Business Overview


A home health medical supply store, also known as a durable medical equipment business, sells and distributes health care equipment to be used in a patient’s home. Whether items are sold exclusively online, at a physical storefront, or a combination of the two, this niche market offers a great business opportunity for the entrepreneur looking to break into the medical community.

Who is this business right for?

For long-term success, home health medical supply business owners should understand the intricacies and terminology of the medical community and feel passionate about helping others live with dignity and grace. Because of the low upfront costs and untapped niche markets, the organized and compassionate entrepreneur stands to generate significant profits early into building their network.

What happens during a typical day at a home health medical supply store business?

Your store is considered a retail business, making customer care and interaction a top priority. Purchasing inventory, changing out displays, and re-stocking shelves will also be a part of your day-to-day activities. In addition to nurturing customer relationships, you and your staff will need to network within the community and build sound relationships with supply manufacturers. Staying on top of emerging trends, comparative pricing, and educating the public on your findings should also be an integral part of your business-building strategy.

What is the target market?

While your target market is anyone who requires home health medical supplies, entrepreneurs emerging in this industry would benefit from targeting Home Care patients and Assisted Living facilities.

How does a home health medical supply store business make money?

Your medical supply retail store will generate revenue from each sold item, with a 45-55% markup on inventory. Some businesses choose to expand their services to include delivery for a nominal fee.

What is the growth potential for a home health medical supply store business?

While your target niche is home healthcare, this doesn’t mean you are limited to homebound patients only. The Homecare and Assisted Living market offers an annual earning potential of $59.6 million revenue, while the Assisted Living market offers $17.6 million in annual revenue. And, with an increase in the world population over the last decade, the industry is poised for continued growth.

Getting Started


What are some skills and experiences that will help you build a successful home health medical supply store business?

Historically, industry leaders are successful business managers, delegating sales responsibilities to their sales staff. Leadership skills such as communication and interpersonal skills are critical, and it is equally important to be a strong delegator and detail-oriented. Your ability to interact with a wide variety of people will prove invaluable, as you will need to communicate and connect with customers, employees, colleagues, and vendors. For business and marketing advice, consider joining a medical equipment suppliers association that serves your geographical area.

What are the costs involved in opening a home health medical supply store business?

If your business plan includes a storefront, finding a location should be one of your top priorities. Average retail showrooms are approximately 1,500 square feet, with an additional 500 to 1,000 square feet for storage, etc. Studies indicate the most profitable locations are in strip malls or shopping centers that are close to medical offices and hospitals. Your storefront, along with inventory, licensing and insurance, promotional materials, and a website average approximately $15,000 for a small showroom. Initial start-up costs to open a medium-sized business increase to almost $200,000, while a large-sized medical supplies business required over $450,000 in start-up capital.

What are the steps to start a home health medical supply store business?

Once you're ready to start your home health medical supply store business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:

STEP 1: Plan your Business

A clear plan is essential for success as an entrepreneur. A few important topics to consider are:

  • What are the initial costs?
  • Who is your target market?
  • How long it will take you to break even?
  • What will you name your business?

Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

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STEP 2. Form a legal entity

Establishing a legal business entity such as an LLC prevents you from being personally liable if your security guard company is sued. Consider using a registered agent service to help protect your privacy and stay compliant.

STEP 3. Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

STEP 4. Open a business bank account

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 5. Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 6. Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7. Get Business Insurance

Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.

STEP 8. Define your brand.

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

STEP 9. Establish your Web Presence

A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

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Select your state below for an in-depth guide on completing each of these steps in your home state.

Where can I find a business mentor?

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

What are some insider tips for jump starting a home health medical supply store business?

Industry leaders recommend offering a variety of options for each type of product. While your Medicare customer may require a basic model, the cash-paying client may opt for top-of-the-line products. When designing your showroom, set the displays up like a patient room, including everything the customer might need. During the planning stages, consult with your state medical board or Board of Pharmacy regarding any specialized licenses, restrictions, and confidentiality requirements in your state. If you plan to accept Medicaid and Medicare, begin the inquiry and eligibility process early.

Growing Your Business


How to promote & market a home health medical supply store business

Social media and registering with local online platforms should be a routine part of your marketing strategy. Additionally, creating a wellness letter will assist in establishing yourself as a thought leader and educating your client base. Hosting healthcare events, sponsoring medical awareness programs, and attending expos is an effective way to get your name recognized and network with others in the industry. When direct marketing, consider expanding your target market to include pharmacist, assisted and independent living centers, case managers, physicians, and discharge planners.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

How to keep customers coming back

As a retailer, your role is to take care of the customer. When dealing with a client directly, keep in mind they are likely worried and unsure of their future. Make the process as seamless as possible, ensuring they walk away satisfied. Offering loyalty and referral programs and personalizing your service with a help desk for support sends the message that you are committed to your customers.

How and when to build a team

When first opening your doors, you should be able to manage the business solo. However, as it continues to grow, you will want additional manpower. Your staff should be honest and compassionate, with strong communication skills and extensive industry knowledge. While you may be able to find all of this in someone in their 20s, consider your clientele before hiring. Who are your customers going to be most comfortable talking to about their medical issues?

Earning Potential


How much can you charge customers?

Durable medical equipment varies in price, depending upon the item. A walker can cost anywhere from $25 to $250, while a hospital bed can cost upwards of $1,500. Conduct research on what the competition is charging and set your prices accordingly.

What are the ongoing expenses for a home health medical supply store business?

For a smaller home health medical supply store, estimated fixed costs average approximately $2,500. This includes marketing expenses, rent and overhead costs, insurance and legal expenses, and accounting. This does not include inventory, which will vary from month-to-month, or payroll expenses. To keep payroll at a minimum, many shop owners pay salespeople a modest salary with commission and/or bonus incentives.

How much profit can a home health medical supply store business make?

Industry leaders offer several formulas for determining annual revenue. One benchmark is gross sales generated per employee, which averages $140,000/employee in this industry. Another formula is to multiply your showroom’s square footage by $800 per square foot per year. With these numbers and minimal ongoing costs, many home health medical supply stores break even before the end of the first year, generating up to $400,000 in profit after the third year.

How can you make your business more profitable?

In this industry, it is important that you know your target market well. Once you understand the requirements of that particular niche, you can expand into other medical supply needs. Hosting an online store with competitive pricing is a great way to expand your reach and boost profits. One successful entrepreneur found success implementing the “hub-and-spoke” business model, offering multiple locations in one geographic territory.

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