Urgent care is a necessity in the U.S. and countries around the world. Starting an urgent care clinic can be a lucrative investment. The urgent care clinic market reached $56.7 billion in 2022. With a projected compound annual growth rate (CAGR) of 10.99% from 2023 to 2030, now is a great time to get involved in the health care system.
The healthcare landscape continues to evolve. Urgent Care centers are well positioned to benefit as they can provide services at lower costs than emergency rooms. They also offer weekend and walk-in availability that complements most physician practices.
This guide will walk you through how to open an urgent care. Topics include market research to create a business plan, competitive analysis to learn about primary care physicians and other care clinics in the area, registering an EIN, forming an LLC, and more.
1. Conduct Urgent Care Market Research
Market research is an important part of starting an urgent care services business. Market research offers details on service and product trends, competitors in the area, your target market, and other information needed to open a successful urgent care center.
Several key factors make Urgent Care an appealing sector:
- First is the shifting landscape of healthcare delivery and reimbursement models.
- As payers incentivize outpatient care, Urgent Care can divert up to 27% of ER visits to more appropriate, convenient settings.
- Profit margins also compare favorably to primary care.
- Urgent Care addresses consumers’ needs for speed, flexibility, and affordability.
- Average costs are upwards of 10 times lower than ER visits.
- Care is delivered on nights and weekends on a walk-in basis without appointments.
- Brands like AFC Urgent Care emphasize short wait times and diagnostic technology offering X-rays, EKGs, and lab tests on-site.
- The model is attractive to entrepreneurial clinicians.
- Startup costs range from $1-3 million, but profitability can be achieved quickly with efficient operations. They do not require large teams or specialized training.
- Medicare reimbursement rates were recently increased.
- Market saturation remains relatively low, presenting ample whitespace for new centers.
- Only 2 percent of U.S. healthcare spending went to Urgent Care in 2021. Services cater well to higher-income suburban communities.
- Partnerships with employers, universities, and health systems represent untapped potential.
The Urgent Care sector represents a sizable market opportunity for entrepreneurs. Convenience-focused care models are aligned with emerging consumer preferences and shift toward outpatient reimbursement.
2. Analyze the Competition
Analyzing the competition is critical for any entrepreneur seeking to open a new Urgent Care center. Competitive analysis provides urgent care facilities with key information for careful planning within the healthcare system industry, including pricing, services, and top marketing networks.
Here are key areas to research:
- Identify existing brick-and-mortar clinics within a 20-minute drive radius.
- Tools like Microsoft Local Search allow you to visualize proximate options on a map.
- Analyze the number of clinics, brands, spacing, locations (strip malls, standalone, etc), and service offerings (e.g. do they offer additional urgent care services such as urgent dental work and similar)
- rive by top competitors at various times to assess patient volumes.
- Research the online presence of competitors.
- Search engines and review sites like Yelp offer visibility into patient sentiment and services.
- Evaluate the number and recency of reviews, star ratings, webpage content, and search ranking.
- Utilize public data sources to analyze industry health. For example, IBISWorld provides financial benchmarks on revenues, wages, number of businesses, and expected local area growth.
Meticulous competitive analysis illuminates market gaps, opportunities to differentiate, evolving patient needs, and potential partnership targets. Ongoing monitoring of new clinic openings, service additions by incumbents, and chatter on review sites allows agility in strategy.
3. Costs to Start an Urgent Care Business
Launching a new Urgent Care center requires significant upfront investment, with ongoing operating expenses consuming a sizable portion of revenues. Based on my extensive experience helping entrepreneurs estimate startup costs across industries, here is an overview of the key financial considerations:
Startup costs to open a single Urgent Care site typically range from $1 million to $3 million. The largest components include:
Real Estate & Construction
- Purchasing land or leasing commercial retail space ($35-85 per sq. ft)
- Building out and equipping clinical areas ($350-500K)
- Hiring and credentialing clinicians like nurse practitioners and physicians ($250K salary)
- Support staff for front desk, billing, etc. ($100K)
Working Capital & Inventory
- 2-3 months operating capital buffer ($500K)
- Medical equipment, supplies, and medications ($100-300K)
Licensure & Consultants
- Permits, business licensing, legal fees ($50-150K)
- EHR systems, consultants, recruiters ($100-300K)
- Branding, websites, materials ($75-200K)
- Grand opening promotions ($25-100K)
Ongoing costs can also be substantial, typically consuming about 60% of revenues:
- Occupancy – 10-15%
- Staffing – 25-35%
- Supplies and medications – 15% (partnering with certain pharmacies can reduce the overall costs due to the amount of potential sales they’d be able to generate, thus reducing the price for bulk purchases)
- General overhead – 5%
- Profit margin – 10-15%
Top-performing centers target $1.5 million in annual revenues, enabling them to break even within 3 years. In summary, launching Urgent Care requires major capital investment offset by strong ongoing profit potential.
