August 24, 2022

Launching Your Medical Start-Up

A knowledge-based medical startup is a medical company that provides healthcare and medical services with the use of technological advances, innovative research, and the latest in diagnostic equipment. It should prioritize the user experience and needs to match the target audience. It should also focus on the current trends and patterns in the industry.

Launching a med-tech startup takes a considerable amount of time, and an entrepreneur should have knowledge of how to manage the company as well as develop and implement innovative products. Here are some tips and resources from The Southern Medical Association to get you started on the right path.

Getting Funding
Most startups require funding and if you don’t have the resources yourself to invest in your start-up, you can get help from a variety of sources. Angel investors are people with the ability to help you finance and may be willing since they have a personal interest in the field you’re pursuing.

 Additionally, universities or large companies, hoping to attract technology partners, often offer technology contests with sometimes significant payouts in cash and in-kind services. Last but not least, local governments sometimes take advantage of tax breaks or other incentives to draw entrepreneurs into development zones.

Business Considerations
Med-tech start-ups are subject to the same rules when it comes to best business practices as any other new business. Many of the steps are the same no matter the entrepreneurial enterprise, such as:

  • A business plan. That’s something every business should begin with. It’s a blueprint for exactly how you’ll build your company. It will include a description of the company, market analysis, competitors, products and services provided, sales strategy, financial projections, and more. Using a business plan template can benefit you by letting you understand the steps to follow and making sure you don’t miss any steps.
  • A business structure. This includes sole proprietorship, partner, LLC, and corporation. Many new start-ups choose to structure as an LLC since it keeps your personal and business finances separate. It also requires less paperwork, lowers the tax burden, and is easy to do yourself and thus saving hefty lawyer fees.
  • Marketing. This is a critical part of any business start-up. You can’t sell if you don’t have a buyer. For medical start-ups, your consumer or your client will be another business. The focus should be on how different you are from your competitor, the clinical outcomes you expect them to receive, and the financial benefit for your client in using your service/product.
  • Employees.  It’s important to have an employee payroll system in place before you begin to hire. Setting up a payroll system requires that you determine a regular pay schedule, ask new hires to fill out W-4s to determine withholdings, manage records for tax reporting and keep all of your payroll information organized. Having a password-protected website to view and print pay stubs, review payroll history and keep track of sick, personal and vacation days provides a better service for your employees and will make it easier for them to track their own finances.

 

Final Tips
If you want to give yourself an edge over the competition, you might want to check out one of the online courses for medical coding. The program is short – less than 30 hours – and could give you additional knowledge of and insights into the medical field.

Last but not least, you need to familiarize yourself with HIPAA. According to HIPAA Journal, it lists three specifications for technology to comply with HIPAA. Those include: 

  • All Protected Health Information (PHI) must be encrypted at rest and in transit.
  • Each medical professional authorized to access and communicate PHI must have a “Unique User Identifier” so that their use of PHI can be monitored.
  • The use of any technology to comply with HIPAA must have an automatic log-off to prevent unauthorized access to PHI when a mobile device is left unattended (this also applies to desktop computers).

Medical startups are rapidly emerging in the global entrepreneur community. You can be a part of this exciting and fast-growing industry as long as you give it time and understand it will take some hard work and time for it to pay off, but the odds are definitely in your favor.

The Southern Medical Association has been uniting the family of medicine through education since 1906. If you have any questions, please call (800) 423-4992.

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