How to Start a Blood Bank Business [Business Plan]

A blood bank is a medical facility that primarily collects, stores, and distributes human blood, blood products, and human organs. A recent report released by World Health Organization (WHO) shows that about 118.4 million blood donations are collected worldwide. The report further states that about 40 percent of these are collected in high-income countries, home to 16 percent of the world’s population.

About 13,300 blood centers in 169 countries report collecting a total of 106 million donations. In the United States, there are approximately 2,400 institutions (community, regional, and ARC blood centers; hospital blood banks; and hospital transfusion services) and 9,500 individuals are members of the AABB.

Steps on How to Start a Blood Bank

1. Conduct Market Research

If you want to start a blood bank, you must make sure you conduct thorough market research. Your aim of conducting market research for your blood bank should be to get an in-depth analysis of the industry, so you can understand the market space and what you are going to be up against. With a successful market research, you will be able to explore the unknown and unlock new possibilities in the industry.

a. Who is the Target Market for Blood Bank?

• Those being treated for cancer
• Accident victims
• Those undergoing surgeries
• Those that are being treated for inherited blood orders.
• Health Management Organizations (HMOs)
• Hospitals, Blood Centers, Biotechnology Companies and other Research Institutes

b. Is Blood Bank Business a Profitable Business?

Blood banks are not meant to run as a profit-making venture; they operate predominantly as nonprofit organizations. In a recent publication, Mr. Doddridge, head of a community center in St. Petersberg, Fla., as well as the current president of the association, estimates that most independently licensed centers have revenues of $50,000 to $500,000 and retain 5 percent to 10 percent of revenues in not-for-profit excesses.

c. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to blood banks because blood banks are expected to operate as a not-for-profit and are regulated by the ministry or department of health in a country.

d. Who are the Major Competitors?

• American Red Cross (ARC)
• America’s Blood Centers (ABC)
• Vitalant
• Community Blood Service Of Illinois
• Gulf Coast Regional Blood Center
• Life South Community Blood Centers
• Carter Blood Care
• Bloodworks Northwest
• Alphacord
• LifeBankUSA
• Cryocyte
• HealthBanks Biotech USA.

e. Are There County or State Regulations or Zoning Laws for Blood Banks?

Yes, there are county and state regulations for blood banks, the U.S. Food and Drug Administration (FDA) is responsible for overseeing and regulating the U.S. blood supply. FDA enforces standards for blood collection and distribution.

It is important to note that when it comes to the regulation of blood banks, CBER develops and enforces quality standards, inspects blood establishments, and monitors reports of errors, accidents, and adverse clinical events. FDA requires blood centers to maintain lists of unsuitable donors to prevent the use of collections from them.

f. Is There a Franchise for Blood Banks?

No, there are no franchise opportunities for blood banks.

g. What Do You Need to Start a Blood Bank?

• A Feasibility Report
• Business and Marketing Plans
• Business Licenses and Permits
• Blood Bank (Accredited Lab Facility)
• Insurance
• EIN (Employer Identification Number)/Federal Tax ID Number.
• A Corporate Bank Account
• Employees

2. Memorable Business Name ideas for Blood Bank

• Community Blood Service Of Miami Beach
• Red Life® Regional Blood Center
• Life Care© Community Blood Centers
• Hope® Blood Care
• West Coast® Blood Bank
• Mark® Blood Bank of America.
• Plato Community® Blood Bank
• Life’s Plug® Blood Bank
• Life’s Moments® Blood Donation Center
• Life Support® Blood Bank
• Kingdom Centric® Blood Bank
• Master’s Place® Blood Donation Center
• Life Matters® Blood Bank
• Mercy Seat® Blood Donation Center
• David’s Foundation® Blood Bank
• King George® Blood Bank
• Pro Life® Blood Bank
• Med Plus® Blood Bank
• Health Pro® Blood Bank
• Pointe® Blood Bank.

3. Register Your Business

a. What Type of Business Structure is Best for Blood Banks?

