How to Start a Medical Transportation Business

Here are the most essential aspects to consider when starting a medical transportation business:

1. Permits — You will need the necessary permits and licenses required by local, state, and federal authorities to operate a medical transportation business. This may include a business license, commercial vehicle license, and specific permits for medical transport.
2. Vehicles — Invest in a fleet of reliable and well-maintained vehicles that can accommodate the needs of your patients, such as wheelchair-accessible vans and ambulances. 
3. Equipment — Equip your vehicles with necessary medical and safety equipment, such as wheelchair lifts, oxygen tanks, and communication devices.
4. Services — Decide on the range of services you will offer, such as non-emergency medical transportation, wheelchair transportation, stretcher transportation, and transportation for dialysis patients. Consider offering specialized services like long-distance medical transport or transport for patients with specific medical conditions.
5. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
6. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
7. Hire staff — Hire experienced and compassionate staff, including drivers and administrative personnel. Conduct thorough background checks and verify credentials.
8. Partnerships — Build relationships with healthcare providers, hospitals, clinics, and nursing homes to secure contracts and establish long-term partnerships.

Step 1: Decide if the Business Is Right for You

Pros and cons

Just to clarify, the business being discussed is a non-emergency medical transportation (NEMT) business. An emergency medical transport business, or ambulance, is an entirely different service that requires significant medical training.   

Starting a medical transportation business has pros and cons to consider before deciding if it’s right for you. 

Medical transportation industry trends

Industry size and growth

• Industry size and past growth – The global non-emergency medical transport industry is worth nearly $8.1 billion in 2022 after expanding 7% the previous year.((https://www.researchandmarkets.com/reports/4995103/non-emergency-medical-transportation-market)) 
• Growth forecast – The global non-emergency medical transportation industry is projected to grow 40% by 2028.

Trends and challenges

Trends in the medical transportation industry include:

• Medical transport businesses are expanding their services to include prescription deliveries, services for long-term care facilities, and transport to COVID testing sites. 
• Aging populations and the increasing number of medical needs that can be met with outpatient services are driving greater demand for NEMT.

Challenges in the medical transportation industry include:

• The rising adoption of telehealth — medical services delivered online — is decreasing the need for transportation to health care providers.
• Increasing fuel costs are eroding the profits of medical transportation businesses. 

Demand hotspots

• Most popular states – The most popular states for patient transportation drivers are Maine, Connecticut, and Rhode Island.((https://www.zippia.com/patient-transportation-driver-jobs/best-states/)) 
• Least popular states – The least popular states for patient transportation drivers are Utah, Nebraska, and Colorado. 

What kind of people work in medical transportation?

• Gender – 25.8% of patient transportation drivers are female, while 74.2% are male.((https://www.zippia.com/patient-transportation-driver-jobs/demographics/))
• Average level of education – The average patient transportation driver is high school educated.
• Average age – The average patient transportation driver in the US is 48 years old.

How much does it cost to start a medical transportation business?

Startup costs for a medical transport business range from $12,000 to $25,000. Costs include your first wheelchair-accessible van, certifications and licensing, and a website.

Each state has different certification and licensing requirements for medical transportation companies and drivers. At the very least, you should have first aid and CPR training. Check with your state for requirements. 

You’ll need a handful of items to successfully launch your medical transport business, including: 

• Wheelchair accessible vans or other vehicles
• First aid kits

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 - $200	$175
Business licenses and permits	$100 - $300	$200
Insurance	$100-$300	$200
Business cards and brochures	$200 - $300	$250
Website setup	$1,000 - $3,000	$2,000
Wheelchair accessble van	$10,000 - $20,000	$15,000
Certifications and licensing	$300 - $500	$400
First aid gear	$100 - $200	$150
Total	$11,950 - $24,800	$18,375

How much can you earn from a medical transportation business?

Base rates are about $40 per trip plus $5 per mile for medical transport, so for each trip you might earn $75. You’ll probably get your business by contracting with medical transportation brokers who work with insurance companies regarding payment, and they will take a commission. After that and fuel costs, your profit margin when you’re working on your own should be about 80%. 

In your first year or two, you might do 20 trips per week, bringing in $78,000 in annual revenue. This would mean $62,000 in profit, assuming that 80% margin. As you add to your customer base, there might be demand for 70 trips per week. At this stage, you’d add more vans and hire staff, reducing your profit margin to around 30%. With annual revenue of $273,000, you’d make a handsome profit of $82,000.

What barriers to entry are there?

There are a few barriers to entry for a medical transportation business. Your biggest challenges will be:

• The cost of a wheelchair accessible vehicle
• Meeting the licensing and certification requirements of your state

Step 2: Hone Your Idea

Now that you know what’s involved in starting a medical transportation business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research medical transportation businesses in your area and online to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing an NEMT business that works with a certain long-term care facility, or a Medicaid beneficiary NEMT service. 

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your services

You can transport people to medical appointments, to and from long-term care, or to other health care or medical facilities. Additionally, consider providing prescription delivery services to meet the needs of patients who cannot easily travel.

How much should you charge for medical transportation?

