How to start an ambulance company: a guide for lifesavers

Starting an ambulance company is a rewarding venture that combines life-saving skills with sharp business savvy. The industry represents a market worth billions of dollars, fueled by consistent demand for medical transport from hospitals, care facilities, and event organizers.

This guide will walk you through the practical steps of obtaining the right licenses, securing funding, acquiring equipment, and hiring your team to help you launch a successful ambulance company in the U.S.

Step 1: Develop your business plan and validate your idea

Start by researching your local market. Contact hospitals, nursing homes, and large event organizers to understand their current medical transport needs and contracts. You can also analyze public health data to identify service gaps in specific neighborhoods or for certain patient populations.

Analyze competitors and estimate costs

A good way to gauge competition is to request a list of licensed providers from your state or county EMS office. This shows you who operates in your target area. Some new owners misjudge the initial investment, so a detailed budget is a must.

Speaking of costs, your initial outlay will be significant. You should plan for a startup range of $100,000 to over $250,000 per vehicle. Here is a typical breakdown:

• Used Ambulance: $20,000 - $60,000
• Medical Equipment: $30,000 - $50,000
• Licensing and Legal Fees: $2,000 - $10,000
• Insurance Down Payment: $5,000 - $15,000
• Working Capital (3-6 months): $50,000+

Here are 3 immediate steps to take:

• Contact three local healthcare facilities to inquire about their transport needs.
• Request a list of licensed ambulance providers from your county health department.
• Create a preliminary budget that itemizes ambulance, equipment, and insurance costs.

Step 2: Set up your legal structure and get licensed

You might want to consider forming a Limited Liability Company (LLC). This structure protects your personal assets from business debts. An LLC also offers pass-through taxation, which means profits are taxed on your personal return, which avoids the double taxation you see with corporations.

Navigate federal, state, and local requirements

Your state’s EMS office is the main regulatory body. The application process can take 6-12 months and cost between $500 and $5,000. Some states also require a Certificate of Necessity (CON) to prove a new service is needed, which can add significant delays.

Federally, you must get an Employer Identification Number (EIN) from the IRS. If your ambulances will carry controlled substances, you also need a DEA registration. A frequent misstep is to apply for licenses before your business entity is officially registered, so complete your state business filing first.

Here are 3 immediate steps to take:

• File for an LLC with your state’s Secretary of State office.
• Apply for a free EIN on the IRS website using Form SS-4.
• Contact your state EMS office to request a provider application packet.

Step 3: Secure your insurance and manage risk

Insurance for an ambulance company is not a place to cut corners. Your policies must cover the unique risks of patient transport and medical care. A frequent misstep is choosing a general agent instead of a specialist, which often leads to coverage gaps and higher long-term costs.

Key insurance policies

You will need a package of several policies. Your broker should bundle these, but you should know what to ask for. Here are the main types of coverage you will need to operate:

• Commercial Auto Liability: Covers accidents involving your ambulances. A minimum of $1 million is standard.
• Professional Liability (Malpractice): Protects against claims of medical error or negligence by your staff.
• General Liability: Covers non-medical incidents, like a visitor slipping at your facility.
• Workers’ Compensation: Mandated in most states, this covers employee injuries on the job.

With these policies in mind, expect annual premiums to range from $8,000 to $20,000 per vehicle. You might want to contact brokers who focus on emergency services. Providers like McNeil & Co., The Hartford, and Heffernan Insurance Brokers understand the industry’s specific risks.

Here are 3 immediate steps to take:

• Request quotes from at least three insurance brokers who specialize in EMS.
• Confirm your state’s minimum liability coverage requirements for ambulance services.
• Draft a basic risk management plan covering vehicle safety and patient handling protocols.

Step 4: Find your location and buy equipment

You will need a base of operations for your vehicles, crew, and supplies. Look for a space between 1,500 and 3,000 square feet, often in a commercial or light industrial zone. This provides enough room for an ambulance bay, supply storage, and a small office.

Many new owners get stuck with locations that have poor road access or zoning that prohibits 24/7 operations. You should confirm these details with the city planning office before you sign a lease. Also, try to negotiate lease terms that permit minor vehicle maintenance on-site.

