medical billing business plan pdf

Medical Billing and Coding Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Healthcare and Medical » Medical Billing Business

Are you about starting a medical billing and coding company ? If YES, here is a complete sample medical billing and coding business plan template & feasibility report you can use for FREE .

Medical billing and coding business owners process and administer medical insurance policies and claims. They help doctors and other healthcare providers collect payments from insurance companies and Medicare. Starting a medical billing and coding business is not too expensive except for the money required to rent, furnish an office space and purchase the applicable software apps.

Running this type of business requires that you should be trained and it is indeed a very lucrative business in the United States, Canada, Australia and the United Kingdom because of the desire for continuous engagement between clients and key stakeholders in the healthcare industry.

A Sample Medical Billing and Coding Business Plan Template

1. industry overview.

A report published by IBISWorld shows that the medical billing industry is worth $3 billion annually with an 8.8 percent growth between a five – year period (2011 to 2016). There are more than 2,300 medical billing businesses in the united states of America employing over 7,000 people.

The industry is valued that high due to the rising demand for medical billing services which has led to more operators entering into the industry. Demand in this industry has risen due to the growing population of the baby boomers who require medical billing services after visits to the doctors.

Over the next five years (2016 to 2022), the industry is predicted to experience steady growth as there will be more senior citizens who will make their demands via Medicare.

Also within this period, the number of people with insurance is expected to rise in line with healthcare reforms which will then allow those with pre-existing conditions to be able to receive insurance. This growing demand will help the industry not only have huge demands which will be taken care of by operators but this will also boost revenue for the industry.

It should be noted however that regardless of the huge demands experienced in this industry, the market share concentration is still quite low especially as only one operator accounts for more than 14 percent of the total industry revenue, while the remaining operators in the industry generate less than 5 percent each in revenue for the industry.

Most of the operators in this industry operate on a large scale and therefore provide a variety of services such as claims adjustment, risk and consulting. According to IBISWorld, the largest player in the industry caused market share concentration to increase with its acquisition streak and a growing pace that has outpaced industry’s growth.

A recent researched published by Grand View Research, Inc. in 2015, shows that the medical billing outsourcing market was worth over $6 billion and has been predicted to reach $17 billion by 2024.

This is largely due to the fact that medical billing has become an intricate part of medical practice, especially as there have been several challenges from in-house billing processes especially with untrained staff, lack of proper financial policy, improper IT structure, as well as billing errors.

These challenges are why most hospitals and doctors’ offices prefer to outsource their medical billing processes; 95 percent of most independent physicians have stated that they prefer outsourcing their medical billing processes to running one in house.

Globally, North America has the highest revenue growth in this industry. The United States has had rapid changes in its healthcare structure and with rising healthcare costs have been the major driver in the North American region. In the industry, consolidation has been one of the major factors helping the growth of the market.

Hospitals are one of the largest clients of medical billing companies and provide the highest revenue especially with the rising healthcare costs which has caused profits to decline for hospitals and which has seen them turning to medical billing businesses to help them manage their revenue.

The medical billing market is segmented into in-house and outsourced billing according to Grand View Research, Inc. As at 2014, the total costs that were incurred by providers for in-house operations amounted to $252 billion. These costs were inclusive of running costs such as IT costs and maintenance cost for in-house billing team as well as administrative team.

This is in comparison to outsourcing which saw a significant reduction in costs for hospitals including fewer errors. Also, outsourcing meant that doctors and physicians could now concentrate on their primary duty which is to provide the best possible care to patients without having to worry about managing billings and recovering claims.

Even though hospitals had the highest market share as at 2015, the positive trend was held in check by increasing demands for medical billing outsourcing services by physician offices and private clinics. However, hospitals are still expected to lead in generating the highest revenue for this industry as they had more claim volumes compared to independent physicians and private clinics.

Globally, the medical billing outsourcing market is broken down into North America, Europe, Asia Pacific, Latin America as well as the Middle East Africa, with North America providing the most revenue for the market.

2. Executive Summary

Jeff Cole® Medical Billing and Coding Company, Inc. is a registered and licensed healthcare consulting firm that specializes in medical billing and coding services. The business will be based in Saint Paul – Minnesota and we have been able to secure a standard office facility.

We are aware that to run a standard medical billing and coding business can be demanding which is why we are well trained, certified and equipped to perform excellently well in our chosen line of business.

Jeff Cole® Medical Billing & Coding Company, Inc. is a client – focused and result driven medical billing and coding services firm that provides broad – based services at an affordable fee that won’t in any way put a hole in the pocket of our clients. We will ensure that we work hard to meet and surpass our clients’ expectations whenever they hire our services.

At Jeff Cole® Medical Billing & Coding Company, Inc., our client’s best interest would always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hire professionals who are well experienced in the medical billing and coding services industry.

Jeff Cole® Medical Billing & Coding Company, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.

Our plan is to position the business to become the leading brand in the medical billing and coding services line of business in the whole of Saint Paul – Minnesota, and also to be amongst the top 10 medical billing and coding services businesses in the United States of America within the first 10 years of operation.

We are optimistic that this will surely be realized because we have done our research and feasibility studies and we are enthusiastic and confident that Saint Paul – Minnesota is the right place to launch our medical billing and coding services business before sourcing for clients from other cities in The United States of America.

Jeff Cole® Medical Billing & Coding Company, Inc. is founded by Jeff Cole. Jeff Cole has over 15 years of experience working at various capacities within the healthcare services industry in the United States of America. Mr. Jeff Cole graduated from both Minnesota State University with a Degree in Accounting, and Yale University and he is a chartered accountant with background in medical billing and coding.

3. Our Products and Services

Jeff Cole® Medical Billing & Coding Company, Inc. is in the medical billing and coding services industry to service a wide range of clients and of course to make profit, which is why we will go all the way to ensure we follow international best practices when executing our jobs. Our service offerings are listed below;

• Medical insurance claims submissions
• Medical insurance billing and coding
• Medical insurance claims adjustment
• Back-office, administrative support and consulting
• Claims processing

4. Our Mission and Vision Statement

• Our vision is to become the number one choice as far as medical billing and coding is concerned in the United States of America.
• Our mission is to establish a world – class medical billing and coding company that will become a standard for running medical billing and coding business not just in the United States of America, but also other parts of the world.

Our Business Structure

Ordinarily we would have settled for two or three staff members, but as part of our plan to build a standard medical billing and coding company in Saint Paul – Minnesota, we have perfected plans to get it right from the beginning which is why we are going the extra mile to ensure that we have competent, honest and hardworking employees to occupy all the available positions in our firm.

The picture of the kind of medical billing and coding business we intend building and the business goals we want to achieve is what informed the amount we are ready to pay for the best hands available in and around Saint Paul – Minnesota as long as they are willing and ready to work with us to achieve our business goals and objectives.

We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer
• Billing and Coding Administrator (Consultant)

Admin and HR Manager

Marketing and Sales Executive

• Customer Care Executive/Front Desk Officer

5. Job Roles and Responsibilities

Chief Executive Office:

• Upturns management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Generates, interconnects, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Medical Billing and Coding Administrator (Consultant)

• Responsible for handling medical insurance claims submissions
• In charge of medical insurance billing and coding
• In charge of medical insurance claims adjustment
• Handles back-office, administrative support and consulting
• Controls claims processing
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Designs job descriptions with KPI to drive performance management for clients
• Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs
• Defines job positions for recruitment and managing interviewing process
• Carries out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations
• Oversees the smooth running of the daily office activities
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of relevant projects
• Writes winning proposal documents, negotiate fees and rates in line with company policy
• Responsible for handling business research, marker surveys and feasibility studies for clients
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops executes and evaluates new plans for expanding increase sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• create reports from the information concerning the financial transactions recorded by the bookkeeper
• Prepares the income statement and balance sheet using the trial balance and ledgers prepared by the bookkeeper
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risk analysis
• Performs cash management, general ledger accounting, and financial reporting for one or more properties
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company

Client Service Executive/Front Desk Officer

• Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the manager in an effective and timely manner
• Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
• Receives parcels / documents for the company
• Distribute mails in the organization
• Handles any other duties as assigned by the line manager

6. SWOT Analysis

Jeff Cole® Medical Billing & Coding Company, Inc. is in business to become one of the leading medical billing and coding companies in the United States of America and we are fully aware that it will take the right business concept, management and organizational structure to achieve our goal.

We are quite aware that there are several medical billing and coding companies all over the United States of America and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be well equipped to confront our threats.

Jeff Cole® Medical Billing & Coding Company, Inc. employed the services of an expert HR and Business Analyst with bias in consulting to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.

This is the summary of the SWOT analysis that was conducted for Jeff Cole® Medical Billing & Coding Company, Inc.

Our strength lies in the power of our team. We have a team that can go all the way to give our clients value for their money; a team that is trained and equipped to pay attention to details and to deliver excellent medical billing and coding jobs. Aside from the synergy that exists in our carefully selected workforce, we have a very strong online presence, we are well positioned and we know we will attract loads of clients from the first day we open our doors for business.

As a new medical billing and coding company, it might take some time for our organization to break into the market and gain acceptance especially from corporate clients in the already saturated medical billing and coding services industry; that is perhaps our major weakness. So also, we may not have the required cash to give our business the kind of publicity we would have loved to.

• Opportunities:

The opportunities in the medical billing and coding services industry is massive considering the number of hospitals and medical insurance related businesses who can’t do without the services of medical billing and coding service providers.

As a matter of fact, rising demand for medical claims processing services has attracted new entrants to the industry and growth in the senior population will boost the number of doctors’ visits, spurring demand for the services of medical billing and coding. As a standard medical billing and coding business, we are ready to take advantage of any opportunity that comes our way.

Some of the threats that we are likely going to face as a medical billing and coding business operating in the United States are unfavorable government policies , the arrival of a competitor within our location of operation and global economic downturn. There is hardly anything we can do as regards these threats other than to be optimistic that things will continue to work for our good.

7. MARKET ANALYSIS

• Market Trends

Experts project that the trend in the medical billing and coding industry will experience steady growth over the next five years, as the growing senior population creates demand via Medicare. Also, the number of insured people will rise in line with healthcare reforms, as people with pre-existing conditions are able to receive insurance.

The growing senior population will keep driving demand for the industry’s services over the next five years, helping revenue blossom for medical billing and coding companies.

Another notable trend in the medical billing and coding services industry is that operators have cut employment to retain margins. Meanwhile, capital investments have accounted for a rising portion of revenue as technological advancements have been adopted to streamline operations and increase efficiency.

8. Our Target Market

We have positioned our medical billing and coding company to service businesses in the healthcare industry and the medical insurance industry in and around Saint Paul – Minnesota and all over key cities in the United States of America.

We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us. We are in business to service the following customers;

• Independent Physicians
• Health centers
• Medical laboratories
• Medical insurance companies
• Private clinics

Our competitive advantage

Jeff Cole® Medical Billing & Coding Company, Inc. is launching a standard medical billing and coding company that will indeed become the preferred choice for hospitals and other healthcare facilities in the United States of America.

One thing is certain; we will ensure that we offer a wide range of medical billing and coding related services that are in high demand in the healthcare industry . We will also go all the way to ensure that we give out discount as at when due and deliver excellent services devoid of errors.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Jeff Cole® Medical Billing & Coding Company, Inc. is in business to offer a wide range of medical billing and coding related services and also to

10. Sales Forecast

We have put plans in place that will help us always attract customers that will translate to increased revenue generation for the business.

We are well positioned to take on the available market in the United States of America and we are quite optimistic that we will meet our target of generating enough income from the first six months of operation and grow the business and our clientele base.

We have been able to critically examine the medical billing and coding services industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Saint Paul – Minnesota.

• First Fiscal Year: $250,000
• Second Fiscal Year: $500,000
• Third Fiscal Year: $950,000

N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Jeff Cole® Medical Billing & Coding Company, Inc. we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for hospitals and medical insurance companies in and around Saint Paul – Minnesota. We have detailed information and data that we were able to utilize to attract the number of customer we want.

We hired experts who have good understanding of the medical billing and coding industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in the United States of America.

In summary, Jeff Cole® Medical Billing & Coding Company, Inc. will adopt the following sales and marketing approach to win customers over;

• Introduce our business by sending introductory letters alongside our brochure to hospitals, dental clinics, optical centers and key stakeholders in the United States of America
• Make use of attractive hand bills to create awareness and market our services
• Position our signage/flexi banners at strategic places around Saint Paul – Minnesota
• Position our greeters to welcome and direct potential customers
• Create a loyalty plan that will enable us reward our regular customers
• Engage on roadshows within targeted neighborhood to create awareness for our services
• List our business and products on yellow pages ad (local directories)
• Leverage on the internet to promote our business
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)
• Join local chambers of commerce and industries to network and market our products

11. Publicity and Advertising Strategy

Despite the fact that our office is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our company. We have been able to work with our publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the hearts of our target market.

