Medical Device Business Plan Template
If you want to start a medical device business or expand your current medical device business, you need a business plan.
The following Medical Device business plan template gives you the key elements to include in a winning Medical Device business plan.
Medical Device Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is a brand new medical device designer and manufacturer, established in 2022 as a C corporation by two college friends. The friends, [Founder’s Name] and [Founder’s Name], developed a cutting edge device during graduate school that has since been improved and FDA approved.
This technology helps solve medication compliance challenges observed and experienced by [Founder’s Name] and [Founder’s Name]. It works by automating the dispensing and refill of medications, as well as providing automatic reminders when it is time for a dose. The device will be available in three versions, intended for the consumer, elder care, and travel markets. Products are customized to meet the needs of each of the three markets.
Helping patients with medication compliance is the bottom line goal of [Founder’s Name] and [Founder’s Name] at [Company Name].
Products Offered
[Company Name] produces three versions of its medication dispenser. These devices have various features specific to their respective markets, and all dispensers feature smart connections. These devices have been approved by the U.S. Food and Drug Administration.
Customer Focus
[Company Name] serves consumers of all ages. The demographics of current and potential clients and customers of our clients are as follows:
- 131 million people in the U.S. use prescription drugs
- 53% of all Americans aged 18 to 34
- 62% of those aged 35 to 49
- 75% of those aged 50 to 64
- 87% of those aged 65 to 79
- 91% of Americans aged 80 or older
[Company Name] recently entered into a contract to supply a 25-location regional pharmacy chain.
Management Team
[Founder’s Name] and [Founder’s Name] comprise the management team of [Company Name], and are in the process of securing additional management and staff personnel.
[Founder’s Name] holds a graduate degree from Florida State University in engineering. She is the CEO of the C corporation and her primary occupation is to present the vision of [Company Name], while encouraging major corporate relationships with retail pharmacies across the United States. She is a former regional sales manager for a major medical device corporation, with a track record of 10 years in that role, garnering over 25M in sales.
[Founder’s Name] holds an MBA degree from University of Alabama, with a focus on corporate strategic management. He is a former sales representative for a major medical device corporation, with a track record of 15 years in that role, garnering over 20M in sales.
Success Factors
[Company Name] is positioned in several ways to become a well-established corporation for the following reasons:
- Founders are highly-experienced in the medical device industry
- Founders have a contract to supply 25 retail pharmacies, which have a combined total of more than 100K customers
- Founders have patented these medical devices
- [Company Name] has a track record of continuous improvement to the original product, as technology progresses
- Founders have staff with experience in medical device manufacturing
Financial Highlights
[Company Name] is currently seeking $430,000 to launch. Specifically, these funds will be used to build on property, pay salaries, market services, and pay for research and development, including prototyping and concept modeling, as follows:
- Manufacturing center design/build: $150,000
- Working capital: $120,000 to pay for salaries, and overhead costs until [Company Name] reaches break-even
- Concept modeling, prototyping, and CAD-drawn sampling: $80,000
- Patenting and Trademarking: $50,000
- Marketing, advertising, customer presentations: $30,000
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a brand new medical device designer and manufacturer, registered in 2022 as a C corporation by two college friends. The friends, [Founder’s Name] and [Founder’s Name], developed a cutting edge device during graduate school that has since been improved and FDA approved. The device uses technology that helps solve medication compliance challenges.
In an informal survey of physicians within the greater Los Angeles area, [Founder’s Name] and [Founder’s Name] found that 56% of patients report some issue with medication compliance. In most cases, these patients rely on their memory to take medications as prescribed. Because memories can be faulty, physicians are eager to find a solution which will easily increase medication compliance.
Both [Founder’s Name] and [Founder’s Name] have personally experienced problems with medication compliance. Both have taken prescription medications since college, and quickly learned how easy it is to forget a dose or two. They soon discovered that this is a common experience, and the two of them embarked on a solution-finding mission: that of creating a device which minimized or entirely eliminated medication non-compliance.
The search led to an array of potential solutions, and with the help of their college professors and mentors, they prototyped several until they arrived at the first iteration of the device they build today. While they were still in school, the pair were awarded a patent for the device. Some years later, when their dreams began to coalesce into a solid plan, the founders took steps to ensure the device was approved by the FDA.
