>> We get phone calls and e-mail all the time asking for information on starting a drug testing business or starting a mobile collection drug testing business. This post provides all the information you need to digest to start your own drug testing business. Read all this information carefully and follow the links below for some awesome video’s that will help you. Then give Joe Reilly a call at 321-622-2020 for an initial consultation on how to start a drug testing business.
Awesome Videos on Starting a Drug Testing Business:
- Nine Minutes on Starting a Drug Testing Business
- [Video Blog] National Drug Screening (NDS) Reseller Program Overview
- If you are really serious about becoming a TPA, watch this two-hour TPA / Reseller Training video
What about a Franchise?
Yes, this is a viable alternative to starting on you own. Do your research and compare. Should you start up on your own or should you purchase a franchise. Here are some Franchise Opportunities that we are aware of:
Why a Drug Testing Business
Are you ready for entrepreneurship? You are thinking about getting into the Drug & Alcohol Testing Business, its sounds great – but where do you start? There is lot to consider, some of it is basic business and a lot of it is specific to the drug testing industry. With some experience behind me, starting a drug testing business from scratch, I will guide you with information to help you formulate your plan of action.
Let us start out with some basic information about the drug testing industry to help you understand what is involved and what your options for your business model will be. First off, we are talking about drug testing in regard to testing individuals for illegal drugs or illegal abuse of legal drugs (prescription). Major uses of drug testing are to detect the presence of these drugs in applicants selected to be hired for a job, existing employees, individuals involved in sports, probationers, parolees, students, parents in child abuse cases, and in many other unique situations.
Is there continued market share available in this industry, yes absolutely? Veteran industry consultant Bill Current with over 25 years’ experience with drug testing stated “While the sluggish economy has slowed virtually all industries in the United States, drug testing sales are good in 2011. This is because after 30 years most employers recognize that drug testing is an essential element of running a profitable business. Drug testing providers still have to work hard, but drug testing is not going away. For that reason, it’s a great business to get into.”
The November 2010 edition of HR Magazine reported that an estimated 54 million full-time civilian workers said their employer has tested workers for drug use. So, is there a market for this business? Yes, there is. A recent report from MarketsandMarkets™ INC. estimates the global drug screening market is expected to reach USD 13.89 billion by 2027 from USD 5.32 billion in 2017. The report further stated that North America is expected to dominate the market followed by Europe.
Drug Testing Business Major Concepts
Knowledge is power in this business. Some key concepts you need to understand and read over very carefully are:
These links above will help you understand the various services you will need to provide as a drug testing company.
You can also work with National Drug Screening to utilize a highly acclaimed Reseller Program to help you manage the drug testing program with laboratory accounts, MRO services and a web-based software system and platform. This along with consulting and training from Joe Reilly will give you a turnkey business.
Basics of Starting a Drug Testing Business
If you have read all of the above and watched the awesome videos you now have a general idea of what this business looks like; you will need to consider some basics in starting a new business. Most importantly, do you really want to operate independently and be the person making all the decisions and shouldering all the responsibility?
This is a question that needs serious thought and will determine if you have the entrepreneurial qualities needed to go out on your own. Also, you must think about, discuss, and plan for the following:
Write a Business Plan: A good business plan should include a description of what you are selling, who the prospective customers are, how you plan to promote, how much money is needed for start-up costs and what are your projections for revenue and expenses.
Legal Format of your Business: The basic legal forms of business ownership are sole proprietorship, partnership, limited liability corporation (LLC) and corporation (Sub Chapter S or C Corporation). Talk to an attorney and your accountant about what makes sense for you and the business you are considering.
Show me the Money: There are three ways to finance start-up costs: use your own money, obtain a loan, or find investors. If possible, it is better to start small, use your savings, and not worry about repaying a debt.
Assistance with the business plan, choosing a legal format, financing your business and many other basic business aspects of what you need are available in your local community. Check with your local Chamber of Commerce, Small Business Development Office (part of SBA, every State has these) or your local SCORE organization in order to access the assistance that is available. Also check the internet, there are many resources available just by a Google search for “starting a new business.” Continue also to educate yourself with magazines such as Business Week, INC, Fast Company and Entrepreneur. Check out also and get familiar with the local BizJournal in your area.
Consider Acquisition, Franchising, Business Opportunity, and Consulting Services
Another big consideration, are you able to purchase an existing business? You might want to speak with a business broker (one that specializes in the drug testing industry). Are you going to start from scratch or perhaps you will want to look at possibilities for franchising and/or business opportunities? There are franchise opportunities in the drug testing industry along with business opportunities. What is the difference?
A franchise is a right granted to an individual or group to market a company’s goods or services within a certain territory or location. Franchising allows entrepreneurs to be in business for themselves, but not by themselves. There is usually a much higher likelihood of success when an individual opens a franchise as opposed to a mom and pop business, since a proven business formula is in place. The products, services, and business operations have already been established; ongoing support is provided from the franchisor.
A business opportunity is like a “business in a box,” as you are provided everything you need to get started. You are granted a license to do business in a way that has everything set up for you in advance. The license is the only purchase made, rather than purchasing an entire business model with franchise fees and marketing fees.
It is important to keep in mind that there are positives and negatives to both franchises and licensed business opportunities. Evaluate each type of opportunity thoroughly to decide what would work best for you.
Another option is to hire a consultant to help you with the startup process of your business; there are consultants available within the drug testing industry and this type of consulting could help you in the short term getting up and running and avoiding mistakes. Of course our recommendation for a consultant is Joe Reilly with experience in the drug testing industry since 1993. Avoid trial and error with an experienced professional business consultant.
Drug Testing Industry Associations – Get Involved
- National Drug & Alcohol Screening Association (NDASA)
- Substance Abuse Program Administrators Association (SAPAA)
- Drug & Alcohol Testing Industry Association (DATIA)
- Professional Background Screening Association (PBSA)
Next Steps for Starting a Drug Testing Business
So now you have done a lot of research, made a lot of decisions, got a basic business plan put together and you are ready to get started. So let’s assume you are starting out as a collector and as your business grows you might want to open up a collection site and then once you are more established you may want to become a third party administrator (TPA).
Refer back to your business plan, work on the initial steps. Check with your local authorities (city, county) for requirements for occupational license which are sometimes even required for a home-based business. As previously mentioned, there are resources to help you with this kind of stuff such as the local Small Business Development Center. Get your basic business supplies in order – business cards, office supplies, a computer; perhaps a laptop if you are going to be mobile. You need a business bank account and perhaps a mailing address. Insurance is a must for a business. DATIA, which merged with the National Drug & Alcohol Screening Association (NDASA) in 2023, has an endorsed insurance carrier you can check out; they know the drug testing industry. You also will need some software such as Microsoft Office, a CRM and perhaps a billing and accounting system such as QuickBooks. You will also need software to help you manage the drug testing operation – ordering of drug tests and receipt of drug tests results along with random testing management and consortium random drug testing.
Do your research and do your homework. Are you ready to own a drug and alcohol testing business?
Summary for Starting a Drug Testing Business
Very important to carefully read all of the over 1500 words on this page and related links and videos. If you do nothing else, watch this video – Nine Minutes on Starting a Drug Testing Business. If you would like an initial 15-minute consultation at no cost call Joe Reilly at 321 622 2020 – Do not call Joe for initial consultation until you have read all of the content on this page along with all related links and videos.
The best of luck to you in launching a new business, we love entrepreneurs and National Drug Screening will do everything in our power to help you become successful. Knowledge is power and you have a lot of homework waiting for you to get started in the Drug & Alcohol Testing Industry.
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