With as low as $125,000 or even lower, you can start a small-scale medical supply business especially if you will be operating the business with just a medical supply truck, 2 or 3 employees, and perhaps from your home.
A medical supply company is a business that purchases medical and surgical equipment, instruments, and supplies, stores these items at distribution centers, and delivers these products to medical and dental practitioners, clinics, hospitals et al.
If you are looking to start a medical supply business, you should first acquire the required experience and exposure before drawing an estimate of what it will cost you to start the business.
Please note that there are key factors that can determine the total budget of starting a medical supply business and that is what we will discuss in this article.
Factors That Influence the Cost of Opening a Medical Supply Business
Your Choice of Location
The truth is that the location of a business will determine how much you will spend on rent or lease, acquiring licenses and permits, utilities, and other costs associated with locations.
If you are looking to start a medical supply business, you should target a location or city that has several clusters of hospitals, medical centers, dental clinics, et al.
In addition to that, you should also make a balance between these facilities and seaports, airports, or even medical supply manufacturing companies. With that, it will be easier to cut down some costs of starting the business.
The Cost of Licensing and Permits
You cannot legally start and operate a medical supply business in the United States of America without first obtaining the specific licenses and permits needed for the business.
Basically, you should make plans to obtain a business license, Federal Employer Identification Number (EIN), State sales tax permit, wholesale drug distributor license, home occupation permit (if operating from home),
Controlled substance registration (if dealing with controlled substances), medical device establishment registration, Food and Drug Administration (FDA) approval for medical devices, health department permit (if applicable),
Hazardous materials handling permit (if storing or handling hazardous materials), environmental permits (if disposing of medical waste), building permits (if renovating or constructing a facility), Fire department permit, Occupational Safety and Health Administration (OSHA) compliance, etc.
In case you are not sure of the required licensing permits to start a medical supply business in your city, you should check with your local government or regulatory agencies. Please note that costs for these licenses and permits can vary.
The Cost of Insurance Policy Cover
Medical supply businesses typically require vehicle insurance, liability insurance, and workers’ compensation insurance to protect against potential risks and liabilities that the business is subjected to by virtue of the nature of the business.
Please note that the cost of insurance policy coverage will depend on factors such as the size of your business and the coverage limits you choose.
The Cost of Equipment and Supplies
The fact that you will need various equipment and supplies for the medical supply business means that you should make a budget for them before launching the business.
As expected, you should make provision for equipment and supplies such as medical equipment inventory, medical supplies inventory, shelving and storage units, computer and inventory management software, office furniture,
Point of sale (POS) system, cash register or payment processing equipment, packaging materials (boxes, bags, etc.), labeling and barcoding equipment, shipping supplies, scales (for weighing medical equipment), cleaning and sanitation supplies,
First aid supplies, safety equipment (gloves, masks, goggles), office supplies (pens, paper, etc.), refrigeration units (for temperature-sensitive supplies), display and marketing materials, security systems (cameras, alarms), etc.
As expected, the amount you are to spend on equipment and supplies will depend on the size of your business, and the medical supply projects you are handling at the time.
But the bottom line is that it is a significant cost that will influence the overall cost of starting a medical supply business.
The Cost of Purchasing Medical Supply Trucks and Vans
Please note that depending on the size and location of your medical supply business, you may need different sizes of medical supply trucks and delivery vans. It is important to note that the cost of a suitable medical supply truck and delivery van will depend on your preferences and also your decision to settle for outright purchase or lease.
The Cost of Marketing and Advertising the Medical Supply Business
Promoting your medical supply business through marketing and advertising efforts is essential to attract clients. Even though there are no specific costs attached to marketing and advertising a medical supply business, the bottom line is that if you want to launch a business that will win a fair share of the available market in your location, then you must be ready to invest a significant amount to promote your medical supply business.
Your Operational Expenses
For a medical supply business, you should budget for equipment maintenance and repair, transportation and delivery expenses, fueling, professional fees (accounting, legal, consulting), interest on loans or credit lines,
Taxes (income, property, sales, etc.), internet and phone services, software subscriptions and IT support, cleaning and janitorial services, security services, utilities, training and development expenses, lease or loan payments for vehicles,
Advertising and promotional materials, donations and sponsorships, and contingency fund for unexpected expenses. These are your operational expenses and you should budget for them.