When starting a blood bank, the best choice for legal structure is to form a nonprofit corporation at the state level and to apply for 501(c)(3) tax exemption at the federal level. Technically, you can apply for an exemption with an LLC, but you would need to be an LLC taxed as a corporation; then, you ask the federal government to treat your blood bank as a nonprofit or tax-exempt organization.

Interestingly, in the United States of America, several states allow a nonprofit LLC, including California, Ohio, Michigan, Minnesota, and Tennessee.

b. Steps to Form an LLC

• Choose a Name for Your LLC.
• File Articles of Organization.
• Choose a registered agent.
• Decide on member vs. manager management.
• Create an LLC operating agreement.
• Comply with other tax and regulatory requirements.
• File annual reports.

c. What Type of License is Needed to Open a Blood Bank?

• Business License
• Clinical Laboratory and/or Blood Bank Permit
• Health and Safety Permit
• Blood Bank License for “Emergency Transfusion Only” services
• Zonal Permits
• Signage Permit
• Operational State Facility Inspections for your blood bank (lab)

d. What Type of Certification is Needed to Start a Blood Bank?

• Specialist in Blood Bank Technology (SBB Certification)
• Medical Laboratory Scientist (MLS)/Clinical Laboratory Scientist (CLS) or Medical Technologist (MT) Certification
• The MLT (ASCP) Certification.

e. What Documents are Needed to Open a Blood Bank?

These are some of the basic legal documents you need to legally start a blood bank in the United States of America;

• DBA
• EIN
• Business and liability insurance
• Federal Tax Payer’s ID
• State Permit and Building Approval
• Certificate of Incorporation
• Business Plan
• Employment Agreement (offer letters)
• Operating Agreement for LLCs
• Insurance Policy
• Online Terms of Use
• Online Privacy Policy Document
• Contract Document
• Company Bylaws
• Memorandum of Understanding (MoU)

f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a blood bank, you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

4. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Blood Bank?

The startup cost of a blood bank is not uniform as some factors can influence the cost. These factors include; the number of blood collection and storage facilities, the size of the facility, and staff strength. But basically, a blood bank will cost from $200,000 – $600,000 to start and that can easily go higher depending on how much you are ready to invest in infrastructure.

b. What are the Costs Involved in Starting a Blood Bank?

• The Fee for registering the organization in the United States – $725.
• The budget for legal fees, insurance, permits, and license – $5,000
• The cost of leasing a facility – 100,000
• The amount needed to renovate the Facility (electrical, furnishings, plumbing, painting, and landscaping) – $10,000.
• The Cost for the purchase of furniture and equipment (Flat Screen TVs, computers, printers, and cabins et al) – $10,000
• Other start-up expenses including stationery – $1000
• Phone and utility deposits – $3,500
• The cost for the purchase of clinical lab equipment – $150,000.
• Cost for payment of salaries for the first 3 months of operations – $50,000
• Additional Expenditure (Business cards, Signage, Adverts, and Promotions et al) – $5,000
• The cost of launching an official website – $600
• Miscellaneous – $2,500

c. What Factors Determine the Cost of Opening a Blood Bank?

• The size of the blood bank
• The choice of location
• The required licenses and permits
• The cost of hiring and paying a business consultant and attorney
• The cost of branding, promotion, and marketing the blood bank
• The cost of furnishing and equipping the blood bank
• The cost of insurance policy cover
• The cost of registering the business
• Cost of recruiting and training your staff
• The cost of purchasing and customizing uniforms
• The cost for the grand opening of the blood bank.

d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new facility for your blood bank, but if you have the required finance, it will pay you to build your blood bank. The truth is that building or reconstructing a facility will allow you to come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Blood Bank?

• Essential medical supplies (blood storage packs, hand gloves, face mask, hand sanitizer and sterilizers et al)
• Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
• Salaries of employees
• Maintenance
• Insurance
• Marketing and promotion costs

f. What is the Average Salary of your Staff?

