While larger healthcare facilities like hospitals make use of electronic medical records to keep track of patients, a good number of smaller facilities, such as private physicians’ offices, still make use of paper-based forms and recording devices to document doctor-patient interactions.

Such medical records, most often, will have to be converted into electronic format to make interactions with insurance companies, pharmacies, and hospitals easier. Starting a medical transcription business provides a low-cost platform for any willing entrepreneur to become self-employed while serving the needs of small, healthcare-related businesses.

According to industry reports, this demand will continue to increase especially since health insurance companies are not ready to process payments without checking medical transcripts. Therefore, doctors and surgeons will steadily seek reliable medical transcription businesses.

Steps on How to Start a Medical Transcription Business

  1. Conduct Market Research

When considering starting a medical transcription business, note that conducting detailed research always helps to ensure you go a long way. It is very important you find out as much as you can about your market demand and also determine if being a medical transcriptionist would work for you.

You should also research the best transcription schools via online forums, and also note the best companies for transcription services. In this line of business, it is necessary to plan everything, from how you will set up the business to how you will market it.

a. Who Is Your Target Audience?

Your target audience will be anyone who requires the services of a medical transcription business. This will often include doctors, hospitals (including medical records departments, information offices, radiology and pathology departments, and emergency rooms), other healthcare providers like clinics and psychologists, and attorneys working with disability or malpractice cases, who need a third party to help them handle medical transcription services.

Medical transcription businesses help transcribe voice recordings or dictations from physicians in a variety of health fields into written reports inserted into the patient’s medical record. Your ideal target audience will depend on the medical field you choose to focus on.

b. Is Medical Transcription Business a Profitable Business?

Yes, a medical transcription business can be very rewarding personally and financially. However note that the better prepared you are going into the business, the more success you are likely to achieve down the road.

c. Are There Existing Niches in the Industry?
  • Transcribing physicians’ notes
  • Transcribing nurses’ notes
  • Transcribing notes of other healthcare professionals
  • Consultations
  • Operative reports
  • Emergency reports
  • History and physicals
 d. Who are the Major Competitors?
  • Acusis
  • Aquity Solutions.
  • EHR Transcriptions.
  • InSync Healthcare Solutions.
  • Med-Scribe.
  • MTBC
  • SmartMD
  • World Wide Dictation
  • eTransMed Medical Transcription Services
  • Eyered Transcription Services
  • Cobb Medical Transcription, Inc.
  • Outsource Strategies International (OSI)
  • Translation Services USA
  • Tradecom Medical Transcription
  • USA Medical Transcription Team
  • Medical Communications USA
e. Are There County or State Regulations or Zoning Laws for Medical Transcription Business?

While there are currently no federal or state licensure requirements for medical transcription businesses, these businesses are still expected to obtain Local County and state business licenses, as applicable. Note that the cost of these licenses will definitely vary from one jurisdiction to another; however, information concerning them can be found on applicable city and county websites.

Also, remember that rules and regulations in the healthcare industry tend to change quickly, therefore you must always check specific requirements in your state before and after opening your medical transcription business.

f. Is There a Franchise for Medical Transcription Business?

No, there are no franchises in this industry as most medical transcriptionists work as independent contractors and have home-based employment. However, as a home-based medical transcription business, you have the potential to earn more by widening your dictation and transcription skills. Note that doing so boosts your medical transcription job opportunities.

g. What Do You Need to Start a Medical Transcription Business?
  • Computer system with printer and internet connection
  • Fax machine
  • Transcribing Software
  • Reference material
  • Voice mail or answering machine
  • Office supplies
  • Technical support
  • A reliable business phone system
  • Headset
  • Foot pedal.
  1. Memorable Medical Transcription Business Names

  • Hope Line Transcription
  • Mega-word Kings
  • Dotted Lines LLC
  • Clear Words Inc.
  • Fountain Transcribers
  • Doctor’s Lines
  • Accurate Typing
  • Trusted Transcriptions
  • Doctors and Nurses
  • Secure Details
  • Bishop’s Court
  • Expert Transcription
  • Plain Words LLC
  • AA Transcription
  • Medi-Trans
  • Concord Transcription
  • Timely Transcriptions
  • Just Words
  • Needle Words
  • After Appointment Experts
  1. Register your Business

a. What Type of Business Structure is Best for Medical Transcription Business?

In the general healthcare industry, only a few businesses operate as sole proprietorships. Most medical transcription businesses are structured as limited liability companies. Have it in mind that this business structure provides the owner protection from liability of the debts of the company, and offers flexibility in ownership, taxation, and distribution of profits. It is also very cheap and easy to form.

b. List Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Select a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
c. What Type of License is Needed to Open a Medical Transcription Business?

Although there are no specific licenses needed to start and manage a medical transcription business, there are general business registrations you may need. These may include a local business license and Employer Identification Number. In addition, medical transcription requires schooling and certifications.

d. What Type of Certification is Needed to Open a Medical Transcription Business?

