A medical supply company is a business that purchases medical and surgical equipment, instruments, and supplies, stores these items at distribution centers, and delivers these products and related services to medical and dental practitioners, clinics, hospitals, etc.
Statistics made available show that the global medical supplies market was worth USD 80 billion in the year 2019 and it is projected to reach USD 95.04 billion by 2026 with a CAGR of 13.5% between 2022 and 2026. Interestingly, the United States is a major player in the global medical market worth $85 billion according to industry analysts. The United States is home to nearly 11,000 medical supply companies.
Steps on How to Write a Medical Supply Business Plan
Table of Content
Shannon McKenzie© Medical Supply Company, Inc. is an American-based and licensed medical supply business that will be located in a well-furnished and centrally located warehouse facility in the heart of Fort Wayne, Indiana.
At Shannon McKenzie© Medical Supply Company, Inc., we will supply a wide array of medical and surgical equipment, instruments, and supplies from different manufacturers (brands) from the United States and abroad. We are set to serve a wide range of clientele in and around Fort Wayne, Indiana.
Shannon McKenzie is the founder and CEO of Shannon McKenzie© Medical Supply Company, Inc.
a. Our Products and Services
Shannon McKenzie© Medical Supply Company, Inc. will be involved in the sale and supply of;
- Nonelectronic medical, surgical, dental, and veterinary instruments and apparatus, such as syringes, anesthesia apparatus, blood transfusion equipment, catheters, surgical clamps, and medical thermometers, electromedical and electrotherapeutic apparatus, X-ray apparatus
- Surgical appliances
- Surgical instruments
- Dental instruments and supplies
- Hospital beds and other specialized hospital furniture
- Personal safety equipment.
b. Nature of the Business
Our medical supply company will operate the business-to-business model.
c. The Industry
Shannon McKenzie© Medical Supply Company, Inc. will operate under the medical supply industry.
d. Mission Statement
Our mission is to partner with leading medical equipment, devices, and related supplies manufacturing companies to become their preferred business partner when it comes to distributing their products in and around Fort Wayne, Indiana.
e. Vision Statement
Our vision is to become the leading medical supply company in the whole of Fort Wayne, Indiana.
f. Our Tagline (Slogan)
Shannon McKenzie© Medical Supply Company, Inc. – The preferred Medical Supply Company!
g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)
Shannon McKenzie© Medical Supply Company, Inc. will be formed as a Limited Liability Company (LLC).
h. Our Organizational Structure
- Chief Executive Officer (President)
- Human Resources and Admin Manager
- Warehouse Manager
- Merchandise Manager
- Sales and Marketing Manager
- Accountants (Cashiers)
- Sales Agents
- Customer Services Executive
- Truck and Van Drivers.
i. Ownership/Shareholder Structure and Board Members
- Shannon McKenzie (Owner and Chairman/Chief Executive Officer) 52 Percent Shares
- Garry Button (Board Member) 18 Percent Shares
- Christian Norman (Board Member) 10 Percent Shares
- Carty Bright (Board Member) 10 Percent Shares
- Lilian Thomas (Board Member and Sectary) 10 Percent Shares.
- Ideal location for a medical supply business
- Highly experienced and qualified employees and management
- Access to finance from business partners
- Access to some of the leading medical device and equipment manufacturers nationally and internationally.
- Financial Constraints
- A new business that will be competing with well-established medical supply companies.
- Inability to retain our highly experienced and qualified employees longer than we want
- A rise in the demand for medical supplies due to the increasing number of new medical and dental practitioners, clinics and hospitals et al within our target market location.
- Online market, new services, new technology, and of course the opening of new markets
i. How Big is the Industry?
Trust me, the market for medical supplies is massive in the United States of America. This can be supported by the fact that the medical supply market in the United States is currently worth $85 billion according to industry analysts.
ii. Is the Industry Growing or Declining?
