How Much Does It Cost to Start a Drug Testing Business?

According to industry analysis, you need between $75,000 to $250,000 to start a drug testing business in the United States.

Aside from the need for substantial startup cash, you will also need good planning to ensure that your business has a good chance at success.

Drug testing is considered an absolute form of vetting employees and it is often legally required by both employers and regulatory agencies.

This growing demand for drug testing services has made now one of the best times to start this business. However, from buying or acquiring the right laboratory equipment to advertising campaigns and hiring staff, the startup costs for a drug testing business can be quite exorbitant.

Factors That Determine the Cost of Opening a Drug Testing Business

1. Company Registration Fees

Most often, these will encompass fees paid to obtain the requisite business license as well as other fees. However, it is important to note that the exact amount you spend to legally register and set up your business will vary depending on things like:

The size of the business, the sort of business structure you intend to register, as well as your location in the United States. Nevertheless, below are common fees that come with registering a drug testing business in the United States:

• Business License Fees: $50 to $500.
• Employer Identification Number (EIN) Fees: $25.
• Name Registration Fees: $25 to $200.
• Initial State Fees: $50 to $2,000
• Fictitious Name/Doing Business As (DBA) Fees: $15 to $100.
• Reinstatement Fees: $50 to $500.

2. Facilities & Infrastructure

When starting this business, it is essential you anticipate the expenses that come with acquiring or renting a physical space to house the business, obtaining the requisite drug testing equipment and supplies, recruiting employees, and/or constructing any related infrastructure required such as bathrooms and/or waiting areas.

Regardless of how much you budget for renting your facility, it is important you consider its location because it will make or destroy your business.

3. Laboratory Equipment

According to reports, these pieces of advanced laboratory equipment can take up as much as $50,000 or even each, depending on how powerful and advanced they are.

Aside from those advanced laboratory equipment, you also need to take into account the expenses that come with acquiring power sources, pumps, and other ancillary equipment and instruments.

You will also need general scientific equipment, such as microscopes, centrifuges, autoclaves, reagents, and other consumables used in experiments.

4. Inventory & Supplies

These businesses also have to splurge on necessary inventory and supplies to carry out successful and accurate testing. Most often, this would include drug testing kits, sample collection materials, laboratory supplies, as well as any other materials you might require.

Note that the cost of these supplies will often depend on the sort of tests you will be carrying out at your facility. For instance, drug testing businesses that offer Oral Fluid testing will need to get collection kits, collection cups, transfer adapters, and different analyzers.

If you intend to offer on-site testing services, you will need things like test cups, gloves, pipette tips, swabs and swab holders, and stability cards.

5. Staffing & Training

In this line of business and also depending on the size of your business, you will want to hire a qualified chemist or lab technician. Keep in mind that having the right personnel within a drug testing business is critical to the success of your business.

You will most definitely need testers, collection staff, and laboratory personnel. Ensure that your staff obtains the right training within each function, coupled with familiarization with the requisite hardware and software products.

6. Technology Acquisition & Services

Note that the software or technology you need will depend on the size of your business as well as your plans and capacity. Some of the technologies you will need include;

• Hardware & Software: Such as barcode scanners, specialized printers, and more
• Laboratory Management Software & Services: Unique laboratory management software that offers features such as specimen tracking, regulatory compliance, reporting, and more.
• LIMS Integrations: Laboratory information management systems (LIMS) that guarantee advanced workflow management, specimen tracking, patient data archiving, and more.

7. Advertising & Promotion

You need to invest in an effective advertising and promotion campaign. Keep in mind that the right advertising and promotion campaign for a drug testing business will involve a wide range of activities, such as:

Developing a website, attending local events, sponsoring local teams and organizations, creating promotional materials such as flyers and handouts, and investing in digital marketing. However, note that all these tend to cost money and can genuinely take out a chunk of your startup capital.

8. Legal & Professional Services

You might need to consult or leverage the expertise of certain professionals when looking to establish your business. The exact amount you spend on legal and professional services will vary depending on your business structure as well as your location in the country. You might as well need accounting, legal advice, and consulting, coupled with finance and banking services.