Medical Laboratory Business Plan

Medical Laboratory Business Plan for starting your own research center

Medical laboratories have always been in demand due to the continuous rise in population. If you are a person who wants to earn recognition in the medical and healthcare business, you must go for opening a medical laboratory. It will not only allow you to earn large sums of money but also to help the elderly and ill in diagnosing the problems with them.

To give an idea of what will be the financial, human resource and other requirements for starting a medical lab, we are providing here a business plan for a medical laboratory. This sample business plan written for the startup, MediChecks will cover all the aspects about how to start a medical laboratory.

Executive Summary

2.1 The Business

MediChecks will be a licensed and certified medical laboratory in Houston. The laboratory owned by Vanessa Smith will conduct wellness checkups, testing for various health conditions, and vaccinations.

If you are wondering how to start your own medical laboratory then keep reading this business plan. You can also get a guide on starting a medical laboratory business pdf format from this site.

2.2 Management of Medical Laboratory

Before you start a laboratory business you must ensure that you possess an excellent management structure.

MediChecks will be hiring a procurement manager, HR manager, and general manager for ensuring the long-term smooth running of the business. The managers will be provided a workforce for performing their respective tasks such as acquiring medical and chemical equipment, hiring the best-suited employees, and administering day-to-day cases.

2.3 Customers of Medical Laboratory

Though our customers will comprise of people of all ages, we expect the elderly to visit us more. Considering that senior people need attention, care, and consideration, we aim at making special arrangements for them.

2.4 Business Target

Our target is to become the most renowned medical lab facility in our hometown. Moreover, we aim at building long-lasting relations with our customers and earning profits by serving them.

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Company Summary

3.1 Company Owner

Vanessa Smith is a graduate of Baylor College of Medicine located in Houston. She has secured a degree in MBBS and has worked at Kindred Hospital Houston Medical Center for two years.

During the years of her service as a doctor, Smith gained experience in handling patients and managing her staff.

3.2 Why the medical laboratory is being started

Smith always wanted to be an entrepreneur in the medical domain. She had been exploring the options for initiating a startup even when she was a university student.

After years of service, she decided to open up a medical laboratory. She decided to do so as the medical laboratory was relatively easier to operate, unlike clinics that needed to be opened 24/7.

In this sample business plan for a medical laboratory we have explained how Smith successfully started and run her business. It can serve as an example for you if you are looking for the best medical business plan template to follow for your own startup.

3.3 How the medical laboratory will be started

Since Smith was a medical graduate, she hired a professional business advisor to write her a business plan for a medical laboratory. After getting a detailed laboratory business plan Smith decided to first hire the managers so that she could have an experienced guide for acquiring the right equipment and staffing the right people.

The second step was seeking the services of an advertising manager who was responsible for also carrying out the company’s campaign on social media. With his advice, Smith hired an IT worker to make sure the company was retaining a perfect website and database system.

For the setup, Smith rented a large ground floor shop and converted it into a medical facility after required renovations. The medical machinery was installed and seating arrangement for patients, doctors, and workers was established.

 

Start-up Expenses
Legal	$250,000
Consultants	$0
Insurance	$40,000
Rent	$25,000
Research and Development	$30,000
Expensed Equipment	$60,000
Signs	$4,000
TOTAL START-UP EXPENSES	$409,000
Start-up Assets	$320,000
Cash Required	$370,000
Start-up Inventory	$53,000
Other Current Assets	$200,000
Long-term Assets	$265,000
TOTAL ASSETS	$1,208,000
Total Requirements	$1,617,000
START-UP FUNDING
Start-up Expenses to Fund	$409,000
Start-up Assets to Fund	$1,208,000
TOTAL FUNDING REQUIRED	$1,617,000
Assets
Non-cash Assets from Start-up	$1,581,000
Cash Requirements from Start-up	$395,000
Additional Cash Raised	$50,000
Cash Balance on Starting Date	$34,000
TOTAL ASSETS	$2,060,000
Liabilities and Capital
Liabilities	$32,000
Current Borrowing	$0
Long-term Liabilities	$0
Accounts Payable (Outstanding Bills)	$42,000
Other Current Liabilities (interest-free)	$0
TOTAL LIABILITIES	$74,000
Capital
Planned Investment	$1,617,000
Investor 1	$0
Investor 2	$0
Other	$0
Additional Investment Requirement	$0
TOTAL PLANNED INVESTMENT	$1,617,000
Loss at Start-up (Start-up Expenses)	$369,000
TOTAL CAPITAL	$1,986,000
TOTAL CAPITAL AND LIABILITIES	$2,060,000
Total Funding	$1,617,000

Products

Before starting your own research lab you must decide which services you would be providing. When you have a clear knowledge about what you will have to do, you can make the right decisions.

