Thanks to advances in medicine and technology, the population of elderly people in the United States continues to increase. While there were fewer than 50 million elderly Americans in 2015, it’s expected there will be 70 million of them by 2030, according to census data. That growth, coupled with the uncertain future of the Affordable Care Act and the public’s need for medical care, has created many opportunities for entrepreneurs to make some serious cash by building businesses that provide needed healthcare services—like starting a medical transportation company.
One of the increasingly popular ways entrepreneurs are doing that is by starting a medical transportation company. These businesses typically exist to take elderly and disabled patients from their homes to routine appointments and non-emergency checkups, then back again.
Patients who use non-emergency medical transportation companies are usually on stretchers, wheelchair-bound, or rely on walkers or canes to move from place to place. In almost all instances, these folks are simply unable to use traditional transportation services—like taxicabs or buses—to get from Point A to Point B. They require some sort of assistance, so to get to their appointments, they have two options: call an ambulance and spend a lot of money or use a non-emergency medical transportation company that’s much more affordable. Many patients—or at least those in charge of managing their finances—choose the latter.
If you’re thinking about starting a medical transportation company, that’s great news. You’ve figured out that there’s a growing need for this kind of service which appears likely to continue growing.
As it stands now, the non-emergency medical transportation sector generates $15 billion annually. How do you get the biggest slice of that pie?
7 Tips on Starting a Medical Transportation Company
Make sure you have enough money
By some estimates, it can cost an average of $350,000 to start your own non-emergency medical transportation company. You need to register your business; cover legal, insurance, permit, and licensing fees; acquire a facility; purchase vehicles; pay utility bills and wage expenses; launch a website; and cover other costs.
Before you move forward any further, make sure you have enough money to launch the business. If not, you may have to sell some equity in your business to an investor or apply for a small business loan.
Pick the right location
Because everyone needs healthcare services, you can also open a profitable business in practically any part of the country. That said, you still want to do your due diligence ahead of time to figure out whether it makes sense to open in specific markets. For example, if there are a lot of non-emergency medical transportation companies in a small city, you may want to open up shop somewhere that doesn’t have as much competition.
Look for locations that have dialysis centers, hospitals, nursing homes, and other senior assisted-living facilities nearby. That’s where you’ll get most of your revenue. Don’t forget that some students need non-emergency medical transportation too. You may also be able to secure contracts through local school districts.
Take care of legal and insurance aspects
You’d be surprised at how many people forget to tackle the fine print when they’re launching a business. First things first: Incorporate your business as a limited liability corporation (LLC) to ensure you won’t lose your personal assets in the event you get sued. You’ll also need to figure out which kind of driver’s license you need to take people from one location to another, which varies on a state-by-state basis. Additionally, you’ll need general liability insurance, car insurance, and worker’s compensation insurance in the event one of your employees is injured on the job.
Figure out how to market your business
Once you’re all set up, it’s time to go out and land your first clients. Do some research to find out how much your competitors charge their customers and price your services similarly. Next, you’ll want to send out some marketing information to prospective customers to let them know that you’re open for business. Offer some discounts to encourage people to give you a shot. You will also want to maintain an SEO-friendly blog that covers relevant industry trends and helpful tips your customers will appreciate. Use social media to promote those posts. That way, when people are looking for a company that offers your services, they’ll find you. You may also want to see if you can form partnerships with hospitals, nursing homes, and other similar facilities.
Make sure you can collect payments
Every business needs the ability to collect payments. In the non-emergency medical transportation industry, you will generally deal with two types of payments: those that come from the patients (or the people who manage their finances) and those that come from the government. In some instances, it may make sense for you to install a device that enables you to collect credit card payments in your vehicle, similar to what many taxis have. In other instances, it might not.
Medicaid payments will be a major portion of your total receipts. The laws vary from county to county, so make sure you’re familiar with the ones that affect your business before launching.
Aside from the Medicaid patients, some patients will be able to pay bills by themselves either by writing checks or paying with cash on the spot. In other instances, you’ll have to bill their guardians, who are responsible for managing their finances. Keep in mind that you may have to wait a while before collecting the second type of payments. If you run into cash flow problems while waiting for checks to come in, you can use an invoice financing service like Fundbox to advance payments on outstanding invoices.
Hire employees as your business grows
As you get more patients and land bigger contracts, you’ll need to hire enough drivers, coordinators, and support staff to handle the higher volume. To ensure your patients get the quality of service they’re looking for, do your best to hire the best and brightest experienced workers you can find. Assuming you’re the CEO, you’ll need to hire nurses, doctors, home health caregivers, drivers, and an office manager. Depending on how big your company gets, you may also need to hire a dedicated marketing team, a finance department, and a human resources manager.
Stay on top of changing laws
At the time of this writing, the ACA is the law of the land. To ensure your company never runs afoul of the law, it is imperative that you stay informed about any new regulations coming down the pike that may affect your business. You will also want to stay abreast of potential changes to tax laws that impact your company.
Like any other business, starting a medical transportation company is hard work. As long as you know that from the outset and are willing to put in the time and energy necessary to succeed, you should do just fine. Not only will starting a medical transportation company generate a lot of revenue and create a lot of jobs, you’ll also be providing a critical service to a number of elderly and disabled patients—helping them and their loved ones enjoy a better quality of life.