Wondering how to start a lab? We take you step-by-step from start to success.
For-Profit Laboratory Essentials
The proliferation of for-profit labs has been a side effect of the boom in healthcare in the U.S. Rather than handling lab functions in-house, most medical practices and healthcare institutions now outsource medical testing to third-party providers.
Successful for-profit labs feature high customer turnover and testing rates. It's not uncommon for even small labs to collect samples from hundreds of patients per day. As you might imagine, industry-wide key value propositions include service, convenience and accuracy.
Although labs are frontline healthcare technicians, typical clients include physician offices, hospitals, managed care organizations, and biotechnology and pharmaceutical companies. As a startup lab owner, it's important to remember that your clients aren't the patients, but the physicians and organizations that make referrals to your business.
Startup Requirements for Lab Entrepreneurs
A for-profit lab is by no means a simple startup concept. In order to achieve traction in the local and regional healthcare marketplace, you will need to effectively navigate a variety of hurdles and startup requirements, including the following:
- Expertise. It goes without saying that your lab must be staffed with qualified technicians. The best labs feature scientific expertise in esoteric testing, genomics, and clinical and anatomic pathology and more. The catch is that it can be difficult to lure the best technicians to work for a startup. If the acquisition of expertise is proving difficult, consider enticing proven professionals with profit sharing or partnership opportunities.
- Capitalization. Cutting corners is a definite no-no in a lab startup. Keep in mind that your customers (e.g. physicians, hospitals, etc.) are counting on your operation to deliver accurate results for their patients. Since even a single slip-up can have dire medical consequences, your startup needs to raise enough funds to fully capitalize staffing, equipment, facilities, supplies and other essential elements.
- Relationships. A cold entry into the lab services industry is tough to pull off, even for experienced entrepreneurs. Much of the laboratory services business hinges on referrals, requiring the development of relationships within the local healthcare community. Like expertise, it's possible to recruit technicians who are already established in the community to overcome a lack of personal industry contacts.
For resources and networking, consider engaging in opportunities with the American Clinical Laboratory Association and other organizations.
Successful Business Plans for Labs
How good is your lab's business plan? If you aren't completely confident in the quality of your business plan, it could be because you haven't invested enough time and effort in its creation.
Although there are a lot of tasks screaming for your attention, cutting corners on your business plan can be a precursor to disaster. Why? Because there are a multitude of reasons why your company can't succeed without a sound business plan.
Before you do anything else, perform a reality check on your startup business plan – and if it's lacking, drop everything and head back to the drawing board.
Look Over the Competition
Well in advance of opening a lab within your community, it's worthwhile to find out what the competition looks like. Use the link below to find competitors nearby. Just enter your city, state and zip code to get a list of labs in your community.
If there's too much competition, it may be wise to consider starting the business in a less competitive marketplace.
Finding a Non-Competitive Business Mentor
If you want to open a lab the next step is to have a conversation with someone who is in the business. Local competitors are not going to give you the time of day, mind you. Why would they want to educate a future competitor?
But, a person who owns a lab on the other side of the country may be willing to share their entrepreneurial wisdom with you, once they realize that you are not going to directly compete with them in their community. Many business owners are happy to give advice to new entrepreneurs. Our estimate is that you may have to contact many business owners to find one who is willing to share his wisdom with you.
Where would you find an entrepreneur who is running a lab that lives outside of your area?
No problem! Just use the link below and try a random city/state or zipcode. Then start dialing for advice until you are successful.
Business Brokerage for Lab Entrepreneurs
Business owners are decision makers. And the first decision you'll need to make is between a lab startup and an acquisition. For lab entrepreneurs, there are many reasons why a purchase is more logical than a startup.
A qualified business brokers can provide a range of services designed to ease your transition into business ownership.
The best business brokers will ensure that you get the right business for the right price, and will help you avoid common lab acquisition mistakes.
Recognize that your chances of surviving in business go up significantly if you buy a franchise and leverage their successful brand and track record.
As part of your process in starting a lab, you may want to assess whether franchising might increase your chances of success.
The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you. You might even find something that points you in a completely different direction.
These additional resources regarding starting a business may be of interest to you.
If you came here to learn about selling to labs, we've got better information for you elsewhere on our site. These resources are more appropriate for you:
If you are interested in starting a different kind of business, please browse our directory of guides below.