Helping patients with medication compliance is the bottom line goal of [Founder’s Name] and [Founder’s Name] at [Company Name].
[Company Name]’s History
[Company Name] was formed as a C corporation. The history of the device is substantial. Extensive experience within the medical device industry provides the backbone of this corporation’s history, with high projections for profitability and multi-stage growth in the years to come.
[Company Name]’s Products
The devices produced by [Company Name] are designed to dispense, refill, and remind patients to take their prescription medications. This device offers a simple solution to medication compliance issues.
Significant advances in the process of concept and discovery, prototyping and production will be patented and trademarked as appropriate. The patents and/or trademarks will add to the value of the medical devices produced.
III. Industry Analysis
The U.S. medical device industry is projected to grow a healthy 3.3% over the next five years, with an increasing demand as time continues. The industry is in a growth cycle, and exhibits high profitability. An aging population and rising community expectations will drive demand for medical devices over the coming years. With the rise of chronic conditions such as diabetes, heart disease, cancer, AIDS, and hepatitis, prescription sales increased an estimated six times faster than population growth, resulting in a dramatic increase in the average number of retail prescriptions per capita. This represents a significant opportunity for [company name].
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the entire United States, targeting several customer segments within that market.
The largest market is retail pharmacies. There are 828,738 pharmacies in the U.S., as of 2022. Pharmacy and drug store staff members typically assist in recommending products to potential customers, as well.
The end consumers are the patients who take prescription medications. They include patients who take medication for chronic conditions, as well as those with acute conditions.
Customer Segmentation
The customers of [Company Name] can be segmented into primary and secondary segments.
Primary Customers:
- Chain Pharmacies
- Independent Pharmacies
- Hospital Pharmacies
- Online Medical Product Retailers
Secondary Customers:
- End Consumers
- Caregivers
- Home Health Care Providers
- Physicians
- Families of Elderly and Disabled Patients
V. Competitive Analysis
Direct & Indirect Competitors
MedTime – direct competitor
Established in 2018, MedTime is a privately held business that has developed the first and only in-home medication manager that intuitively sorts and dispenses medication. The MedTime device has audible and digital reminders; automates refills; and provides real-time as well as historical adherence data. MedTime operates on a subscription fee and offers a free 90 Days Risk-Free trial. Each subscription comes with a MedTime smart dispenser. Additionally, the subscription gives access to a medication management app that gives pill-time reminders and missed-dose alerts, tracks what was taken and when, and gives remote caregiver monitoring for safety and medication schedule management with HIPAA-compliant security. The subscription also has automatic refills with free delivery and access to a 24/7 live support.
MedMonitor – direct competitor
MedMonitor is a privately held business that provides services that simplify medication management and improve medication adherence. MedMonitor offers an automatic pill dispenser that reminds users when it is time to take their medication through flashes, beeps, text messages, and phone calls. The dispenser also provides the user’s caregivers, family members, or pharmacists with notifications about dosage activity, which can be monitored remotely through a patient profile’s on MedMonitor’s website. The subscription comes with a dispense device that is filled for several weeks, depending on the number of dosages per day, optional Locking, refill trays, an optional Medical Alert that has a two-way voice channel with the medical alert professionals, and an interactive screen that can be personalized. Additionally, the subscription comes with access to a secure website, where users and caregivers can easily program their unit’s medication schedule remotely, set up preferred notifications and review reports.
MediBox – direct competitor
MediBox is a privately held business that developed a medication dispenser designed for people who have a hard time remembering to take their medicine. It reminds patients to take their medications, automatically dispenses a 90-day supply of up to 16 different medications, and sends messages to family and caregivers if they miss a dose. The MediBox is easy to set up, provides refill alerts and fast refills, provides a picture of the pills for each dose given, has a tilt sensor alerts for possible tampering or incorrect dosing/spillage, is lockable, and is the only medication dispenser tested to significantly improve adherence in an FDA approved clinical trial.
Competitive Advantage
[Company Name] has several competitive advantages over competitors, listed as follows:
- Founders have experience and in-depth understanding of the target markets, as well as direct contact with over 200 decision-makers in this industry
- Founders have several years of experience in sales and marketing of medical devices throughout the U.S.
