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How To Start A Medical Scrubs Business

How To Start A Medical Scrubs Business

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How To Start A Medical Scrubs Business

How To Start A Medical Scrubs Business

Medical clothing is a product that won’t go out of style when the next season comes around. Scrubs are sanitary clothing made for medical professionals to protect them from coming in contact with bodily fluids. The material is typically thick and helps prevent fluids from seeping through. The term “scrubs” came about because this clothing was worn in a “scrubbed” environment, such as surgical rooms.

Today, many medical professionals wear scrubs: doctors, nurses, dentists, phlebotomists, and countless others. As a result, medical scrub businesses have a broad customer base. They can market different styles and designs, such as kid-friendly prints for pediatricians or custom, logo-printed scrubs for uniforms.

Business Description

Boiled down to the basics, medical scrub retailers draw up designs, purchase materials, produce the final product, and sell their items to customers. But however simple the basics are, a lot more detail goes into a medical scrub retail business.

For instance, are the scrubs handmade or contracted to a manufacturer? Will your business sell generic scrubs, or will your items be boutique, custom designs? Will the line be sold in a retail store? A mobile booth? Online? The potentials are endless, and so are the business decisions. Ultimately, medical scrubs businesses can sell their products in various niches.

Industry Summary

The medical scrubs industry, a significant segment of the broader medical apparel market, supplies a range of products that include scrubs, lab coats, surgical masks, and other healthcare garments. These are essential items used daily by healthcare professionals across various settings, such as hospitals, clinics, research laboratories, and educational institutions.

This industry has seen steady growth over the years, driven by the expanding healthcare sector, aging population, and rising health awareness. However, the global COVID-19 pandemic significantly accelerated this growth, leading to increased demand for medical scrubs and other healthcare garments due to heightened hygiene and safety requirements. In fact, the medical scrubs industry is expected to increase by 5.9% annually over the next several years and reach $140 billion in revenue by 2028.

Medical scrubs businesses operate in a highly competitive market, which includes both large multinational corporations and small and medium-sized enterprises. They compete on factors such as product quality, price, design, and customer service. While the market is mature in regions like North America and Europe, emerging economies present significant growth opportunities due to increasing healthcare infrastructure and spending.

In terms of manufacturing, many businesses source their products from countries with lower production costs, although there’s a growing trend towards local production due to concerns about supply chain reliability and sustainability. Businesses are also increasingly focusing on product innovation, such as antimicrobial fabrics and ergonomic designs, to meet changing customer needs and differentiate their offerings.

In the digital era, e-commerce has become an important sales channel for the medical scrubs industry, offering businesses a cost-effective way to reach a wider customer base. Many businesses also use social media and other digital marketing strategies to promote their products and engage with customers.

Overall, the medical scrubs industry plays a critical role in the global healthcare sector, and it’s expected to continue growing in the foreseeable future. However, businesses in this industry need to navigate various challenges, including intense competition, changing customer expectations, and evolving regulatory standards.

Target Market

Medical scrub businesses can operate in various markets, ranging from individuals to large business contracts. Determining your business’s niche can help narrow down which market is best.

Retailers: Many medical scrub businesses will target physicians, nurses, surgeons, and other health care and medical staff. Selling at retail can not only be done through a storefront but also through online stores, or traveling booths at conventions and markets.

Wholesalers: Selling to retailers typically requires some level of manufacturing as retailers often purchase scrubs in bulk. If you want to keep things smaller and avoid manufacturing, you may opt for local shops and sell your line in smaller batches.

Business contracting: Establishments, such as medical offices, dental offices, or long-term care living facilities, often need scrubs for their employees. Additionally, they may want a certain color, logo, or design, leading them to purchase custom scrubs through a medical clothing business. As such, contracting with these types of businesses can be lucrative and offer steady business.