Besides, medical machinery is very expensive so you need to have a defined plan of your offered services as the purchases will be made accordingly.

In this laboratory development plan sample we have listed the services offered by MediChecks in their initial phase.

· Wellness Checkups

Regular checkups are an absolute necessity if you want to prevent diseases and chronic illnesses. To help adults as well as kids in diagnosing the conditions with them, we will conduct medical checkups.

Our package will include vision and hearing tests, urinalysis, hemoglobin test, ECG, renal and abdomen checks, and a blood pressure check.

· Clinical Laboratory Services

We will offer all sorts of blood tests, cholesterol tests, urinalysis tests, spinal fluid analysis, immunology and allergy tests, liver function tests, and thyroid tests.

· Radiology Services

In the beginning, we will offer X-ray, ECG, and ultrasound facilities. However, within a year, we expect to also include MRI in our radiology services.

· Disease Checks And Vaccination

We will offer diagnostics checks for various illnesses such as coronavirus, dengue, etc. Moreover, we will also provide immunology and vaccination services for children.

Marketing Analysis of Medical Laboratory Business

Like every other business, a laboratory startup also requires a detailed analysis of the target market. Before launching your diagnostic laboratory business you have to understand your market dynamics and your target customers.

Understanding the market before drafting your medical laboratory business plan is very important as it enables you to make timely and right decisions.

If you are looking for how to start a medical laboratory or how to create an effective marketing plan, you can take help from here. In this guide on starting a medical laboratory business pdf we have provided the detailed marketing analysis done by MediChecks.

5.1 Market Trends

Medical and diagnostics laboratories are in demand these days. The reasons include a constant rise in population and an unexpected surge in coronavirus cases. Citizens have started caring about their wellbeing more than ever as they realize that any underlying health conditions can make them susceptible to COVID-19.

According to IBISWorld, nearly 27,000 diagnostic labs are running in the US in 2020. The number is expected to increase more. Statista forecasts a revenue generation of $54.7 billion by 2024 by all the medical labs in the US. All the facts suggest that it is the right time to invest in this business.

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5.2 Marketing Segmentation

The detailed marketing segmentation of our target audience is as follows:

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5.2.1 Senior Citizens: Our major target group will comprise of elderly people of our town. We expect the senior citizens of Houston to visit us for regular wellness checkups. Routine checkups and testing will enable them to prevent many diseases and severe conditions.

5.2.2 Young & Adults: Our second target group comprises of young people and adults. They are expected to avail our clinical laboratory services as well as radiology services.

Adults usually need to have blood or urine tests, X-rays, and other checkups. So we expect them to be our second largest group of target customers.

5.2.3 Teens & Kids: Teens and kids will also be coming to us for various tests, checkups, and vaccinations. To provide them with an unforgettable experience, we will be giving them small items as gifts along with their reports.

We realize that this group of our target customer is usually afraid of doctors and medical checkups. Therefore, by exchanging gifts we will make them feel like we are their friends and well-wishers.

Market Analysis
Potential Customers	Growth	Year 1	Year 2	Year 3	Year 4	Year 5	CAGR
Senior Citizens	40%	40,000	41,000	43,000	48,000	52,000	10.00%
Young & Adults	36%	26,000	27,000	28,000	30,000	32,000	10.00%
Teens & Kids	24%	10,000	11,000	13,000	15,000	16,000	11.00%
Total	100%	76,000	79,000	84,000	93,000	100,000	10%

 

5.3 Business Target

Our business targets are listed as follows:

• To maintain an average rating above 4.7 throughout the year
• To achieve a customer repeat rate of 35% by the end of the first year
• To earn a net profit margin of $10k per month by the end of the first year and $20k per month by the end of the second year

5.4 Product Pricing

Our prices are lower than those of our competitors. We will also be offering several discounts in the initial phase of our business so that we can attract more and more customers.