While certification isn’t mandatory in this line of business, it helps to boost your pedigree and increase your potential earnings. Certifications to consider include;

  • Registered Medical Transcriptionist (RMT)
  • Certified Medical Transcriptionist (CMT).
e. What Documents are Needed to Open a Medical Transcription Business
  • Service contracts
  • Assumed name certificate
  • Employer Identification Number
  • Operating agreement
  • Insurance
f. Do You Need a Trademark, Copyright, or Patent?

No, you won’t need to file for intellectual property protection/trademark since you can start and run this business without having issues with anyone for using your company’s intellectual properties. Nevertheless, if you are looking to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can file for intellectual property protection with the USPTO.

 4. Do your Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Medical Transcription Business?

Note that the costs involved with opening a medical transcription business will depend on numerous factors. However, at the most basic level, starting your business from home entails you will need just a computer and a foot pedal to allow you to start and stop audio without your hands.

Factoring in all the equipment, the total cost of starting a medical transcriptionist business will be around $6,000 to $10,000. With the proper training, equipment, and financing, you are ready to start your medical transcription business.

b. What are the Cost Involved?
  • Reliable computer or laptop: $1,000 – $2,000
  • Solid internet connection: $30-$50/month
  • Foot pedal to control audio: $100
  • Transcription course: $3,000 – $15,000
  • Medical transcription certification $2,000 – $4,000
  • Business cards, flyers, and other marketing collateral: $50-$100
c. What Factors Determine the Cost of Opening a Medical Transcription Business?
  • Business license and permits
  • Business structure and registration
  • Insurance
  • Rent, renovation, and furnishing of your workspace
  • Choice of software
  • Number of employees
  • Advertising and marketing plan
  • Miscellaneous
d. Do You Need to Build a Facility?

No, a good number of medical transcription businesses operate from their home office as a dedicated commercial office space isn’t usually necessary. However, when putting together your office, endeavor to choose a quiet corner of your house that has good lighting, preferably a separate room away from distractions.

e. What are the Ongoing Expenses of Running a Medical Transcription Business?

Aside from the hours, the most beneficial fact about a medical transcription business is that there are little or no ongoing expenses. Working from home ensures that things like rent and utility are the same as what you already pay, and you’ll be using the computer you already have (albeit with the addition of a foot pedal).

Aside from printing more business cards and visiting local potential clients, a good number of your marketing and outreach will be done for free online, without any monthly cost to your business.

f. What is the Average Salary of your Staff?
  • Chief Executive Officer: $59,340
  • Medical transcriptionist: $57,786
  • Accountant: $41,670
  • Customer Service Executives: $32,780
g. How Do You Get Funding to Start a Medical Transcription Business?
  • Bootstrapping
  • Small business loan
  • Investors
  • Crowd-funding
  • Government grants
  • Venture capital

 5. Write a Business Plan

a. Executive Summary

At Dotted Lines LLC, our aim is to make available high-quality, low error rate, medical transcriptions to healthcare facilities in the city of Columbus, Ohio. By using sophisticated software, we will always provide our clients with the sort of accuracy and convenience not yet available to the medical community in Ohio. We also plan to extensively train our staff to ensure they offer our clients top notch services, void of mistakes and errors.

b. Products and Service
  • Consultations
  • Operative reports
  • Emergency reports
  • History and physicals
c. Mission Statement

Our mission at Dotted Lines LLC is to provide excellent medical transcription service to our various clients. As we comply with this maxim, everything else will fall into place. We will always strive to ensure that our services exceed the expectations of our customers.

Vision Statement

Our vision at Dotted Lines LLC is to offer top-notch transcription services that will allow the physician to call our office and record the dictation over the phone to the recording computer. We believe that this will allow the physician to submit dictations at any time during the day, without having to schedule the transcriber to come in or forward a cassette to the dictation service.

d. Goals and Objectives
  • To create a customer-centric company whose primary goal is exceeding customer’s expectations
  • To grow the number of clients by 35% through superior service.
  • To ensure 40% of our clients become repeat customers.
  • To create a sustainable home-based business, surviving off of its own cash flow.
e. Organizational Structure
  • Chief Executive Officer
  • Medical Transcriptionist
  • Accountant
  • Customer Service Executives

Marketing Plan

a. SWOT Analysis
  • Owner’s industry experience
  • Top-notch software significantly increases the convenience and accuracy of the offered service.
  • Detailed training program for employees.
  • Restrictions and inability to rapidly scale.
  • Inadequate marketing budget.
  • The time it will take to establish brand equity as a start-up.
  • A viable and growing market.
  • The ability to grow the practice with increased amounts of experience and industry knowledge.
  • Encouraging margins.
  • Existing transcription services that choose to specialize in medical transcription.
  • Massive technological gains in speech recognition software for individual consumers.
  • The outsourcing of transcription services to national companies through increased Internet technology.
b. How Do Medical Transcription Businesses Make Money?

