Learn how to start a drug testing business from industry professional Joe Reilly
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Drug-testing businesses are in demand!
The U.S. Department of Transportation (DOT) requires all safety-sensitive employees to undergo drug testing. Not only that, many private companies require drug screening as part of their pre-employment process, or be subject to random, post-accident, reasonable suspicion and periodic drug tests during their time of employment.
It’s easy to understand why DOT rules and regulations require flight crews, commercial drivers, ship operators, pipeline staff, railroad personnel, and public transit workers to be drug tested. No one working those jobs should be under the influence of illegal drugs or abuse prescription drugs.
But many private companies like to drug test their employees, too. Maybe they get a break on insurance, or maybe they advertise that they drug test to attract a certain type of employee
Drug testing is also done on certain athletes, people on probation, parents in child abuse cases, and teenagers who are suspected by their parents of using drugs.
Whatever the reason, there is a need for drug screening businesses throughout the United States. If you want to fill that need by starting your own drug alcohol testing business, here are some tips to help you get started.
DETERMINING THE TYPE OF DRUG-TESTING BUSINESS TO GET INTO
As a business owner, you have three choices for starting a drug-testing business: franchise, business opportunity, and self-start. Let’s explore all three.
A drug-testing franchise operates as other franchises do. You’re probably familiar with the concept, and you’re likely a customer of a franchise or two yourself.
Jimmy John’s Sandwiches, Hampton by Hilton, Supercuts, Servpro, Subway, McDonald’s, and Ace Hardware are all franchises, and they all have recognizable names.
Some available drug-testing franchises with recognizable names include USA Mobile Drug Testing (USAMDT®, ANY LAB TEST NOW®, and ARCPoint Labs.
An advantage of a franchise is that it’s an already-established business model. You own the individual business, and you get training and guidance. But you still work for the corporate office in the sense that you must adhere to their guidelines.
Buying a franchise is expensive. You typically pay a large sum to purchase the franchise, and you pay annual corporate royalty fees.
A business opportunity is somewhere between a franchise and self-starting your own business.
When you choose the business opportunity route, you buy an existing business. You don’t necessarily operate under a brand name, although you could use the existing company’s name if you want to.
You will be set up to get started when you buy a business opportunity, but you are then on your own. There is no corporation to give you ongoing help, but there are no ongoing royalty fees to pay, either.
When you self-start, you’re on your own. You don’t have a corporate headquarters to deal with or to share your wealth with, and you don’t need to pay someone to take over their business.
You have complete control when you self-start. And just because you’re on your own when you self-start a drug-testing business doesn’t mean there isn’t help and resources available to you.
You can hire a consultant to help you get started. A consultant can train you on what you need to know to get your business off the ground. This is a great way to avoid making costly mistakes.
HOW TO START WHEN YOU’RE SELF-STARTING
Self-starting a business requires more upfront work on your part than buying a franchise or business opportunity does. We’ll focus more on this now.
Once you’re confident that self-starting a drug-testing business is the right choice, you need to determine your startup costs, research the marketplace, and write a business plan.
The U.S. Small Business Administration provides a wealth of information on starting a business in general.
Here’s an overview of self-starting a drug-testing business.
Determine Startup Costs
You’ll need a certain amount of equipment and supplies to start a drug-testing business.
If you will work with a particular laboratory, they will typically provide you with specimen cups, shipping materials, and forms to fill out. If you will be testing for alcohol as well, you’ll need to buy a Breathalyzer.
You’ll also need typical supplies common to all businesses, such as business cards and a website (or a social media page at the very least).
Determine whether you’ll be a strictly mobile operation, which means you travel to your clients to take specimens, or whether you’ll want to set up shop with a facility that people can come to for testing.
Research the Marketplace
You need customers to succeed.
Determine whether there is a market share in your area for your business. If there is, you’ll need to find out whether other drug-testing businesses are meeting that need or whether there would be room for your business as well.
Think also about how you will market your service. You’ll need a sales strategy set up before you begin. Make a list of prospects, and plan to make sales calls to them.
Write a Business Plan
You’ll need to determine what sort of drug-testing business you will run.
Most people start their business as a collecting one, where they and staff collect specimens to send to a laboratory. Your business plan might have you doing that for several years before you expand. Later, you might consider expanding to manage a company’s drug-testing program.
Determining what your pricing structure will be and your projected profit margin should be a part of your business plan.
You should also know what the regulatory requirements are for the type of business you will set up and how you can meet them. Collectors need to be trained before they start collecting samples. If you will be a DOT collector, there will be more specific training for you to do. Perhaps you want to be full service and operate as a Consortium/Third Party Administrator (C/TPA).
If you wish to expand to manage a drug-testing program, you would need to learn specific regulations, guidelines, and federal and state laws.
You have options when it comes to getting in the drug-testing business. If you choose to self-start, Joe Reilly & Associates can give you the specialized training you’ll need. Joe Reilly has been in the business since 1993.
For over ten years, Joe has served on the Board of Directors of the Drug & Alcohol Testing Industry Association (DATIA) and as Chairman of the Board for four of those years.
At Joe Reilly & Associates, Inc, we can provide advice on a franchise, business opportunity or self-start. We offer expert training and consulting services in the drug and alcohol testing industry. Whether you’re starting your business from scratch, or looking to expand into new markets, we can help. To learn more about how we can assist with your drug testing business, give us a call today at 321-622-2020.