Stock your ambulance

With a location in mind, you can focus on equipment. Your medical gear is a major investment. Here are some items you will need and their typical costs:

• Cardiac Monitor/Defibrillator: $15,000 - $30,000
• Transport Ventilator: $5,000 - $10,000
• Powered Stretcher: $10,000 - $20,000
• Suction Unit & Oxygen Supplies: $1,000 - $2,500

You can source these items from medical suppliers like Bound Tree Medical or McKesson. They are accustomed to working with new services and can help you build an initial supply order.

Here are 3 immediate steps to take:

• Identify three potential properties in commercial or light industrial zones.
• Contact your city planning office to verify zoning for 24/7 medical transport.
• Request an initial equipment quote from a supplier like Bound Tree Medical.

Step 5: Set up your payment processing

Most of your revenue will come from insurance billing, which can take 30-90 days. You will bill the insurance carrier first, then send an invoice to the patient for any remaining balance like deductibles or co-pays. This delayed cycle affects your cash flow.

You need a system to accept credit cards, debit cards, and digital wallet payments. Some new owners overlook collecting payments for non-emergency transports or co-pays on the spot. This leaves money on the table and creates more administrative work later.

For ambulance companies that need to accept payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit and digital wallets directly through your smartphone - just tap and done.

At just 1.99% per transaction with no hidden costs or extra hardware needed, it's particularly useful for collecting co-pays after a non-emergency transport. This rate is often lower than the 2.5% to 3.5% that other payment providers charge.

• Get Started: Download the JIM app for iOS.
• Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
• Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers.

Here are 3 immediate steps to take:

• Research state regulations on balance billing for ambulance services.
• Compare fee structures for at least two payment processing systems.
• Download the JIM app to explore its features for on-site payments.

Step 6: Secure funding and manage your finances

Traditional banks can be hesitant, so you might want to explore SBA 7(a) loans. These government-backed loans can fund up to 90% of your startup costs. Lenders will want to see a strong business plan and a personal credit score above 680.

For a single-vehicle operation, a loan between $150,000 and $350,000 is common. Interest rates often hover around Prime + 2.75% to 4.75%. Equipment financing is another route, where the ambulance itself serves as collateral, which can make approval easier.

Look into grants and special programs

Don't overlook grants, especially if you plan to operate as a non-profit. The federal Assistance to Firefighters Grant (AFG) program sometimes funds private non-profit EMS agencies. Also, check with your state’s Office of Rural Health for specific rural provider grants.

You will need significant working capital. Plan for at least $75,000 to $150,000 to cover six months of payroll, fuel, and supplies. Many new owners get into trouble by not preparing for the 60-90 day delay in insurance reimbursements, which creates a serious cash crunch.

Here are 3 immediate steps to take:

• Contact an SBA-preferred lender to discuss a 7(a) loan application.
• Research eligibility for the Assistance to Firefighters Grant (AFG) program.
• Calculate your estimated operating costs for six months to define your working capital target.

Step 7: Hire your team and set up operations

Key roles and certifications

Your team is your most important asset. You will primarily hire Emergency Medical Technicians (EMTs) and Paramedics. Plan for a staff of 4-6 full-time field employees per ambulance to ensure you have 24/7 coverage without burning out your crew.

• EMT-Basic (EMT-B): Handles basic life support and patient transport. Expect to pay between $35,000 and $50,000 annually.
• Paramedic (EMT-P): Provides advanced life support, including medication administration. Salaries typically range from $50,000 to $75,000.

All field staff must have a state EMS certification, a valid driver's license with a clean record, and CPR certification. A frequent oversight is focusing only on medical credentials and forgetting the driving history, which is just as important for insurance and safety.

Scheduling and management

Managing shifts and certifications manually is a recipe for compliance headaches. You might want to use scheduling software designed for EMS. Systems like Aladtec or ePro Scheduler help you build schedules, track overtime, and get alerts for expiring certifications, which simplifies payroll and compliance.

Here are 3 immediate steps to take:

• Draft job descriptions for EMT and Paramedic positions, including salary ranges.
• Check your state’s EMS office website for specific certification and background check rules.
• Request demos from two EMS scheduling software providers like Aladtec or ePro Scheduler.

