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This question is about medical transporter.
How to start a medical transportation business
To start a medical transportation business, you need to determine if you have the proper funding, select the right location, and take care of insurance and legal requirements. For details of each of these steps and others you can take to start a medical transportation business, use this guide:
Determine if you have the proper funding. This is a crucial first step in starting your medical transportation business.
Medical transportation businesses are very expensive to start. They come with a lot of regulatory startup costs that are usually in the hundreds of thousands of dollars range.
Some of these expensive costs include registering your medical transportation business, legal insurance, permits, and licensing fees.
You also have to consider the huge cost of acquiring or leasing a facility for your business operations and the housing of your vehicles, as well as actually purchasing a fleet of adequate medical transportation vehicles. Not to mention a large staff of employees whose wages you must pay.
The utility bills for your facilities and the maintenance bills for your transportation fleet are also very big costs.
Before you start, it is essential to make sure you possess the kind of capital it takes to start a business of this magnitude. You might have to consider seeking investors for your business or applying for a small business loan to cover some of these high expenses.
Select the right location. All states in the US need healthcare services, so opening a medical transportation business in any state can be profitable, but you still want to make sure you are opening one in the right market.
To properly do this step you should perform market research on medical transportation businesses in your area to get a sense of the competition and the demand.
Are there ample hospitals, medical clinics, urgent cares, and other medical facilities in the area you are wanting to grow your business in? This matters if you want to have a successful medical transportation business.
Smaller areas, such as those in small towns or rural communities are likely to have fewer medical transportation businesses and thus less competition for your company.
If you are looking to do this in a metropolitan or fairly urban market, you are going to have to determine a market strategy to help you stand out amongst competitors
You should be looking into locations that have an abundance, or at least some, medical facilities like hospitals, dialysis clinics and centers, nursing homes, and other senior-living assisted facilities.
Remember, some students need non-emergency medical transportation services, meaning you might be able to secure contracts with local school districts.
Take care of insurance and legal requirements. You need to look into all of the necessary insurance and legal requirements you need to comply with to operate your medical transportation business.
As the first step in this area, you should seek to incorporate your business. Incorporating your medical transportation businesses means you, as the owner, can not be personally sued for your personal assets.
You'll also need to figure out which driver's licenses your drivers will need to transport people from one location to another. Getting a Commercial Driver's License (CDL) is something you will need and any drivers that you hire will need. It is almost always a requirement to start a medical transportation business.
CDL licenses fall into three different categories:
Class A
Class B
Class C
Trailer gross weight rating restrictions separate Class A and Class B. A Class A license allows you to drive tractor-trailers, while a Class B license clears you to drive straight trucks, box trucks, and large passenger buses.
Class B is likely the one you should look most closely at getting for yourself and your drivers if you plan on using buses or shuttles for your medical transportation business.
A Class C license might also apply. This one allows you to drive smaller vehicles, like passenger vans and certain delivery trucks.
The next step is to get federal and state tax IDs. Your employer identification number (EIN) is critical to starting and growing your business. It helps with matters like opening a business bank account and paying taxes. Essentially it is like a social security number, but for your business. In certain states, you may also have to get a tax ID as well.
You now should apply for the proper licenses and permits for your medical transportation business. This guarantees that your business stays legally compliant. The licenses and permits you may need for your business varies, depending on what state you operate in, the specific location of your business, and other factors as well.
You will also have to secure a motor vehicle record (MVR). This step is fairly simple in most states, but you should still do the proper planning in the event of delays.
In most states, there is a fee you must pay to get a motor vehicle record. In certain states you can also accomplish this online and get a digital version. In other states, drivers may need to pick up a physical copy or have it mailed to their home address, or to your business address.
A medical transportation business means you need a variety of insurance policies. Business insurance is necessary to protect your LLC from liabilities, and other possible claims.
You also obviously need auto insurance for all of your medical transportation vehicles. You also should get general liability insurance, and worker's compensation insurance for your drivers and any other employees you plan to hire. This protects you in the event an employee experiences an injury while working for your company.
It is highly recommended that you seek the counsel of an experienced insurance agent to determine all the necessary insurance policies you should get for your business.
Market your medical transportation business. Once your business is all set up and legally able to operate, it's time to try and gain some clients, and start to grow your company.
You should also reference the market research you performed earlier to properly take this step. You need to know what your competition is charging, so you can try to undercut the mart rates, however, it's tricky, because you still need to make sure you are charging service fees that keep your business sustainable and profitable.
You can send out marketing information via email and other online resources, to potential clients to let them know you are opening your doors for business. Offering discounted rates at first is a great way to gain a steady clientele.
You should also utilize social media to promote your services, website, and blog. Make sure you link your business social media accounts to your website and vice versa. This way anyone interested in your services will have an easy time finding your business.
You should definitely consider trying to partner with hospitals, nursing homes, and other medical facilities. If you partner with these places, you can often promote your business within them, by placing flyers on their front desk or community boards.
Ensure you can collect payments. Every kind of business needs to be able to collect payments, and a medical transportation business is no different.
In the non-emergency medical transportation industry, you will typically encounter two types of payments. Payments that come from patients, or the people that manage a patient's finances. And payments that come from the government.
You might want to consider installing devices into your vehicles that allow you to accept debit and credit card payments. This might make sense for your particular business, but in certain cases, it might also be unnecessary.
There are laws that govern Medicaid payments, and since you are often going to be dealing with this type of payment, it is important to research the laws governing these payments in your particular county and state.
Certain clients, who are not on Medicaid, will pay with cash or check on the spot after transportation service has been rendered. And in other cases, you will have to bill the guardians of patients to receive payment.
It is important to remember that payments from the government take time to receive. If you start to develop cash flow problems with your medical transportation business you can invoice finance services to advance payments on invoices that have yet to be paid.
Hire qualified and motivated employees. Depending on the scale of your medical transportation business plan you may not need many (or any) employees initially, or perhaps you do need a large team.
To provide transportation services to many medical facilities at once, you are going to need a considerable roster of drivers.
There are also going to be administrative duties that you are likely going to need assistance with. You may not need staff for administrative functions at first, however it is always a good idea to plan for the future if your business expands.
If you are planning on keeping your business on the small side, you can get away with wearing many hats in the business, and hiring only a few employees, but if you want your business to grow in scale, you are going to need a workforce.
Getting more patients and gaining larger contracts means you'll need to hire coordinators, and support staff, in addition to more drivers, to handle the increased volume of services.
If you are looking to quickly grow your medical transportation business, you should also look into hiring employees in the areas of human resources (HR), marketing, finance, and accounting.
Try to stay on top of new and changing laws. The Affordable Care Act (ACA) is the set of laws that most affect your industry at the moment. It is important to familiarize yourself with any applicable information found in the ACA.
You need to make sure your company always complies with applicable laws and regulations to ensure it isn't penalized, fined, or at worst, shut down.
There are also many laws and regulations that are created on a fairly regular basis that might affect your medical transportation business in some way.
You will also want to stay up to speed on potential changes and developments concerning tax laws that might have an impact on your business.
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