We are set to take the medical billing and coding services industry by storm which is why we have made provisions for effective publicity and advertisement of our company. Here are the platforms we intend leveraging on to promote and advertise Jeff Cole® Medical Billing & Coding Company, Inc.;

• Place adverts on community based newspapers, radio and TV stations
• Encourage the use of word of mouth publicity from our loyal customers
• Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business
• Ensure that our we position our banners and billboards in strategic positions all around Saint Paul – Minnesota
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Contact hospitals, dental clinics, optical center, medical laboratories, medical insurance companies and other health facilities by calling them up and informing them of Jeff Cole® Medical Billing & Coding Company, Inc.
• Advertise our business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and vans and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals

12. Our Pricing Strategy

Hourly billing for consulting related services is a long – time tradition in the industry.  However, for some types of medical billing and coding services, flat fees make more sense because they allow clients to better predict consultancy costs.

As a result of this, Jeff Cole® Medical Billing & Coding Company, Inc. will charge our clients a flat fee for many basic services. At Jeff Cole® Medical Billing & Coding Company, Inc. we will keep our fees below the average market rate by keeping our overhead low and by collecting payment in advance.

In addition, we will also offer special discounted rates to startups. We are aware that some clients would need regular access to medical billing and coding consultancy and advisory services, we will offer flat rate for such services that will be tailored to take care of such clients’ needs.

• Payment Options

The payment policy adopted by Jeff Cole® Medical Billing & Coding Company, Inc. is all inclusive and we will ensure that we abide by the financial rules and regulation of the United States of America. Here are the payment options that Jeff Cole® Medical Billing & Coding 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

In view of the above, we have chosen banking platforms that will enable our client make payment for all our services without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting/leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a medical device development and manufacturing business; it might differ in other countries due to the value of their money. These are the key areas where we will spend our startup capital on;

• The total fee for registering the business in the United States of America – $750
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300
• Marketing promotion expenses for the grand opening of Jeff Cole® Medical Billing & Coding Company, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580
• The total cost for hiring Business Consultant – $2,500
• The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400
• The total cost for long – term leasing of a standard office facility – $150,000
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits – ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The total cost for the purchase and installation of CCTVs – $10,000
• The cost for the purchase of office furniture and gadgets (Computers, Software Apps, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
• The total cost of launching a Website – $600
• The total cost for our opening party – $7,000
• Miscellaneous – $10,000

We would need an estimate of $200,000 to successfully set up our medical billing and coding company in Saint Paul – Minnesota.

Generating Startup Capital for Jeff Cole® Medical Billing & Coding Company, Inc.

Jeff Cole® Medical Billing & Coding Company, Inc. is a private registered business that is solely owned and financed by Mr. Jeff Cole and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the start up capital to 3 major sources.

• Generate part of the start – up capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $50,000 ( Personal savings $35,000 and soft loan from family members $15,000 ) and we are at the final stages of obtaining a loan facility of $150,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Jeff Cole® Medical Billing & Coding Company, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to offer our services a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while. Jeff Cole® Medical Billing & Coding Company, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of.

Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of office facility and remodeling the facility: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed software apps, tools, furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party/launching party planning: In Progress
• Establishing business relationship with key stake holders in the healthcare industry and medical insurance industry: In Progress

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Medical Billing Business Plan Template & Guidebook

Establishing a successful medical billing business starts with having an effective plan. Finding the right template and guidebook to create one can be challenging, but the #1 Medical Billing Business Plan Template & Guidebook makes it easy. This comprehensive resource provides comprehensive step-by-step guidance throughout the entire planning process, allowing you to create a strong business plan for your medical billing business. Read on to discover more about this helpful tool and why it can set your business up for success.

Get worry-free services and support to launch your business starting at $0 plus state fees.

• How to Start a Profitable Medical Billing Business [11 Steps]
• 25 Catchy Medical Billing Business Names:

How to Write a Medical Billing Business Plan in 7 Steps:

1. describe the purpose of your medical billing business..

The first step to writing your business plan is to describe the purpose of your medical billing business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a medical billing business:

The mission of [name of business] is to provide comprehensive medical billing services that allow healthcare providers to optimize their revenue and dedicate more time and energy to their patients’ care. We strive to be the leading provider of innovative, high-quality medical billing services in the region.

2. Products & Services Offered by Your Medical Billing Business.

The next step is to outline your products and services for your medical billing business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your medical billing business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your medical billing business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your medical billing business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a medical billing business?

• Computer and reliable internet connection
• Software for generating medical bills and claims
• Printer/copier for printing and scanning documents
• A business license or permit
• A separate phone line dedicated to your business
• An understanding of healthcare insurance policies and procedures
• Security clearance to access protected health information (HIPAA)

5. Management & Organization of Your Medical Billing Business.

The second part of your medical billing business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your medical billing business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Medical Billing Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a medical billing business varies based on many different variables, but below are a few different types of startup costs for a medical billing business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your medical billing business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your medical billing business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your medical billing business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Medical Billing Business Plans:

Why do you need a business plan for a medical billing business.

A business plan is an essential document for any business, including a medical billing business. It acts as a roadmap that outlines your company’s goals, strategies to reach them and the actionable measures you can take to realize those goals. Without a plan, it can be difficult to stay organized and define the direction of the business. Additionally, a business plan is often required by potential investors or lenders to show that you have taken the proper steps to research and plan for all aspects of your medical billing business.

Who should you ask for help with your medical billing business plan?

You should ask a business consultant or a professional with experience in the medical billing and healthcare industry for help with your medical billing business plan. Additionally, some local Small Business Development Centers (SBDCs) may also be able to provide advice and assistance.

Can you write a medical billing business plan yourself?

Writing a medical billing business plan is certainly something that can be done on your own. However, it is best to consult an experienced professional or someone who specializes in business planning to ensure that your plan is comprehensive and covers all the important aspects of creating a successful medical billing business. Some of the topics to consider when writing a medical billing business plan include market analysis, marketing plan, financial analysis, operational structure, and financial forecast.

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I'm Nick, co-founder of newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.

Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.

From assessing market viability and formulating business plans to selecting the right technology and navigating the financial landscape, I am dedicated to helping fellow entrepreneurs overcome challenges and unlock their full potential. As a steadfast advocate for small business success, my mission is to pave the way for a new generation of innovative and driven entrepreneurs who are ready to make their mark on the world.

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Medical Billing Business Plan Template

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How to start a medical billing company [2024 guide]

Want to start a home-based medical billing business but not sure of the process?

Don’t worry, we’ve got you covered.

There are numerous benefits to running your own home-based business. Working in comfort, building your schedule, being your boss, ditching the daily commute; the list goes on.

However, before investing money, effort, and time into establishing a medical billing business, you should determine if coding and billing is a good fit for you. It takes a lot to get up and running, including a rigorous certification course.

Rest assured, however, the returns of a well-run medical billing business are fantastic. With independence and a steady income, you’ll have a healthier work-life balance and the ability to decide how large you want your company to grow.

Here’s what we will cover in this article

Click on the links below to jump to a particular section.

• What is a Medical Billing Business?
• Is a Home-Run Medical Billing Business Right For You?
• Is There a Need For Your Service?
• What Are the Startup Costs Involved?
• Get Hands-On Experience in a Medical Role
• Apply For Medical Billing Training
• Watch Out For Scams
• Create a Business Plan
• Other Necessities
• A Clearinghouse
• A Medical Billing Software
• Other Equipment & Forms
• Choosing a Billing Software
• How to Charge Clients
• Income Potential
• Specialize Yourself
• Construct a Strong Marketing Plan
• Network & Grow
• Bonus: An Alternative Business Opportunity

Ready to get started? Let’s go!

What is a medical billing business?

Medical centers, hospitals, and private care professionals bill patients for appointments and services. These services can include check-ups, procedures, testing, treatments, and so on.

Medical coding and billing businesses translate these patient services into a bill, and then send and follow up on such medical claims with insurance companies.

Why do doctors and healthcare providers use outsourced billing methods in their revenue cycle management procedures?

Health insurance companies, Medicare, and Medicaid require billing departments to process medical bills through extensive software under strict rules and provisions.

These rules state that billers and coders submit claims with a series of particular codes specific to the medical procedure performed by the health provider. This makes the medical claims billing process far more streamlined and organized.

However, that isn’t all.

Revenue Cycle Management is the administration of medical financial transactions resulting from patient-provider encounters. These transactions include:

• Collections
• Payer contracting
• Provider enrollment
• Data analytics

Medical billers and coders play a significant role in carrying out these revenue cycle procedures. They follow the patient’s payment actions from the initial appointment or interaction with a medical provider to the final payment of the bill.

Billers and coding specialists help doctors earn revenue promptly through their coding and billing abilities and extensive knowledge of the requirements of insurance companies.

Through patient medical records and medical reports, billers and coding specialists can create and process accurate bills far quicker than health professionals.

Faster processing means more cash flow and decreased accounts receivables for care providers.

Is a home-run medical billing business right for you?

Running any business requires:

• Organization
• Data entry skills
• Management skills

If you want to run a successful medical billing service from home, nurture these qualities and skills within yourself.

If this is the first time you are starting a new business, check out our 10 entrepreneurial skills you need .

Next, determine if the healthcare industry interests you.

• Would you enjoy going through medical records and generating claims codes?
• Would you like working with both care providers and insurance companies to receive payment for services rendered?
• Would rejected claims and complications frustrate you? What about uncollectibles?
• Do you have an interest in learning more about medical procedures?
• Did you enjoy working in the medical field in the past?

The medical billing process in the United States can be very complicated. Be sure that you have a passion for the work.

Is there a need for your service?

Before putting time and money in your home business, first research if there is a need for third-party billing in your area.

Contact doctors and healthcare providers and ask them these questions:

• Does an outside company handle your billing or do you do it yourself?
• What software programs do you use/recommend?
• If you use an outside provider, what processes do you outsource?
• How many patients do you see and bill daily?

Tip – Nursing homes and hospitals also use medical billing services and can be a lucrative area of specialization.

The questions listed above will:

• Provide a clear idea of the need for your services in the area
• Give you tips on which software is the best
• Indicate what volume of claims you can expect from your prospective clients.

What are the startup costs involved?

Fortunately, a solo-run medical billing business is easy to start and requires a minimal investment of money. Startup costs typically range between $2,000-$10,000 .

Running a home-based small business lets you avoid overheads like renting out an office space and hiring and training employees.

The most expensive cost in starting your billing service is billing software . Prices can range from $100 to $10,000 based on the size of the company, the number of employees, the number of providers, and software features.

You will also need office supplies, including:

• A reliable computer ($500 – $3000)
• A printer and fax machine ($150+)
• Software licensing ($1500-$3500 per user)

Other costs you may need to consider are:

• Software upgrades ($500-$3500 per year)
• Backup hard drives ($50-$150 per drive)
• Ethernet switches and wires ($50-$100 per wire)
• IT support ($100+ per hour)

If you grow your business into a medium/large company, professional, in-house systems are required and can cost up to $50,000 to purchase and install. Servers will further cost another $3,000-$5,000, and training can cost $3,000+.

A. First steps to starting your own medical billing business

The multi-step process of starting your own medical billing home business can be extensive. We advise that you follow each step thoroughly and obtain every license and certificate required to be in legal standing and risk no chance of being shut down.

Here’s how to start.

1. Get hands-on experience in a medical role

If you are new to the medical industry, it is highly beneficial to work in the medical field for at least a few months before starting your business.

A great way to do this is by working in the billing department of a medical office or a hospital. You will experience the medical industry and billing process first hand, and will also gain an improved understanding of the average volume of patients that visit doctors daily.

Working in a doctor’s office will help you network and source potential clients for your business. You will handle a variety of medical records and insurance claims, and may even get to learn the electronic billing process if the practice supports it.

2. Apply for medical billing training

Why do you need medical billing training?

Medical billing differs from other types of invoices for two reasons:

• Medical bills go through an insurer before being sent to a patient.
• Medical bills require highly specialized codes and descriptions when sent to insurers.

Also, many medical procedures have similar names; therefore, billing specialists must have in-depth knowledge about anatomy, physiology, pharmacology, and health insurance terms.

A variety of colleges offer billing certification courses, both online and in-person. The completion of most billing certifications takes 9 to 18 months and requires 18 credits.