• Chief Phlebotomist/Chief Executive Officer – $65,000 Per Year
• Admin and HR Manager – $48,000 Per Year
• Lab Technicians/Phlebotomist – $45,000 Per Year
• Nurses/Nurse’s Aides – $40,000 Per Year
• Marketing and Sales Executive (Business Developer) – $38,000 Per Year
• Accountant (Cashier) – $38,000 Per Year
• Customer Service Officer (Receptionist) – $26,100 Per Year
• Cleaners – $24,000 Per Year

g. How Do You Get Funding to Start a Blood Bank

• Raise money from personal savings and sale of personal stocks and properties
• Apply for a loan from your bank/banks
• Apply for business grants and seed funding from the government and donor organizations.
• Source for soft loans from your family members and friends.

5. Write a Business Plan

a. Executive Summary

Health Pro® Blood Bank is a licensed independent, non-profit blood donation center and a blood bank that will operate from an accredited facility in New Orleans, Louisiana. We will supply blood to various hospitals, blood centers, biotechnology companies, and other research institutes.

b. Products and Service

Collection of blood from different blood donation centers and we will preserve the blood samples at a setup where the blood will remain fresh and can be used later when someone needs it.

c. Mission Statement

Our mission is to build a non-profit organization that collects, screens, stores and distributes blood to hospitals, blood centers, biotechnology companies, and other research institutes.

Vision Statement

Our vision is to become one of the preferred choices for individuals and organizations when it comes to the demand for blood donation in the whole of the United States of America.

d. Goals and Objectives

The goals and objectives of a blood bank are to make sure that no one dies because of blood shortage and they achieve this by collecting, screening, storing, and distributing blood to hospitals, blood centers, biotechnology companies, and other research institutes as required.

e. Organizational Structure

• Chief Phlebotomist/Chief Executive Officer
• Admin and HR Manager
• Lab Technicians/Phlebotomist
• Nurses/Nurse’s Aides
• Marketing and Sales Executive (Business Developer)
• Accountant (Cashier)
• Customer Service Officer (Receptionist)
• Cleaners

Marketing Plan

a. SWOT Analysis

Strength:

• Excellent operational history
• Attention to detail.
• Access to international donors.
• Experience and trained professionals.
• Excellent customer testimonials.
• Reliable and efficient blood collection, screening, storing, and distribution service.

Weakness:

• Starting with a small blood storage facility
• Limitation caused by location (starting with just one collection center)
• We will need a loan to set up the blood bank
• Lack of economies of scale.

Opportunities:

• A growing number of people who would need blood from time to time in the United States.
• Build upon existing clientele
• Online market, new services, new technology, and of course the opening of new markets.

Threat:

• Loans diminish grants received until they are paid off
• First year will be financially tight while we gain more donors and pay off loans
• Competition in the area could increase
• Management of employees requires time, money, and efforts
• The U.S. Food and Drug Administration (FDA) could change its regulatory status and decide to regulate and enforce strict regulations that can strangulate new blood banks.

b. How Do Blood Banks Make Money?

Blood banks make money from;

• Fees paid by hospitals, blood centers, biotechnology companies, and other research institutes
• Contributions for partners and donors
• Grants from government agencies and charity organizations
• Community support.

c. Payment Options

• Payment via bank transfer
• Payment with cash
• Payment via credit cards
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer

d. Sales & Advertising Strategies

• Introduce Your blood bank by sending introductory letters alongside your brochure to hospitals, blood centers, biotechnology companies, research institutes, and key stakeholders in and around your city
• Print out fliers and business cards and strategically drop them in offices, libraries, public facilities, and train stations et al.
• Use friends and family to spread the word about your blood bank
• Post information about your blood bank on bulletin boards in places like schools, libraries, and local coffee shops et al to attract blood donors
• Place a small or classified advertisement in the newspaper, or local publication about your blood bank
• Advertise your business in relevant health magazines, newspapers, TV, and radio stations.
• Attend relevant expos, seminars, and business fairs et al to market your services
• Encourage the use of word-of-mouth marketing from loyal and satisfied customers

Financial Projection

a. How Much Should You Charge for your Product/Service?

