How to Start a Profitable Medical Delivery Service
Delivering oxygen tanks is a little different than delivering pizza. Learn about regulations, getting clients, and managing drivers for a medical delivery service.
Starting a medical delivery service can be a profitable business venture. There are often very few startup costs. You can likely manage with small storage space if you're storing inventory, and you don't need a huge office space.
Besides that, you're only responsible for vehicle maintenance (if you're supplying your own), paying your delivery drivers, and finding clients.
But delivering oxygen tanks and X-rays is a little different than delivering pizza.
There are strict policies in place designed to protect you, your employees, and your customers—these range from OHSA regulations to laws set by the Department of Transportation.
Plus, just because you follow the rules doesn't mean your own business will get (and retain) new clients and quality couriers.
You need to offer quick, secure, and affordable delivery to undercut the competition while making sure you and your employees are paid well.
In this post, we give you the foundational knowledge needed to start your medical delivery service.
Plus, we use our experience as a route management software company to show you how you can optimize your delivery processes while increasing the profitability of each delivery you make.
Circuit for Teams routing software makes it easy to optimize multiple driver routes, keep customers updated, and get proof of delivery.Start free trial →
The basics of starting a medical delivery service
There are hundreds of steps you need to take to start any new business, from picking a business name, printing business cards, building a social media presence, and creating a business plan.
But for this post, we focus less on the generic business to-do items you'll need to cross off and more on giving you tips specific to medical delivery. What follows is some advice on regulations, clientele, and hiring for a medical delivery business.
Know the regulations and laws
When you're running a medical courier service, you're dealing with medical items. This means oxygen tanks, medical samples (such as vials of blood and other biological material), hypodermic needles, and other sensitive materials.
What happens if one of your courier drivers drops a piece of equipment? What happens if the cargo isn't stored at the appropriate temperature? How often do you need to check oxygen levels? What do you do with documents with your customer's name and their medically sensitive information?
The good news is that there are answers to all of these questions — it's up to you to know them and make sure your medical courier business is compliant.
If your business is run out of the United States, most of your rules are set by organizations such as HIPAA, OSHA, and Federal Motor Carrier Safety Administration, though there may be additional laws broken down by each state's Department of Transportation.
You can find online certifications that help you become qualified to deliver medical supplies. This will be a good investment for yourself even if you plan on hiring drivers, as you'll be the one who sets and enforces company policy.
Here is one of the more popular certification training sites we found: Avantor.
Through Avantor and similar sites, you can get certification in biohazard containment, HIPAA Compliant Patient Confidentiality, OSHA Blood Borne Pathogen Handling, and more.
These certifications will go a long way in helping you get new clients, which we cover next.
Get new clients
There are several potential clients for your medical delivery service, including:
- Nursing homes
- Patients (residential addresses)
- Private practices (dentist's offices, surgeons, etc.)
We've previously published a guide to help delivery services get new clients.
Generally, the same strategies apply to medical delivery services, specifically creating an online presence (such as a company website) designed to show up in Google when people search for medical couriers in your area, cold-calling relevant businesses, and networking with healthcare professionals.
For more information on all of those methods, click here to read our post on getting new courier contracts.
Hire and train delivery drivers
Try to be as detailed in your ad as possible, paying extra attention to what an applicant needs to be a successful candidate.
For example, below is a job ad for a medical courier handling CPAP machines. The ad does a good job at outlining the extent to which the courier will be working with CPAP machines, from setting them up to instructing the patient how to use them.
Other jobs are more straightforward, such as this ad for a medical courier:
With this job, the driver just has to pick up and drop off lab specimens, driving the same route Monday-Friday at the same time.
This ad also lists the pay but seems to imply that the driver is responsible for their own fuel. We'd recommend being more explicit about the pay and expenses required in your job ad, so the candidate knows what to expect in terms of total compensation.
Also, list what's required on the ad, such as a driver's license, a clean driving record, car insurance policy (if they're using their own vehicle), and any background checks you'll run before extending an offer.
To make sure the driver you hire stays on your team as a happy and productive courier, it's important to give them adequate training. Don't just assume someone with courier experience will automatically know how you want things done.
We wrote a whole post about training new delivery drivers on your process, but perhaps the biggest takeaway is that it's relatively easy to train a driver on the technical aspect of the job.
This is especially true if you're using a delivery platform like Circuit, which is easy-to-use and works with all major GPS navigation software, like Google Maps and Waze.
What can be more challenging is training your new delivery driver to treat their route like their own small business. But your courier is the last person your customer will see. This means they leave a lasting impression, from how they dress to how they answer any questions to how their vehicle looks.
If you can cultivate a culture where your courier understands they are representing your business whenever they are making a delivery, then you're setting them (and your service) up for success.
How to increase revenue and client retention: Optimize your delivery process with Circuit
We originally made Circuit to be a route planning app for delivery drivers who wanted to optimize their delivery routes. By creating the fastest and most efficient route possible, delivery drivers can save time and money.
For example, one of our customers is a courier who, after he started using our route planner to create his routes, was able to double the number of deliveries he could make in a day. That meant fewer expenses and more profit.
As we talked to our customers, we realized there was a need for a more advanced delivery management system — one that helped delivery teams manage all aspects of their delivery process.
So we made Circuit for Teams: a route management system that lets dispatchers, planners, and business owners manage multiple drivers and their daily routes through our mobile app — available for both iOS and Android devices.
