Do you want to start a blood bank? If YES, here is a complete guide to starting a blood bank business with NO money and no experience.
Okay, so we have provided you an in-depth sample blood bank business plan template. We also took it further by analyzing and drafting a sample blood bank marketing plan backed up by actionable guerrilla marketing ideas for blood banks. In this article, we will be considering all the requirements for starting a blood bank. So put on your entrepreneurial hat and let’s proceed.
Why Start a Blood Bank Business?
Blood is the red fluid that circulates in one’s blood vessels. Even though the blood’s main function is to act as a transport system for the body, it also plays another major role in the body as it helps defend it against infection. Blood does not have a substitute as it cannot be produced and so donors are the only source by which blood can be gotten for patients who need it.
A unit of blood can often be separated into four major components; red blood cells, white blood cells, platelets and plasma. Half of the volume of blood is made up of cells such as the red blood cells, white blood cells and platelets, while the plasma makes up the fluid.
Blood can be grouped into four and everyone falls into one of the groups; A, B, AB or O. The blood type which is usually inherited depends on the absence or presence of certain substances on the red blood cells. The approximate distribution of blood types in the United States is usually different depending on the race or ethnic group.
In order to determine the compatibility of the blood type of the donor and the recipient, specific methods are used to match the blood types for safe transfusion. Those in group O with a negative type are referred to as universal donors as they are the only ones that can donate blood to any recipient regardless of the blood type.
According to statistics, more than 44,000 pints of blood are needed every day and it is expected that the everyday needs are adequately being catered to by the national blood supply. Blood is collected from volunteer blood donors, tested and stored so as to ensure that blood is available all year round for those who need it. Most major disasters do not usually require large amounts of blood and in most cases; hospitals usually have to rely on blood within the institution to carry out their life saving duties.
Blood is usually donated via three major ways; the most common way is the volunteer donation where an individual donates one pint of blood that can then be used for any patient that needs it. Another way by which blood can be donated is through direction and it is done by family members who have the same blood type.
There is also the autologous form of donation where blood is drawn from an individual before an elective surgery that is expected to have large blood loss and then stored for 42 days and then given back to the individual should the need for a transfusion arise. This kind of donation is usually for those with rare blood types that might not usually be available in the blood bank.
Starting a Blood Bank Business – A Complete Guide
- Industry Overview
The use of blood to treat trauma and disease started in France in 1667 when the first direct blood transfusion was documented. However, transfusions during those times often ended in disaster because there was no equipment to determine the compatibility of the blood that was being donated to a recipient.
It was in 1901 that Dr. Karl Landsteiner, a German scientist made a discovery regarding different blood groups and his categorization found only three blood groups, A, B and O. This discovery provided an answer as to why some of the blood transfusions had ended in disasters and others had been successful.
According to IBISWorld, even though the blood and organ banks in the United States generate revenue of $11 billion annually, it has had a 0.1 percent growth for a period of five years – 2012 to 2017. There are more than 1,500 blood and organ banks in the United States employing more than 77,000 people. Operators in this industry often have to grapple with increasing and steady demand for blood as well as organs.
However, even though there is a high demand for blood and its products, revenue generated is largely dependent on donations from individuals. Decreasing demand and supply constraints has however stagnated revenue in this industry; revenue is however expected to pick up between 2017 and 2022.
Prospective operators are expected to grapple with the moderate barrier to entry as American Red Cross dominates the industry; and even though there are other thriving players in the industry, it has discouraged many new companies from entering into this industry.
Most of the operators in the industry are usually nonprofit; which is another factor that has discouraged most companies from entering into the industry. There are however private blood banks operating in the industry but they are usually subjected to checks from state regulations as well as the US Food & Drug Administration (FDA).
Globally, the market for blood banks as well as its products is expected by 2022 to have reached nearly $46 billion because of rising diseases, increase in demand for plasma derivatives and immunoglobulins as well as blood donation being done for profit, causing an increase in the number of blood bank establishments that will become dependent on paid donations. Also, more people are no longer donating blood for altruistic purposes as many prefer to be paid, which has pushed for the commercialization of blood banking and equally causing an increase in the number of donors.
The United States leads the global market especially as it has a healthcare infrastructure that is not only well developed but also properly coordinated. Other factors causing the United States to lead the pace are its adoption of advanced technologies, its reimbursement policies that are favorable, its high standard of care and the strong support it gets from government.