The medical supply line of business is growing because medical and dental practitioners, clinics, and hospitals et al. cannot operate their business without medical equipment and devices. Come to think of it, with the recent outbreak of coronavirus and the stress meted on the health system globally, the importation of medical equipment has experienced a boom and it will continue in the upper trajectory for a long time to come.
iii. What are the Future Trends in the Industry
The future trends when it comes to the medical supply business will revolve around technology. Software that is meant to predict what customers want from a medical supply company and also to create online markets where people can order medical equipment and devices from the comfort of their offices.
iv. Are There Existing Niches in the Industry?
No, there are no existing niche ideas when it comes to the medical supply business.
v. Can You Sell a Franchise of your Business in the Future?
Shannon McKenzie© Medical Supply Company, Inc. has plans to sell franchises in the nearest future and we will target major cities with thriving markets in the United States of America.
- The arrival of new medical supply companies or even medical device and equipment manufacturers within our market space
- Unfavorable government policy and regulations.
- Steady wage expenses
- Economic uncertainty
- Liability problems
- The FDA’s Center for Devices and Radiological Health (CDRH) could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses like ours.
i. Who are the Major Competitors?
- Henry Schein
- Cardinal Health
- Medline Industries
- Carex Health Brands, Inc.
- Drive DeVilbiss Healthcare.
- NOVA Medical Products.
- Kaye Products, Inc.
- Medtronic PLC.
- Abbott Laboratories
- General Electric Company
- Danaher Corporation
- Boston Scientific Corporation
- Johnson & Johnson
- Varian Medical Systems Inc.
- Siemens Healthineers
- 3M Health Care
ii. Is There a Franchise for Medical Supply Business?
Yes, there are franchise opportunities for the medical supply business, and here are 20 of them;
- Auxo Medical, LLC.
- BioPed Footcare Centers
- Medicap Pharmacies Incorporated
- MEDIchair Ltd.
- Sonus Hearing Care.
iii. Are There Policies, Regulations, or Zoning Laws Affecting Medical Supply Business?
Yes, there are county or state regulations or zoning laws for medical supply businesses. Players in this industry are expected to work with the existing regulations governing similar businesses in the county where their business is domiciled.
Please note that in the United States, the FDA’s Center for Devices and Radiological Health (CDRH) is tasked with regulating firms who manufacture, repackage, re-label, and/or import medical devices sold in the United States. Also, the FDA’s CDRH regulates radiation-emitting electronic products (medical and non-medical) such as lasers, x-ray systems, ultrasound equipment, microwave ovens, and color televisions.
a. Who is Your Target Audience?
i. Age Range
Our target market are medical businesses who have the finance to purchase medical supplies from us.
ii. Level of Educational
We don’t have any restriction on the level of education of those we will welcome to our medical supply company or who will purchase medical supplies from us.
iii. Income Level
There is no cap on the income level of those we are looking to sell medical supplies.
There is no restriction when it comes to the ethnicity of the people that will purchase medical supplies from us.
There is no restriction when it comes to the language spoken by the people that will purchase medical supplies from us.
vi. Geographical Location
Anybody from any geographical location is free to purchase medical supplies from us.
Shannon McKenzie© Medical Supply Company, Inc. will not restrict any customer from purchasing medical supplies from us based on their lifestyle, culture, or race.
b. Advertising and Promotion Strategies
- Brand All Our Delivery Vans and Trucks.
- Tap Into Text Marketing.
- Make Use of Bill Boards.
- Share Your Events in Local Groups and Pages.
- Turn Your Social Media Channels into a Resource
- Develop Your Business Directory Profiles
- Build Relationships with players in the health care industry.
i. Traditional Marketing Strategies
- Marketing through Direct Mail.
- Print Media Marketing – Newspapers & Magazines.
- Broadcast Marketing -Television & Radio Channels.
- OOH, Marketing – Public Transits like Buses and Trains, Billboards, Street shows, and Cabs.
- Leverage direct sales, direct mail (postcards, brochures, letters, fliers), print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.
ii. Digital Marketing Strategies
- Social Media Marketing Platforms.
- Influencer Marketing.
- Email Marketing.
- Content Marketing.
- Search Engine Optimization (SEO) Marketing.
- Affiliate Marketing
- Mobile Marketing.
iii. Social Media Marketing Plan
- Start using chatbots.
- Create a personalized experience for our customers.