Checklist To Start A Medical Scrubs Business

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Starting any business can seem like a daunting task, but with a little planning, it can be surprisingly simple. If you’re thinking of starting a medical scrubs business, here’s a checklist to help you get started:

Step 1: Research the medical scrubs market

Starting a new business requires comprehensive research to determine the feasibility of your venture, especially in a specific market like medical scrubs. Here are some steps and resources you can use to start this research:

Identify Your Target Audience: Medical professionals (doctors, nurses, technicians, etc.) will be your primary target. However, also consider the growing demand from non-medical professionals who may prefer scrubs for comfort. Understand their demographics, locations, preferences, buying behaviors, etc. Surveys, focus groups, and interviews can be helpful in this regard.

Evaluate the Competition: Look at other businesses that are selling medical scrubs. What are their price points? What styles and materials do they offer? Where are they located? You can use a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) to compare your business plan to the competition.

Review Online Marketplaces: Review sites like Amazon, eBay, and others to gauge the demand for medical scrubs. Look at product listings, customer reviews, and overall sales rank.

Local Demand Analysis: Check with local hospitals, clinics, medical schools, dental practices, and veterinary clinics, they could be potential customers. You can schedule meetings, conduct phone calls, or send out surveys to these potential customers to understand their needs better.

Regulatory Environment: Depending on your customer, understand the regulations associated with medical scrubs. These might include rules about hygiene, safety, manufacturing standards, etc. Regulatory bodies or professional healthcare organizations can provide this information.

Social Media Analysis: Another way to evaluate the market is to join social media groups to understand what potential customers are saying about medical scrubs and the competitors. This can give you insights into what people like or dislike about current offerings and where there might be gaps in the market.

Industry Trade Shows and Conferences: Attending industry events can help you understand current trends, meet potential customers, and see what competitors are offering.

Seek Expert Opinions: Reach out to industry consultants or experienced professionals in the medical apparel industry. Their insights and advice can be incredibly valuable in understanding the market.

Remember, market research is an ongoing process. Once your business is operational, continue conducting research to keep up with industry changes and evolving customer needs.

Step 2: Write a business plan

While not the most fun step of starting a business, a business plan is important for a medical scrubs business because it can help you to outline your goals and strategies for the business.

When you are writing your business plan, be sure to include information on the target market for your medical scrubs. This will include demographics such as age, gender, income level, and geographic location. You should also research the competition in your area and determine what sets your business apart from them.

Related: How to write a business plan

Step 3: Secure funding

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a medical scrubs business is another.  

There are a variety of sources to fund a medical scrubs business. Personal funds and friends of family are a good place to start, but if more funding is needed, banks are often the next place to look. Banks are typically going to require a business plan and want the borrower to have good credit and be able to invest 15-25% of their money towards the total start-up costs. If additional security is needed, the bank can utilize a loan guarantee from the Small Business Administration (SBA).

Related: Finding the money to start a business

Step 4: Register the business

The next step in starting your medical scrubs business is to make sure it’s properly registered and legal to operate. It’s important to note, however, that the exact process can vary from state to state, so you’ll need to check the specific requirements for your location. Here’s a general guide to the key registrations:

Form a Business Structure: This is a crucial decision that can impact your business in many ways including liability, taxes, and control over the company. For a medical scrubs business, an LLC (Limited Liability Company) or Corporation could be appropriate, as these structures can provide you with liability protection, which is crucial for a business dealing with healthcare-related products. While less expensive to register, a sole proprietorship might also be an option if you’re running a very small operation, though the owner is personally liable.

Related: Comparison of business structures

Register Your Business Name: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtain Business Licenses and Permits: Every city and state has different licensing requirements for retail businesses, but some common licenses include a local business license, building signage, sales tax permit, Employer Identification Number (EIN), and more.