The Asia-Pacific has however been projected to lead the fastest growth due to its growing per capita spending on healthcare, under-served blood services causing the inability to meet patient needs, development of healthcare infrastructure and the rising demand for medical tourism.
The blood bank industry has its challenges though and one of them has to do with a market that is constantly shifting. Blood banks over the years have often operated on the assumption that there will always be blood shortage which led to several cancellations of elective surgeries.
However, the recession caused a change in the procedures as there was surplus blood being ready to be supplied. This however led smart entrepreneurs to act as industry middlemen and therefore take advantage of the surplus by soaking up the excess blood pints and distributing them to where they were needed.
Whole blood usually cost around $100, however when broken into various components can fetch nearly $200. Because of the limited number of days by which red blood cells (42 days) and platelets (5 days) can be stored, there is a huge waste in the system as every year, up to 14 percent of blood pints that had been donated are discarded. Also, some of the blood pints that are being discarded spoil during shipping, while the rest are wasted at hospitals.
Starting a Blood Bank Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The population that requires the services of a blood bank are those being treated for cancer, accident victims, those undergoing orthopedic surgeries, those undergoing cardiovascular surgeries, those undergoing organ and marrow transplants and those that are being treated for inherited blood orders.
Therefore, if you are looking to define the demography for your blood bank business, it should be one that accounts for any individual regardless of race, personality, status or level of wealth.
List of Niche ideas Within the Blood Bank Business That You Can Specialize in
The primary purpose of a blood bank is to collect, store and distribute human blood and its products to clients such as the hospital, who then pay for the blood and then give as needed to their own patients. The blood bank industry is one that is hugely dominated by one or two brands and so new operators look to offer niche services in order to compete fairly against already established competition and stand out as well.
Companies that operate on a huge scale have the luxury of offering more niche services due to their infrastructure and capital. Some of the niche ideas that are available within the industry and can be specialized on are;
- Blood Banking and Blood Products
- Blood Components and Plasma Products
- Health Screening Services
- All other human blood services
The Level of Competition in the Blood Bank Industry
Even though the industry is mostly dominated by nonprofit blood banks such as the Red Cross, there is still an intense level of competition in the industry as new entrants and even existing ones strive to get a fair share of the market.
Clients to blood banks want to know that they can get blood and blood products whenever they want and that the blood and blood products are being properly screened, stored and handled. It is therefore important that you do not compromise on your infrastructure as well as your storage facilities.
If you are therefore looking to start your blood bank in the United States, you should be aware that you will be facing stiff competition from already existing brands and therefore should be well prepared.
List of Well – Known Brands in the Blood Bank Industry
There are leading blood banks regarded as key and niche players in their fields and this is because their products are trusted by those who demand for them due to their means of sourcing for blood, their storage facilities, how long they have been in the business as well as many other factors. Knowing who the leading players are will enable you structure your business after them in order to attain a level of popularity as well.
The leading blood banks in the United States of America and all over the world are;
- American’s Blood Centers
- American Red Cross
- New York Blood Center
- United Blood Services
- Sanquin Blood Supply Foundation
- Blood Systems
According to facts and figures, one pint of blood can save 3 lives and every 1 in 7 cases that has been admitted to a hospital usually need blood. In the United States every year, the pints of blood that are usually being transfused are more than 15 million; which means that more than 40,000 pints of blood are being transfused on a daily basis in the United States as well as in Canada. However, only less than 10 percent of those that are eligible to donate blood do so annually even though the whole donation process takes less than an hour.
The fastest growing segment of the blood product industry is plasma as its global market has reached and surpassed $2 billion. Even though about five international companies dominate the market, the United States tops the major produce market as it collects about 60 percent of the global annual of 15 million liters yield.
Blood centers have brought about more complexity regarding the collection of blood in the past decade. This is because blood centers have now added five tests with which to screen for AIDS and hepatitis. Also, even though there is no central blood donor data, blood centers – commercial and nonprofit – have started purchasing computer systems with which to track donors so as to find out when a donor has tested positive to any of the diseases.
The industry is expected to face its biggest challenge in the next ten years which has to do with huge capital generation in order to be able to build or upgrade facilities, hire more staff, purchase more equipment as well as conduct research that will safeguard the supply of blood.
Starting Your Blood Bank Business from Scratch vs Buying a Franchise
When looking to start any business, you might be faced with the option of starting your business from scratch or having to buy a franchise. While either option is fine, choosing one will depend totally on what your goals and objectives are. Because of the many regulations that abound, there are however no franchise opportunities available in this industry.