4. Form a Legal Business Entity
When starting an Urgent Care business, the legal structure you choose has important implications on liability, taxes, and ease of management. While sole proprietorships offer administrative simplicity, incorporation better limits financial risks.
Here’s an overview of key considerations:
A sole proprietorship provides complete managerial control and avoids corporate taxes. However, the owner assumes unlimited personal liability for debts and legal claims. This poses too much risk given Urgent Cares handles medical emergencies. If sued, all personal and business assets could be forfeited.
Partnerships allow multiple owners to collaborate, raising additional capital. However, they offer minimal liability protections and involve complex profit-sharing mechanisms. Decision-making authority becomes diffused, and partnerships can prove difficult to dissolve.
A corporation shields personal assets from business liabilities and makes raising investments easier via share offerings. However, rigid statutory requirements, double taxation of profits, and public disclosure rules are overly burdensome for small Urgent Care startups.
Limited Liability Company (LLC)
Most experts recommend LLCs for healthcare practices. LLCs limit liability exposure by legally separating the business and owners. An Urgent Care LLC offers pass-through taxation, avoiding double taxes on company profits. The flexible management structure retains decision-making control while permitting new partners over time.
5. Register Your Business For Taxes
A federal employer identification number (EIN) serves as a unique tax ID for any business entity, similar to a social security number for an individual. All Urgent Care startups must obtain an EIN even if they do not plan to hire employees. Here are key facts about the straightforward application process:
The Internal Revenue Service issues EINs at no charge to entity owners. An EIN is required to open any business bank accounts, apply for relevant licenses, and file tax returns for your LLC or corporation.
You can easily request an EIN on the IRS website. Simply answer a few questions about your entity type, ownership structure, and contact details. An EIN will be provided immediately upon completion.
Outside of the EIN, ensure your business is registered locally to collect and remit any sales taxes on services provided. The requirements and forms vary by state and locality but often involve nominal filing fees under $100.
An EIN uniquely identifies you as an urgent care consultant business to government agencies for essential tax reporting and compliance purposes. The number enables important tasks like opening bank accounts while imposing no direct costs on founders. Be sure to also check your state and municipal requirements around sales tax licenses.
6. Setup Your Accounting
Proper financial management is critical for any Urgent Care startup to maximize growth potential and tax efficiency. Implementing the right accounting processes and software early on establishes clean books that withstand IRS scrutiny. Here’s an overview of best practices I recommend Urgent Care entrepreneurs follow:
Open a Business Bank Account
Begin by separating business and personal finances. Register for a dedicated business bank account and credit card. Never come funds or pay personal expenses from the business. Keeping accurate, clearly delineated financial records is essential to passing audits.
Next, utilize small business accounting software like QuickBooks to automatically track income and expenses. Link bank/credit card accounts to sync transactions and generate financial reports with one click. This eliminates manual data entry and ensures up-to-date visibility for smarter decisions.
Hire an Accountant
Consider hiring an accountant for further support. Core services like monthly bookkeeping, payroll, quarterly sales tax filings, and custom financial reports ensure full compliance at an estimated $150 – 500 per month. This frees you to focus on patients, not payments.
Come tax season, your accountant can save thousands in legal tax reduction strategies. Prioritize working with CPAs experienced in serving healthcare practices. Expect fees from $500 – 5,000 to file federal and state tax returns for your Urgent Care LLC.
7. Obtain Licenses and Permits
Opening a new Urgent Care exposes entrepreneurs to considerable regulatory requirements across healthcare and general business licenses. Find federal license information through the U.S. Small Business Administration. The SBA also offers a local search tool for state and city requirements.
At the federal level, a National Provider Identifier (NPI) number uniquely identifies the clinic across healthcare administration and insurance claims. The CMS-1500 form collects important data on ownership structure and services when registering for an NPI online.
Additionally, Urgent Care staff must clear individual credentialing checks. Clinicians need valid state medical licenses allowing diagnosis and treatment plus DEA registrations to prescribe controlled medications. Other staff should obtain appropriate licensure for radiology technicians, nurses, and medical assistants.