The Primary Coding Manuals & Certification Exams

When choosing a certification program, pick a course that includes all necessary code manuals and exam preparations.

Medical billing certificate programs should cover three primary code manuals:

• CPT: Current Procedural Terminology (set by the American Medical Association)
• ICD-10-CM: International Statistical Classification of Diseases and Related Health Problems (Maintained by the World Health Organization)
• HCPCS: Healthcare Common Procedure Coding System

Following the course, you should be prepared to take exams offered by the three medical billing and coding businesses listed below:

• Certified Medical Reimbursement Specialist exam – American Medical Billing Association (AMBA)
• Certified Coding Associate – American Health Information Management Association (AHIMA)
• Certified Professional Coder’s board exam – American Academy of Professional Coder’s (AAPC)

3. Watch out for scams

There are a plethora of medical billing opportunities that aid entrepreneurs in starting their own third-party billing business.

For example, a company may offer to set the entrepreneur up with training, the perfect electronic billing tools, and a list of potential clients that need outsourced billing services.

Sounds too good to be true, right?

Reliable services like this surely exist, however many of them are scams. The Federal Trade Commission has created a guide for how to detect and avoid scams.

It is crucial that you do thorough research on service providers if you choose to take this route.

The FTC suggests that you, “check with the state Attorney General’s office , consumer protection agency and the Better Business Bureau in your area and the area where the promoter is based to learn whether there are any unresolved complaints about the business opportunity or the promoter.”

4. Create a business plan

Determining what kind of business you want to run is the first step in creating an airtight business plan.

Do you want to run a sole proprietorship or a partnership with another person? Will your business be an LLC ? Will it be a large corporation?

Meet with a certified public accountant to understand which option suits your personal and tax needs.

Next, ask yourself a few questions:

• Who is your target audience?
• What are the initial costs?
• What kind of income can you expect?
• What is the name of the business?
• What do you need to get started?

5. Other necessities

Here are a few more things you will need to accomplish before starting your medical billing company:

• Apply for a business license
• Register for taxes
• Set up a business bank account
• Set up accounting
• Obtain necessary permits and licenses
• Get business insurance
• Start an LLC. Here are some free guides .

B. What you need to get up and running

Here are the essential items you will need to run a medical billing business smoothly:

1. A clearinghouse

A clearinghouse is a financial institution that processes and facilitates the exchange of payments, securities, or derivatives transactions. In your case, it is a company that electronically receives and transmits medical claims billing.

How much does this service cost?

The cost of a clearinghouse can range from below $100 to several hundred dollars depending on the bells and whistles. Some clearinghouses also demand additional fees for each new medical care provider or account you add.

2. A medical billing software

As mentioned earlier, the most expensive part of setting up your in-house company is medical billing software.

If you want some specific features of your choice and a billing software specifically made for your business, you can get a bespoke medical billing software developed for you.

Otherwise, billing software can range anywhere from a couple of hundred dollars to $10,000. While some are basic, others include features like marketing plans and lead generation.

Fortunately, many software companies provide free trials. Give your top choices a try before investing heavily in the most critical part of your business.

3. Other equipment & forms

There are a few other necessities you will need to have:

• A reliable computer with an internet connection
• A phone, printer, and fax machine
• Medical insurance forms
• Reference books (ICD-10, CPT, and HCPCS Expert 2000 coding books)
• A productive work environment

If you gain a plethora of clients, you can also use invoicing software to remain organized. If you run a high-volume business, electronic billing may be of use to you.

C. Choosing a billing software

As mentioned earlier, medical billing software pricing can vary widely based on software features and the size of your business.

Here are some of the most popular billing software of 2021:

A cloud-based medical practice management system that includes billing features like medical claims processing, claims scrubbing, code & charge entry, health insurance verification, and more.

• Solo Practice: $499 per month
• Mid-Sized: $4,990 per month
• Large Practice: $12,425 per month

Capterra rating: 4/5

A cloud-based medical practice management software with built-in billing and EHR capabilities. The billing feature is integrated with Xero accounting software and includes payment processing, invoice generation, claims management, and financial reporting tools. 

• Solo Practice: $23 – $93 per month
• Mid-Sized: $102 – $139 per month
• Large Practice: $150 – $270 per month

Capterra rating : 5/5

CareCloud EHR

A cloud-based medical practice management system with an integrated billing app that features claims processing, claims scrubbing, code & charge entry, health insurance verification, invoice history, and more.

• Solo Practice: $349 – $649 per month
• Mid-Sized: $3,490 – $6,290 per month
• Large Practice: $8,725 – $15,725

A web and mobile-available software that manages patient billing through cloud technology. Billing features include claims processing & scrubbing, health insurance verification, dunning management, and more.

• Solo Practice: $300 per month
• Mid-Sized: $3,000 per month
• Large Practice: $7,500 per month

CollaborateMD

A simple, efficient, and affordable cloud-based medical practice management and medical billing solution for your third-party billing needs. Billing features include claims processing, claims scrubbing, health insurance verification, remittance advice, and more.

• Solo Practice: $165 – $345 per month
• Mid-Sized: $1,650 – $3,450
• Large Practice: $4,125 – $8,625

Note – Pricing for billers and coders may vary based on the number of users, features, and number of clients.

For more options, check out Capterra’s list of the best medical billing software .

D. How to charge clients

There are a few ways to charge your clients in the medical billing process:

A percentage of collections –   The most popular method, as it often lends the highest return and revenue.

A per-claim fee –   This method includes charging a set fee for each claim that is submitted, whether paid or unpaid.

An hourly fee – Hourly fees are useful for medical billing businesses that provide complementary services. The current average hourly rate of a medical billing clerk employee in the U.S. is $18/hour . As an independent contractor, you will likely earn more.

The option you choose depends on the healthcare providers you partner with, as well as the billing and medical coding you perform.

Tracking billing hours

If you opt for charging hourly fees, try using Time Doctor to track your working hours.

If you have a team, Time Doctor follows the websites that they visit while clocked-in and will send reminders when it thinks they are visiting a site that is unrelated to work.

E. Income potential

As with all businesses, the income you earn largely depends on the success and size of the company. Whether you earn $20k or $100k per year will depend on the care providers you partner up with, as well as if you specialize yourself and run an efficient business.

F. Specialize yourself

Specializing yourself in one or two fields of healthcare can significantly benefit your knowledge and income in this business.

For one, you will eliminate the number of billing codes you need to use regularly. More importantly, much of your credibility as a medical billing clerk will depend on your knowledge of the industry and medical services at hand.

The more you speak their language, the more care providers will hire you for outsourced billing. Here are a few areas of specialty to consider:

• Cardiologists
• Veterinarians
• Chiropractors
• Family practitioners
• Psychiatrists

Note – A healthcare provider that charges a high copay doesn’t necessarily mean more income for you. Doctors with a low copay often require a higher patient billing volume to succeed, sending more insurance claims your way.

G. Construct a strong marketing plan

Your business, like all businesses, won’t grow itself.

Medical billing is a heavily saturated industry. You must create a rigorous marketing plan if you want to hit the ground running.

Getting your first client can be the biggest challenge. You have a head start if you have experience in the medical care industry and have maintained positive relations with healthcare providers in the past.

One of the best ways to market yourself in the medical billing industry is through in-person visits where you drop off marketing material and create relationships with providers.

Moreover, creating a website and business cards or vCards for your service, as well as offering incentives will stimulate growth and lead opportunities.

While generating leads, consider providing these free incentives to lure in prospects:

• An analysis of the benefits of outsourcing billing services for their specific medical practice.
• A code review. Analyze which codes are out-of-date or incorrect, and estimate the amount of lost revenue that has resulted from these codes.
• A free claim process and an estimate of the time your services saved them.
• An analysis of their Superbill and accounts receivable, and an estimate of why some of their medical claims are rejected.
• A consultation to evaluate if they comply with HIPAA and OIG.

If you struggle to bag your first client, you can also offer discounts and other incentives for some time. For instance, you could offer twenty percent off for the first month of your services.

Whatever route of marketing you choose to pursue, create a strategic plan ahead of time so that you are ready to go when it’s time to grow your business.

H. Network & grow

Knowing the right people can always help achieve your goals.

What’s more?

Word of mouth referrals and positive personal testimonies are fantastic for your business.

Embed yourself in the network of medical professionals and make a name for your business. Involving yourself can be done through joining professional organizations, getting in touch with your own family’s medical providers, and working in a medical office that allows you to come in contact with a variety of providers.

Expanding your network will increase your chances of obtaining new clients and growing your business.

I. Bonus: An alternative business opportunity

There is an alternative option for starting your own third-party billing business that can be fruitful if done well.

What is it?

Buying an already existing medical business.

Purchasing an already existing billing company can be done privately or through a broker and can help you avoid a few startup fees and client roundups.

Acquiring a successful business can also lead to high returns with less initial work.

However, before acquiring an already-existing business, ask a few critical questions:

• How many clients does the company have?
• How long have they been customers?
• Are they under contract?
• What method of payment do they use?
• What prices do they pay?

Establishing your own billing business can be both lucrative and enjoyable.

Keep in mind that a work-at-home business requires commitment, dedication, and organization. We at Time Doctor would know. Our team is made up of 80+ remote workers!

For tips on how to be more productive in your remote work, check out the Top 10 secrets to maximize remote work productivity .

With that said, there are numerous benefits to being your boss, including a flexible schedule and the freedom to make your own business decisions.

Furthermore, running a medical billing service out of your home avoids overhead costs and requires little capital to establish.

When done well, a medical billing business can give you the steady income and flexible schedule you have been desperately seeking!

Andy is a technology & marketing leader who has delivered award-winning and world-first experiences.

Is medical billing outsourcing the best option for my medical practice?

Process documentation best practices (and why you’ll fail without it), related posts, the gig economy: redefining career paths in modern workplaces, maximizing team efficiency: strategies for a more productive workplace, the role of leadership in fostering team efficiency, technological tools and innovations enhance team efficiency, sustainable operational improvement: balancing efficiency and environmental responsibility, how to leverage technology for enhanced operational efficiency.

How to Start a Medical Billing Business: a Comprehensive Guide

Various facilities have complicated processes for billing that require expertise, along with top-notch tools for accurate and timely services. Most facilities outsource them from third-party providers. 

Billing patients for treatments can be complicated. For example, you need to consider social security, Medicare, Medicaid, insurance claims as well as other programs. Patients like veterans and seniors are eligible for exemptions, and these should appear in their bills. 

Any service streamlining the billing process is welcome to offer new solutions. So starting a business that focuses on payments for deliveries or services can improve patient care.

If you are interested in starting an NEMT business in New York , we have another article about it. 

Here's how you can open a business that provides billing services for healthcare facilities: 

Learn About the Industry and the Market 

Medical billing is a service-based business, and many established companies are already thriving. The industry is ripe for expansion, and you need to find a specific niche to immediately capture your audience.

First, determine what area of healthcare can do with additional resources. Some billers focus on hospital supplies and medical provisions. Others focus on patient care and management. 

Consider specific sectors with high demand, such as dental billing services, medical transportation, mental health, psychiatric clinics, or family clinics. Do your due diligence and talk to potential partners—look at sectors underserved in your area. If you want to save time and jump into business faster, you can consider searching for medical billing businesses for sale or medical billing franchises. But if you want to start from scratch, below are the steps to follow. 

Acquire Licenses, Permits, or Additional Credentials

Billing service providers need permits, documents, and licenses to open. Review coding and certification requirements to complete the American Billing Association's certification exams. Know what's needed for processing insurance claims so you can work seamlessly with insurance companies.

The American Academy of Professional Coders and the American Health Information Management Association also offer certifications. These provide a deeper understanding of medical coding and other business essentials.

An application for a business license and permit to issue receipts and invoices completes this step. 

Review Startup Costs and Financing

Calculate expenses for your software, licensing fees, computers, scanners, printers, and other equipment and programs for your business. Determine the employees to hire and the overhead costs of technical support for everyone, including clients.  

Consider your options to pay for all costs associated with starting a medical billing agency. Small business owners often use personal credit cards or bank loans for initial capital, so make sure your calculations are accurate and cover everything you need. 

Some small businesses raise capital by selling stock shares to investors. This is another financing option you should consider. 

Register Your Business Name and Get a License

You must register your business name with the local government. First of all, you need to research medical billing company names that exist. Try to be creative so you can stand out. File the paperwork with your county clerk or city hall. Your entity name will protect you at a state level, which means no one else in the area can use it.