Starting this business from the scratch is capital intensive and there are many regulations that abound for entrepreneurs in this field. It is therefore best that you conduct a thorough research before starting the business so that you do not get stuck halfway. You will have to build a solid business structure so that you can hire the most competent people to work for you and help you attain your goals and objectives.
Possible Threats and Challenges You Will Face When Starting a Blood Bank Business
The blood bank industry does not have the typical business environment that characterizes other industries and as a result there aren’t many new entrepreneurs looking to enter the industry. This fact should not however deter you from going into the business; it should however make you prepared for the challenges and threats that you are likely to face. You should however note that it is not all threats and challenges that can be easily handled and should these occur at any time, the best you can do is wait till the challenges pass.
Some of the threats and challenges that you will however be facing whilst starting your blood bank center are; security requirements, accreditations, laboratory and storage equipment as well as the US FDA and state regulations if you are looking to run a private blood bank center.
Starting a Blood Bank Business – Legal Matters
- Best legal entity to use for this type of business
Choosing an appropriate legal entity for your business is very important as the blood bank business is not only strictly regulated but also carries a lot of risks as the blood center can be sued by donors or the recipients anytime or even by the regulatory agency; and so it is vital that you are careful when choosing a legal entity for your blood bank.
Legal entities might differ depending on the state where you intend to operate the blood bank from and so it is vital that you engage the services of an attorney to help with the best legal entity that will suit your business as well as protect you.
There are several legal entities that entrepreneurs looking to start a business can use; sole proprietorship, partnership, corporation and Limited Liability Company (LLC); however, not all these legal entities will best serve the purpose of the entrepreneur looking to start a blood bank.
The corporation and LLC form of legal structure is one that will best protect the entrepreneur against any risk that will be incurred during the course of running the business. If you are confused on which to choose, you can contact an attorney to help you choose which legal structure will best serve your purposes especially if you intend to run your business on a national or international level.
Catchy Business Name ideas Suitable for a Blood Bank Business
When looking to start any business, one of the first steps you need to take is giving your business a name with which it can be identified. Choosing a business name isn’t easy as the business name must be catchy, memorable and easily pronounceable.
Below are some catchy business name ideas suitable for your blood bank;
- Quicky Blood Center
- Red Blood Center
- Saving Lives Blood Bank
- Silver Heart Blood Center
According to information from the Insurance Information Institute, 25% of businesses out of all those that close down due to a calamity never resume business again because they were not properly insured. Every entrepreneur starting a business knows that there is a risk especially if you had to scrape together funds to start the business, so it will be foolish of you not to protect your business.
It is important therefore to protect yourself, business, employees and your bottom line. If you aren’t sure of what insurance policies to get, you might need to seek out an insurance agent or broker help you with the right insurance policies for your business.
Below are some of the basic insurance policies that you will need to purchase for your blood bank business;
- Commercial Property Insurance
- Casualty Insurance
- Workers’ Compensation Insurance
- General Liability Insurance
- Errors and Omissions Insurance
- Product Liability Insurance
- Business Auto Insurance
- Umbrella Policies
- Contents Coverage
Intellectual Property Protection/Trademark
Except you are going to manufacture new equipment that will be used to collect and analyze blood better, the aim of your blood bank will be to just collect, analyze, store and distribute blood to those that need it. Several companies have however applied for intellectual property protection to protect their names, logos and other material they deem worthy.
Is Professional Certification Needed to Run a Blood Bank Business?
In order to start a blood bank, there are several certifications that you will need to get from the federal and state agencies but you might not need any professional certification especially if you are not medically inclined. However, you cannot run a blood bank like any kind of business as certain professionals must be in place for you not to get into trouble with the regulated authorities as this business is one that is strictly regulated.
List of Legal Documents You Need to Run a Blood Bank Business
The blood bank business is one that is strictly regulated and if you are looking to start the business, you will require certain documents at hand so that you do not run into any trouble with the authorities. Try to get a lawyer that is familiar with the industry to help you with whatever documents that you might need to run your blood bank.
Below are some of the basic documents that you will require to run your blood bank;
- Certificate of Incorporation
- Operating Agreement for LLCs
- Business License and Certification
- Business Plan
- Insurance Policy
- Employment Agreement
- Employer Identification Number (EIN)
- Federal Tax Identification Number (TIN)
Financing Your Blood Bank Business
The blood bank business is one that is capital intensive and will need you to source for funds externally with which to start and run your business till it begins to generate revenue. Sourcing for startup capital is not an easy venture especially in this kind of industry where there are already few companies dominating the market.