Navigating state and local jurisdictions brings additional licensing obligations around facility operation. For example, some states require all outpatient centers to maintain a formal Accreditation Association for Ambulatory Health Care (AAAHC) certification demonstrating quality standards.
Furthermore, confirm zoning regulations permit medical facilities within desired real estate locations. Apply for local business licenses from the city or county revenue office. These may mandate filing an Assumed Name Certificate to legally transact under your specified urgent care brand name.
Do not overlook building safety inspections and certificate of occupancy permits before occupying a physical site. The above are just a sample of must-have approvals indicating compliance across healthcare laws, state statutes, and municipal codes.
8. Get Business Insurance
Operating an Urgent Care exposes founders to substantial risks absent proper insurance coverage. I cannot overstate the importance of procuring adequate policies before opening doors to the public. Going bare invites financial ruin. Here’s an overview of prudent protection:
Most concerning is the lack of malpractice insurance covering injury lawsuits from patients. A single multi-million dollar judgment could swiftly bankrupt the clinic. Even with strong safety protocols, consider coverage limits upwards of $1 million per incident given the emergency services rendered.
Furthermore, typical Commercial General Liability (CGL) policies exclude healthcare professional services. An Urgent Care CGL policy costing ~$3,000 annually accommodates the clinic’s unique risks around accidents on premises impacting visitors and staff.
Finally, gaps may emerge between CGL and malpractice policies regarding an event like a customer slip-and-fall injury due to spilled biohazards. “Insurance stacking” closes this gap to confirm full coverage across all plausible scenarios.
Obtaining the right insurance mix requires contacting brokers specializing in outpatient medical centers. They solicit quotes from reputable providers like The Doctors Company or Coverys. Expect premiums of around $10,000 yearly depending on prior history.
9. Create an Office Space
Establishing a physical office space can prove useful for Urgent Care founders, offering a professional meet point with partners and workspace outside clinical facilities. Depending on budget and location flexibility, here are various options to consider:
Converting a home office into a corporate headquarters presents a budget-friendly path. Expect costs around dedicated internet and phone lines ($150+ monthly) plus furnishing a spare room. Meetings can be hosted digitally. However, separating work and personal domains often proves beneficial long term.
Coworking spaces like WeWork provide stylish, flexible memberships renting desk space by the month ($300+). Many offer conference rooms to host investor meetings. This makes for a presentable commercial address without assuming lengthy leases. However, available locations may not suit proximity needs to urgent care sites.
In areas with ample retail presence, an on-site office at a strip mall urgent care allows close oversight of clinic operations. This does trade off conveniences like parking and signage that standalone spaces enjoy. Occupancy costs also consume space that could serve additional patient exam rooms instead.
Ultimately most owners graduate towards modest commercial office arrangements nearby care facilities, whether bought or leased at ~$25 per square foot. This dedication remains conducive to productivity and growth, keeping clinic activity separate from HQ while enabling regular check-ins.
10. Source Your Equipment
Launching an Urgent Care center requires extensive medical equipment and supplies to assess and treat walk-in patients. While significant upfront outlays are typical, alternatives exist beyond outright purchases to economize startups. Here are proven strategies to secure essential assets:
Purchasing brand-new diagnostic tools, exam room furnishings, and medications represents the simplest but most expensive path at roughly $250,000. Vendors like Henry Schein Medical offer one-stop procurement but with retail markups and long lead times.
Seeking used equipment through auction sites like eBay or local ads on Facebook Marketplace often delivers major cost savings around gently utilized assets from facility closures. Bring expertise when inspecting items to confirm proper functioning and maintenance records.
Rentals from specialty outfits enable accessing required technology like x-ray machines without six-figure capital investments upfront. This flexibility aids cash flow as patient volumes ramp up. However, accumulated rental fees may eclipse purchase costs over multi-year operating agreements.
Leasing via major health system partnerships brings advantages like bulk purchasing discounts on devices, medications, and consumables. Large operators like AFC Urgent Care promise turnkey setup while allowing new entrepreneurs to learn processes before building out their centers. But revenue splitting arrangements limit profit potential long run.
11. Establish Your Brand Assets
Establishing a distinct brand identity helps urgent care startups stand out from competitors and attract loyal local patients. Beyond clinically focused care, setting the right branding foundation across key touchpoints fosters recognition and trust.