Marketing Strategy

Preparing a marketing plan for laboratory center requires special efforts and skills. In developing laboratory strategy for the advertisement you have to keep in mind that you are addressing the sufferers. Your tone and words must reflect that you are empathizing with them not for your gains but for theirs.

In this lab proposal format we are providing the marketing strategy adopted by MediChecks.

6.1 Competitive Analysis

Our biggest competitive edge is our customer-oriented approach. Since our topmost priority is to turn our customers into prospects, we have kept our rates slightly lower than others.

Secondly, we have the best medics of the town who are both professional and empathizing. All of our medical workers are highly knowledgeable and hold certifications in Anatomic and Clinical Pathology.

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6.2 Sales Strategy

• We’ll offer 40% discount on all of our services in the first two months
• We’ll ensure a strong social media presence to reach our target customers
• We’ll advertise our startup through billboards and posters
• We’ll offer small to medium sized gifts to our customers below the age of 13

6.3 Sales Monthly

6.4 Sales Yearly

 

6.5 Sales Forecast

Sales Forecast
Unit Sales	Year 1	Year 2	Year 3
Wellness Checkups	45,000	47,700	50,562
Clinical Laboratory Services	56,000	59,360	62,922
Radiology Services	35,000	37,100	39,326
Disease Checks & Vaccination	34,000	36,040	38,202
TOTAL UNIT SALES	170,000	180,200	191,012
Unit Prices	Year 1	Year 2	Year 3
Wellness Checkups	$42.00	$48.72	$56.52
Clinical Laboratory Services	$63.00	$73.08	$84.77
Radiology Services	$37.00	$42.92	$49.79
Disease Checks & Vaccination	$35.00	$40.60	$47.10
Sales
Wellness Checkups	$1,890,000.00	$2,323,944.00	$2,857,521.54
Clinical Laboratory Services	$3,528,000.00	$4,338,028.80	$5,334,040.21
Radiology Services	$1,295,000.00	$1,592,332.00	$1,957,931.43
Disease Checks & Vaccination	$1,190,000.00	$1,463,224.00	$1,799,180.23
TOTAL SALES	$7,903,000.00	$9,717,528.80	$11,948,673.41
Direct Unit Costs	Year 1	Year 2	Year 3
Wellness Checkups	$49.00	$55.00	$62.00
Clinical Laboratory Services	$60.00	$64.00	$68.00
Radiology Services	$32.00	$33.00	$36.00
Disease Checks & Vaccination	$24.00	$25.00	$26.00
Direct Cost of Sales
Wellness Checkups	$2,205,000.00	$2,623,500.00	$3,134,844.00
Clinical Laboratory Services	$3,360,000.00	$3,799,040.00	$4,278,668.80
Radiology Services	$1,120,000.00	$1,224,300.00	$1,415,736.00
Disease Checks & Vaccination	$816,000.00	$901,000.00	$993,262.40
Subtotal Direct Cost of Sales	$7,501,000.00	$8,547,840.00	$9,822,511.20

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Personnel plan

Hiring the right staff is an integral part of any business especially when the work demands frequent interactions with people.

Before conducting strict testings and interviews, MediChecks prepared a list of required employees, their job descriptions, and expected salaries.

Keep reading this medical business plan sample to learn the detailed personnel plan of MediChecks.

7.1 Company Staff

Smith will be the CEO herself. For her laboratory, she’ll hire the following people

• 1 General Manager to manage the lab’s overall operations
• 1 Human Resource Manager to manage staff
• 1 Procurement Manager to acquire machinery, equipment, and chemicals
• 2 IT Experts to maintain lab’s database, website, and social media presence
• 4 Medical Laboratory Professionals to perform tests
• 2 Pathologists to examine test samples
• 2 Radiologists to operate radiology department
• 2 Cleaners to maintain the facility
• 2 General Employees/ Technicians for daily works
• 1 Receptionist to guide people
• 1 Security Guard

7.2 Average Salary of Employees

Personnel Plan
	Year 1	Year 2	Year 3
General Manager	$20,000	$22,000	$24,200
HR Manager/ Procurement Manager	$34,000	$37,400	$41,140
IT Experts	$16,000	$17,600	$19,360
Medical Laboratory Professionals	$36,000	$39,600	$43,560
Pathologists	$28,000	$30,800	$33,880
Radiologists	$26,000	$28,600	$31,460
Cleaners	$14,000	$15,400	$16,940
Technicians	$15,000	$16,500	$18,150
Receptionist	$10,000	$11,000	$12,100
Security Guard	$10,000	$11,000	$12,100
Total Salaries	$189,000	$207,900	$228,690

 

Financial Plan

A business cannot thrive without efficient financial planning. If you are setting up a laboratory you will have to purchase expensive equipment and machinery. Therefore, to use the available capital resources to the maximum, you must have a clear plan of which funds have to be spent where.

