Startup cost
$200k
TRUiC Business Ideas
How to Start a Home Health Medical Supply Store Business
Decision Snapshot
Home Health Medical Supply Store
Idea Score
68
Profit margin
36%
Break-even
18 mo–36 mo
Time to launch
12 wk–36 wk
Demand trend
Rising
5-yr failure rate
—
Capital intensity
High
Time commitment
Flexible
Part 1 - How to start a Home Health Medical Supply Store business - Background
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.
Our guide is in 3 parts:
- Part 1 - How to start a Home Health Medical Supply Store business - Background
- Part 2 - Our planner tool to see if this idea is the right fit for you
- Part 3 - Action plan to get started
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.
Day-to-Day and Growth
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.
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?
Part 2 - Is a Home Health Medical Supply Store business the right fit for you?
Business Evaluation & Strategy Tool
We'll walk you through the four pillars every business needs: Points of Leverage, Marketing Strategy, Financial Model, and Personal Compatibility. At the end you'll see a personalized report and your action plan below will be tailored to your answers.
Step 1 of 4 — Points of Leverage
Every viable business has natural advantages. Below are common leverage points across four categories. Pick the ones that apply to your Home Health Medical Supply Store business. We've pre-suggested a few based on your idea — review and adjust.
Step 2 of 4 — Marketing Strategy
Without a way to connect with customers, even great businesses fail. Pick the channels you plan to use to reach your customers.
Step 3 of 4 — Financial Model
Enter your monthly baseline costs — the minimum overhead to keep the business running. Then we'll calculate how many sales per month you need to break even.
Step 4 of 4 — Personal Compatibility
A business that doesn't fit your life will fail no matter how good the numbers look. Tell us how this business fits you.
Your Home Health Medical Supply Store Evaluation Report
Complete the four pillars and your personalized summary will appear here.
Points of Leverage
Marketing Strategy
Financial Model
Personal Compatibility
Part 3 - Action plan to launch your Home Health Medical Supply Store business in 90 days
Nine concrete steps to take you from idea to open business, grouped into 30-day phases. Complete the planner above and we'll highlight what's most important for your situation.
First 30 days — Foundation
-
Form your legal entity
An LLC keeps your personal assets separate from business debts and lawsuits — the most common reason small business owners choose this structure. Sole proprietorships and partnerships do not provide this protection.
-
Get an EIN and register for taxes
Apply for your free Employer Identification Number through the IRS, then register for any state or local taxes that apply to your business (sales tax, franchise tax).
-
Open a business bank account and credit card
A dedicated business account is required to maintain personal asset protection. Mixing personal and business finances ('piercing the corporate veil') can void your LLC's liability shield.
-
Set up business accounting
Recording expenses and income from day one makes tax filing easier and lets you see when the business is actually profitable. Use software (QuickBooks, Wave) or a part-time bookkeeper.
Days 30–60 — Compliance & Risk
-
Get permits and licenses
State and local requirements vary widely. Brick-and-mortar businesses typically need a Certificate of Occupancy; service businesses may need specific professional licensing; food businesses need health permits.
-
Get business insurance
General Liability Insurance is the most common starting point. If you'll have employees, most states require Workers' Compensation. Specific industries need additional coverage (product liability, professional liability, etc.).
Days 60–90 — Launch
-
Define your brand
Your brand is how customers perceive and remember you. A clear name, logo, and visual identity make every later marketing decision easier and protect you legally as you grow.
-
Create your business website
Every legitimate business needs a website. Social media pages are not a substitute — you don't own the platform. Modern website builders mean you can launch a clean site in a weekend without a developer.
-
Set up your business phone system
A dedicated business number keeps your personal life private, makes the business look legitimate, and lets you route calls professionally. Cloud phone services start under $20/month.