Top 10 Things to Know When Starting Your NEMT Business!
August 31, 2021
In my last article, I talked about the questions that I am asked many times when talking about starting a NEMT company. How much does it cost, what about training, what about insurance, where do I get passengers from are just some of the questions? These are all good questions so I this article, I want to talk about the Top 10 things you will need to know before going out on the journey to establish your own NEMT company.
The TOP 10
#1: How will you be organized: How will your business be organized? Will it be a corporation of some type, LLC, Single Proprietor, or some other designation? A good tax accountant can walk you through these steps to help you determine the correct way to set up your company make that appropriate filing. This includes any appropriate state taxes that may be applicable.
#2: Operating Possibilities: Creating a good start-up plan involves understanding how you will operate. This means the number of days per week, the hours that you will be operating. This will also help determine the number of vehicles needed as well as the drivers and staff needed. You will need to explore what type of training will you need? Obviously, driver training is the most important, followed by staff training and maintenance training. Choosing the right program is important as most brokers will require training of the drivers in specific areas along with company policy and procedure programs and any Federal or State requirements.
#3 Vehicle Acquisition: Do I purchase or lease vehicles or a combination of both? What are the advantages or disadvantages of each? Will the vehicles I need be ambulatory only or have a combination of wheelchair /mobility device accessibility? Will I provide stretcher service in a non-emergency situation?
#4 Staffing Considerations: Will you have staff to hire? What positions will I need filled? Dispatcher, Driver, Mechanic, Road Supervisors, etc. Depending on the size of your operation and the direction that you choose to operate will determines some of these answers.
#5 Do I need a marketing plan? It will be very important to your developing new business to have a plan. The plan should include what targeted area or passengers you are going to serve. Also, should give detail on your advertisement and marketing dollars that you want to spend. It would be a good idea to enlist the help of a local marketing professional that knows your area, what works (like newspaper, radio, print media, social media) etc. versus what doesn’t work.
#6 Your Partners? Who will I operate with? Do I apply with a medical transportation broker, or do I set up a process to obtain rides for passengers or a combination of both? This is important to decide where do the rides come from as you will need a good revenue stream to stay in business. The broker may have requirement provisions that affect the drivers and vehicles that you will need to plan ahead to be qualified. Also, you will need to understand your state requirements or federal requirements/rules to operate.
#7 Where will I locate? Where will I operate geographically? What cities, towns, counties, etc.? It is important to choose wisely. Will your office be located in the center of your service area? Making a decision will affect the mileage that is put on your vehicles. You don’t want to put on unnecessary mileage, or deadhead miles. This will cost you money on the bottom line regarding miles driven, fuel used, and the driver’s payroll hours. Do I need a facility to house maintenance or will I outsource maintenance? Making this decision early in the planning stages will help decide on your capital needs.
#8: Know your Capital! Based on the decisions you make from the discussions in this article will determine how much capital you will need. It is very important to understand how much money you have to work with. Getting started can be capital intensive. A good start-up budget is necessary so you know what expenses to expect and where you are going to spend your money first! I recommend a good accountant that understands transportation and related expenses such as labor costs, vehicle maintenance costs, insurance costs, training costs, hiring costs, etc. What will be your bottom line? What do I charge for a ride? What is my break-even point? All important questions to establish the answers for. I also recommend establishing a banking relationship with a commercial bank. You will need to separate your personal finances from your business finances.
#9: Communication: How are people going to know that you are in business? You will need to establish a corporate look/identity / or brand that people in your community can relate to. This includes a logo that can be used on your vehicles, stationary, business cards, websites, and drivers, staff uniforms. This is very important decision that will help deliver a message about your company and that you are a professional organization. Establishment of a phone number those passengers and users of your company can reach you. I recommend an 800 number that can be used on vehicles, media advertising, and a host of other communications.
#10: Web Site and social media: There are many ways to reach out to the riding public. At a minimum, I would recommend that you establish a website that gives information about your company, how to reach your company, schedule a ride, and pay for a ride. There are other means to reach out such as Facebook, instant messaging, direct mail, etc. Unless you are savvy enough to set up websites and social media, I would reach out to a marketing firm or companies that work to set up this kind of interaction. They can produce a professional-looking website that will project a great company image and get your company brand/identity / or corporate look into the public eye.
I have described the Top 10 understandings that you must have when starting a NEMT company. As you develop your company, you will see that many offshoots of these topics develop and have to be addressed during the planning stages. It is important to become comfortable with your company policy, procedures, and programs from the very start of the planning process.
Thanks, and See You Next Time!
Frank J. Ciccarella
Ready for a Test Drive?
From the beginning, RoutingBox has remained committed to removing barriers for transportation companies attempting to provide access to healthcare and community services. Now, we want to help you.