How to Start a Clinic and Secure Financing for It

Starting a clinic is a rewarding endeavour, but it requires careful planning and adequate financing. As a healthcare provider, your goal is to offer quality services while ensuring your clinic operates smoothly and efficiently. You should therefore be aware of the basic steps to know how to start a medical clinic in India, and how to secure financing for it.

The cost of setting up a clinic in India varies widely, depending on several factors such as the type of clinic, location, size, and equipment. 

Here are the primary expenses you need to consider:

Location and Space

Rent or purchase costs depend on the city and the size of your clinic. In major cities like Delhi, Mumbai, or Bengaluru, the cost could be significantly higher.

Renovation and Infrastructure

You will need to renovate the space to meet medical standards. This includes basic construction, plumbing, electrical work, and furniture. Costs can range from ₹2 Lakhs to ₹10 Lakhs, depending on the space.

Medical Equipment

The cost of medical equipment is one of the largest expenses. Depending on the speciality of your clinic, you will need equipment like examination tables, diagnostic tools, sterilisation machines, and more. The cost can vary between ₹5 Lakhs and ₹25 Lakhs or more.

Staffing

You will need to hire medical professionals and support staff. Salary expenses will be recurring and should be factored in from the outset. Depending on the size of the clinic, this could be ₹50,000 to ₹5 Lakhs per month.

Operational Costs

Day-to-day costs such as medical supplies, utilities, maintenance, and marketing must be accounted for as well. These expenses can be around ₹1 Lakh to ₹5 Lakhs annually.

The total cost to set up a clinic can range from ₹10,00,000 to ₹50,00,000 or more, depending on your vision and location.

To know how to open a medical clinic in India, you can follow the below given steps:

1. Research and Planning

Start by identifying the type of clinic you want to open. This could be a general practice, specialised clinic, or diagnostic centre. Conduct market research to understand the demand for healthcare services in your area. Create a detailed business plan, outlining the clinic’s services, target audience, and financial projections.

2. Legal Formalities

a. Register your Clinic

You need to register your clinic as a legal entity. This can be done under different structures like a sole proprietorship, partnership, or private limited company.

b. Obtain Licenses

In India, clinics require several licenses and permits to operate legally. You will need to obtain an establishment license from the local municipality and a medical registration certificate. If you’re planning to offer specialised services, any additional licenses specific to that field.

3. Choose a Location

The success of your clinic depends on its location. Look for a place that is easily accessible and has a high footfall of potential patients. It’s ideal to be in proximity to residential areas or commercial hubs. Also, make sure that the premises meet all the health and safety regulations set by local authorities.

4. Setting Up Infrastructure

Design your clinic to create a welcoming and hygienic environment. Focus on patient comfort while ensuring the space is functional. You will need to invest in medical furniture, lighting, and storage solutions. Make sure the clinic adheres to safety standards, such as having proper waste disposal mechanisms and sanitisation facilities.

5. Hiring Staff

Hire qualified healthcare professionals, including doctors, nurses, and medical assistants. Additionally, consider administrative staff for tasks like patient registration, billing, and appointment scheduling. Ensure that your staff is well-trained and knowledgeable about patient care protocols.

6. Procure Equipment

The type of medical equipment you need will depend on your specialisation. For example, a dental clinic will require dental chairs, X-ray machines, and sterilisation equipment. A general practice clinic will require examination tables, thermometers, and stethoscopes. Look for suppliers who provide high-quality equipment at reasonable prices. You can also consider leasing equipment initially to reduce costs.

7. Market Your Clinic

To attract patients, you need to promote your clinic. Develop a marketing strategy that includes online presence (website, social media), offline methods (flyers, newspaper ads), and referral programs. Word of mouth is very effective in the healthcare industry, so providing excellent service will help in gaining loyal patients.

8. Secure Financing

Setting up a clinic can be expensive, and securing the necessary funding is crucial. There are various ways you can finance your clinic such as getting a business loan for the clinic, finding an investor, or using personal savings.

Opening a clinic in India requires adhering to several legal formalities. This ensures that your clinic operates smoothly and complies with the regulations set by local and national authorities. 

Here’s a breakdown of the key registrations and licenses you’ll need:

Clinic Registration

You must register your clinic as a legal entity. This could be a sole proprietorship, partnership, or private limited company. Each type of business structure has its own benefits, so choose the one that suits your needs. If you plan to expand in the future, a private limited company might be more beneficial due to limited liability.

Medical Registration

Every doctor must be registered with the Medical Council of India (MCI) or the respective State Medical Council. This ensures that you and your medical staff are legally qualified to practice medicine.

Establishment License

To legally run a clinic, you must obtain an establishment license from the local municipal corporation or health department. This license confirms that your clinic complies with health and safety standards.