Once you register your business, it is considered a distinct legal entity, and you are eligible for tax benefits, legal benefits, and personal liability protection. 

Choose a Software for Medical Billing

Healthcare facilities prefer a streamlined process to make claims and payments easy for all parties. A medical billing service should have software to make this easy.

Once registered, you should choose software that focuses on medical billing but can manage all business processes. It must be easy to use, have all-in-one features that reduce manual work, increase claim approval rate, get money faster, track all claims, and more. 

NYBillPro is a HIPAA-compliant, cloud-based medical billing software that will streamline all tasks in the billing process. It is cost-effective, increases claim approval rates, and boosts your company's productivity. You can receive payments on time and grow your company more quickly. 

Find a Clearing House

A clearing house mediates between insurance and medical facilities. Clearing houses and insurance companies should be well-established as it is much better if each party is familiar with their processes. 

During your search, check their processes for claims and what they do when rejected. Review their customer support system so you know you will receive assistance when you need it.

Build Your Website

A website can promote your business, especially one that relies on technology as a service. You can also advertise your services and connect with potential clients. 

Websites are also valuable for collecting email addresses and contact information to inform clients about sales and promotions. It will help you build a network that connects facilities, medical providers, and patients alike.

Purchase a domain name and get a hosting service for your website. You can use a simple template for your web pages or hire a web developer to make your site look credible and professional.

Develop an Advertising and Marketing Strategy

Advertising will help you reach more clients and build brand recognition. Newer forms of advertising, like social media or search engine optimization (SEO), are much more affordable than traditional methods. These are your best options if you plan to use your website to promote and market your company. 

A Medical Billing Business Can Be Your Key to Success

It's not easy to open a new business, especially in these challenging times. However, the healthcare industry and digital technology are proving to be resilient and essential. Even in a recession, you can start a business with a high chance of success.

Medical billing providers can improve healthcare services because they help facilities focus on providing top-notch patient care. Opening a medical billing business is a worthy investment that will benefit many. 

Get a free demo to see how NYBillPro can help you on your business journey!

Yurii is a Marketing Director at ISI Technology. With a deep understanding of the healthcare industry, he offers invaluable insights on our blog related to medical billing. Yurii's articles provide practical tips, industry updates, and guidance for healthcare professionals and billing specialists. Join him to stay updated with trends in the industry.

The author assumes no responsibility or liability for any errors or omissions in the content of this site. The information contained in this site is provided on an "as is" basis with no guarantees of completeness, accuracy, usefulness or timeliness. 

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How to Write a Business Plan for an Outpatient Medical Practice

Noah Parsons

16 min. read

Updated February 7, 2024

Free Download:  Sample Medical Practice Business Plan Template

So you’re thinking about starting your own outpatient medical practice.

You probably have many good reasons to open a private practice. Private practices can be lucrative, although it requires you to spend time building relationships with patients while also attending to all business processes that are part of running your practice .

Maybe you want more autonomy over your practice and your workflow. Or maybe you hope to expand your services to underserved areas or specific populations based on your expertise.

If you’re thinking about starting an outpatient medical practice, one of the first things you should do is write a business plan. Even if you’re able to self-fund your practice and don’t need outside investment, your business plan is a great tool for thinking through all the different aspects of building a profitable and sustainable practice.

You should go into this thinking about your business plan as a living document, not something you do once and then file away forever. Use it as a tool, especially around your financials. Revisit and update it regularly by comparing your forecasts to your actuals and adjusting as necessary.

To help you get started, you can download our free business plan template . If you’ve never written a business plan before, Bplans also offers a library of sample medical business plans that you can review or even download to use as a model.

• Executive summary

The first section that will appear in your business plan is the executive summary . But before you dive right in, it’s the section of your plan that you should actually write last. It’s a summary and an overview of your outpatient medical practice and your plans, so it will be easy to put together after you’ve written the rest of your plan.  

Executive summaries are short—keep it to one to two pages. Keep in mind that if you’re using your plan to get funding, investors and banks tend to read your executive summary to get a sense of whether to read on and consider your request. Do not neglect it; just write it last.

Your executive summary will include the following sections:

• Who you are: Your business name, location, and contact information.  
• What you offer and the problem your business solves: What does your practice offer and why is it needed? This is your value proposition .
• Target market: Who is your ideal patient? Do they self-pay or use insurance? Be specific.
• Competition: Who else is offering similar services?
• Team: Who is on your management team?
• Financial summary: Explain your business model, startup costs, revenues, and liabilities to the company. Mention your funding needs.
• Milestones and traction: How have you validated that there’s a need for your practice in your location?

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Position your practice’s business opportunity

Now that you’re familiar with what’s included in your executive summary, tuck that information away, and get to work on the rest of your plan.

Think of the next few sections of your plan as the overarching description of your practice’s business opportunity. You’ll cover the problem you’ve identified and the solution that your practice offers. Then you’ll think through your ideal customer , your competition , and your opportunities for growth . This section area should describe the services you provide and how they benefit your patients.

• Problem and solution

First, describe the problem that you’ve identified and how your practice solves that problem. Here’s a brief example:

The problem : There is a lack of affordable pediatric and gynecological care available in coastal areas of Lane County, Oregon. Many patients have to travel miles to the closest practice.  

The solution : Dr. Gardner plans to open Ocean Lane Outpatient Care to serve smaller Oregon coastal communities scattered outside of major towns with major hospitals. Due to her focus on pediatric and gynecological care, Dr. Gardner’s particular services are especially valuable in this location due to the lack of available service providers in the area. Dr. Gardner’s practice will accept private insurance and Medicaid, as well as a sliding scale for patients in a certain income bracket.   

The services section identifies what kind of medical practice you are opening. Restate who your practice serves and what kind of services you specialize in. Talk about how your practice approaches treatment and what goals you have in addition to providing quality care. Here’s an example from a sample business plan for a medical practice.

Include a breakdown of all services furnished by the clinic, being as granular as possible. For example:

Gynecology:

• Annual women’s wellness exam

Pediatrics:

• Immunizations
• Youth eating disorder treatment
• Target market

Next, talk about your ideal patients. If you’re in the earliest stages, you’ll want to do some research that verifies your hypotheses.

For example, Dr. Gardner would have needed to verify her assumption that people in coastal towns in Oregon are in need of pediatric and gynecological services—a need that isn’t currently satisfied by available resources.

A formal market analysis can help verify that there’s a need for your particular practice in your intended location.  

Your target market section should include:

• TAM, SAM, and SOM: Total Available Market (TAM), Segment of the Available Market (SAM), Share of the Market (SOM). Here, you are looking at the difference between targeting everyone: TAM (all people who need medical care—so all humans in your area), versus your ideal clients: SAM (maybe this is those with certain insurance or ability to self-pay), versus the number of new patients you think you can realistically reach: SOM, especially within your first few years. The idea is that not everyone will be an ideal patient. It matters because you can waste a lot of money with marketing outreach to everyone, instead of targeting a specific population that is more likely to be looking for your services.
• Buyer persona : Imagine there’s one specific patient who represents your ideal patient. Be specific. Maybe she’s 34 years old, has private insurance, is relatively healthy, but needs more regular medical care and advice.  
• Competition and competition matrix : List competitors and analyze what makes them competitive. For instance, your competitors might be large hospitals because of the wide range of services they offer. You might also be competing with local chiropractors or other alternative medicine practices that already have a foothold in local communities.
• Future products and services : Name the products/services you will offer as your practice grows and earns more money and as your patients develop new needs. Maybe you will want to open a second location when you gain enough patients. Or maybe you will want to extend your practice’s hours of operation.

Ideal patient profile

Your ideal patient profile identifies the type of patient whom you hope to attract and retain. To clarify, this does not mean you only serve your ideal patient type. Rather, focusing your outreach efforts on attracting your ideal patient will allow you to grow your practice more effectively than targeting a large number of patients who may or may not be in the market for your practice’s specialty.

When developing your ideal patient profile, consider:

• Who you enjoy working with
• Who needs the services you provide
• Who can and will pay your pricing (or have an insurance plan that you want to accept)

For instance, because Dr. Gardner specializes in preventive and curative care, a patient seeking palliative treatment for terminal cancer is not the ideal patient. This patient would not receive the best care for their needs from Dr. Gardner’s services.

Acquiring a new patient is six to seven times more expensive than retaining a current patient. In order to support and retain current patients, develop a strategy to proactively meet their needs and set benchmarks to measure the success of your strategy.

• Execution: How your practice will respond to the opportunity

First, your business plan laid out the opportunity at hand. Now, the rest of your plan will focus on how to take advantage of that opportunity. Now is the time to lay out what you’ll do to attract patients and set up a viable business model with healthy financials.

Components of this section include:

• Your marketing and sales plan
• Strategic partnerships or alliances
• Your operations plan
• Your team and company information
• Financial plan
• Milestones and metrics that you’ll need to hit to be viable
• Your key assumptions and risks
• Your funding ask and exit strategy, if applicable
• Marketing and sales plan

The marketing and sales component of your plan should include how you plan to reach the patients in your target market, how you’ll bill for your services, and what you need to do to bring in the right number and type of patients.

• Positioning : Describe how you will present your company to your customers with your positioning statement . Think about answering these questions: What are you offering your patients that they can’t get elsewhere? Why should they pick you instead of another practice? Where do you see yourself in the competitive landscape? Use this model to help:

“For [target market description] who [target market need], [how our business offering meets the need]. Unlike [key competition], it [most distinguishing feature].”

For [coastal community members] who [require gynecological care], Ocean Lane Outpatient Care [provides both pediatric and women’s health services]. Unlike [other area medical practices], Ocean Lane Outpatient Care is [conveniently located near the communities it serves and can fill the gap between pure pediatric care and full-blown adult care for young women].

• Pricing and billing : Medical pricing is complex, especially if you plan to work with insurance companies. Practice Builders says that “a 10 percent increase in pricing can result in a much better return than a 10 percent reduction in costs—or even a 10 percent increase in patient volume.”

Make sure you price your services at what they are worth and explain your pricing to your patients. Consider the demographics your practice serves when you choose your pricing. Research other practices in the area and learn more   about how you can choose the best prices for your patients and your practice.Also, consider how you will get patients to keep coming back to your practice. Sometimes you can increase sales by upselling and cross-selling , or offering complementary services.

If you accept insurance, the contracts you set up with insurance companies for reimbursement will probably dictate your pricing, so this is a good place to talk about your negotiation strategy as well.

• Update your website and social media frequently and ensure your website is mobile-friendly and share-friendly with credible links added.
• Make sure all communications with and about patients are HIPAA-compliant . Download a HIPAA Compliance Guide to ensure you are following regulations.
• Maintain a positive online reputation for your practice as a key management technique. You can do this by claiming your profile on any third-party sites that list it. Encourage your patients to review you online, too.
• Strategic alliances : List any people or organizations with whom you are working. You will most likely need to partner with a regional lab for medical testing. Opening an on-site lab can be costly for a smaller practice. You will most likely need to partner with a nearby hospital as part of a referral system or to share select services and equipment.

The operations section of your business plan covers how your business works, from the logistics to the technology.

• Technology: Describe how your technology works, but do not go into too much detail. Investors can ask for more information if they want to. Will you rent or buy equipment ? The technology you need ranges from simple items like thermometers to more complex items like centrifuges.
• Billing and information storage: Provide a brief overview of how you will manage information technology and patient records to promote safety, efficiency, and compliance with HIPPA  regulations and industry standards. Explain your usage of Electronic Medical Record (EMR) software in this section.
• Payment types you accept: Consider payment types such as private pay, private insurance, Medicaid/Medicare, etc. What kind of referrals can you offer to the uninsured or those who cannot afford your services?
• Milestones and metrics

In this part of your plan, you set measurable, achievable milestones, such as the number of new patients added per month in the first year of operations. Milestones can be about any aspect of your medical practice as long as they emphasize growth. For metrics , decide which numbers to check regularly to track your company’s health. This area should also include information about traction (past successes) and risks:

• Traction: Look back at major milestones you have achieved. Hopefully, they demonstrate that your business model works and that you are filling a need for your market. If you’re looking to attract private funders, this section is important since it shows your initial success .
• Key assumptions and risks : Acknowledge the assumptions you are basing your business on. Set out to prove them right if you can. Also, discuss risks so that investors know you have considered what could go wrong and that you have a plan for dealing with challenges. Malpractice suits and changing healthcare regulations are risks specific to the healthcare field. Malpractice insurance is a must for addressing the former. Changing healthcare regulations can affect the volume of patients who are able to afford your services.

Your team can be more important than your product or service. Describe your team here, even if it is just you and a receptionist who answers the phone in your office building.

