With about $350,000 or more, you can start a small-scale to medium-scale durable medical equipment business. Note that there are key factors that determine the total budget of starting a DME company.
A DME (Durable Medical Equipment) company is a business that specializes in providing medical equipment and supplies intended for long-term use by patients in their homes or other care facilities.
DME companies typically offer a wide range of products such as wheelchairs, hospital beds, oxygen equipment, mobility aids, diabetic supplies, and other assistive devices.
DME (Durable Medical Equipment) companies often work closely with healthcare providers, insurance companies, and government agencies to coordinate the delivery and billing of DME products and services.
So, if you are looking to start a DME (Durable Medical Equipment) company, you should first acquire the required experience, and exposure, before drawing an estimate of what it will cost you to start the business.
8 Factors That Influence the Cost of Opening a DME Company
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Your Choice of Location
The location of a business will determine how much you will spend on rent or lease, on acquiring licenses and permits, on utilities, and every other cost associated with locations.
For example, if you are looking to start a DME (Durable Medical Equipment) company, you should target a location or city that has clusters of hospitals, medical centers, pharmacies, dental clinics, eye clinics, healthcare providers, insurance companies, government agencies et al.
In addition to that, you should also try to make a balance between these facilities and seaports, airports, or even DME manufacturing companies. With that, it will be easier to cut down some costs of starting the business.
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The Cost of Licensing and Permits
You cannot legally start a DME company in the United States of America, and in most countries of the world without first obtaining the specific licenses and permits needed to start the business.
You may have to apply for licenses and permits such as business license, Federal Employer Identification Number (EIN), Durable Medical Equipment Supplier License, Medicare Supplier Number, Medicaid Provider Number,
National Provider Identifier (NPI) Number, Accreditation from Accreditation Commission for Health Care (ACHC) or other accrediting bodies, State-specific DME Permit or Registration,
Controlled Substance Registration (if distributing certain medical devices), Tax Identification Number (TIN) or Employer Identification Number (EIN), and Occupational Safety and Health Administration (OSHA) Permit.
In case you are not sure of the required licensing permits required to start a DME (Durable Medical Equipment) company in your city, then you should check with your local government or regulatory agencies.
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The Cost of Insurance Policy Cover
DME companies typically require vehicle insurance, liability insurance, and workers’ compensation insurance to protect against potential risks and liabilities that the business is subjected to.
Note that the cost of insurance policy coverage will depend on factors such as the size of your business and the coverage limits you choose.
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The Cost of Initial Supplies
As expected, you should make provision for equipment and supplies such as: Wheelchairs, Hospital beds, Walkers, Canes, Crutches, Oxygen equipment, Nebulizers,
CPAP machines, Commodes, Patient lifts, Blood pressure monitors, Thermometers, Orthopedic braces, Mobility scooters, and Bathroom safety equipment et al.
The amount you are to spend on equipment and supplies will depend on the size of your business, and the medical supply projects you are handling.
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The Cost of Purchasing Medical Supply Trucks and Vans
Depending on the size and location of your DME (Durable Medical Equipment) company, you may need different sizes and types of medical supply trucks and delivery vans.
It is important to note that the cost of a suitable medical supply truck and delivery vans will depend on your preferences and also your decision to settle for outright purchase or lease.
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The Cost of Marketing and Advertising the DME (Durable Medical Equipment) Company
Promoting your DME (Durable Medical Equipment) company through marketing and advertising efforts is essential to attract clients.
If you want to win a fair share of the available market share in your location, then you must be ready to invest a significant amount to promote your DME company.
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The Cost of Recruiting, Purchasing, and Customizing Uniforms for Your Employees
You should make plans to recruit a general manager, sales manager, inventory manager, customer service representative, warehouse supervisor, accountant or financial manager, procurement specialist, sales boys and girls, front desk/payment attendants, and security personnel.
These employees are expected to have different uniforms and all these uniforms will cost you money which is why it must be part of your budget if you are looking towards opening a DME (Durable Medical Equipment) company.
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Your Operational Expenses
For a DME (Durable Medical Equipment) company, you should make plans for equipment maintenance and repair, depreciation of equipment and assets, transportation and delivery expenses, fueling,
Professional fees (accounting, legal, consulting), interest on loans or credit lines, taxes (income, property, sales, etc.), internet and phone services, software subscriptions and it supports, cleaning and janitorial services,
Security services and systems, travel and entertainment expenses (if applicable), utilities, training and development expenses, research and development costs (if applicable), lease or loan payments for vehicles,
Advertising and promotional materials, donations and sponsorships, and a contingency fund for unexpected expenses, and any additional employees you may hire when you have a project that requires additional workforce.