- Create an efficient content marketing strategy.
- Create a community for our target market and potential target market.
- Gear up our profiles with a diverse content strategy.
- Use brand advocates.
- Create profiles on the relevant social media channels.
- Run cross-channel campaigns.
c. Pricing Strategy
When working out our pricing strategy, Shannon McKenzie© Medical Supply Company, Inc. will make sure it covers profits, insurance, premium, license, economy or value, and full package. In all our pricing strategy will reflect;
- Cost-Based Pricing
- Value-Based Pricing
- Competition-Based Pricing.
Sales and Distribution Plan
a. Sales Channels
Our channel sales strategy will involve using partners and third parties—such as referral partners, affiliate partners, strategic alliances in the health care industry, and freelancers (medical reps) to help refer customers to us.
Shannon McKenzie© Medical Supply Company, Inc. will also leverage the 4 Ps of marketing which is a place, price, product, and promotion. By carefully integrating all these marketing strategies into a marketing mix, we can have a visible, in-demand service that is competitively priced and promoted to our customers.
b. Inventory Strategy
The fact that we will need to stock up our warehouse with different types of medical supplies per time means that Shannon McKenzie© Medical Supply Company, Inc. will operate an inventory strategy that is based on a day-to-day methodology for ordering, maintaining, and processing items in our warehouse. We will develop our strategy with the same thoroughness and attention to detail as we would if we were creating an overall strategy for the business.
Shannon McKenzie© Medical Supply Company, Inc. will make sure we work with “Just-in-time (JIT) inventory” – (JIT involves holding as little stock as possible, negating the costs and risks involved with keeping a large amount of stock on hand.)
c. Payment Options for Customers
Here are the payment options that Shannon McKenzie© Medical Supply Company, Inc. will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards / Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
d. Return Policy, Incentives, and Guarantees
At Shannon McKenzie© Medical Supply Company, Inc., our customers are our top priority hence if you receive any medical equipment or device that is different from your receipt, we will sincerely apologize. Please call us as soon as you notice that there was an error in your order, and you may come to pick up the correct item.
For credit card payments, you will be refunded the sales price amount associated with the error and recharged for the new items’ price. For cash payments, you will be asked to pay the difference of the balance if the new product has a greater value than the product received in error.
In the same way, you will receive the difference of the balance back as credit for the new item if less than the products received in error. In some cases, we may offer you store credit. Your order will be a priority if you come to pick it up. In all cases, please return the medical supplies order in the original container(s) to our host.
e. Customer Support Strategy
Our customer support strategy will involve seeking customers’ feedback. This will help us provide excellent customer service to all our clients and investors, it will help us to first understand their needs, experiences, and pain points.
Regularly, we will work towards strengthening our Customer Service Team and also Leverage Multi-Channel Servicing as part of our customer support strategy.
We plan to expand our revenue by 45 percent in the second year and the plan will include a marketing, sales, and operations component. The operations component of the plan would include attracting partnership and retainership deals that will enable the firm to boost our sales and support revenue growth.
a. What Happens During a Typical Day at a Medical Supply Company Business?
- The business is open for the day’s work
- Stocks are taken for the day in the warehouse
- Customer orders are taken, processed, and are delivered to them by the delivery guys
- Cashier collect’s cash and reconcile account for the day
- Administrative duties are carried out
- The warehouse is restocked when required.
- The business is closed for the day.
b. Production Process (If Any)
The nature of the medical supply business doesn’t give room for a production process.
c. Service Procedure (If Any)
The service procedure for a medical supply company starts with a customer (medical and dental practitioners, clinics and hospitals et al) requesting or ordering medical devices and equipment.
Once the request is gotten, it will be processed and the order delivered to a location as requested.
d. The Supply Chain
Shannon McKenzie© Medical Supply Company, Inc. will rely on key players in the medical device and equipment manufacturing industry to partner with for steady supplies at an affordable rate. So also, we have been able to establish business relationships with medical and dental practitioners, clinics and hospitals et al to be their major suppliers of medical devices and equipment.
e. Sources of Income
Shannon McKenzie© Medical Supply Company, Inc. will make money from selling;
- Nonelectronic medical, surgical, dental, and veterinary instruments and apparatus
- Surgical appliances
- Surgical instruments
- Dental instruments and supplies
- Hospital beds and other specialized hospital furniture
- Personal safety equipment.
a. Amount Needed to Start your Medical Supply Company?