If you however have a well written business plan, then you might be able to get the attention of potential investors to invest in your business. Sourcing for capital might not be easy but it is something that every entrepreneur has to be prepared for at either the start or during the course of running the business.
Some of the ways by which you can source for startup capital for your blood bank are;
- Generate part of the startup capital from sale of stock or properties
- Source for startup capital from an investor or business partner
- Apply for loan from the commercial bank
Choosing a Suitable Location for your Blood Bank Business
Choosing the right location for your blood bank is very important as you will need as many donors as possible to easily access your facility and donate blood for which will be distributed later to your intended customers. If you are located in an area that is too far, not only will you have to pay more to advertise your blood bank to increase awareness for it, but you might have few donors willing to commute that far to donate blood.
The facility which you intend to lease or buy has to be conducive enough for your employees and should be able to meet the regulations by the state and federal regulatory agencies. It is important that the blood bank is not located close to an open sewage, drain or any other unhygienic environment. When designing the facility, it is important that you take the storage section into consideration.
It is always best to engage the services of a real estate agent to help in sourcing for the right location for your blood bank center. Ensure that your blood bank is located in an area that has high traffic so that people are constantly reminded of your services.
Aside from being in the hub of donors, your location should be one that is also close to your target clients as well even if it means you have to splurge in getting the facility.
Starting a Blood Bank Business – Technical and Manpower Details
It is important that blood bank centers consistently produce and distribute the highest quality of blood as well as blood products. A blood bank center must ensure that it has complied with all Food, Drug and Cosmetic Act (FDCA), who also requires that these blood banks comply with current good manufacturing practice (CGMP) regulations; as the courts have held that blood products that are produced in violation of CGMPs are regarded as adulterated no matter how safe the procedures used were. A single violation of the CGMP can render a product adulterated, this even covers incorrect product label.
It is therefore important that an established blood bank takes CGMP compliance very serious as the risks that are associated with noncompliance are very significant. The FDA on the other hand can subject the blood establishment to repeated inspections, seize products, and send warning letters or even sue for injunctive relief. It is therefore the legal obligation of a blood bank center to ensure that any risk does not come to the donor or recipient through its negligence.
The equipment used by a blood bank varies depending on the establishment and how busy its activities are. Also, the equipment required by a blood bank depends on what services the blood bank offers from whole blood, separation, blood analysis or cross-matching.
Basic equipment that are usually needed are; temperature recorder, refrigerated centrifuge, hematocrit centrifuge, general laboratory centrifuge, automated blood typing, haemoglobihometer, refractiometer, blood container weighing device, water bath, Rh view box, autoclave, serologic rotators, laboratory thermometers, electronic thermometers, blood agitator, compound microscope, hand-lens, pasteur, pipettes, glass slides, wash bottles, filter papers, dielectric tube sealer, ELISA reader with printer, washer and micropipettes, BP apparatus, donor chair, bacteriological incubator, plasma thawing bath, blood bag tube sealer as well as other furniture and fittings for administrative uses.
In building a solid business structure for your blood bank, it is essential that you hire competent individuals that align with the core vision and objectives of your company. Therefore, those that you should hire include; medical officer, blood bank technician, registered nurse, technical supervisor, blood bank technologist, administrative manager, human resources manager and security guard.
From the above analysis, you will need at least 8 key individuals to help achieve all your intended goals and objectives.
The Service Delivery Process of a Blood Bank Business
Before blood can be donated, there are certain things that must be adhered to such as being free from infectious disease, not taking certain medications, recent vaccinations, and knowing which travel activities might not allow you be eligible to donate blood even if for a certain period of time. Blood collection takes 10 minutes but the whole process might last for an hour. When donating blood, you will need to register, get a brief medical screening, have your blood collected as well as given refreshments.
The process involved in the collection of blood can be divided into two methods; the whole blood and the apheresis. The former is usually for donors who do not know their blood type and so usually involves the donor’s blood being drawn into a plastic bag and then taken to the blood center laboratory to be processed before being separated into components such as red blood cells, plasma, platelets and cryoprecipitate. Once this has been separated the red blood cells can then be stored for at most 42 days.
The apheresis method of blood donation usually involves a special machine where the collected blood goes through and then is separated during the course of donation in order for only certain parts of the blood to be collected. This therefore means that a single component such as the red blood cells can be collected in one sitting.