Related: State guides for general business licensing

Step 5: Acquire & set up the location

When picking a location for your medical scrubs business, you will need to consider several factors. The ideal location will vary depending on whether you have a physical retail location, sell online, or sell directly to clinics, hospitals, doctor’s offices, or a combination of all. The most important thing in a retail store is location, and if you plan to sell at retail, you’ll ideally want to be located close to a medical center, or hospital.

Another important factor to consider when picking a location is the cost of doing business. Be sure to calculate all of the costs to operate this location, as the rent is just one aspect of the expenses for your location.

Finally, you will need to make sure to check local zoning regulations before signing any lease or sales agreement. If the location isn’t zoned for retail, it could be difficult or take some time to get approval from the city.

Related: Choosing a business location

Step 6: Source suppliers

Now that the funding and location are out of the way, it’s time to find suppliers to stock your store. Finding reliable and high-quality suppliers is important to the long-term success of your business is important. Here are some tips and steps to follow:

Identify Your Needs: Before you start looking for suppliers, have a clear understanding of what you need. This includes the types of materials, the quantity, the frequency of your orders, and your budget. Additionally, are there other accessories to source such as gloves, stethoscopes, etc?

Research: Start by conducting a broad search for suppliers online. Websites such as Alibaba, Global Sources, and ThomasNet can help you find potential suppliers globally. However, also consider local suppliers for quicker lead times and easier communication. Look for suppliers specializing in healthcare textiles or medical apparel to ensure they’re aware of industry standards and requirements.

Attend Trade Shows: Trade shows specific to the healthcare, textile, or apparel industry are excellent places to meet potential suppliers. These events provide an opportunity to speak directly with manufacturers and suppliers, assess their product quality, establish relationships, and negotiate pricing.

Ask for Recommendations: Reach out to your network and industry connections for supplier recommendations. Other business owners, especially in the healthcare or apparel industry, could provide valuable suggestions.

Request Samples: Once you’ve identified potential suppliers, ask for samples of their products. This allows you to assess the quality of their materials firsthand.

Evaluate Suppliers: Consider factors such as price, quality, reliability, communication, and their ability to fulfill orders on time. Don’t be tempted to go for the cheapest option; quality and reliability are equally, if not more, important. Check their reviews or testimonials, and ask for references if possible. Additionally, some suppliers are more friendly to startups and can provide useful information to help you get started.

Step 7: Create a marketing strategy

Starting a new business is always an exciting undertaking, but before you can open your doors, people need to know you exist!

Starting with digital strategies, an engaging, user-friendly website with clear product descriptions, pictures, and competitive pricing can serve as a virtual storefront. An e-commerce platform will allow customers from anywhere to purchase products directly. In addition to the website, it’s also beneficial to develop an SEO strategy, ensuring that the business appears in search results when potential customers are looking for medical scrubs online.

Leveraging social media platforms is another effective tactic to get people to the website and storefront; you can use these channels to showcase your products, share testimonials, and engage with customers directly. Consider paid advertising on platforms like Google, Facebook, and Instagram to reach a larger audience.

Additionally, content marketing, such as blog posts and articles about the industry, can help establish your business as a trusted source of information. Email marketing is another key strategy, providing a means to connect with customers regularly, share promotions, and keep your brand top of mind.

Finally, fostering partnerships with local hospitals, clinics, and medical schools can provide access to a large customer base and build credibility within the local area. Giving away free sets of apparel to these partners can be an effective way of letting potential customers try your merchandise. Consider attending industry trade shows and events to network with potential customers and understand industry trends. Combining these strategies can help a medical scrubs business to effectively market itself and grow its customer base.

Also, if you plan to sell your brand of scrubs, you can advertise in medical publications, like the Journal of Clinical Investigation, American Journal of Nursing, American Journal of Public Health, and The Journal for Nurse Practitioners.

Related: Low-cost ideas to market a new business

Step 8: Launch your medical scrubs business

If you have made it this far, you are really close to starting the business, however, there are several elements that may need to be tied up before launching your business. A few key ones include:

Business Insurance: Having the right insurance is crucial to protect your business from various risks. For a medical scrubs business, you might want to consider product liability insurance, general liability insurance, workers’ compensation insurance (if you have employees), and property insurance if you have a physical store or warehouse.

