As the new year begins, more and more entrepreneurs are opening up to the idea of getting into the healthcare industry and it’s easy to see why. The increasing involvement of telemedicine in today’s healthcare industry and it’s rapidly growing market, along with the expected rise in enrollments at health profession schools, show that this sector is not only thriving but will continue to grow and be profitable. Still, despite all of these and more, attaining success within the field continues to be a tough thing to do, especially for budding organizations.
That said, here are some of the common pitfalls entrepreneurs must be aware of if they have a particular interest in building a healthcare startup:
Picking the Wrong Business Structure
While it’s true that risks are an unavoidable part of starting a business in any field, the hazards that come with setting up a startup within the healthcare sector grow tenfold. After all, most clients also double as patients. As such, enterprises are expected to prioritize customer trust, security, and privacy above everything else. This opens up startups to potential lawsuits, which is why forming an LLC, rather than a sole proprietorship, as your beginning business structure is recommended.
Unlike sole proprietorships and partnerships, an LLC keeps business owners from being personally responsible for their company’s liabilities. This means that if lawsuits were filed against your company, they won’t harm your personal properties and lead you to bankruptcy. Even the biggest healthcare companies walk a legal fine line, so make sure you’re protected from the get-go.
Not Using the Right Technologies
A big chunk of healthcare predictions for 2021 is based on telemedicine’s rise and the growing importance of all things digital in the sector. In some studies, it was even predicted that around 35% of patient interactions will become digital this year, following the continuous growth of global telehealth that is predicted to reach $50 billion. This proves how crucial it is for startups to appropriately leverage the technologies available to them.
For instance, by being able to utilize cloud technology to its full potential, startups can become better at managing and securing their clients’ data. Aside from improving certain processes, innovations like AI and VR can also help startups be competitive. Case in point: Atomwise. This startup used AI to launch a virtual search for safe and existing drugs that could be altered to treat Ebola. They found two. Cloud technology and AI are only two of the many technologies that a startup can look into and properly leverage.
An Incomplete Team
Healthcare startups can’t be managed by just two to three people alone—you need other professionals that can effectively manage every aspect of your business. For example, an accountant sorts a company’s finances and meets with investors. A marketer can help promote the business on the right channels. You can even employ the help of a healthcare researcher to help compile your data.
In line with the previous subheading, any startup can also benefit from various tools like project management software, email marketing platforms, and other tech solutions that can help streamline processes. Fortunately, no matter what software you need, Akvelon can form a team that can make it. With access to over 875 experts that have extensive experience in fields like cloud computing, blockchain and ML, you’re sure to get a team that can build the right products.
Having a Poor Understanding of the Healthcare Ecosystem
Of all the things that make it difficult for startups to take off in the healthcare industry, nothing beats the complex ecosystem that keeps the sector working. Before entrepreneurs can even dream of making it into the healthcare business, they must first learn to navigate the intricate connections between hospitals, pharmacies, manufacturers, and other relevant stakeholders.
While the ultimate goal of organizations in the industry is to forward the well-being of patients, it’s important to remember that the ones paying for most of the services are large enterprises, insurance companies, and relevant government institutions. This means that aside from patient care, startups must also have a business plan that’s appealing to those who fund them. Learning the healthcare ecosystem’s ins-and-outs can also help owners come up with a plan that fits today’s payment and reimbursement dynamic.
Article exclusively submitted to akvelon.com
Written by Rita Jordan