Base rates are about $40 per trip plus $5 per mile for medical transportation. After broker commissions and fuel costs, you should aim for a profit margin of 80%. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be transportation brokers, senior housing and individuals who need services. You can connect with brokers and residences on LinkedIn or find them on Google or Yelp and call them directly. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Medical Taxi Business Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “NEMT service” or “medical transportation”, boosts SEO
• Name should allow for expansion, for ex: “LifeLine Medical Transit” over “CancerCabs Transportation”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Medical Transportation Business Plan

Here are the key components of a business plan:

• Executive Summary: A brief summary of your medical transportation business plan, highlighting its key aspects and objectives.
• Business Overview: An introduction to your medical transportation business, including its mission, vision, and the problem it aims to address.
• Product and Services: Details about the specific medical transportation services you will offer, such as ambulance transport, non-emergency medical transport, and any additional services.
• Market Analysis: An examination of the medical transportation market, including trends, target demographics, and potential growth opportunities.
• Competitive Analysis: An evaluation of your competitors in the medical transportation industry, assessing their strengths and weaknesses.
• Sales and Marketing: Your strategies for promoting and selling your medical transportation services, including advertising and customer acquisition plans.
• Management Team: An overview of the individuals responsible for running the business, their qualifications, and roles.
• Operations Plan: A description of how your medical transportation business will operate, covering logistics, fleet management, and regulatory compliance.
• Financial Plan: Financial projections, budgets, and funding requirements for your medical transportation business.
• Appendix: Supporting documents and additional information, such as resumes, market research data, and legal documents.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to medical transportation businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your medical transportation business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a medical transportation business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Medical Transportation Business Licenses and Permits

Starting a medical transportation business requires obtaining a number of licenses and permits from local, state, and federal governments.

Each state has different certification and licensing requirements for medical transportation companies and drivers. At the very least, you should have first aid and CPR training. Check with your state for requirements. 

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your medical transportation business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as Route Genie, TripSpark, or MOBISOFT, to manage your dispatching, scheduling, and billing. 

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

• Professional Branding — Establish a trustworthy and caring brand image with a well-designed logo, branded vehicles, and professional uniforms for staff.
• Website and SEO — Develop a detailed website that outlines your services and compliance with health standards, optimized for local SEO to target searches related to medical transportation.
• Social Media Engagement — Use LinkedIn for professional networking and Facebook to share patient testimonials and updates, enhancing community trust and engagement.
• Content Marketing — Maintain a blog focused on the significance of reliable medical transportation and patient stories, and send out regular newsletters with updates on vehicles and service expansions.
• Video Content — Produce videos that highlight the features of your vehicles and the careful handling of patient transport, demonstrating your commitment to safety and comfort.
• Industry Engagement — Participate in healthcare expos and medical conferences to connect with potential clients and stay abreast of industry trends.
• Training and Demonstrations — Provide demonstrations to healthcare providers to showcase your transportation capabilities and service quality.
• Healthcare Partnerships — Build long-term partnerships with local healthcare facilities to become their preferred provider for medical transportation.
• Customer Loyalty Programs — Offer loyalty incentives such as priority scheduling and discounts for frequent users to foster long-term relationships.
• Feedback Programs — Implement a feedback system to continually improve your services based on client insights and needs.
• Targeted B2B Advertising — Advertise in medical journals and online healthcare platforms to reach healthcare facilities, and use vehicle branding effectively to promote your services while on the move.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your medical transportation business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your medical transportation business could be:

• Reliable, caring medical transport — your parents deserve the best 
• Certified medical transportation for your long-term care patients
• Medical transportation and prescription delivery you can count on

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a medical transportation business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in medical transportation for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in medical transportation. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a medical transportation business include:

• Dispatcher – dispatch drivers for pickups and deliveries
• Drivers – drive patients to appointments
• General Manager – scheduling, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Medical Transportation Business – Start Making Money!

The need for medical transportation is on the rise, and NEMT businesses are thus in high demand. If you want to provide your community with an essential service, a medical transport business offers that and good potential profits! 

Now that you know what’s involved, it’s time to put your helper hat on and launch your successful medical transportation business.

Q&A Section

Can a medical transportation business be profitable?

Yes, a medical transportation business can be profitable if you provide quality services. Of course, you’ll also be helping people in your community.

How can I differentiate my medical transportation business from competitors in the market?

To differentiate your medical transportation business from competitors, focus on providing exceptional reliability, efficiency, and safety. Invest in well-maintained vehicles equipped with advanced medical equipment and technology. Offer specialized services like non-emergency medical transportation or critical care transportation.

How can I build relationships with healthcare providers and institutions to secure contracts and sales?

Building relationships with healthcare providers and institutions requires proactive networking and relationship-building strategies. Attend healthcare industry events, conferences, and seminars to meet key decision-makers. Reach out to healthcare providers directly, offering information about your services, highlighting your track record, and showcasing any relevant certifications or accreditations.

What types of vehicles and equipment are necessary for a medical transportation business?

The types of vehicles and equipment necessary for a medical transportation business depend on the services you offer. Typically, you would need various types of vehicles such as ambulances, wheelchair vans, or medical sedans. The vehicles should be equipped with basic medical supplies, secure patient transport systems, communication devices, and appropriate safety features.

How can I manage the logistics of long-distance medical transportation?

Managing the logistics of long-distance medical transportation requires careful planning and coordination. Ensure compliance with regulatory requirements, such as obtaining necessary permits and licenses. Develop a robust scheduling system to optimize routes and minimize travel time.