America’s transportation industry is changing right before our eyes. The days of calling a friend, a taxi, or ambulance as the only choices for people to obtain non emergency medical transportation (NEMT) are over. As the population ages, the opportunity for business people to enter the transportation economy has never been greater, and all signs point to potential success, albeit if you’re not going about it in a smart manner, and you don’t learn and discover what you don’t know, you’ll greatly reduce your profitability and chances for success.
As the world and face of NEMT evolves from changing networks and technology improvements, you too as a NEMT provider must change your strategy to capitalize and profit.
You’re much more to your clients than a simple straight forward”ride,” going from point A to point B, so make sure you act like it. By learning all you can, including reading articles such as this, you’re moving in the right direction.
In no particular order, here are six things every NEMT driver and provider needs to know.
You don’t have to make money right away, or at least you don’t have to try to make “all the money.” What I mean by this is be willing to work for another if you’re not already familiar with the NEMT industry. Don’t be afraid to get your hands dirty so to speak and start at the bottom of the pole. What you’ll gain in knowledge will aid in how you operate your own business. There’s a reason why bosses go undercover to see what’s happening on the “front lines” and it has great value to those who embrace knowledge as the valuable commodity it is.
After gaining vital experience as a driver and/or employee in another NEMT operation, you’ll learn what works and what can be improved upon, all while receiving on-the-job-learning pay. If you think you’re losing money because you’re only making the salary of a driver for example, you’re missing the point. The little you give up could result in huge multiples in savings down the road because of what you will surely learn in the process.
2. Surround yourself with experts. Don’t go cheap when it comes to the brain trust you have helping guide you. Hire quality bookkeepers, legal advisers, and of course, get an insurance agent that can help your business grow. All the people you surround your business with should have the mindset of helping your business well beyond the scope of their services. Anyone that simply wants to take your money and run isn’t the type of person who will provide the upside value beyond what you’re paying them and should be replaced by those that will.
3. Contracts, you will (as all businesses do) need contracts to operate. It’s important for you to understand all the details of the contracts you agree to and sign. If you don’t understand the entire contract, you’re at a serious disadvantage and worse still, you could breach (violate) terms of a contract without even knowing or trying if you’re not fully aware of your duties, obligations, and promises made in your contract. Again, this comes from taking the time to talk to legal counsel for items you’re not familiar with before you agree to any given contract term or terms.
4. Start slow, and grow at a trajectory everyone, including your insurance carrier is comfortable with. In a nutshell, it’s the employees that really can make or break you. Mostly, this means break you if you grow too fast. I personally have experience in employees ruining a viable business and building one up. What they do in terms of building or destroying your business is largely controlled by you and who you decide to hire. I always recommend hiring the best you can. Overpay them so they stay and treat them well. When you find one not working out, and placing the staff at risk, be quick to let them go. You’re doing everyone a favor by firing people quickly. It allows them to find something better suited, lowers your stress level, and results in a better client experience, if for only you’ll stay in business in the case of a worker who’s not front client facing. Keep this in mind too. On average, from my experience, the average person who pays their bills on time and has good credit is more likely, all else equal, to be a good employee compared to the average person who’s credit is in the garbage. Be VERY leery of those with endless “excuses”that don’t add up well.
5. Going back to working for another first, albeit much beyond, it’s important to know everything you can about the industry. That means attending trade shows and joining online groups. Information is key and embracing an attitude of “Kaizen” (continuous improvement) always learning what you can about NEMT and transportation in general will give you a leg up on your competition who doesn’t take the time and effort. In short, education, education, education.
6. Again with the people you hire. Your drivers are the face of your business. Make sure they are emotionally, mentally, and physically up to the task. Yes, in a low unemployment environment it’s a challenge to find quality workers, albeit here’s a secret for those that haven’t been employers for many years, it’s always a challenge and the challenge only changes. You will always have to think creatively to get the best people. There’s a saying I read once and fully subscribe to…. First class people hire first class employees. Second class people hire third class employees. The meaning is that if you go cheap, you won’t get what you pay for when it comes to people. You’ll get a greater value hiring only the best, regardless of what it takes than to go cheap. A bad driver can easily cost you many multiples in the difference in paying higher to get quality people.
7. Many states require driver certification and for those states that don’t, having certified drivers is good for you in many ways. Firstly, it demonstrates the person is actually capable and willing to become certified. Second, it can impact your insurance rates in many ways, including lower claims in both frequency and severity. Having your employee drivers invested by completing certification helps you also know they meet a minimum amount of competency. In short, if you’re going to be in the NEMT business, make sure your drivers are NEMT certified.
8. Have a presence on Facebook and/or website. Potential clients these days want to investigate you and perform their due diligence. Make it easy to find out about you and your business. If you’re not an expert in web development, don’t try to become one overnight. You can use Facebook if you need to until you get a decent web developer, but at some point you want a website and use it to generate revenue and build your reputation. And remember, one way or another others will draw an opinion on your business based on your (or lack of) website and to a lessor extent, Facebook.
9. Make sure you’re system processes are up to the task. Pen and paper may have worked in the business world 20 years ago, however, you’re up against competitors who are utilizing the best software and practices to maximize their revenue for every driver and dollar put into place. Think of it as a technological arm’s race if you will, but as any history buff knows, almost every war’s outcome was greatly influenced by technology. In business, the situation is the same and invest heavily into your processes so you can capitalize on every opportunity available.
10. Have the proper vehicles. This can be a tough one due to the amount of starting capital required. Keep in mind, you don’t need the newest and most expensive vehicles you can buy to find the right amount of success. That said, if you’re starting out without wheelchair ramps/lift, you’re not likely going to get a premium for your driving as you would if you had the equipment. There’s nothing wrong with building up your business (again, think small and make small mistakes) and investing in upgraded vehicles that are able to provide the maximum revenue as your business grows and can pay for themselves through your cash flow.
Robert Weinstein is a husband, dad, stock market junkie, real estate broker, and of course…Insurance agent. Interests include my family, economics, marketing, technology, real estate, finance/investing, history, and Asia.
Robert’s insurance expertise includes having the designation of Certified in Long-Term Care (CLTC) and assist in asset protection for families with members entering retirement.
Robert is also an accomplished syndicated writer whose work can be found in TheStreet, MainStreet, CNBC, Forbes, Yahoo Finance, Seeking Alpha, MSN Money, The Money Show, Stock Saints, Motley Fool, Fidelity, Minyanville, RealMoney Pro, and many national and international newspapers.