• Management team and qualifications: Address who works for you, what do they do, and how much you pay them. Compile the details of their relevant experience and education.
• Hiring plans : Outline who, if anyone, you need to hire to fill skills gaps in your management team and how much you plan to pay them.
• Company overview

The company overview tells about who you and your staff are and appeals to potential investors. Keep it short—it should be the shortest chapter of your business plan but is still very important.

It needs to include these elements:

• Mission statement : Your mission statement articulates your goals for what your company does for its customers, employees, and owners. It will read something like this: “Our mission is to provide X (services) for Y (customers) by Z (methods).” For instance, Ocean Lane Outpatient Care is dedicated to providing quality care for all the inhabitants of coastal Lane County by providing affordable and versatile services.”
• Intellectual property : List any patents you have or have pending, and mention any core technology you are licensing from another company.
• Legal structure and ownership : Explain your business structure and who owns how much of it. More on considerations for physicians and legal structure here.
• Business location : Describe the company’s location and any facilities it owns.
• Company history if it’s an existing company

Having a solid financial plan is critical, whether you’re seeking funding or not.  A typical financial plan includes projections by month for the first year and annual projection for the next three to five.

Include these key elements:

• Profit and loss statement : this explains how your business made a profit or incurred a loss in a given amount of time (typically three months) by listing all revenue and expenses, then documenting the total amount of net profit or loss.
• Cash flow statement: documentation of how much cash the business brought in, how much it paid out, and the amount of its ending cash balance (on a monthly basis).
• Balance sheet : snapshots how your company is performing at a given moment by including how much money you have in the bank, how much your customers owe you, and how much you owe your vendors.
• Sales forecast : projections of what you think you will sell in a given timeframe (one to three years).
• Business ratios : Comparisons of your company’s financials with numbers from the industry profile.
• Keep it brief. For example, Dr. Gardner will employ administrative aides and nurses.
• Use of funds : Needed if you’re seeking investment or a loan. This section explains how you will use investors’ money.
• Exit strategy : You only need this if you’re seeking outside investment. An exit strategy is a method by which entrepreneurs and investors, especially those that have invested large sums of money, transfer ownership of their business to a third party to recoup money invested in the business. Common exit strategies include being acquired by another company, the sale of equity, or a management or employee buyout.

When writing your financial plan, make sure to consider startup costs . For a medical practice, average startup costs can include initial fees, malpractice insurance, cost of renting or leasing office space, and the cost of any legal or tax advisors.

Consider submitting your plan to at least five to 10 banks if you need help financing your startup costs. Many banks have divisions designated to providing loans to new dental and medical practices , so submit your plan to that division if you can. Startup costs can be high in the medical field, so make sure not to underestimate them.

Finally, your appendix is the holder for any supporting information such as charts, images, graphs, and more. If you need to include large sets of data or pages of information, put it here. That way, it is available but does not distract from the plan’s most important pieces.

For instance, you can expand on your personnel plan with charts of each employee’s annual insurance costs. You can also include versions of your profit and loss statements and other financials that extend further into the future.

Don’t forget to go back to your executive summary! Remember to keep it brief and write it based on what you have written already.

When you’re ready to write your business plan, there are an array of resources available to you. Download our free business startup checklist to think about the next steps. Also, check out our free business plan template . Reviewing sample business plans in the medical field can help you get a better sense of the process and information you’ll provide. Downloading this plan for a family medicine clinic will probably be most helpful if you’re setting up a primary care practice.

Remember that this plan is a living document. Schedule a regular business plan review meeting. You should review your trajectory and compare your financial projections to your actuals frequently to keep your practice on track.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

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Medical Practice Business Plan Template

Written by Dave Lavinsky

Medical Practice Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their medical practices. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a medical practice business plan template step-by-step so you can create your plan today.

Download our Ultimate Medical Practice Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your medical office as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to start a medical practice, or grow your existing medical practice, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your medical practice in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Medical Practices

With regards to funding, the main sources of funding for a medical office are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for medical practices.

Finish Your Business Plan Today!

How to write a business plan for a medical business.

If you want to start a medical private practice or expand your current one, you need a business plan. Below we detail what should be included in each section of your business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of medical office you are operating and the status. For example, are you a startup, do you have a practice that you would like to grow, or are you operating practices in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the industry. Discuss the type of practice you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of medical office you are operating.

For example, you might operate one of the following types of medical practices:

• Group medical practice : this type of medical practice consists of two or more physicians providing medical care in the same facility. The physicians typically have different specialties, which allow them to collaborate and consult with each other.
• Private medical practice: this type of medical practice involves only one physician working along. A private practice usually serves a limited number of patients and operates with a small staff.
• Hospital-based medical practice: this type of medical practice is an ancillary medical office that is owned by a nearby hospital. The hospital will manage the practice and employ the doctors and nurses to work in their facilities and ancillary clinics.

In addition to explaining the type of medical practice you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What is your business model?
• What is your mission statement?
• What milestones have you achieved to date? Milestones could include the number of patients served, number of positive reviews, reaching X amount of patients served, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your business structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the medical industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the medical industry educates you. It helps you understand the market in which you are operating. 

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section:

• How big is the medical industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your medical office? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, families, seniors, and anyone needing a type of medical service.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of medical office you operate. Clearly, families would respond to different marketing promotions than seniors, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other medical offices. 

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes hospitals, clinics, teledocs, and online health forums.

With regards to direct competition, you want to describe the other practices with which you compete. Most likely, your direct competitors will be other practices located very close to your business location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of medical services do they provide?
• What areas do they serve?
• What types of patients do they serve?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide services that your competitors don’t offer?
• Will you provide faster patient waiting time?
• Will you provide better patient service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a medical office, your marketing plan should include the following:

Product : In the product section, you should reiterate the type of practice that you documented in your Company Analysis. Then, detail the specific services you will be offering. For example, in addition to medical services, will you provide nutrition and diet guidelines, insurance claim processing, family and loved one communication, and any other services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your practice. Document your location and mention how the location will impact your success. For example, is your medical office located near a school, a busy neighborhood, an office complex, or an urban setting, etc.? Discuss how your location might be the ideal location for your patients.

Promotions : The final part of your marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Commercials
• Social media marketing
• Local radio advertising
• Word-of-mouth

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. It should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your practice, including patient and family communication and scheduling, managing appointments, inventory of medical supplies, accounting, billing, payroll, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to obtain your XXth patient, or when you hope to reach $X in revenue. It could also be when you expect to expand your medical practice to a new location.  

Management Team

To demonstrate your practice’s ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company. 

Ideally you and/or your management team members have direct experience in managing medical practices. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a medical practice or a physician or nurse in the local medical field.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you take on one new patient at a time or multiple new patients offering a variety of medical services ? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your medical practice, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. 

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a medical practice:

• Cost of furniture and build-out
• Cost of medical supplies and equipment
• Payroll or salaries paid to staff
• Business and medical malpractice insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your list of medical services your practice will offer, types of patients you will be targeting, and the areas your practice will serve.  

Putting together a business plan for your medical practice is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful medical practice.  

Medical Practice Business Plan FAQs

What is the easiest way to complete my medical practice business plan.

Growthink's Ultimate Medical Practice Business Plan Template allows you to quickly and easily complete your Medical Practice Business Plan.

Where Can I Download a Medical Clinic Business Plan PDF?

You can download our medical clinic business plan PDF here. This is a business plan template you can use in PDF format.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of medical practice business you are operating and the status; for example, are you a startup, do you have a medical practice business that you would like to grow, or are you operating a chain of medical practice businesses?

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Other Helpful Business Plan Articles & Templates

Medical Clinic Business Plan PDF Example

• February 28, 2024
• Business Plan

Creating a comprehensive business plan is crucial for launching and running a successful medical clinic. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your medical clinic’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a medical clinic business plan but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the healthcare industry, this guide, complete with a business plan example, lays the groundwork for turning your medical clinic concept into reality. Let’s dive in!

Our medical clinic business plan is carefully designed to cover all the important parts needed for a good strategy. It explains how the clinic will run, how we’ll take care of patients, how we’ll tell people about our services, what the healthcare situation is like, who our competitors are, who’s in charge, and how much money we expect to make.

• Executive Summary : Provides an overview of the Medical Clinic’s business concept, healthcare market analysis , management structure, and financial strategy.
• Facility & Location: Describes the clinic’s physical setup, including its architectural design, medical equipment, patient amenities, and the strategic choice of its location to maximize accessibility for its target patient base.
• Treatments & Pricing: Enumerates the healthcare services the clinic will provide, from general medical consultations to specialized treatments, alongside a transparent pricing model.
• Key Stats: Shares industry size , growth trends, and relevant statistics for the healthcare market.
• Key Trends : Highlights recent trends affecting the healthcare sector, such as technological advancements, patient care innovations, and regulatory changes.
• Key Competitors : Analyzes the main competitors in the vicinity and differentiates the clinic based on services, patient care quality, and operational efficiency.
• SWOT: Strengths, weaknesses, opportunities, and threats analysis tailored to the healthcare context.
• Marketing Plan : Strategies for attracting and retaining patients, including digital marketing, community health programs, and patient service excellence.
• Timeline : Key milestones and objectives from the clinic’s establishment through the first year of operation, including licensing, staff recruitment, and service launch.
• Management: Information on the healthcare professionals managing the medical clinic and their roles, emphasizing their medical expertise and healthcare management experience.
• Financial Plan: Projects the clinic’s 5-year financial performance, including revenue from medical services, operational costs, profits, and expected expenses, ensuring a sustainable and profitable healthcare service model.

Medical Clinic Business Plan

Download an expert-built 30+ slides Powerpoint business plan template

Executive Summary

The Executive Summary introduces our medical clinic’s business plan, offering a concise overview of the clinic and its healthcare services. It details our market positioning, the comprehensive medical services we provide, its location, size, and an outline of our day-to-day operations. 

This section will also delve into how our clinic will integrate into the local healthcare market, including an assessment of the direct competitors in the area, identifying who they are, and highlighting our clinic’s unique selling points that set us apart. 

Additionally, it includes information about our management and co-founding team, outlining their roles and contributions to the clinic’s success. A summary of our financial projections, including expected revenue and profits over the next five years, will also be presented to offer a clear view of our clinic’s financial outlook.

Make sure to cover here _ Business Overview _ Market Overview _ Management Team _ Financial Plan

Dive deeper into Executive Summary

Business Overview

For a medical clinic, the Business Overview section can be concisely structured into 2 main components:

Facility & Location

Briefly describe the clinic’s facilities, highlighting the state-of-the-art medical equipment, patient-centric design, and a welcoming atmosphere that ensures comfort and privacy.

Mention the clinic’s strategic location, emphasizing its accessibility and conveniences such as proximity to main transit routes and ample parking. Explain how this location was selected to serve the clinic’s target patient demographics effectively.

Treatments & Pricing

Detail the comprehensive range of medical services provided, from routine health check-ups to specialized treatments in areas like cardiology, pediatrics, or orthopedics.

Describe your pricing model, ensuring it mirrors the high standard of care offered and is competitive within the healthcare market. Highlight any health plans, membership options, or loyalty programs designed to offer added value to patients, fostering long-term relationships and patient loyalty.

Make sure to cover here _ Clinic & Location _ Treatments & Pricing

Market Overview

Industry size & growth.

Start your medical clinic business plan by looking at how big the healthcare world is, especially for the services you provide like general health, special treatments (skincare, children’s health), or quick care. Think about how this area is growing and where you might find new chances to grow.

Key market trends

Then, talk about what’s new in healthcare, like how people want care that’s just for them, using tech to help patients (like video doctor visits or digital health records), and focusing on keeping people healthy before they get sick. Point out that people are looking for services that meet their specific health needs and that there’s a growing interest in clinics that care for the whole person.

Key competitors

Lastly, look at who you’re up against, which could be big hospitals, small clinics that focus on one area of health, or even online health services. Think about what makes your clinic different and better, maybe because of the great care you give, the wide range of services you have, or new ways you’re bringing health care to people. This part should clearly say why people need medical services, who else is providing them, and how your clinic can stand out and do well in this busy world.

Make sure to cover here _ Industry size & growth _ Key market trends _ Key competitors

Dive deeper into Key competitors

First, conduct a SWOT analysis for the medical clinic , identifying Strengths such as a team of expert medical professionals and a comprehensive suite of healthcare services. Weaknesses might include factors like high operational costs and the complexity of insurance processes. Opportunities can arise from the growing emphasis on health and wellness and the potential for telemedicine services. Threats could stem from increased competition and the impact of economic downturns on discretionary healthcare spending.