Drug License

If you plan to dispense medicines at your clinic, you’ll need a drug license from the Central Drugs Standard Control Organisation (CDSCO) or the State Drug Authority. This ensures that your clinic is licensed to sell or store pharmaceutical products.

Bio-medical Waste Management License

As per government regulations, clinics must have proper waste management systems for handling bio-medical waste. This includes getting a license from the Pollution Control Board and ensuring that waste is disposed of properly.

Fire Safety Certificate

A fire safety certificate is required to ensure that your clinic has proper fire safety measures in place. This is necessary for ensuring the safety of both staff and patients.

GST Registration

If your clinic’s turnover exceeds ₹20 Lakhs annually (for services like diagnostics and consultations), you will need to register for Goods and Services Tax (GST). GST registration is mandatory for tax purposes.

Note: Ensure that you meet all the regulatory requirements before beginning your clinic’s operations. You can consult with a legal expert or a business advisor to help navigate the licensing process.

Proper financial planning is essential to ensure the success and sustainability of your clinic. Here’s how you can plan your finances and secure the necessary funding:

Create a Detailed Budget

Start by creating a comprehensive budget that covers initial setup costs (infrastructure, medical equipment, etc.) as well as ongoing operational costs (staff salaries, utilities, medical supplies). A clear budget will help you estimate how much capital you need to raise.

Track Your Cash Flow

It’s important to keep track of your clinic’s income and expenses. This will allow you to plan for future investments, handle any financial setbacks, and ensure profitability.

Separate Personal and Clinic Finances

If you are using personal savings to fund the clinic, make sure to open a separate business account. This will help you maintain clear records and prevent confusion between personal and clinic finances.

Estimate Revenue and Profitability

Estimate your potential revenue based on the services you plan to offer. Compare this with the cost of setting up and running the clinic to determine when you can expect to break even and start making a profit.

A business loan can be used for various purposes to help set up or expand your clinic. Here are some common uses:

Clinic Infrastructure and Renovation

A significant portion of the loan can be used to rent or purchase a suitable space, and for renovating and designing the clinic to meet medical standards.

Purchasing Medical Equipment

Medical equipment is crucial to the operation of a clinic. A business loan can help you buy essential equipment such as diagnostic machines, examination tables, and other healthcare tools.

Staffing Costs

Hiring qualified medical professionals and administrative staff is essential. You can use a business loan to cover initial staff salaries and other human resource expenses.

Operational Expenses

Operating costs, including medical supplies, utilities, and marketing, can be covered by the loan to ensure the clinic runs smoothly from the start.

Marketing and Promotion

Securing funding to invest in marketing and building an online presence will help attract patients and build your clinic’s reputation.

You can secure a high-valued loan on Bajaj Markets. Simply compare different lenders and apply with minimal documentation. Here is the list of lenders you can compare to choose the one that fits you best: 

Disclaimer: The mentioned rates are subject to change at the lender’s discretion.

To qualify for a business loan, you need to meet certain criteria. Here are the basic requirements you may need to fulfil:

• Indian Citizenship

You must be an Indian citizen

• Good CIBIL Score

A healthy CIBIL score is essential to increase your chances of approval

• Self-employed or Non-professional

You should be either a self-employed professional (e.g., doctor, chartered accountant) or a non-professional (e.g., trader, manufacturer)

• Age Range

Your age must fall between 21 and 60 years

• Business Registration

Your business should be registered as a partnership, limited liability partnership, or private limited company

• Business Vintage

The business must have been operational for at least one year

• Annual Turnover

Your business should have a minimum annual turnover of ₹1.5 Lakhs, as per your ITR

In addition to fulfilling these eligibility criteria, ensuring that you have the necessary documents in place is equally important. Below is the list of documents typically required when applying for a business loan in India:

• Identity Proof

PAN card, Aadhaar card, passport, driving licence, or Voter’s ID

• Address Proof

Aadhaar card, passport, utility bills, or lease agreement

• Income Proof
  

  • Bank statements for the past 6 months

  • ITR

  • Certified copies of details such as income computation

  • Profit and Loss (P&L) statement

  • Balance sheet for the last 2 years
    

• Business Proof

Sole Proprietorship Declaration or a certified copy of the Partnership Deed or Memorandum and Articles of Association

Starting a clinic can be a rewarding career move, providing both personal satisfaction and the opportunity to serve your community. However, it requires careful planning, financial investment, and a clear understanding of the necessary legal and operational steps.

By considering the key factors such as location, licensing, staffing, and financing, you can lay a solid foundation for your clinic’s success. Whether you choose to secure financing through loans or personal savings, ensure that you have a sustainable plan in place to run the clinic efficiently. With the right approach, you can turn your vision into a thriving healthcare practice.