If you want to know how an effective financial plan looks like you can take help from here. In this sample business plan for a medical laboratory, we have provided the detailed financial plan of MediChecks.

8.1 Important Assumptions

General Assumptions
	Year 1	Year 2	Year 3
Plan Month	1	2	3
Current Interest Rate	8.10%	8.20%	8.37%
Long-term Interest Rate	8.30%	8.45%	9.05%
Tax Rate	23.50%	25.90%	27.50%
Other	0	0	0

 

8.2 Brake-even Analysis

 

Brake-Even Analysis
Monthly Units Break-even	5300
Monthly Revenue Break-even	$134,000
Assumptions:
Average Per-Unit Revenue	$248.00
Average Per-Unit Variable Cost	$0.62
Estimated Monthly Fixed Cost	$165,000

 

8.3 Projected Profit and Loss

Pro Forma Profit And Loss
	Year 1	Year 2	Year 3
Sales	$7,903,000	$9,717,529	$11,948,673
Direct Cost of Sales	$7,501,000	$8,547,840	$9,822,511
Other	$0	$0	$0
TOTAL COST OF SALES	$7,501,000	$8,547,840	$9,822,511
Gross Margin	$402,000	$1,169,689	$2,126,162
Gross Margin %	5.09%	12.04%	17.79%
Expenses
Payroll	$189,000	$207,900	$228,690
Sales and Marketing and Other Expenses	$128,000	$135,000	$143,000
Depreciation	$2,100	$2,200	$2,350
Leased Equipment	$0	$0	$0
Utilities	$3,100	$3,500	$4,100
Insurance	$1,800	$2,100	$2,400
Rent	$2,800	$3,100	$3,700
Payroll Taxes	$38,000	$41,000	$44,000
Other	$0	$0	$0
Total Operating Expenses	$364,800	$394,800	$428,240
Profit Before Interest and Taxes	$37,200	$774,889	$1,697,922
EBITDA	$37,200	$774,889	$1,697,922
Interest Expense	$0	$0	$0
Taxes Incurred	$7,440	$154,978	$339,584
Net Profit	$29,760	$619,911	$1,358,338
Net Profit/Sales	0.38%	6.38%	11.37%

 

 

8.3.1 Profit Monthly

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

Pro Forma Cash Flow
Cash Received	Year 1	Year 2	Year 3
Cash from Operations
Cash Sales	$53,000	$57,240	$61,819
Cash from Receivables	$12,000	$12,960	$13,997
SUBTOTAL CASH FROM OPERATIONS	$60,000	$65,400	$70,632
Additional Cash Received
Sales Tax, VAT, HST/GST Received	$0	$0	$0
New Current Borrowing	$0	$0	$0
New Other Liabilities (interest-free)	$0	$0	$0
New Long-term Liabilities	$0	$0	$0
Sales of Other Current Assets	$0	$0	$0
Sales of Long-term Assets	$0	$0	$0
New Investment Received	$0	$0	$0
SUBTOTAL CASH RECEIVED	$61,000	$66,000	$71,000
Expenditures	Year 1	Year 2	Year 3
Expenditures from Operations
Cash Spending	$33,000	$37,500	$40,000
Bill Payments	$17,000	$20,000	$22,000
SUBTOTAL SPENT ON OPERATIONS	$54,000	$57,000	$62,000
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out	$0	$0	$0
Principal Repayment of Current Borrowing	$0	$0	$0
Other Liabilities Principal Repayment	$0	$0	$0
Long-term Liabilities Principal Repayment	$0	$0	$0
Purchase Other Current Assets	$0	$0	$0
Purchase Long-term Assets	$0	$0	$0
Dividends	$0	$0	$0
SUBTOTAL CASH SPENT	$55,000	$59,400	$64,152
Net Cash Flow	$14,000	$16,000	$19,000
Cash Balance	$26,000	$28,000	$31,000