Marketing Plan

Next, develop a marketing strategy aimed at attracting and retaining patients. This strategy should focus on targeted advertising to reach specific demographics, offering promotional incentives for referrals, maintaining an active and engaging presence on social media, and fostering community ties through health education and events.

Finally, create a detailed timeline that marks essential milestones for the clinic. This includes the initial setup and opening phase, followed by the launch of marketing initiatives, efforts to expand the patient base, and strategies for broader service offerings, all designed to ensure the clinic progresses with a clear and defined purpose.

Make sure to cover here _ SWOT _ Marketing Plan _ Timeline

Dive deeper into SWOT

Dive deeper into Marketing Plan

The management section focuses on the medical clinic’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the medical clinic toward its financial and operational goals.

For your medical clinic business plan, list the core team members, their specific responsibilities, and how their expertise supports the medical clinic’s mission.

Financial Plan

The Financial Plan section is a comprehensive analysis of the medical clinic’s financial strategy, including projections for revenue, expenses, and profitability. It lays out the clinic’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs and capital expenditures.

For your medical clinic business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your main assumptions (e.g. prices, customers, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

Privacy Overview

• Business Plan for Investors
• Bank/SBA Business Plan
• Operational/Strategic Planning Services
• L1 Visa Business Plan
• E1 Treaty Trader Visa Business Plan
• E2 Treaty Investor Visa Business Plan
• EB-1 Business Plan
• EB-2 NIW Business Plan
• EB-5 Business Plan
• Innovator Founder Visa Business Plan
• Start-Up Visa Business Plan
• Expansion Worker Visa Business Plan
• Manitoba MPNP Visa Business Plan
• Nova Scotia NSNP Visa Business Plan
• British Columbia BC PNP Visa Business Plan
• Self-Employed Visa Business Plan
• OINP Entrepreneur Stream Business Plan
• LMIA Owner Operator Business Plan
• ICT Work Permit Business Plan
• LMIA Mobility Program – C11 Entrepreneur Business Plan
• USMCA (ex-NAFTA) Business Plan
• Franchise Business Plan
• Landlord business plan
• Nonprofit Start-Up Business Plan
• USDA Business Plan
• Cannabis business plan
• Ecommerce business plan
• Online boutique business plan
• Mobile application business plan
• Daycare business plan
• Restaurant business plan
• Food delivery business plan
• Real estate business plan
• Business Continuity Plan
• Pitch Deck Consulting Services
• Financial Due Diligence Services
• ICO whitepaper
• ICO consulting services
• Confidential Information Memorandum
• Private Placement Memorandum
• Feasibility study
• Fractional CFO
• How it works
• Business Plan Examples

Medical Device Business Plan

NOV.06, 2023

Medical Device Business Plan Sample

A medical device business plan is a document that outlines how to start and run a successful company that produces and sells products that diagnose, treat, or prevent diseases or injuries. Navigating the vast and expanding medical device sector presents thrilling opportunities alongside complex hurdles. A well-crafted business plan illuminates the route to success. Articulate your vision, milestones, tactics, and budgetary forecasts.

A business plan should also demonstrate how you will stand out from the crowd, satisfy users, adhere to regulations, and uphold ethical standards. A medical billing business plan is a specific type of medical device business plan that focuses on how to provide billing and coding services for healthcare providers.

In this article, we will provide you with a medical device business plan sample that you can use as a template or a reference for your business plan. We will cover the following sections:

• Executive Summary
• Company Overview
• Industry Analysis
• Customer Analysis
• Competitive Analysis
• Marketing Plan
• Operations Plan

Management Team

• Financial Plan

Executive Summary Section of Our Medical Device Business Plan

Business overview.

Medix is a medical device company that develops and sells innovative and affordable devices for diabetes management. We aim to enhance the well-being and health results of those managing diabetes. We aim to offer user-friendly and dependable products that assist in tracking and regulating blood sugar levels.

Products and Services

Medix offers two main products:

• Medix Glucometer – A smart glucose meter that connects to a mobile app via Bluetooth and provides accurate and instant readings of blood glucose levels.
• Medix Patch – A wearable patch that continuously measures blood glucose levels through the skin without needing finger pricks or test strips.

Customer Focus

Medix focuses on serving people with diabetes, seeking convenient and affordable solutions to manage their condition. According to the IDF Diabetes Atlas 10th edition report , 537 million adults (20-79 years) live with diabetes – 1 in 10. Experts predict that this number will rise to 643 million by 2030 and 783 million by 2045. Therefore, there is a huge demand for effective and accessible diabetes care products.

Leo Clark and Aria Bennett, two experienced entrepreneurs with biomedical engineering and business administration backgrounds, founded Medix. Leo is the CEO and head of product development, while Aria is the COO and head of marketing and sales. A team of qualified engineers, designers, developers, marketers, salespeople, and advisors supports them.

Success Factors

Medix has several competitive advantages that will enable it to succeed in the medical device industry:

• Innovation with cutting-edge technology to create novel devices
• High standards of quality and safety in every aspect of devices
• Customer satisfaction by providing user-friendly devices
• Social impact by addressing a major health problem globally

Financial Highlights

Medix seeks $5 million in seed funding to launch its products and scale its operations. The company projects to generate $1.2 million in revenue in the first year, $3.6 million in the second year, and $10.8 million in the third year, with a gross margin of 60% and a net profit margin of 20%. The company expects to break even in the second year and reach a valuation of $50 million by the end of the third year.

Company Overview Section of Our Medical Device Sales Business Plan

Who is Medix Medical Supply?

Medix dedicates itself to developing and selling innovative, affordable, and reliable devices for diabetes management. Our products help people with diabetes to monitor and control their blood glucose levels with ease and effectiveness, leading to better health outcomes and an improved quality of life.

Medix Medical Supply History

Medix is a company that provides innovative solutions for diabetes care. It was founded by Leo Clark and Aria Bennett in 2023, who both personally experienced the challenges and frustrations of living with diabetes. These challenges included frequent finger pricks, expensive test strips, inaccurate readings, and complicated insulin injections.

They started Medix with their personal funds and an incubator grant to address these issues. Medix developed two products – the Medix Glucometer and the Medix Patch – to make diabetes monitoring and treatment easier, more accurate, and more affordable.

The Medix products have received regulatory approvals from the Food and Drug Administration (FDA) and the European Medicines Agency (EMA). They are now ready for launch in the US and European markets. For more information, please refer to our dentistry business plan .

Legal Structure

Medix, an LLC registered in Delaware, USA, has obtained ownership by Leo Clark (60%) and Aria Bennett (40%). Additionally, the company has applied for a patent for its products in the US Patent and Trademark Office (USPTO).

Industry Analysis Section of Our Medical Device Business Plan

The medical device industry is one of the world’s most innovative and dynamic sectors. Fortune Business Insights reported that the global medical device market was valued at $512.29 billion in 2022 and can grow from $536.12 billion in 2023 to $799.67 billion by 2030, at a CAGR of 5.9%.

The medical device industry is driven by several factors, such as:

• The increasing prevalence of diseases and the aging population
• The rising demand for minimally invasive and personalized treatments
• The advancement of technology and digitalization
• The emergence of new markets and segments

Customer Analysis Section of Our Medical Supply Business Plan

Demographic profile of target market.

Medix’s target market is the US market, which ranks third for the highest number of people with diabetes. We target diabetic people looking for convenient, affordable solutions to manage their condition. 

According to the National Diabetes Statistics Report by CDC, here are some interesting stats about why the US market is best for Medix:

• 37.3 million people have diabetes (11.3% of the US population)
• 28.7 million people are diagnosed, including 28.5 million adults
• 8.5 million people are undiagnosed (23.0% of adults)
• 96 million people aged 18 years or older have prediabetes (38.0% of the adult US population)
• 26.4 million people aged 65 years or older (48.8%) have prediabetes

The demographic profile of our target market is as follows:

• Age – We target all ages, mainly the young and middle-aged, who are tech-savvy and have more money to spend. A CDC report says 34.1 million adults aged 18 years or older—or 13.0% of all US adults—have diabetes.
• Gender – We target both males and females, as diabetes does not discriminate by gender. A NIDDK (NIH) report says a higher percentage of men (41%) than women (32%) have prediabetes.
• Income – We target all income levels, mainly the low and middle-income who need better healthcare solutions. An NCBI (NIH) report says 80% of the adults worldwide with diabetes live in low- and middle-income countries (LMICs).

Customer Segmentation

Based on our market research and customer feedback, we have identified four main customer segments for our products:

• Segment A – Tech-savvy innovators who value quality, performance, and convenience. They share their views online.
• Segment B – Cost-conscious buyers who seek affordable and effective products. They trust their peers’ recommendations.
• Segment C – Health-conscious improvers who want products that motivate and support them. They join online health communities.
• Segment D – Compliance-driven users need products that ensure safety, security, and simplicity. They depend on their health providers and caregivers.

The table below summarizes our findings:

Based on the table, we have decided to target segments A and B as our primary segments, and segments C and D as our secondary segments.

Competitive Analysis Section of Our Medical Equipment Producer Business Plan

Direct and indirect competitors.

Our direct competitors are other medical device companies that offer similar or substitute surgical medical equipment for diabetes management. Some of the major players in this category are:

1. Abbott – A global healthcare company that offers a range of products for diabetes care with mobile apps for real-time data and insights.

• Strong brand recognition
• Global presence
• Innovation capabilities
• Customer loyalty

Weaknesses:

• Limited availability
• Technical issues

2. Dexcom – A medical device company specializing in CGMs for diabetes management. These devices use sensors to record and transmit data to a receiver or a smartphone.

• High accuracy
• Reliability
• Convenience
• Customer satisfaction
• Short sensor lifespan
• Skin irritation

3. Medtronic – A medical technology company that offers a range of durable medical equipment for diabetes care, such as insulin pumps, CGMs, and APSs. The system connects to a mobile app to monitor and control settings.

• Leadership position
• Advanced technology
• Clinical evidence
• Customer support
• Safety concerns
• Regulatory hurdles
• Competition

Our indirect competitors are other healthcare providers or solutions that offer alternative or complementary ways to manage diabetes, such as medications, diet plans, exercise programs, coaching services, etc. Refer to our hospital business plan to learn more.

Competitive Advantage

Medix’s unique value proposition and competitive advantage over its competitors are:

• Medix is more innovative
• Medix is more convenient
• Medix is more versatile
• Medix is more affordable
• Medix is more user-friendly

Marketing Plan Section of Our Medical Device Business Plan

Promotions strategy.

We will promote our products using online and offline channels to attract and retain customers. Our promotional mix consists of:

• Advertising – Online platforms (e.g., Google Ads, Facebook Ads) and offline media (e.g., newspapers, billboards) to deliver relevant and engaging messages.
• Public Relations – Press releases, media interviews, podcasts, webinars, etc., to generate positive publicity and exposure. Social media platforms (e.g., Facebook, Twitter) to interact and communicate with customers and stakeholders.
• Sales Promotion – Discounts, coupons, free samples, free trials, referrals, loyalty programs, etc., to stimulate sales and repeat purchases. Contests, sweepstakes, giveaways, etc., to create excitement and buzz.
• Personal Selling – Direct sales, telemarketing, email marketing, etc., to contact and persuade customers to buy our products. Online platforms (e.g., Amazon, eBay, Shopify) to sell our products directly.

We will use a value-based pricing strategy that reflects the value and benefits of our products and our competitive advantage. We will also offer competitive pricing that matches or undercuts our competitors’ prices.

We will charge $100 for each Medix Glucometer and $50 for each Medix Patch. We will also generate recurring revenue from the sales of test strips ($0.5 each) and insulin cartridges ($10 each). We estimate that each customer will use an average of 100 test strips and 12 insulin cartridges per year.

Operations Plan Section of Our Medical Device Business Plan

Operation functions.

We do these core activities to offer our products and services to our customers:

• Product Development – We research, design, test, and improve our products using agile methods, customer feedback, market trends, and tools like GitHub, Jira, Figma, etc.
• Manufacturing – We produce our products on a large scale and high quality by outsourcing to a reliable contract manufacturer.
• Distribution – We deliver our products to our customers quickly and cheaply using direct and indirect channels in different regions or countries.
• Customer Service – We support and assist our customers before, during, and after their purchase using various channels and methods.