Bookkeeping Setup: Implement a solid bookkeeping system from the start. Good bookkeeping ensures you have a clear picture of your financial health, aids in tax preparation, and can be crucial in securing additional funding or loans. Wave Accounting (FREE) or Quickbooks are popular choices, but there are many bookkeeping tools available.

Opening a Business Bank Account: Separating personal and business finances is critical. A business bank account and credit card can help you track business expenses accurately, provide a cash flow buffer, and build a credit history for your business.

Payment Processing: Being able to accept credit card payments, both online and in-person, is vital in today’s market. Investigate payment processing services that offer competitive rates and consider mobile payment options like Square for any point-of-sale transactions.

Inventory Management: Efficient inventory management prevents stockouts and overstocking. Consider using an inventory management system to track your stock levels, orders, sales, and deliveries in real time.

Hiring Employees: If your business is large enough to require additional help, be sure to understand the hiring process, tax obligations, and labor laws. Look for employees who are reliable, share your business values, and can provide excellent customer service.

Compliance with Health and Safety Regulations: Given the nature of the business, adherence to health and safety regulations is critical. Make sure your products meet all relevant guidelines and standards.

Every business will have different needs based on its location, size, and specific business model, so while this advice provides a general guide, it’s important to seek personalized advice from experts like business consultants, lawyers, and accountants as well.

This material is property of StartingYourBusiness.com

Greg’s Tip: Many new business owners underestimate the costs of starting and running a business, which can lead to financial difficulties down the road.

Make sure to account for all possible costs in your financial plan, including a buffer for unexpected expenses.

Greg's Business Tip

Common Questions When Starting A Medical Scrubs Business

How much does it cost to start a medical scrubs business? 

Opening a new business is an exciting adventure. But any business owner knows that once you pass the initial planning stage and start gaining traction, it helps to know some of the finer details, such as the costs. On a very basic level, you might expect startup costs to range anywhere from $50,000 to $150,000 or more. A few costs to consider include:

Business Formation Costs: Business licenses, permits, and insurance are all essential aspects of setting up your new business, and these aspects have price tags. However, the cost varies depending on where your business is located.

Store Acquisition and Renovations: Getting the shop ready to open (whether online, storefront, or retail) will involve acquiring the store or vehicle and any necessary signage, shelving, inventory management software, etc.

Initial Inventory: There are multiple options for obtaining retail inventory. The primary merchandise sold will be scrubs, but there are opportunities to make additional sales items such as shoes and equipment.

Distributors are a common option, but if you plan to sell your own unique brand, you will need to research medical uniform manufacturers.

Clothing factories typically have a minimum order quantity (MOQ), meaning you must order the minimum amount per designed item. So, for example, a medical scrub outfit could cost from $8 – $12 a piece with a MOQ ranging from 100 – 3,000 pieces or more. A distributor will allow for lower quantity ordering, but with higher prices.

As you are starting a retail storefront reselling scrubs, let’s assume you place an order with a distributor for 200 pieces at $15 each; then, the minimum order would cost you $3,000.

Materials are another cost to consider. Sometimes the material costs are included in the factory MOQ quote, but it is always good to check whether the fabric is included. Otherwise, your expenses increase quite a bit without the fabric and materials included.

If you aren’t sure which way to go or looking for more information, check with the Uniform Retailers Association (URA) and North American Association of Uniform Manufacturers and Distributors (NAUMD)

Marketing: Marketing is essential in growing your business reputation and selling your product. A good marketing plan is one that gets you exposure. However, this often (but not always) requires an investment of money. A cost-free way to market is through your business’s social media accounts. But, purchasing ads and mailers is another excellent way to promote your product. For reference, ads on social media platforms cost between $0.38 – $5.26 per click.

