Starting a medical transportation business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful medical transportation business.
Importantly, a critical step in starting a medical transportation business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Medical Transportation Business:
- Choose the Name for Your Medical Transportation Business
- Develop Your Medical Transportation Business Plan
- Choose the Legal Structure for Your Medical Transportation Business
- Secure Startup Funding for Your Medical Transportation Business (If Needed)
- Secure a Location for Your Business
- Register Your Medical Transportation Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Medical Transportation Business
- Buy or Lease the Right Medical Transportation Business Equipment
- Develop Your Medical Transportation Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Medical Transportation Business
- Open for Business
1. Choose the Name for Your Medical Transportation Business
The first step to starting a medical transportation business is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your new business venture:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your medical transportation business.
2. Develop Your Medical Transportation Business Plan
One of the most important steps in starting a medical transportation business is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your medical transportation business.
- Company Overview – this section tells the reader about the history of your medical transportation business and what type of medical transportation business you operate. For example, do you offer an ambulance service, wheelchair transportation, non-emergency medical transportation, or a medical escort service?
- Industry Analysis – here you will document key information about the medical transportation industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target clients are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your medical transportation business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your medical transportation business make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business
3. Choose the Legal Structure for Your Medical Transportation Business
Next you need to choose a legal structure for your medical transportation company and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the medical transportation business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a medical transportation business together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a medical transportation business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a medical transportation business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your medical transportation company, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Medical Transportation Business (If Needed)
In developing your medical transportation business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a medical transportation business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a medical transportation business that they believe has high potential for growth.
5. Secure a Location for Your Business
One way to find the right location for your medical transportation business is to look for areas with a high population density. This will ensure there is a high demand for your services. Additionally, you should consider areas with a large elderly population, as this demographic is more likely to require medical transportation. Finally, consider the cost of doing business in different locations and choose the one that offers the best return on investment.
6. Register Your Medical Transportation Business with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your medical transportation business’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your medical transportation company to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
The licenses and permits you will need to start a medical transportation business vary from state to state. In general, you will need a business license, a permit to transport passengers, and a permit to transport medical equipment.
Depending on the type of medical transportation business you launch, you will have to obtain the necessary state, county and/or city licenses.
10. Get Business Insurance for Your Medical Transportation Business
You need medical transportation insurance to operate a medical transportation business.
Other business insurance policies that you should consider for your own business include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Auto insurance: If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Medical Transportation Business Equipment
When starting a medical transportation business, you will need to invest in some essential equipment. This includes wheelchair accessible vans, stretchers, and first-aid supplies. You may also want to invest in a roadside emergency kit to help you deal with any unexpected situations.
12. Develop Your Medical Transportation Business Marketing Materials
Marketing materials will be required to attract and retain customers to your medical transportation business.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your medical transportation business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional medical transportation business website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your medical transportation business.
13. Purchase and Setup the Software Needed to Run Your Medical Transportation Business
To run a medical transportation business, you’ll need software that can help manage your scheduling and billing. You’ll also need software that can track your vehicles and drivers, so you can ensure that everyone is where they’re supposed to be and that your patients are being transported safely.
Medical transportation software allows you to manage all aspects of your company’s operation, on a single platform. With one solution in place, you won’t have to rely on multiple systems. That will reduce the amount of time spent switching between programs or entering data into different systems, which is especially helpful if you’re relying heavily on technology to run your business.
With access to the right medical transportation software, you’ll be able to provide better service for your patients and ensure your business is operating smoothly.
14. Open for Business
You are now ready to open your medical transportation business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Medical Transportation Business FAQs
Is it hard to start a medical transportation business?
It's not hard to start a medical transportation business.
A lot of people need medical transportation providers. Additionally, healthcare organizations require medical transportation service providers. In most states it's relatively easy for anyone with vehicle access and a commercial driver's license to get started. State and local regulations vary by area, so check your desired operating area for specific requirements.
One thing that makes this an attractive business is the low level of startup investment needed- which means there are more profit margins overall too.
How can I start a medical transportation business with no experience?
There are a few things you can do to be a medical transportation provider with no experience. You can start by researching the healthcare industry and what it takes to run a successful business in this field. You can also look into franchising opportunities or networking with other business owners in the medical transportation industry. Finally, you can also attend workshops and seminars that focus on medical transportation businesses. By taking these steps, you will be well on your way to starting a successful medical transportation business.
What type of medical transportation business is most profitable?
There is no one definitive answer to this question. Factors that will affect profitability include the type of transportation services offered, the location of the business, and the competition in the area.
In many cases, the most profitable form of medical transportation is a combination of services that provides patients with a range of options. For example, if a main medical transportation service is door-to-door transport for medical appointments, then a complementary service might be local area taxi cab pick up and drop offs. An additional service could include hospital transport, where the patient is dropped off at the hospital, another company transports them to their doctor's office or other designated area.
How much does it cost to start a medical transportation business?
It can cost anywhere from $10,000 to $50,000 to start a medical transportation business. This includes the cost of a vehicle, liability insurance, and other related expenses.
What are the ongoing expenses for a medical transportation business?
The ongoing expenses for a medical transportation business can vary depending on the services that are offered. Typical expenses may include marketing and advertising, vehicle maintenance and repairs, insurance, licensing and regulatory fees, and employee salaries and benefits.
How does a medical transportation business make money?
Medical transportation businesses make money by billing insurance companies for services. They may also charge patients directly for services, or receive payments from third-party administrators or government programs. Many medical transportation businesses are for-profit entities, although some are nonprofit organizations.
Is owning a medical transportation business profitable?
There is no definitive answer to this question since it can vary depending on the size and scope of the business, as well as the location. However, in general, it can be a profitable business if it is operated efficiently and has a good marketing strategy.
Why do medical transportation businesses fail?
There are many reasons medical transportation businesses fail. One reason is the industry is highly competitive and it can be difficult to differentiate one's business from others. Another reason is that many potential customers may be unwilling to pay the high prices charged by many of these businesses. Additionally, there are numerous regulations governing the transportation of patients, which can be difficult to adhere to or understand. Finally, there is a high level of liability associated with transporting patients, which can lead to expensive lawsuits if something goes wrong.