Shannon McKenzie© Medical Supply Company, Inc. would need an estimate of $2.5 million successfully set up our medical supply company in the United States of America. Please note that this amount includes the salaries of all our staff for the first month of operation.
b. What are the Costs Involved?
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $3,300.
- Marketing, Branding and Promotions – $2,000.
- Business Consultant Fee – $2,500.
- Insurance – $12,400.
- Rent/Lease – $150,000.
- Other start-up expenses include commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($1,800).
- Operational Cost (salaries of employees, payments of bills et al) – $130,000
- Start-up Inventory – $1.5 million
- Store Equipment (cash register, security, ventilation, signage) – $1,750
- Furnishing and equipping the warehouse facility – $20,000
- Website: $600
- Opening party: $3,000
- Miscellaneous: $7,000
c. Do You Need to Build a Facility? If YES, How Much will it cost?
Shannon McKenzie© Medical Supply Company, Inc. will not build a new facility for our medical supply company; we intend to start with a long-term lease for a standard warehouse facility and after 5 years, we will start the process of acquiring our warehouse facility in a centralized location in the city.
d. What are the Ongoing Expenses for Running a Medical Supply Company?
- Utility bills (gas, internet subscriptions, phone bills, signage and software renewal fees et al)
- Salaries of employees
- Trucks and vans maintenance
- Marketing costs
e. What is the Average Salary of your Staff?
- Chief Executive Officer (President) – $120,000 Annually
- Human Resources and Admin Manager – $60,000 Annually
- Warehouse Manager – $55,000 Annually
- Merchandize Manager – $50,000 Annually
- Sales and Marketing Manager – $45,000 Annually
- Accountants (Cashiers) – $45,000 Annually
- Sales Agents – $35,000 Annually
- Customer Services Executive – $35,000 Annually
- Truck and Van Drivers – $30,000 Annually
f. How Do You Get Funding to Start a Medical Supply Company.
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
- Source for soft loans from your family members and friends.
a. How Much Should You Charge for your Product/Service?
There is no fixed price when it comes to medical equipment and supplies; we will supply based on the commission stipulated by the equipment manufacturing company.
b. Sales Forecast?
- First Fiscal Year (FY1): $1.3 million
- Second Fiscal Year (FY2): $2.4 million
- Third Fiscal Year (FY3): $3.5 million
c. Estimated Profit You Will Make a Year?
- First Fiscal Year (FY1) (Profit After Tax): $450,000
- Second Fiscal Year (FY2) (Profit After Tax): $950,000
- Third Fiscal Year (FY3) (Profit After Tax): $1.75 million
d. Profit Margin of a Medical Supply Company Product/Service
The ideal profit margin we hope to make at Shannon McKenzie© Medical Supply Company, Inc. will be between 5 percent and 15 percent depending on the product and the brand (medical device and equipment manufacturing company).
a. How do you intend to grow and expand?
Shannon McKenzie© Medical Supply Company, Inc. will grow our medical supply company by first opening other outlets in key cities in the United States of America within the first five years of establishing the business and then will start selling franchises from the sixth year.
b. Where do you intend to expand to and why? (Geographical locations)
Shannon McKenzie© Medical Supply Company, Inc. plans to expand first to Miami, Florida, Houston, Texas, New York City, New York, Oklahoma City, Oklahoma, Chagrin Falls, Ohio, Kaysville, Utah, Cedar Rapids, Iowa, Las Vegas, Nevada, Los Angeles, California and Dallas, Texas.
The reason we intend to expand to these locations is that available statistics show that the cities listed above have the most thriving market for medical supply companies.
The founder of Shannon McKenzie© Medical Supply Company, Inc. plans to exit the business via family succession. We have placed structures and processes in place that will help us achieve our plan of successfully transferring the business from one family member to another without hitches.