you’ll need to focus on the business aspects. It’s important to understand the essentials for starting any kind of company in the contemporary entrepreneurial landscape. This includes everything from a solid plan to raising your business profile. Gaining some knowledge and expertise here will help you to start and operate your healthcare business on a strong footing.
Earning a Degree in Business
Pursuing a business degree is one of the most valuable resources at your disposal as a medical entrepreneur. There are various types of Master of Business Administration (MBA) degree programs you could find affordable and effective when starting a medical company. These include:
- General MBA
A general MBA program provides a broad curriculum across key areas of business management. It’s designed to give you expertise in strategic company operations, effective leadership, and essential critical thinking methods. When starting a medical business, this MBA helps you to immediately begin your company from a position of strength.
- Business Analytics MBA
The key decisions any business makes today are driven by data that is constantly shifting. Pursuing an MBA specialization in business analytics can provide you with the skills to give your burgeoning medical company a competitive edge. The curriculum is designed with a focus on assessing and interpreting quantitative data alongside qualitative information so you can make better-informed decisions.
- Project Management MBA
Choosing the right school for an MBA specialization can help you achieve global leadership expertise. A project management MBA is particularly relevant if you want to start a medical business dependent on team coordination and tight development lifecycles. This is particularly relevant for MedTech developers and rehabilitation providers.
Starting a healthcare business can take significant startup funds, with the average cost usually sitting around $70,000 to $100,000. This can certainly vary depending on your type of business. So it’s important to gain a full understanding of what your expenses are likely to be.
There are the usual rent, staff, equipment, and utility costs. You’ll also need to pay for business licenses and taxes for your field. If you’re directly serving the public, your costs will also almost certainly include malpractice insurance.
You may be able to obtain a U.S. Small Business Administration (SBA) loan, but bank loans may also be an option depending on your credit score. As medicine is a lucrative industry, your business may also be an attractive target for investors.
Remember, it’s important to have a strong grasp of how to not just gain but also effectively utilize your funds. Pursuing an MBA specialization in finance can give you insights into how to navigate investment strategies and the mechanics of working capital. The financial expertise you gain here could affect the confidence of potential loan providers and investors, too.
Obtaining Necessary Licenses and Permits
Before you’re able to start a medical business, there are licenses and permits you’ll need to obtain. There will certainly be variances depending on your type of company and the state you intend to operate in.
These are likely to include:
- Local Business License
A state or local business license is a consistent requirement no matter what business you’re opening. You will usually be required to show you have the medical industry licenses and permits your state demands for your sector. Some states will also have zoning limitations for certain activities. The SBA provides a tool to search for licensing requirements in your area.
- Federal Licenses and Permits
Many aspects of the medical industry are regulated and licensed at the federal level. Even if your business is transporting certain biological items or specimens across state lines, you may need a license from the Department of Agriculture to do so. These applications can often be filed online. It’s important to research the full federal requirements for all your business’s activities.
- Controlled Substances License
If you’re directly interacting with patients or offering medications, you are likely to need a controlled substances license. The applications for this usually include providing the legal and disciplinary history of all key employees and owners. You’ll also be expected to provide a blueprint of the facility in which you’re holding substances.
Name Your Business
The name of your medical business is an important consideration. It needs to communicate important messages about your services, your values, and your brand voice. Often, short and single-word names are most effective because they’re memorable. This can help you to stand out in a crowded marketplace and ensure consumers seek you out when they need the services you offer.
File Tax Paperwork
In most cases, you’ll find that your tax registration requirements are the same for any other small business. However, alongside your federal tax filing responsibilities, there may be specific state tax requirements in your operating area.
Common taxes you’ll need to file include:
- Limited Liability Company (LLC) Filing
There can be distinct filing requirements on the state level when you register your LLC. You must also register your LLC with the IRS. Yearly returns of all payments (ingoing and outgoing) must be made to the IRS and your state is likely to have similar requirements.
- Property Tax
If you’re operating from premises, your state may require you to pay property taxes. In some cases, this may be covered by your landlord as part of your rental agreement.
- Sales and Use Tax
Some states don’t tax the use of goods or services. In those that do, you’ll also need to register to collect these taxes from your consumers or clients. However, medicines are often exempt from sales tax, so it’s important to check with your state tax agency.
Market Your Business
Healthcare is a growth industry and as such, there is a significant amount of competition out there. Marketing is your most powerful tool to stand out from the crowd and connect with consumers. In the current landscape, digital marketing methods can be instrumental in helping your business grow. But the way businesses use these methods is also constantly evolving.
You need to strategize your social media use to leverage awareness of your brand and gain consumer engagement. Remember that content marketing can assert your expertise in your field and boost your search engine rankings.
Skills Needed To Start a Business in Healthcare
Among the reasons an MBA is essential to start a business is that the curriculum focuses on forging the skills you need to be a strong leader in your sector. Leadership is one of the soft skills you’ll have to develop, alongside supportive skills such as collaboration and communication. Not everyone is naturally inclined to these skills, but they can be learned with some focus and commitment.
Put time into developing transparent and authentic leadership practices. Often, seeking out mentors in the medical industry is the best way to get a practical grasp of this.
You can’t expect to gain leadership abilities all at once. As with any other area of business, it can be a learning process that takes years. But by committing to continual education and improvement, you can build a medical business that makes a profit while improving the lives of patients.
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