Like any other business venture, starting up an urgent care begins with research, followed by careful planning and development, and finally, a leap of faith.
You can make that leap feel a little more secure when you make decisions based on good information and have adequate funding to put your plans in motion.
But how much money will you need to get started and stay in operation during those critical early days while your accounts receivables is maturing? That depends on a number of variables like location, size, and your real estate arrangement.
Prime real estate may be easy to spot, but it’s not always easy to come by. Whether you’re planning to buy, build, or lease clinical space, opening your urgent care in the right location is crucial. Highly visible, high-traffic, easily accessible retail space may require a bigger initial budget, but in the long run, it may pay off with a greater flow of patients.
Geography will also affect your costs. While California is known for its entrepreneurial successes, startup costs in cities across the Golden State are high compared to almost anywhere else in the country. On the other hand, cities in the south, like Chattanooga, Louisville, and Wichita are the most startup-friendly based on costs. Salary requirements will also fluctuate based on geography.
Rural, urban, or suburban? No two localities are alike. It may be cheaper to build or lease in a rural area, but you may find it much costlier to find—and pay—providers.
The average urgent care is about 3,000 square feet, but you should choose the size of your space based on expected patient volume and the services you plan to offer. If you plan to offer exclusively urgent care, you may not need as much space as a clinic offering physical therapy, OccMed, or wellness services. Always choose clinic space with the best location you can afford that offers a workable floor plan. Most importantly, never choose size over location.
Real Estate Arrangement
Do you plan to lease space, build a new office, or buy an existing clinic? Investigate all your options before making a decision as your choice will affect your start-up costs.
Location should always be your first consideration. The majority of urgent care operators, especially those just entering the industry, lease space. In particular markets, situations may be more favorable to either build-to-suit or purchase land and own the property.
Whether you buy, lease, or build, assess the space, the services you plan to offer, and work with an architect and/or designer experienced in the urgent care space. An experienced builder can keep you compliant, make the most of the space, and help you stay within your budget.
Keep in mind that state and local building codes and insurance company guidelines may have some impact on specific design elements, although they do not dictate things like the number of rooms or placement of objects . Some states require special permits and licensure. Be sure to check local regulations.
Adding It All Up
Considering all the various startup costs—including buildout, equipment, supplies, startup services and cash on hand—the average cost to start up a new urgent care clinic is estimated between $850,000 and $1 million. On the high end, the cost could be up to $1.5 million.
On average, most urgent cares begin to break even between 18 and 24 months depending on reimbursement, competition and your marketing efforts. Be sure your funding is adequate for your specific budget.
The good news is, funding is available to support your investment. Most banks offer SBA (Small Business Administration) loans. In fact, some specialize in loans specifically for the healthcare industry. Other sources of funding include grants—especially associated with rural development, physician practice loans, and lines of credit. Finding investors, especially for smaller scale urgent care providers, can be a little more difficult—but not out of the question.
If you’re not sure where to begin, hire an urgent care consultant to help guide you as you create a business plan, make your decisions and avoid the pitfalls.
If you want to learn more about launching your urgent care, read the first post in our Startup Series, The Giant eBooks for Urgent Care Startups.