Doctors and other medical professionals rely on high-quality equipment to treat patients. This equipment ranges from gloves and masks (PPE) to intricate niche tools used by specific surgeons, doctors and health professionals. Hospitals and office managers work closely with medical supply businesses to procure this equipment and ensure they always have the items they need.
With market size expected to reach 160 Billion USD by 2025, and a CRGA growth rate of 7.2 percent, it’s an opportunity to consider. Set yourself up for success by getting to know the ins and outs of starting a medical supply business.
Choose a medical niche or underserved market
Operating a medical supply business is no different from any other company in that you need to find what makes your brand unique. Once you know that, you can find your target market and work to set yourself apart from competitors. Ask questions like these to better understand what you bring to the industry:
- Are you an expert in a medical niche and know what certain specialists need?
- Are you an ex-doctor or medical professional with real-life medical experience?
- Is there an underserved market that needs a reliable source of medical supplies?
- Do you have an idea for getting supplies to doctors faster or better, like a subscription service or convenient online portal?
Not only will answering these questions help you establish your business, but it will also guide your marketing and help you secure funding.
Determine your business type
Once you have a business idea, you will want to form your company. Decide whether you want to operate as a Limited Liability Corporation (LLC), C-Corporation, or S-Corporation. The type of business you choose will depend on your business structure and affect how you’re taxed, what fees you need to pay, whether or not you need to raise capital and more.
Work with a local accountant to help you decide what is best for your business and refer to the BizFilings business type comparison tool to get a better understanding of your options. Each state has its own guidelines and costs for forming a business, such as whether you need to produce annual reports or pay annual fees to stay operational. Knowing all of these details will help you choose the right business entity for your new medical supply venture.
Secure your operating licenses
In addition to registering your company, you need to secure business licenses and permits necessary for a medical supply business. Forming an LLC or C-Corp doesn’t necessarily mean you can legally operate, just that the state knows you exist—you must get your licenses or permits secured before beginning.
You can use the BizFilings’ Business License Wizard to identify which licenses would be relevant to your business and check with your local business regulations and requirements to ensure you have all the correct paperwork to begin operating. Note that fees will vary from state to state and may be based on annual revenue.
Fund your business
Important to any good business is accurate bookkeeping and a strong financial footing. You must have a clear understanding for how you plan to fund your medical supply company and how this funding will affect your budget now and in the future. A few funding options include:
- Bootstrapping: This refers to relying solely on your own money.
- Small business loan: To secure a loan, you’ll work with a financial lender to get financing.
- Investors: With an investor, you’ll work with private entities to receive funds and then share part of your profits as your business grows.
- Crowd-funding: Use a site like Kick-Starter to fund your business with donations from people around the world. This is a good option for companies with a socially-driven mission.
The viability of these medical supply financing options will vary depending on your business size and startup costs and, each option also has its own benefits and drawbacks. For example, you don’t have to share your profits or make interest payments by bootstrapping, but that may not be an option if you don’t have access to startup capital.
Identify vendors and distributors
The foundation of your business will be working closely with medical distributors and vendors. These are large-scale manufacturers who produce millions of supplies each year who then sell to distributors like yourself so you can market and sell the wares on a smaller scale. When choosing your supplier(s) and vendor(s), consider a few key factors:
- Future innovation: Does your supplier have plans to grow and innovate in the coming years, ensuring that you stay relevant as a business as well?
- Communication: How well are they at communicating with you? Are their terms and business details clear?
- Expertise: How well do they know their market? How much can you benefit from their expertise?
- Quality: Are they as committed to quality as you are?
- Delivery systems: Will their delivery systems make it easier to run your business or are they complicated and difficult to manage?
Work with a medical supply mentor or expert to better understand the qualities of successful medical supply partners and determine which potential vendors and distributors would be best for your specific needs.
Build your business and market your brand
Once you have established what your business is and how it operates, the only thing left to do is execute your business and marketing plan. During this period, you will open your warehouse, website or both, ensuring that you have a place to house the medical supplies and/or manage orders.
You also need to use this time to develop marketing materials and start reaching out to potential clients. Your industry may require different marketing methods, so be sure to do your market research first. This will help you dial in on who you want to target and how to best reach them.
Let us help you build a medical supply business
With the right planning, you can build a successful medical supply business. You don’t necessarily need a strong medical background to do this, just knowledge of what medical professionals need and a marketing plan to make them more effective at what they do.