Medical laboratories bear an important responsibility in the healthcare field. Labs’ tests and analyses help doctors diagnose and treat patients’ problems, and labs help healthcare workers understand a patient’s conditions throughout the course of treatment.
Starting a lab business requires extensive research and planning. And it’s important to hire professional staff members who can follow the proper procedures so that your lab can maintain or earn accreditation. Learn more about the process with this step-by-step guide to starting your own laboratory business.
Every great business starts with research. Then, you compile this research into a business plan. Your business plan helps you plan for success, outlining your goals and how you will achieve them.
Knowing the parts of a business plan will help guide and then organize your research. The key components of any successful laboratory business plan are:
- The executive summary: This is the largest part of your plan and highlights key parts from the entire plan. After reading the executive summary, the reader should know your mission statement, what your business does, how it does it, who it’s targeting, and what differentiates It from the competition.
- Products and services: This includes pricing and unique features and benefits.
- Market analysis: This includes information about your target market, your coemption, and potential changes in the industry that could impact your business.
- Marketing strategy: A marketing strategy determines how your lab will attract and retain customers.
- Budget and financial planning: These concerns cover potential costs and how to manage them. Include a pro forma statement that projects future income and expenses. The pro forma is helpful for attracting lenders and investors.
2. Establish the Business Structure
Next, decide on your lab’s business structure. The structure determines the activities your business can do, legal responsibilities, and your lab’s tax obligations. Seek legal and tax advice from experts to help you determine which structure best suits your business goals and needs.
The four main types of business structures are sole proprietorship, partnership, corporation (C or S), and limited liability company (LLC). Here is basic information about each business structure type.
- Sole proprietorship: This is the simplest structure, with one individual responsible for operating the business. Business income and expenses are included on the owner’s tax return.
- Partnership: This is the simplest structure for a business with two or more owners. The partners are personally liable for business debts.
- Corporation: This complex business structure requires owners to meet more tax requirements and follow more regulations. But this gives your business a separate entity from the owners. Choose between a C-corporation or an S-corporation.
- LLC: This structure combines elements of partnerships and corporations. It gives owners personal liability protection and reduces tax requirements.
3. Fund the Lab
The next step in this guide to starting your own laboratory business is to determine who will fund your business. If you want to self-fund, you might rely on people you know for capital or take money from your savings or investments. But you’ll likely want to finance your lab with investor money or by taking out bank loans. Seek expert financial advice while you make the important decision on how to finance your lab.
Getting venture capital from investors involves sharing your business plan and working out the terms of your financial agreement. The potential investors will look through your business plan, so it’s a good idea to create a presentation that includes visuals that highlight why they should invest in your company. And to get a business loan, expect to share your business plan and financial projections for the next five years with banks or other lenders.
4. Secure the Lab Facility
After financing your lab, it’s time to find your facility and get equipment. When looking over your facility options, think of the site location. Choose a location that supports rather than hinders your work. For example, think of how far samples will need to travel to and from your lab and where they need to go.
Another thing to consider is the facility’s size. You want to avoid space that’s too small for your future growth, but you want to balance your space needs with cost.
Also think about your lab’s utilities, including electrical and plumbing needs. Labs need greater electrical capacity than most facilities. And you need to outfit your space for uncommon plumbing fixtures such as handwash sinks, emergency shower stations, and floor drains.
5. Purchase Equipment
Once you have decided on the space, it’s time to purchase lab and office equipment. Think strategically about what you want your lab equipment to accomplish so that you buy equipment with features you’ll use.
Next, find vendors. You could choose to buy new equipment directly from the manufacturer. This way, you’ll benefit from the warranty and service contract. Or you could buy discounted devices from third-party vendors. These sellers often sell products from multiple manufacturers, making it easy for you to compare features and costs.
Ask your vendors to demonstrate equipment. Once you’ve narrowed down your vendor options, negotiate between the vendors so you can get competitive pricing, longer warranties, or better service contracts in case the equipment malfunctions after the warranty expires.
Office equipment includes ergonomically designed chairs and tables. You’ll also need to purchase software to handle things such as billing, reporting, and managing data.
6. Hire Personnel
Follow federal and state employment and labor laws as you create employee benefits, write job descriptions, and draft communication resources like employee handbooks. Using a laboratory consulting firm gives you access to the best candidates for every job position.
You can work with a lab consulting agency to staff your lab at all levels, from technicians to directors. You’ll quickly build a team of professionals that can perform all the duties your lab needs. And moving forward, as your business grows and your staff needs further develop, the agency can help you fill more positions or hire seasonal or traveling employees.
Get Business Support from Lighthouse Lab Services
If you’re starting a medical laboratory business, keep in mind that you’ll also have to address administrative tasks such as credentialing for required state and CLIA certificates and implementation of your standard operating procedures. Fortunately, the industry experts at Lighthouse Lab Services will get your lab going in as little as 90 days using our six-step startup process. No matter where you are in your business journey, contact us today for a free consultation.