Step 8: Market your service and secure contracts

Focus on relationship-based sales

Your primary customers will be healthcare facilities. Focus your efforts on hospitals, nursing homes, and dialysis centers. The key decision-makers are usually case managers and discharge planners who need reliable partners for non-emergency patient transports.

This is a long sales cycle. Some owners get discouraged when they do not land a contract after one meeting. You should plan for multiple follow-ups to build trust. Face-to-face meetings are far more effective than cold calls or emails.

Expand with event services and online credibility

You can also find work by providing standby medical services for local events like concerts, festivals, and marathons. This diversifies your income. Contact event organizers directly to offer your services. A single event contract can be quite profitable.

A simple, professional website is a must. It should clearly list your services, service area, and contact details. This builds credibility when a facility manager looks you up after a meeting.

Here are 3 immediate steps to take:

• Create a target list of 10 local healthcare facilities and identify their discharge planners.
• Develop a one-page brochure that details your services, equipment, and staff qualifications.
• Contact one local event organizer to inquire about their standby medical service needs.

Step 9: Develop your pricing and billing strategy

Establish your rate structure

Most ambulance companies use a "base rate plus mileage" model. The base rate reflects the service level. A Basic Life Support (BLS) non-emergency transport might have a base rate of $400-$600, while an Advanced Life Support (ALS) emergency can exceed $1,200.

On top of that, you will add a per-mile charge, which usually falls between $15 and $30. While your gross margin on a single trip might seem high, your actual net profit after all costs and lower insurance payouts often settles between 5-10%.

Align prices with reimbursement rates

A frequent misstep is to set prices in a vacuum. Your revenue is tied to what insurers will pay. Start by looking at the Ambulance Fee Schedule from the Centers for Medicare & Medicaid Services (CMS). This document dictates Medicare rates and heavily influences private insurance payments.

Private insurers typically reimburse at 120% to 180% of the Medicare rate. You will also need to use specific HCPCS billing codes for each service. For instance, code A0428 is for a BLS non-emergency trip, while A0427 is for an ALS 1 emergency.

Here are 3 immediate steps to take:

• Download the latest Ambulance Fee Schedule from the CMS website to find your local rates.
• Create a rate sheet with separate prices for BLS, ALS, and per-mile charges.
• Call two competitors to inquire about their private pay rates for a 15-mile non-emergency transport.

Step 10: Maintain quality and scale your operations

Establish your quality benchmarks

To set yourself apart, you might want to pursue accreditation from the Commission on Accreditation of Ambulance Services (CAAS). While voluntary, it signals a high standard of care. It also makes you more attractive for competitive hospital contracts and can sometimes lower insurance premiums.

You should track key performance indicators (KPIs). Aim for response times under 8 minutes for 90% of urban emergencies, a standard used by many high-performance systems. You can also use patient satisfaction surveys and internal chart reviews to measure clinical quality and service levels.

Know when to expand

With quality metrics in place, you can decide when to grow. Many owners expand too fast and strain their cash flow. A good signal to add a vehicle is when your fleet utilization consistently exceeds 70% during peak hours. This prevents service delays and crew burnout.

Your payroll is another indicator. If overtime regularly makes up more than 15% of your total labor costs, it is often more cost-effective to hire additional staff. As you add crews and vehicles, billing software from providers like Zoll or ImagineSoftware can help manage the increased complexity.

Here are 4 immediate steps to take:

• Download the CAAS accreditation standards to review their requirements.
• Create a simple patient satisfaction survey to gather feedback after transports.
• Set a vehicle utilization target of 70% to help guide your expansion decisions.
• Review billing software options like Zoll to prepare for future growth.

Launching your ambulance service is a major step. The key is to build strong ties with local healthcare facilities, as they become your most reliable partners. You have the roadmap, now go make a real impact in your community.

And when it comes to payments, keep things straightforward. JIM lets you accept cards on your smartphone for a simple 1.99% rate, so you can easily handle co-pays without extra devices. Download JIM and simplify your cash flow.