Starting a Blood Bank Business – The Marketing Plan
- Marketing ideas and Strategies
A blood bank center will not use the conventional marketing strategies that most other businesses use because of the process involved in collecting blood. Most of the blood that is usually sold to hospitals is blood that is freely donated by individuals and so marketing your blood bank to your potential clients – whether you are nonprofit or commercial blood center – will not have the aggressiveness that is being identified with the marketing tactics used by other kinds of businesses in other industries.
Except for private blood banks that use money to entice donors, most blood centers try to appeal to individuals in a way that makes the individuals feel compelled enough to donate blood. However, it is important to note that while you might compel individuals to donate blood, not everyone will or can donate blood.
It is therefore pertinent that you have taken a thorough research about who can donate blood so that you do not end up running into trouble with the government and regulated authorities. Also, a thorough research has to be conducted on your potential clients – the hospitals – so that you can easily determine how many hospitals are within your area and how many you can easily convince to buy your pints of blood.
Most blood banks usually engage the services of a marketing consultant that has thorough knowledge of the industry so as to know which marketing strategies to craft that will be effective for the intended target audience. It is important that whatever marketing strategies are being crafted is in line with your corporate goals and objectives so that they can be easily attained.
Alternatively, you can hire marketing executives who are experienced in the blood bank industry to craft marketing strategies that will allow you to compete with popular blood banks and in so doing penetrate the market in order to get a fair share for your blood center.
The advantage with hiring marketing executives as opposed to contracting a marketing consultant is that marketing executives can also physically meet with clients in order to attract more blood donors or to sell your blood pints and products to potential clients. Below are some of the marketing ideas and strategies that you can use for your blood bank;
- Empower your marketing executives to contact the hospitals in your area and inform them of your blood bank and why they should buy from you instead. Ensure that you drop a brochure that lists your services, fees and contact information
- Get a professional web designer to create a website for you and ensure that you also employ an SEO strategist to ensure that your website comes out tops when blood donation centers are being searched for in search engines
- Install billboards and flexi banners in various strategic locations in order to create awareness about your blood bank
- Attend seminars, conferences and events in order to associate with others and create awareness about your blood bank
- Offer different services and ensure that this is known to your target market
- Use social media platforms such as Facebook, Twitter, Instagram and Linkedin to promote your blood bank center
Possible Competitive Strategies for Winning your Competitors
Regardless of the kind of business this is, there is still a healthy dose of competition that exists in the blood bank industry especially as most blood bank centers are trying to get a share of the market for themselves due to the fact that the market is hugely dominated by the American Red Cross and one or two other blood centers.
In order to win over your competitors in this industry, it is important that you develop competitive strategies that are highly creative as the best way for you to be noticed is for you to stand out, while producing results that will be highly beneficial to your target market.
There are several important factors that you can look into in order to remain competitive and be able to win your competitors and the areas are in your infrastructure, your storage facilities, your other services as well as the amount of research you are going to conduct.
Strategies to Boost Your Blood Bank Brand Awareness and Create Your Corporate Identity
Regardless of the business you are running, creating strategies with which to boost the awareness of your brand will enable you to not only gain the trust of donors but also your intended target audience. The blood bank industry is one that is highly competitive and as such if you are not deliberate about boosting your brand and presenting a positive corporate image to the public, you might not easily attain your intended goals and objectives.
No one starts a business with the intention of not building the brand to a recognizable status. However, in order to be able to attain recognition for your brand and compete fairly against others, you should be ready to use various means to promote and advertise your business.
In some businesses, any sort of publicity – good or bad – is good for them. However, this is not so in this industry as a hint of bad publicity could totally destroy the image of a company no matter how long it has been cultivated. Therefore, quality services and publicity go hand in hand in this sort of business.
Before you can set aside money to promote your brand, it is essential that you conduct a thorough research in order to determine what means will be most effective for you when looking to publicize and communicate a positive corporate image to your intended audience. While the internet has become very effective in promoting one’s business, you cannot discount the effect of offline activities as well.
Below are some of the platforms that can be used to boost your brand as well as promote your business;
- Place adverts in newspapers and related magazines as well as on radio and television stations about your blood center
- Write articles that are educating and enlightening about blood and its donation and put them in online platforms as well as in newspapers and magazines
- Install billboards and banners in various strategic locations in order to create awareness for your blood center
- Participate in community activities in order to create awareness for your business
- Ensure that your blood bank is advertised on your website and get an SEO strategist to help pull traffic to your site
- Create a distinct logo and use this to brand all your official cars and get customized tee shirts for staff so as to create awareness especially during public activities