Your new medical delivery service can use Circuit for Teams to:
- Optimize delivery routes
- Monitor ongoing routes
- Provide customers with real-time status updates
- Collect Proof of Delivery
Let's take a look at how each feature helps your business.
You can use Circuit to create the fastest route possible for your delivery service. This means you — or your drivers — will save time completing their stops. On average, our route planner has helped delivery teams and drivers save an hour a day in labor, but actual savings could be much greater.
You save time in two ways:
- It takes you less time to plan routes.
- It takes your drivers less time to complete their routes.
One of our customers — a non-profit response group that delivered prescription medication to its community during COVID-19 lockdowns — saved 12+ hours a week in route planning alone when they started using Circuit.
Before Circuit, they had to do manual route planning (using a combination of pen, paper, and Google Maps to plan multi-stop routes).
But when you plan routes like that, it's not only time consuming, but there's no way to confirm you're actually creating the most efficient route possible.
When you use Circuit, our route planning algorithm can create the fastest route possible in seconds.
From our web app, you can load up addresses by importing a data file (.csv, .tsv, .xls, or .xlsx).
You can also add addresses manually, which is great. This gives your drivers the option to add addresses to their route once they've already started their day. Circuit will then update the route accordingly.
Plus, we use the same auto-complete technology that you find in Google Maps, which means as you type in an address, Circuit will suggest the most likely destination.
Once the addresses are loaded into Circuit, you can then customize your parameters.
With Circuit, you can set:
- Priority stops: This tells Circuit to make sure one stop is made before all others. This is great for accepting rush orders from clients, such as blood samples that need to be delivered ASAP.
- Time windows: You can establish time windows, so deliveries are made when a doctor's office or lab is open.
- Average time per stop: Some deliveries take longer than others. If your delivery drivers are spending an average of 15 minutes at each stop, then their optimized route will change based on traffic patterns. By setting your average time per stop, you can help Circuit create a better-optimized route.
After you've customized and optimized your route, you can assign it to your drivers. They log into the Circuit mobile app and can start making deliveries.
Route monitoring (driver tracking)
Your medical delivery service business is going to be handling sensitive — and expensive — materials, from medical equipment to possibly even prescription medication.
By using Circuit for Teams, you can monitor your drivers in real-time. This lets you see where your drivers are and also where they're going. Our route monitoring features give you their location within the context of the route, so you see what stop they completed, what stop they're heading to next, and an accurate ETA.
Not only do you gain peace of mind knowing where they are, but it also means that if a customer calls asking for an update, you can just reference your route monitoring dashboard instead of having to reach out to your driver and interrupt their work.
But another way of handling those customer inquiries is by sending out order tracking updates, which we cover next.
It doesn't matter whether you're delivering to residential or commercial addresses — people want to know when their delivery is arriving. This lets them plan their day, take lunch when it's convenient, and make sure they are available to receive the package.
You can set up Circuit for Teams to send out delivery updates to your customers.
The first alert goes out when the driver starts their route. (Alerts can be either an SMS message, email or both.). Your customer gets an ETA based on the optimized route you created with Circuit. They also get a link to a tracking dashboard where they can get real-time updates on their delivery.
The customer receives a second alert when your delivery driver is close to their stop. This second alert happens when the driver is about 10 minutes away.
The customer can also communicate with the driver directly through these alerts. For example, say your medical courier is delivering oxygen tanks to a residential address for a patient under hospice care. If the alerts are going to the hospice nurse, they can alert the driver that the patient is finally getting some much-needed sleep and ask them not to ring the doorbell when they arrive.
These little things will help your courier business stand apart, increasing positive word of mouth and hopefully leading to referrals that help you grow your business.
Proof of delivery
Your medical delivery service can use Circuit for Teams to capture electronic proof of delivery (POD).
This POD can be a signature (the customer signs your driver's smartphone with their finger) or a photo.
However, with medical specimens, it's unlikely that your courier will leave a package at the door and take a photo. But it's not completely unheard of — some customers may want contact-free delivery, in which case leaving the package at the door and taking a photo is the next best way to confirm that a delivery was made.
No matter how you collect proof of delivery (either through a signature or photo), the copy of the POD is sent to your customer and stored in your Circuit dashboard for easy reference.
By combining these core aspects of last-mile delivery into one mobile and web app, we have helped all kinds of courier and delivery companies scale up and optimize their processes.
One of our customers — a bicycle courier company that delivers prescription medication in a major metropolitan city — used Circuit to grow their business from a two-person delivery company to a business with 10 drivers that make up to 400 deliveries per day.
Final thoughts: Creating a successful medical delivery service
Like any type of business, there's a long list of to-do items when you're starting your own medical delivery service.
There are administrative tasks (coming up with a name, choosing a tax filing status), marketing tasks (creating a social media presence, running ads, networking), and managing the last-mile delivery operations of your business — getting the parcel to its final destination.
Without using a delivery and route management platform like Circuit, you run the risk of shrinking your margins because you're spending more than necessary on each delivery.
By using Circuit, you can not only deliver items quickly, but you can do it in a way that increases customer satisfaction. Offering status updates on orders and having proof of delivery provides peace of mind (for both you and your customer).
Are you ready to see how Circuit can be used to help you run your medical delivery service? Start your free trial.