How to Start a Home Health Medical Supply Store Business

Home Health Medical Supply Store Business Image

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.

Learn how to start your own Home Health Medical Supply Store Business and whether it is the right fit for you.


Start a home health medical supply store business by following these 9 steps:

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your home health medical supply store business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

STEP 1: Plan your Business


A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

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

Luckily we have done a lot of this research for you.

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 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.

Who 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.

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.

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.

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 home health medical supply store business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.

You should also consider using a registered agent service to help protect your privacy and stay compliant.

A cube with LLC printed on its sides

For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?

STEP 3: Register for taxes


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

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

A cube with LLC printed on its sides

You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

STEP 4: Open a business bank account & credit card


Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

  • This separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.

Get a business credit card

  • This helps you separate personal and business expenses by putting your business' expenses all in one place.
  • It also builds your company's credit history, which can be useful to raise money and investment later on.

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.

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.

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.

Start A Home Health Medical Supply Store Business In Your State

A cube with LLC printed on its sides

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

Is this Business Right For You?

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 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 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.

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Take the Next Step

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.

Resources to Help Women in Business


There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

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.

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?

Next Steps

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