Prices may vary when it comes to a pint of blood, but the typical pint of red blood cell product costs between $130 to $150 in the US.

It is important to note that some blood banks donate their blood free of charge especially when they can attract enough grants and funds from donors.

b. How Much Profit Do Blood Bank Owners Make a Year?

Running a blood bank as a non-profit organization requires that no profits be pocketed by the owners or board of directors. Any profits must be re-invested into the organization.

c. What Factors Determine the Amount of Profit to Be Made?

• The capacity of the blood bank as it relates to attracting funds
• The location of the blood bank
• The management style of the blood bank
• The business approach of the blood bank
• The advertising and marketing strategies adopted by the blood bank
• The number of years the blood bank has been in operation

d. What is the Profit Margin of a Blood Bank?

Blood banks are not designed to make profits.

e. What is the Sales Forecast?

• First Fiscal Year (FY1): $140,000
• Second Fiscal Year (FY2): $280,000
• Third Fiscal Year (FY3): $320,000

6. Set Up your Office

a. How Do You Choose a Perfect Location for Blood Bank?

• The demography of the location especially as it relates to the number of blood recipients
• The demand for blood in the location
• Accessibility of the location
• The number of blood banks, blood donations centers, hospitals, biotechnology companies, and other research institutes in the location
• The local laws and regulations in the community/state
• Traffic, parking and security et al

b. What State and City are Best to Open a Blood Bank?

• Salt Lake City, UT
• Saint Joseph, MO
• Port Allen, LA
• Rock Hill, MO
• Atlanta, GA
• West Sacramento, CA
• West Chester, OH
• Austin, Tx
• Westbrook, ME
• Idaho Falls, ID

c. What Equipment is Needed to Operate a Blood Bank?

When drawing blood, you will need gloves, alcohol, or iodine to cleanse the area, a tourniquet, tubes, tube holder, needles, tape, gauze, and a fridge for storing blood. You will also need computers or laptops, internet facility, telephone, fax machine, and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.

7. Hire Employees

When it comes to hiring employees for a standard blood bank, you should make plans to hire a competent chief phlebotomist/chief executive officer (you can occupy this position), admin and HR manager, lab technicians/phlebotomist, nurse aides and paramedics, marketing and sales executive, accountant, customer service officer (receptionist) and cleaners.

8. Launch the Business Proper

You may not need to start your blood bank with a party, but there is no rule stopping you from doing so. You can choose to do a soft opening or you can go for a grand opening party. The bottom line is that with a proper launching of the blood bank, you will be able to officially inform people in your city that your blood bank is open for business.

a. What Makes a Blood Bank Successful?

• Choose a good location and reliable storage facility
• Work with strategies that will help you regularly attract blood donors and also grants and support
• Hire only competent, hardworking, and trustworthy staff
• Be deliberate with your marketing sales approach especially as it relates to attracting grants and donations
• Encourage the use of word of mouth to promote your blood bank
• Leverage all available online and offline platforms to promote your blood bank.

b. What Happens During a Typical Day at a Blood Bank?

• The business is open for the day’s work
• People that want to donate blood come in to donate blood
• Blood is stored and monitored
• Marketing/website upkeep
• Administrative duties
• The business is closed for the day.

c. What Skills and Experience Do You Need to Build a Blood Bank?

• Ability to successfully draw blood from patients with minimal or no complications.
• Empathy and interpersonal skills for working with patients.
• Detail-oriented and committed to ensuring patient confidentiality.
• Excellent motor skills and the ability to stand for long periods of time
• Customer services skills
• Interpersonal skill
• Business management skills
• Work experience in the healthcare industry
• Experience in managing people
• Experience in business administration
• Experience in handling working in a clinical lab