A medical transcription business generates revenue by charging its clients for transcribing their documents. Note that the precise payment arrangement may be negotiated between the business and the client, such as receiving a flat fee for the number of minutes transcribed or billing them according to the number of hours that it took you to complete the transcription.

c. Payment Options
  • Payment via bank transfer
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Contacting the medical practice for the first time.
  • Identifying the gatekeeper and making contact with them.
  • Mailing or dropping off information
  • Scheduling an appointment for a presentation
  • Offer niche medical transcription services
  • Seek referrals and testimonials
  • Develop a robust digital marketing strategy
  • Hire a content specialist or graphic designer
  • Distribute newsletters and direct mail
  • Implement a nurture campaign

 Financial Projection

a. How Much Should You Charge for your Service?

Although what you decide to charge your clients can be personal, you must stay competitive with other businesses in the market. Therefore, it’s recommended you charge around one to two dollars per minute of audio that you transcribe. You can also choose to charge more for certain special requests (such as recording time stamps, transcribing extremely difficult audio, and so on).

b. How Much Profit Do Medical Transcription Business Owners Make a Year?

Most often, this will depend on how many clients the business has (and the owners’ ability to find new clients), their workload, and whether they choose to work part-time or full-time. However, note that in this line of business, the sky (almost) is the limit in terms of the possible profits an owner can make, depending on a flexible work schedule that you set for yourself.

A good amount of home-based medical transcription professionals work full time, but you can choose to work however much or little you like. Depending on your experience, speed and skill, you can earn up to (or exceed) $26 an hour. Because medical transcriptionists charge by the line, you can increase your potential income by increasing your typing speed and accuracy.

c. What Factors Determine the Amount of Profit to Be Made?
  • Business Size
  • Number of Clients
  • Marketing and Customer Retention Strategies
  • Investment
  • Pricing Model
d. What is the Profit Margin of a Medical Transcription Business?

In this line of business, typical gross margins are between 6% and 10%.

e. What is the Sales Forecast?
  • First Fiscal Year (FY1): $220,000
  • Second Fiscal Year (FY2): $430,000
  • Third Fiscal Year (FY3): $1,211,000
  1. Set Up your Office

a. How Do You Choose a Perfect Location for Medical Transcription Business

Things to put into consideration when choosing a suitable location for a medical transcription business include;

  • Cost
  • Demographics
  • Basic Infrastructures
  • Closeness to the market
  • Competitors
  • Licensing and permits
b. What State and City are Best to Open a Medical Transcription Business?
  • Cincinnati, Ohio
  • Pittsburgh, Pennsylvania
  • San Antonio, Texas.
  • Austin, Texas
  • Philadelphia, Pennsylvania
  • Columbus, Ohio
  • Houston, Texas
c. What Equipment is Needed to Operate?

In this line of business, the equipment you need includes a computer, laser printer, backup, dictionary, and transcription styling software. You also need a foot pedal, headphones, and a secure internet connection.

  1. Hire Employees

Although you can start and run this business alone, you may need to hire additional transcribers to help run your business. Howbeit, when hiring, always make sure that you select people with appropriate experience and training.

Coupled with salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

  1. Launch the Business Proper

After you must have acquired the necessary equipment, hired medical transcriptionists, and sought to obtain clients, note there is still one very crucial step in launching your brand new medical transcription business, and this is locating and joining the appropriate trade association.

Have it in mind that joining a trade association can be an incredibly valuable resource to a new medical transcription business owner as it immediately connects you with other business professionals within the medical transcription industry coupled with providing a multitude of other benefits.

a. What Makes a Medical Transcription Business Successful?

In a medical transcription business, note that all a client wants is perfection. You may never achieve 100-percent perfection, but minimizing errors will ensure that your clients stay happy.

It is also important that you maintain your pickup and delivery schedules. If you have issues with the work or are in danger of falling behind, you must let the affected clients know as quickly as possible. You want to create a solid reputation as being honest, trustworthy and accountable.

b. What Happens During a Typical Day at a Medical Transcription Business?

In this line of business, the most basic day-to-day activities will involve transcribing speech, editing the document, and then delivering it to clients. Aside from the aforementioned, other activities would include things like making contact with potential customers, corresponding with existing customers, and advertising and managing your business.

c. What Skills and Experience Do You Need to Build a Medical Transcription Business?

Truth be told, hands-on experience will bolster your efforts in the business. However, to gain experience, you should consider applying for medical transcription internships during the training program. You may also gain experience by working in an established medical transcription business after completing the training.

Have it in mind that gathering experience not only increases your efficiency but also gives you an insight into running a successful medical transcription company. Other skills necessary to run this business include;

  • Business knowledge and experience
  • Computer and software experience
  • Medical office experience
  • People skills
  • Typing skills