Get a Business Phone Number
Securing an official business phone line early on projects professionalism when engaging prospective partners and answering patient inquiries. Web-based services like RingCentral provide toll-free numbers, call routing tools and unlimited minutes for $30 a month.
Design a Logo
A custom logo also synthesizes market positioning into a memorable icon, readily placed across signage, websites, uniforms, and print collateral. Online design platforms such as Looka provide professional logo generation using just a business name and some color preferences for under $50.
Print Business Cards
Every team member should carry crisp business cards indicating their name, title, phone number, and facility address(es). Cards offer credibility during community outreach. Outdoor/indoor signs should welcome visitors at all clinic locations. Produce these items affordably through Vistaprint.
Buy a Domain Name
Secure a domain name early to establish web visibility and reinforce credibility. Services like Namecheap offer domain registration and hosting packages starting under $50 annually.
Design a Website
Build out your actual website via user-friendly platforms like Wix or custom development firms found on Fiverr. Carefully curating brand touchpoints through professional collateral materials, consistent visuals, and a dynamic web presence attracts new patients while solidifying market positioning as an accessible, trusted healthcare provider.
12. Join Associations and Groups
Joining relevant professional associations and peer networks accelerates the growth of urgent care entrepreneurs through shared knowledge and mutually beneficial connections. Tapping into industry groups builds credibility while gleaning actionable insights.
At the national level, the Urgent Care Association provides essential advocacy, resources, and conferences for operators through an affordable annual membership. Local state associations like the California Urgent Care Association also lobby for legislative changes benefitting in-state providers.
Attending local meetups is a great way to get connected. Find gatherings through searchable sites like Meetup. These regular gatherings cover topics like optimizing clinical workflow or strategic branding. Interact firsthand with medical administrators and clinician entrepreneurs navigating similar startup challenges.
Peer engagement can continue online through Facebook communities like the Urgent Care Medical Professionals and Caregiver / Personal Care Worker / Home Health Aid Jobs [USA] groups. Learn from thousands of fellow operators across the country in threaded discussions or monthly video webinars.
13. How to Market an Urgent Care Business
Marketing represents the lifeblood driving urgent care patient volumes and profitability. While delivering compassionate, quality medical care remains paramount, consistently broadcasting clinic availability through diverse channels secures and expands market share. Here are key strategies to embrace:
Satisfied patients directly referring family, friends, and coworkers via word-of-mouth endorsement offers invaluable and lasting growth. Providing a world-class visit experience makes customers eager advocates. Tactfully solicit shares on social media and ratings on crowd-sourced physician review sites.
Digitally, urgent care competitors rely heavily on search, social media, and ad campaigns to intercept patients. Consider intelligently optimized Google and Facebook ads geo-targeting local residential zips tied to valuable keywords like “affordable X-rays” or “no appointment vaccines”.
Additional digital tactics include:
- Launch Google and Bing pay-per-call ad campaigns
- Initiate email nurture sequences to recent visitors
- Produce useful health content on a blog, YouTube, or podcast
- Create social media channels sharing helpful advice
Traditional options like direct mailers, local event sponsorships, and out-of-home signage near heavily trafficked roadways also continue to deliver new patients, albeit less efficiently on a per-dollar basis.
The ideal mix blends digital excellence optimally in real time with select offline channels delivering mass impressions across the target geography. Carve out at least 10% of gross revenues for marketing experiments measuring ROI on customer acquisition. Urgent Care is a volume game, and skillful promotion ensures clinics operate at peak capacity.
14. Focus on the Customer
Delivering exceptional patient experiences represents a strategic imperative for Urgent Care operators to cultivate customer loyalty and accelerate growth through word-of-mouth referrals. Some ways to improve customer focus in an urgent care facility include:
- During visits, little frictions like extended wait times or insensitive staff interactions get amplified on crowd-sourced review sites like Yelp.
- Going the extra mile with compassionate care or clear communications inspires patients to enthusiastically rate the clinic 5 stars and refer family and friends.
- Urgent Care competes with ERs and primary care on convenience factors like access, affordability, and satisfaction.
- Mastering customer service across both clinical excellence and front-desk hospitality materially boosts retention and referrals.
- Patients gladly return for future needs while recommending the clinic because of the confidence established through caring service.
Leading operators invest substantially in both rigorous medical protocols and formal customer service training to optimize experiences. When urgent care teams consistently deliver timely, empathetic, and clinically sound care, customers eagerly validate those quality perceptions online and offline to drive enduring growth.