- Patented and trademarked medical devices will increase value of the corporation
VI. Marketing Plan
The [Company Name] Brand
There are many medical device providers within the U.S. industry; there is only one, [Company Name], which delivers an affordable device proven to increase medication compliance.
Promotions Strategy
[Company Name] will promote its devices via the following methods:
Public Relations
[Company Name] will make a series of press releases as the company continues in phase one of growth. Each announcement will present current notes of interest, such as medical device innovations, key company personnel additions, patents received, or trademarks confirmed. Each press release will contain forward-looking statements.
Press releases will be sent to newspapers, industry newsletters and social media outlets.
Social Media
[Company Name] will build activity on Instagram, Facebook, and, in particular, LinkedIn. These media markets will help drive traffic to the website and serve as a source for new hires and competitor information.
Website
The website for [Company Name] will be primarily an introduction to the corporation, with successive pages demonstrating pictorial examples of its device improvements, concept models and CAD-drawn samples. A “From the Bench” article written by one of the founders shall be dropped monthly to add to reader interest.
Partnerships
[Company Name] will partner with various philanthropic organizations in giving to charitable causes, including those that support the medical device industry. This effort will create potential target markets, as well as serve as a way of giving back to the customers served.
Medical Device Trade Shows
[Company Name] shall be represented at booths at national industry trade shows, where the company will be highlighted via video presentations and examples of its devices.
Medical Conferences
[Founder’s Name] and [Founder’s Name] shall both serve as company representatives on expert panels or in seminars. They will represent [Company Name] as industry leaders and as experts within the medical device industry.
Pricing Strategy
The pricing strategy for [Company Name] will be based on models that conform to the pharmacies, physicians’ offices, caregivers and patients who purchase the devices.
VII. Operations Plan
Functional Roles
[Company Name] contains the following functional roles:
Research & Development Role
- Direct responsibility for technological advances relating to the device
- Responsible for production of prototyping, 3D printing, and CAD-drawn samples
- Oversight of staff members who work with every phase of production
FDA Administration Role
- Direct responsibility for timely FDA review and approval process
- Oversight of timelines for customization process; in tandem with R & D
Administrative & Human Resources Role
- Direct responsibility for all office functions and administrative procedures, including financial accounting and tax processes
- Customer relations responsibility
- HR responsibility (until future HR Director hired)
- Oversight of maintenance staff and inventory, stock, and supplies
Marketing & Sales Manager
- Responsible for all marketing and sales promotions and presentations
- Responsible for representation of the company at trade shows and in seminars or other industry events
- Oversight of sales representatives
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] was founded by [Founder’s Name] and [Founder’s Name]. The corporation shall be under the direction of the founders who share equal shares of the corporation. Each founder will be responsible for a portion of the functional roles within the corporation and those who operate it.
Given the history of the founders within the medical device industry, building a staff of teams will be done with purposeful and serious thought and with an understanding of which team member will perform best in each role.
Hiring Plan
[Company Name] will hire the following personnel as soon as possible in phase one of growth:
- Research & Development Director
- Marketing & Sales Manager
- FDA Administrative Officer
- Administrative & Human Resources Director
- Administrative staff members (2)
IX. Financial Plan
Revenue and Cost Drivers
The revenue for [Company Name] will be generated by sales of medical devices offered to pharmacies, physicians, caregivers, and patients.
[Company Name] will produce the three current versions of its medication dispenser, as well as developing continuous improvements to the devices offered by [Company Name].
The major costs for [Company Name] will include overhead (including employees, building and material costs), costs for research and development, prototyping, 3D printing, and costs related to FDA approval processes.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $430,000 to launch and take the company through phase one of the growth cycle. Specifically, these funds will be used to build on property, pay salaries, market products, and for research and development, including prototyping and concept modeling, as follows:
- Manufacturing center design/build: $150,000
- Working capital: $120,000 to pay for salaries, and overhead costs until [Company Name] reaches break-even
- Concept modeling, prototyping, and CAD-drawn sampling: $80,000
- Patenting and Trademarking: $50,000
- Marketing, advertising, customer presentations: $30,000
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of wholesale contracts per year | |
|---|---|
| FY 1 | 5 |
| FY 2 | 10 |
| FY 3 | 15 |
| FY 4 | 20 |
| FY 5 | 25 |
| Average order | $250 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