Milestones and Timeline

We have these specific goals and objectives to track our progress and success in our operation functions:

• June 2024: Complete R&D, testing, prototyping of products
• September 2024: Obtain regulatory approvals and certifications
• December 2024: Launch marketing campaign and product launch in the US
• March 2025: Market research for Europe entry
• December 2025: Launch Europe marketing, market entry
• March 2026: Invest in production capacity
• June 2026: Expand manufacturing workforce
• December 2026: Evaluate production, increase to 100k units/month

Management Team Section of Our Medical Device Business Plan

Founders and co-founders.

Leo Clark, a biomedical engineer with type 1 diabetes, and Aria Bennett, the daughter of a type 2 diabetic and a business administrator, founded Medix. Leo is responsible for the product development function, while Aria leads the marketing and sales function. Both have several years of experience working in their respective fields and personal and professional experience with diabetes.

Other Key Team Members

• Alice Lee – Our chief engineer
• Bob Chen – Our chief developer
• Carol Wang – Our chief designer
• Dave Jones – Our chief marketer
• Emma Smith – Our chief salesperson

Financial Plan Section of Our Medical Device Business Plan

Key revenue and costs.

Medix’s main sources of revenue, along with pricing, are:

• Medix Glucometer – $100 for each Glucometer
• Medix Patch – $50 for each Patch
• Test Strips – $0.5 for each test strip
• Insulin Cartridge – $10 for each cartridge

We estimate that each customer will use an average of 100 test strips and 12 insulin cartridges per year.

Medix’s main categories of expenses are:

• Cost of Goods Sold (COGS) – Our main cost of goods sold is the cost of materials, components, parts, and additional supplies. We estimate that the COGS per unit is $40 for the Medix Glucometer, $20 for the Medix Patch, $0.1 for the test strip, and $2 for the insulin cartridge.
• Operating Expenses (OPEX) – Our main operating expenses are the costs we incur for running and operating our business, such as salaries, rent, utilities, marketing, advertising, R&D, etc. Our OPEX will be 40% of our revenue in the first year, 35% in the second year, and 30% in the third year.

Funding Requirements and Use of Funds

Funding Requirements – We seek $5 million in seed funding to launch our products and scale our operations. We have already raised $500,000 from our savings and a small grant from a local incubator. We need an additional $4.5 million to cover our expenses for the next 18 months until we reach the break-even point.

Use of Funds – We will use the funds for the following purposes as highlighted in the below chart:

Key Assumptions

• Market size for our products is 10% of the total number of people with diabetes in the US and Europe
• Market share is projected to grow from 107,000 customers in 2024 to 444,000 customers in 2026
• Sales volume is projected to grow from 321,000 units in 2024 to 1.33 million units in 2026
• Gross margin is projected to be 60% in all three years
• Net margin is projected to grow from 20% in 2024 to 30% in 2026

Financial Projections

Based on the above assumptions, we have prepared the following financial projections for the next three years:

Income Statement

OGSCapital – Your Partner for Medical Device Startup Success

With over a decade of experience, at OGSCapital, we have helped various entrepreneurs craft winning business plans. Our consultants provide end-to-end support – from market research and competitor analysis to realistic profitability forecasts. We understand the medical device industry inside-out, including regulations, manufacturing, and distribution.

Whether you need help with your hospital feasibility study , medical equipment manufacturing business plan, or medical supply store business plan, we tailor our approach to your specific product and goals. Partner with us to launch your startup on the path to profitability and rapid growth.

Frequently Asked Questions

How to start a medical device business.

A strategic business plan is a key ingredient in a startup medical device company. But that alone won’t cut it – the company also requires a talented group of professionals, structured product development procedures, a plan for meeting regulatory guidelines, and effective marketing tactics. A distributor or a medical equipment supplier can help distribute the devices.

How profitable are medical devices?

The medical equipment industry is booming with high growth potential. The average operating margin for medical equipment and supplies companies averages 2.87%. The medical device market will grow at a CAGR of 5.5% to 5.9% from 2022 to 2030.

How do I market my medical device?

As highlighted in our Medical Clinic Business Plan , some popular marketing channels to market a medical device include online platforms, social media, trade shows, conferences, webinars, publications, referrals, and testimonials. A medical equipment rental company can also help market the device.

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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Medical Practice Business Plan Template

Written by Dave Lavinsky

Medical Practice Business Plan

You’ve come to the right place to create your Medical Practice business plan.

We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Medical Practices.

Medical Practice Business Plan Example

Below is a template to help you create each section of your Medical Practice business plan.

Executive Summary

Business overview.

Fresno Medical is a new medical practice located in Fresno, California. Our goal is to provide affordable healthcare to individuals and families living in the area and surrounding communities. We offer general and preventative healthcare for all ages, including checkups, screening tests, and immunizations.

Our medical practitioners and supporting staff are well-trained and have a passion for improving the health and well-being of our clients. We serve our patients not just with our knowledge and skills but also with our hearts. We aim to help our patients experience the best healthcare possible while maintaining relationships that last a lifetime.

Service Offering

Fresno Medical practice will focus on providing primary care services to every family member, from infants to adults. Some of the general and primary care services we provide include:

• Immunizations: flu shots, COVID boosters, measles, mumps, polio, etc.
• Annual checkups
• Pediatrics: checkups, developmental screening, immunizations, etc.
• Health screenings: blood pressure, cholesterol, depression, diabetes, etc.
• General health counseling

Fresno Medical will work with local and national insurance companies to ensure that every patient can afford our services. If the patient’s insurance does not cover all of their medical costs, Fresno Medical will provide payment plan options so that they are not overwhelmed by their medical bills.

Customer Focus

Fresno Medical will primarily serve the community of Fresno, California. The community consists primarily of middle to lower income residents who need access to affordable medical care. Many of these residents are hesitant to go to hospitals or other medical facilities due to their costs. We will offer lower prices, flexible payment plans, and flexibility when working with insurance companies to accommodate this demographic.

Management Team

Fresno Medical is owned and operated by Jessica Wells, who has been working as a doctor at local hospitals for 15 years. Throughout her career, she has worked for hundreds of patients and families with all their general and preventative care needs. Though she has never run a medical practice herself, she has worked in the industry long enough to gain an in-depth knowledge of the business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Fresno Medical will also employ nurses, expert medical staff, and administrative assistants that are passionate about helping the local community.

Success Factors

Fresno Medical will be able to achieve success by offering the following competitive advantages:

• Location: Fresno Medical’s location is in a high-traffic area that is easily accessible to thousands of residents. It’s visible from the street with many people walking and driving to and from work on a daily basis.
• Patient-oriented service: Fresno Medical will have a staff that prioritizes the needs of the patients and educates them on the proper way to take care of themselves.
• Management: Jessica Wells has a genuine passion to help the community. Because of her previous experience and reputation in the medical community, she is fully equipped to open this practice.
• Relationships: Jessica Wells has developed strong connections with her patients and fellow staff throughout her career. Many patients have expressed interest in following Jessica to her new practice, and some former colleagues have shown interest in working for the clinic. Jessica also has relationships with medical equipment suppliers and insurance companies.

Financial Highlights

Fresno Medical is currently seeking $400,000 to launch. The capital will be used for funding capital expenditures, staffing, marketing expenses, and working capital.

The breakdown of the funding may be seen below:

• Clinic design/build: $100,000
• Medical supplies and equipment: $130,000
• Three months of overhead expenses (payroll, rent, utilities): $100,000
• Marketing and advertising: $50,000
• Working capital: $20,000

The following graph below outlines the pro forma financial projections for Fresno Medical.

Company Overview

Who is fresno medical.

Fresno Medical is a medical practice located in Fresno, California. We offer general and preventative health care for all ages. We offer immunizations, pediatrics, health screenings, and more. Our medical practitioners and supporting staff are well-trained to improve the health and well-being of our patients.

Fresno Medical is run and owned by Jessica Wells, who has been a doctor in the local medical community for 15 years. She has helped hundreds of patients and families with their general healthcare needs throughout her career. She also has gained knowledge and experience in the operations and marketing aspects of the medical business, which will prove indispensable for this private practice.

Fresno Medical’s History

After years of working with patients in hospital settings, Jessica Wells decided to establish a private practice. She wanted to develop a closer relationship with her patients, which was difficult to achieve while working in a large hospital. With this goal in mind, Jessica incorporated Fresno Medical as an S-corporation on March 15th, 2023.

Since its incorporation, the medical practice has achieved the following milestones:

• Found a clinic space and signed a Letter of Intent to lease it
• Developed the company’s name, logo, and website
• Hired a contractor for the office build-out
• Determined equipment and fixture requirements
• Began recruiting key employees with previous healthcare experience
• Drafted marketing campaigns to promote the practice

Fresno Medical’s Services

Fresno Medical will focus on providing primary care services to every family member, from infants to adults. The costs will depend upon the materials used, the physician’s time, and the amount designated for each procedure. Some of the general and primary care services we provide include:

• Immunizations: flu shots, measles, mumps, polio, etc.

Fresno Medical will maintain privacy according to HIPAA regulations. All patients will be welcome, including those without insurance. However, we expect most patients to utilize their insurance plans to pay their costs. The medical practice will work with local and national insurance companies to ensure that every family can afford our services. After billing insurance, Fresno Medical will provide flexible payment plan options so that no patient is overwhelmed by their medical bills.

Industry Analysis

Healthcare is a human right that everyone deserves access to. The medical industry will always be a necessity as it is the industry keeping society alive and well. Therefore, the medical industry is expected to continue to grow as the population grows. This is especially true for private practices, as there is a rising demand for small, patient-focused clinics that provide top-tier medical services.

Furthermore, the demand for private physicians has been on the rise. Hospitals have been low on rooms and beds the past few years, and nurses and doctors have been overworked. This has led to an increased demand for more medical professionals and private practices that can help lessen the load of larger hospitals.

Moreover, the pandemic instilled the importance of quality healthcare and practices in the general population. We expect that people all around the world will now put in more effort towards taking care of their health and getting the care and screenings they need.

According to Facts & Factors, the global private medical market is expected to experience a compound annual growth rate (CAGR) of 12.5% over the next five years. This is enormous growth that is rarely seen in other industries. Furthermore, there is a growing demand for more primary care physicians as the general population aims to prevent developing chronic and preventable diseases. According to Grand View Research, the primary care market will experience a CAGR of 3.2% over the next 10 years, which is also moderate growth.

With such a demand for more medical practices and a greater emphasis on general health, we believe that Fresno Medical is starting at the right time and will see great success.

Customer Analysis

Demographic profile of target market.

Fresno Medical will serve the community residents of Fresno, California, and its surrounding areas. The community of Fresno, California has thousands of middle-class individuals and families seeking an affordable medical practice to take care of all their health concerns.

The demographics of Fresno, California are as follows:

Customer Segmentation

The company will primarily target the following customer segments:

• Middle-class individuals
• Hospital patients

Competitive Analysis

Direct and indirect competitors.

Fresno Medical will face competition from other companies with similar business profiles. A description of each competitor company is below.

City Metro Hospital

Founded in 1968, City Metro Hospital is one of the most popular hospitals in the area. Thousands of residents get all their primary care and emergency care needs taken care of with City Metro. It provides almost every service you can think of and enlists the help of thousands of doctors, nurses, and other expert medical professionals.

Though City Metro Hospital will continue to thrive, it does not foster an environment designed for long-lasting relationships. Since the pandemic, the hospital has been overwhelmed with patients and a staff shortage. This has led to doctors seeing thousands of patients and a tremendous increase in wait times. Fresno Medical will offer a more intimate setting where patients and doctors can create a long-lasting relationship that spans decades.

Quality Doctors

Quality Doctors is a private medical practice that provides highly personalized medical care. Quality Doctors includes a team of dedicated healthcare professionals with dual residency in emergency medicine and internal medicine. The practice offers same-day/next-day appointments, telemedicine, office visits, and home visits. Services offered by Quality Doctors include primary care, urgent care, and virtual visits.

Like City Metro Hospital, Quality Doctors is a large care system that cares for thousands of patients. This means that patients also do not get a close relationship with their doctor, which many crave. Furthermore, Quality Doctors has put much of its money and services toward emergency care in recent years and reduced its primary care services. Patients who want a lasting relationship with a primary care doctor will feel more welcome with Fresno Medical.

Johnson Community Care

Established in 1949, Johnson Community Care is a private medical practice with multiple locations. Patients all around the state can receive care at any location near them. Each site provides primary care services, emergency care, pharmacy services, and lab testing. Instead of heading to multiple locations to get all of these services, patients can get all their healthcare needs taken care of in one building.

Though Johnson is a highly successful medical practice, its major downfall is that it only provides services to those with its unique insurance plan. Therefore, anyone who has insurance through another company or plans provided by their employer cannot receive care at Johnson without paying out-of-network prices. Fresno Medical will partner with many insurance companies and provide flexible payment plans to help as many patients as possible.