A professional website sets you apart from your competitors and builds client trust. The average cost for a professionally designed website is $2,000 for a small business. If a professionally designed website is not within the budget, you can do it yourself with a free website builder service, such as Wix or Squarespace.

Employees. Whether you hire a seasonal accountant or a full-time employee, you may want to account for employee costs in your business budget. On average, freelance accountants charge $30 per hour, and marketing managers charge around $22 per hour.

Remember, these are only rough estimates, and the actual costs can vary. It’s essential to conduct a detailed financial analysis tailored to your specific business plan and local market conditions. Consider consulting with a business advisor or accountant to ensure you have a realistic understanding of the financial commitment involved in starting a medical scrubs business.

How profitable is a medical scrubs business?

Custom scrubs sell for a higher-than-average apparel price simply because the items are specially made and designed to withstand the realities of the job. For this reason, it’s not uncommon to see higher prices for scrubs and in this example, the retail price that you plan to sell at is $30.

The largest cost for a medical scrubs business is the cost of inventory and it’s not uncommon for the cost of inventory to be 50% of the retail price, so in this example where the retail price is $30, your wholesale scrubs cost is $15 from the distributor.

Looking at the profitability, let’s say you sell 1,000 scrubs a month. At a profit of $15 each, you would be making a gross profit of $15,000 per month or $180,000 per year. After subtracting operating expenses (e.g., rent, salaries, utilities, marketing, insurance, etc.), you’ll be left with your net profit. If your monthly operating expenses amount to $10,000 a month, your annual net profit would be $180,000 – ($10,000 * 12) = $60,000.

It’s crucial to note that this is a simplistic estimate and doesn’t include the cost of any medical accessories. Profits can be affected by various factors, including changes in sales volume, changes in the cost of goods sold, seasonality, and unexpected expenses. Also, it’s quite likely that a new business may not make a profit in its first year due to initial startup costs and the time it takes to build up a customer base. Therefore, it’s important to prepare a detailed business plan and regularly update your financial projections. As always, consulting with a business advisor or accountant can provide valuable insights and help you plan your business finances effectively.

What Skills Are Needed to Run a Medical Scrubs Business?

As you explore starting your own medical scrubs business, you likely already have entrepreneurial skills to help jumpstart your business. Here are a few skills that come in handy:  
 
Coordination and Planning. Coordination and planning are similar but slightly different skills you need to run a medical scrubs business. For instance, you will need to coordinate
– Scrub designs
– Manufacturer orders
– Customer orders and deliveries
– Bookkeeping and accounting

In addition, you must be able to plan out launches, marketing strategies, and timing of order fulfillment.

Although employees can help with a lot of these tasks, it remains important for you to have these skills too. Business coordination and planning help ensure efficiency, reduces company waste, and keeps you in tune with the business. The last thing you want is customer orders to go unfulfilled, accomplished incorrectly, or delivered late. A poor reputation can be a devastating business setback.

Design. Finding your niche helps to set your business apart from other medical scrub businesses. Developing your niche includes defining your brand and clothing designs. For example, perhaps your line focuses on scrubs with lots of functional pockets, or maybe the scrubs are designed for pregnant customers. Although a professional designer can help you plan out brand ideas, having an overall vision for your business’s niche helps.

Sales and Marketing. Once you have your line of scrubs and your brand identity, you will need to acquire customers. You gain customers through selling and marketing your product to buyers. In addition to sales and marketing, having a knack for negotiation is another valuable skill, especially while lining up ongoing contracts.

Final Thoughts

Starting a medical scrubs business is a great option for those passionate about designing clothing lines and eager to sell. Scrubs are a line of clothing that won’t go out of style, and medical professionals will continuously need new and replacement scrubs, securing a steady market.

How To Start A Medical Scrubs Business

How To Start A Medical Scrubs Business

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