8.5 Projected Balance Sheet

Pro Forma Balance Sheet
Assets	Year 1	Year 2	Year 3
Current Assets
Cash	$270,000	$302,400	$332,640
Accounts Receivable	$24,000	$26,880	$30,213
Inventory	$4,100	$4,592	$4,800
Other Current Assets	$1,000	$1,000	$1,000
TOTAL CURRENT ASSETS	$298,000	$333,760	$375,146
Long-term Assets
Long-term Assets	$10,000	$10,000	$10,000
Accumulated Depreciation	$18,400	$20,608	$23,184
TOTAL LONG-TERM ASSETS	$21,000	$23,520	$26,460
TOTAL ASSETS	$276,000	$309,120	$347,760
Liabilities and Capital	Year 4	Year 5	Year 6
Current Liabilities
Accounts Payable	$15,000	$16,800	$18,883
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
SUBTOTAL CURRENT LIABILITIES	$11,600	$12,992	$14,603
Long-term Liabilities	$0	$0	$0
TOTAL LIABILITIES	$12,300	$13,776	$15,484
Paid-in Capital	$29,000	$30,000	$30,000
Retained Earnings	$61,000	$66,490	$73,139
Earnings	$182,000	$198,380	$218,218
TOTAL CAPITAL	$281,000	$306,290	$336,919
TOTAL LIABILITIES AND CAPITAL	$293,300	$309,120	$347,760
Net Worth	$280,000	$305,200	$335,720

8.6 Business Ratios

Ratio Analysis
	Year 1	Year 2	Year 3	INDUSTRY PROFILE
Sales Growth	7.10%	7.87%	8.72%	3.00%
Percent of Total Assets
Accounts Receivable	9.20%	10.19%	11.29%	9.80%
Inventory	5.44%	6.03%	6.68%	9.90%
Other Current Assets	2.33%	2.58%	2.86%	2.40%
Total Current Assets	151.00%	152.00%	153.00%	158.00%
Long-term Assets	11.60%	11.80%	12.20%	12.00%
TOTAL ASSETS	100.00%	100.00%	100.00%	100.00%
Current Liabilities	4.77%	4.81%	4.85%	4.34%
Long-term Liabilities	0.00%	0.00%	0.00%	0.00%
Total Liabilities	7.23%	7.29%	7.35%	7.38%
NET WORTH	104.02%	104.85%	105.82%	110.00%
Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	96.80%	99.41%	102.20%	99.00%
Selling, General & Administrative Expenses	94.07%	96.61%	99.31%	97.80%
Advertising Expenses	1.65%	1.69%	1.74%	1.40%
Profit Before Interest and Taxes	41.00%	42.11%	43.29%	33.90%
Main Ratios
Current	38.7	39.8	41.6	32
Quick	33.6	34.8	35.67	33
Total Debt to Total Assets	0.29%	0.24%	0.17%	0.40%
Pre-tax Return on Net Worth	76.02%	79.82%	83.81%	75.00%
Pre-tax Return on Assets	91.04%	95.59%	100.37%	111.30%
Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	32.90%	33.92%	34.97%	N.A.
Return on Equity	58.63%	60.45%	62.32%	N.A.
Activity Ratios
Accounts Receivable Turnover	7.6	7.8	7.9	N.A.
Collection Days	100	100	100	N.A.
Inventory Turnover	32.9	34.545	36.8	N.A.
Accounts Payable Turnover	16.17	16.34	16.84	N.A.
Payment Days	27	27	27	N.A.
Total Asset Turnover	2.5	2.6	2.71	N.A.
Debt Ratios
Debt to Net Worth	-0.03	-0.04	-0.05	N.A.
Current Liab. to Liab.	1	1	1	N.A.
Liquidity Ratios
Net Working Capital	$230,000	$242,880	$256,481	N.A.
Interest Coverage	0	0	0	N.A.
Additional Ratios
Assets to Sales	0.83	0.88	0.95	N.A.
Current Debt/Total Assets	1%	1%	0%	N.A.
Acid Test	27.6	29.9	31.1	N.A.
Sales/Net Worth	2.1	2.1	2.3	N.A.
Dividend Payout	0	0	0	N.A.

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