Competitive Advantage

Fresno Medical enjoys several advantages over its competitors. These advantages include:

• Relationships: Jessica Wells has developed strong connections with her patients and fellow staff during her career. Many patients have expressed interest in following Jessica to her new practice, and some former colleagues have shown interest in working for the clinic. Jessica also has relationships with medical equipment suppliers and insurance companies.

Marketing Plan

Brand & value proposition.

The Fresno Medical brand will focus on the company’s unique value proposition:

• Client-focused healthcare services, where the company’s interests are aligned with the customer
• Service built on long-term relationships
• Big-hospital expertise in a small-clinic environment
• Moderate pricing for all preventative and general health services

Promotions Strategy

The promotions strategy for Fresno Medical is as follows:

Fresno Medical understands that the best promotion comes from satisfied patients. The clinic will encourage its patients to refer their friends and family by providing healthcare benefits for every new client produced. This strategy will increase in effectiveness after the business has already been established.

Social Media

We will maintain a social media presence to attract local clients looking for a new doctor or medical practice. We will post information about our team, services, and general health tips for better wellness. To create a genuine connection with our patients, we will also use social media to engage with them and answer any questions they may have about our practice.

Fresno Medical will have an informative and attractive website featuring all its services and referrals from other satisfied patients. The website will be highly informative and be designed in a way that is friendly and eye-catching.  

Fresno Medical will invest in a high SEO presence so that the clinic is listed at the top of the Google or Bing search engine when a potential patient is researching private medical practices in Fresno, California.

Fresno Medical’s pricing will be significantly lower than big hospitals. We will partner with as many insurance companies as possible to ensure that our patients’ medical care is covered. For services not fully covered by insurance, we offer a flexible payment program so patients are not overwhelmed by their medical bills.

Operations Plan

The following will be the operations plan for Fresno Medical.

Operation Functions:

• Jessica Wells will operate as the CEO of Fresno Medical. She will run all the general operations and executive functions of the company. She will also provide basic medical care for patients until she can hire a full medical staff.
• Jessica is joined by Mindy Keller, who will serve as the Marketing Manager and run all of the marketing and advertising efforts.
• Jessica is also joined by Rhonda Smith, who will work as the Receptionist of the clinic and the Administrative Assistant for the company.
• Jessica is also joined by Cindy Nguyen who will be the company’s Head Nurse. She will manage and train incoming nurses and provide medical treatment to patients.
• Jessica will continue to hire a team of medical staff to treat the medical practice’s growing patient list. The team will consist of doctors, nurses, physicians, and other necessary medical staff.

Milestones:

Fresno Medical expects to achieve the following milestones in the following six months:

• 4/202X Finalize lease agreement
• 5/202X Design and build out Fresno Medical
• 6/202X Hire and train initial staff
• 7/202X Kickoff of promotional campaign
• 8/202X Launch Fresno Medical
• 9/202X Reach break-even

Fresno Medical is owned and operated by Jessica Wells, who has been working as a doctor at local hospitals for 15 years. Throughout her career, she has worked with hundreds of patients and families and taken care of all their general and preventative care needs. Though she has never run a private medical practice herself, she has worked in the industry long enough to gain an in-depth knowledge of the business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

The medical practice will also employ nurses, expert medical staff, and administrative assistants that are passionate about helping the local community.

Financial Plan

Key revenue & costs.

The revenues for the medical practice will come from the fees it will charge the patients and their insurance for the health care services it provides.

The cost drivers for the company will include the payroll of the staff, lease on the office building, medical supplies and equipment, and marketing costs.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and to pay off the startup business loan.

• Year 4: 100
• Year 5: 125
• Annual lease costs: $40,000

Financial Projections

Income statement, balance sheet, cash flow statement, medical practice business plan faqs, what is a medical practice business plan.

A medical practice business plan is a plan to start and/or grow your medical practice business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Medical Practice business plan using our Medical Practice Business Plan Template here .

What are the Main Types of Medical Practices?

There are a number of different kinds of medical practices , some examples include: Group medical practice, Private medical practice, and Hospital-based medical practice.

How Do You Get Funding for Your Medical Practice Business Plan?

Medical Practice businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

A well-crafted medical practice business plan is key to securing any type of funding.

What are the Steps To Start a Medical Practice Business?

Starting a medical practice business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Medical Practice Business Plan - The first step in starting a business is to create a detailed medical practice business plan that outlines all aspects of the venture. This should include market research on the medical industry and potential target market size, information the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your medical practice business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your medical practice business is in compliance with local laws.

3. Register Your Medical Practice Business - Once you have chosen a legal structure, the next step is to register your medical practice business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your medical practice business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Medical Practice Equipment & Supplies - In order to start your medical practice business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your medical practice business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful medical practice business:

• How to Open a Medical Practice

Medical Business Plan

You cannot start and run a successful medical business without writing and implementing a comprehensive business plan.   A business plan gives you a complete framework for researching and analyzing the market, identifying possible opportunities, financing the project, and scaling it all together. Here are some of the best examples of medical business plans worth having a look.

Medical Practice Business Plan Template

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Size: A4, US

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Best Medical Business Plan Examples & Templates

 medical business plan example.

Size: 8.86 MB

If writing a medical business plan were easy, every business aspirant would do it with ease. To be clear, a comprehensive business plan for a new healthcare facility takes time to put together. But, what if you are green in this in the first place? The best thing to do is to look at a sample plan to get a clear picture of what a comprehensive strategy for a health facility looks like. This PDF file is a unique sample of a well-written business strategy for a healthcare facility. The plan covers everything you need to know about establishing a healthcare center, from business objectives and guiding principles to demographic analysis and their access to care.

Printable Medical Business Plan

Size: 780 KB

It doesn’t make sense to start a medical business without a strategy in place. You need to identify your audience, sturdy the market, conduct a SWOT analysis , and develop a marketing technique. This calls for a comprehensive business plan and here is an example that you can download and use as a guide to writing your own strategy. This sample will help you to understand a few things. First, you’ll learn how to write a clear summary of the proposed medical business. Second, you will see what a detailed business description looks like. Third, you will dive deep into learning and understanding the competition. Then, you will learn about financial strategy, which is important for starting and running a healthcare business at scale.

Free Medical Business Plan Example

Size: 88 KB

It is important to understand that a business plan does not have to be complicated. It doesn’t have to be dozens or hundreds of pages either. In fact, you can set up and run a successful medical business with a very simple business plan . This PDF document is an example of a very simple business strategy, which a clear indication that even lean business plans can help you take a step in the right direction. This plan covers a number of sections, including an executive summary for the proposed business, proposed services, market evaluation, and marketing approach. Click the link above to download the PDF file.

Medical Practice Business Plan Example

Size: 237 KB

This PDF document is one of the most comprehensive medical business plans that you can read to understand what a professionally written business strategy looks likes. The 37-page file features a unique outline, which makes the entire document easy to scan. This file has a lot of information. From the executive summary and market sturdy to SWOT and market analysis , there is quite a lot to learn. The author uses a simple language throughout the document. So, whether you are green to writing a business proposal or you just need a simple example for reference, this is a good template to download.

Medical Startup Business Plan Example

Size: 219 KB

You cannot start and run a successful business without a plan. In fact, many businesses that begin to operate without a strategy often close within the first six months. This happens across various industries, even in medical business. Now that you have made up your mind to start a medical business, you first need to write a business plan. If you have never written one before, don’t worry. You can just download this PDF file, read the entire strategy example, and then use the same knowledge that you pick from it to write a comprehensive business plan of your own. Click the link above to download this template.

 Medical Business Plan Example for Clinic

Size: 262 KB

Ask every serious entrepreneur what it takes to start and run a successful business and they’ll tell you that the first thing you need is a business plan. This tells you that a successful business depends on a comprehensive strategy . Now that you have made up your mind that it is time for you and your stakeholders to start a clinic in your locale, it’s important to write a business plan before investing money in the project. The plan will enable you to determine whether the business is feasible to pursue. By finding, connecting with, and studying the target market, it becomes easy to understand your business even before starting it. Download this medical plan for the clinic to learn more.

 Private Hospital Business Plan Example

Size: 2.15 MB

Even if you have enough funding to start a private hospital, you’ll need to do in-depth research and then come up with a solid business plan that will help you set up the enterprise. At the end of the day, your goal is to run a successful business . This is something you can’t do if you start with a proper strategy. Remember, the success of your private medical startup will depend on the structure of the plan. The success of the upcoming business will depend on the structure of the plan. In other words, a business plan is a must-have.

 Simple Medical Business Plan Example

Size: 141 KB

You already know that it is difficult to run a successful business without a plan. So, if you want to set up a new medical facility in your area, first start by writing a business plan for the foreseen startup. The PDF file above is a unique example of a business plan that you can use for reference. This guide is important because it focuses on the most important elements that make up a comprehensive business plan.

 Comprehensive Business Plan for Medical Facility

You can use this sample template to write a comprehensive business plan for a medical facility. Some of the highlights include identifying challenges and determining their respective opportunities. This gives you a clear understanding of the market that you would like to target so that you can align your medical services to their needs once you start operation.

 Short Medical Business Plan Example

Size: 264 KB

If you are the kind of a medical business enthusiast who prefers to write a short business plan, this example is suitable for you. The content of the file includes an executive summary, market analysis, business growth, marketing strategy, and financial projection.

Text prompt

• Instructive
• Professional

Create a study plan for final exams in high school

Develop a project timeline for a middle school science fair.

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• Physician Fee Schedule
• Local Coverage Determination
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ASP Billing Resources

• JW - JZ Modifier FAQs (PDF) : CMS requires providers and suppliers to report the JW modifier on all claims that bill for drugs and biologicals separately payable under Part B with unused and discarded amounts from single-dose containers or single-use packages. If there’s no wastage from single-dose containers or single-use packages, report the claim with the JZ modifier.
• JW Modifier and JZ Modifier Policy HCPCS Codes (PDF) (Updated 03/07/2024) :  A non-exhaustive list of specific billing and payment codes to which only single-dose containers are assigned, and thus may require use of the JW or JZ modifiers depending on the setting of use.
• Medicare Claims Processing Manual, Pub. 100-04, Chapter 17 : View for exceptions including radiopharmaceuticals, biologicals paid using average wholesale price (AWP), and drugs on the NOC file.
• HCPCS Quarterly Update : The official update of the HCPCS code system is available as a public use file. Effective date is noted in each ZIP file.

Blood Clotting Factor Furnishing Fee:

The Medicare Modernization Act section 303(e)(1) added section 1842(o)(5)(C) of the Social Security Act which requires that, beginning January 1, 2005, a furnishing fee will be paid for items and services associated with clotting factor. 

The Center for Medicare and Medicaid Services (CMS) includes the clotting factor furnishing fee in the published national payment limits for clotting factor billing codes. When the national payment limit for a clotting factor is not included on the Average Sales Price (ASP) Medicare Part B Drug Pricing File or the Not Otherwise Classified (NOC) Pricing File, the contractor must make payment for the clotting factor as well as make payment for the furnishing fee

CMS guidance requires physicians and other providers to bill using the appropriate HCPCS or CPT code and to accurately report the units of service. Physicians and other providers should ensure that the units billed do not exceed the maximum number of units per day based on the code descriptor, reporting instructions associated with the code, and/or other CMS local or national policy.

The prices below reflect the Clotting Factor Furnishing Fee per unit effective January 1st of each year.

• CY 2005 - $0.140 per unit
• CY 2006 - $0.146 per unit
• CY 2007 - $0.152 per unit
• CY 2008 - $0.158 per unit
• CY 2009 - $0.164 per unit
• CY 2010 - $0.170 per unit
• CY 2011 - $0.176 per unit
• CY 2012 - $0.181 per unit
• CY 2013 - $0.188 per unit
• CY 2014 - $0.192 per unit
• CY 2015 - $0.197 per unit
• CY 2016 - $0.202 per unit
• CY 2017 - $0.209 per unit
• CY 2018 - $0.215 per unit
• CY 2019 - $0.220 per unit
• CY 2020 - $0.226 per unit
• CY 2021 - $0.238 per unit
• CY 2022 - $0.239 per unit
• CY 2023 - $0.250 per unit

2023 -  MM12860 (PDF)

2022 -  MM12420 (PDF)

2021 -  MM11932 (PDF)

2020 -  MM11435 (PDF)

2019 -  MM10918 (PDF)   

2018 -  MM10254 (PDF)   

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