If you’re passionate about helping others and are driven by the idea of owning your own business, then the thought of launching a business in the health care field may have crossed your mind already. Opening a retirement home, a health clinic, a hospital, or a palliative care center can be extremely rewarding and, with U.S. health spending projected to grow by 5.8% annually as baby boomers age, reasons for entering the industry can appeal to many. But the health care industry is heavily regulated and even a single seemingly innocent error can cost your business millions; couple that with the competitive nature of the industry and health care can be a difficult field to succeed in.
Before diving in, it’s important to analyse objectively your prospects. The Plan Writers, along with many other small business consultants and start-up business experts, believe that building a business plan prior to launch is the best way to assess your chances of viability without having to spend large sums of money to test your idea. So, here are a few tips from The Plan Writers, a business plan writing company, on creating a business plan that acts as a gauge of viability and not just as a document to pitch to investors.
Familiarize Yourself with HIPAA
The Health Insurance Portability and Accountability Act (HIPAA) of 1996 plays a significant role in the strategic and day-to-day operations of health care businesses. The HIPAA Privacy Rule and the HIPAA Security Rule are particularly challenging sets of guidelines to follow as they dictate the handling of patient data. Patient information needs to remain confidential, unaltered, and available. Assuring that each condition is met requires substantial investments in IT. Do you have enough storage to cache a lifetime of patient data? Will you have the necessary tools to extract and analyse patient data on demand? Additionally, how will you protect against the threat of hackers? If you breach a condition, will you be able to recover if you’re hit with a lofty fine? Health care environments require many technological resources, and your business plan should include a strategy to implement the necessary resources. Failing to overlook this step could set your business up for failure on Day 1.
To find out if your potential business is considered a “covered entity” under HIPAA, check out www.hrsa.gov.
Research Starting Costs
Starting costs are a major barrier to entry for many entrepreneurs looking to join the health care industry. Though some business types have manageable start-up costs – a doula services business can be started for under $2,000 for instance – others may require a loan from the bank or some other form of financial backing if you have limited capital of your own to invest. Mobile hearing testing services and alternative health care centers have start-up costs that typically range from $50,000-$200,000. Before finalizing your decision on whether to launch your business, research starting costs and determine if there’s a suitable financial plan of action for you.
Look Into Franchising
Some health care companies provide franchising opportunities. Take some time to consider if purchasing a franchise business is a good fit for your situation and goals. Typically, franchises have higher start-up costs. Nurse Next Door, a home health care franchise that provides in-home care for clients, cites a range of $134,000 to $180,000 as its total franchise start-up fee. Other drawbacks to opening a franchise include less freedoms and royalty payments, while advantages include corporate support, brand name recognition, and lower inventory prices.