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Start-up Advice

How do I Start a Primary Healthcare Business?

Growing demand for better healthcare offers opportunities.





Entering the business of healthcare can be daunting. It’s a huge industry with a variety of sectors and challenges. Healthcare related businesses face all of the generic challenges of business, as well as certain legal, moral and ethical issues while pursuing growth and profitability. An area with the most potential and activity at present is primary healthcare (PHC).

This is the provision of basic care including preventative, curative and rehabilitative services, typically outside a hospital, with the aim of preventing and treating disease holistically and at an earlier stage, thereby reducing cost and complications.

Private providers are increasingly important in the provision of PHC in Africa, and help to relieve pressure on public services while improving the quality of PHC. They also help to facilitate broader socio-economic benefits of improvements in health.

5 Reasons to Consider Primary Healthcare as a Business

1. Size and growth potential

The growing middle class in Africa is increasing demand for higher quality healthcare services, and is able to pay for them. In South Africa, there are about 42 million uninsured individuals, about four million of whom are employed and regularly purchase (out-of-pocket) private PHC services. In addition, as the NHI is implemented, opportunities to become accredited private providers of PHC packages will arise with the potential customer-base comprising all uninsured individuals, irrespective of their affordability.

2. Global focus and policy shift

There is a movement to shift the focus of healthcare delivery from hospitals to the primary healthcare space, based on mounting evidence that PHC is the most cost-effective way of delivering healthcare and improving health. Investments are being made in innovation, funding, policy and legislation, and partnerships within this space are increasing, creating opportunities for entrepreneurs. 

3. Challenges

There is substantial scope for innovation and creativity in what appears to be a highly regulated sector. If you master the regulatory environment, you’re likely to become successful.

4. Lack of business focus

Healthcare professionals require highly advanced technical expertise and skills to provide care. However, this often means that they feel unable to impact the healthcare system on a broader scale because of limitations in their business and other skills. By combining business skills with sector experience, one can build a successful business.

The business side of healthcare is not the exclusive preserve of experienced professionals, and entrepreneurs are desperately needed to help create and drive the required innovations. 

5. Potential for social impact

The social impact of healthcare cannot be over-emphasised. There are few more important factors in socio-economic development than improvements in health, and few better areas in which to invest if one seeks to improve it.

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Entering Healthcare


What are the practical steps required to enter this market? The lessons are based on our experience in healthcare, but apply to most entrepreneurial ventures.

1. Marry opportunity with passion

Find a niche in the healthcare sector that aligns with your passion and interests. This will get you through the tough times.

2. Act

Your business idea is almost worthless without action and the ability to implement it.

3. Be strategic in your partnerships

If you do not have healthcare experience, find a partner who does. If you’re a healthcare professional find yourself a good business partner, but have a honeymoon period with a clearly defined ‘divorce’ agreement in case things go sour.

4. Know what you are offering and believe in it

Starting a business in healthcare is the same as starting a business in any other sector.

5. What need do you fulfill

To attract clients, your value offering must be clearly defined and you must be able to solve a problem or cater for a need. Understand who the clients are and how your business model works and fits into that.



Focus is an asset, but this does not mean forgetting the bigger picture and how your business fits into it.

1. Financing

There are many funding mechanisms available for the healthcare sector, but navigate them carefully. Joining an established SME and helping it grow is an option for attracting investment at an earlier stage. As in any relationship, do not forget to clearly define aspects of ownership, responsibility and roles in the business. 

2. Prioritise resource use

Spend all your time and resources on finding clients and delivering a phenomenal service or product to them. Forget fancy phones or nice offices – ensure income is greater than expenses. 

3. Research and mentorship

If you have trouble finding a niche, reach out to people in the industry. Invite healthcare executives for a coffee and ask them what service or product they need and if they would be prepared to pay for it. Get them to guide you as you prepare to sell or package your offering.

4. Network

Attend functions, forums, events and follow up on every person you meet. Keep a record of every encounter so that you always find the right person, and use your networking to help other business people or entrepreneurs. One day they will repay you the kindness.

5. Collaborate

Learn the power of collaboration and co-operation: Share your knowledge and resources. The healthcare sector, particularly primary healthcare, is highly fragmented and it is through collaboration that synergy and efficiency is created, which improves services to patients, lowers costs and increases business opportunities and profits for companies.

The Opportunities

PHC is a vast sector of businesses involved in the direct provision of care as well as delivering key services and products in support of providers:

  • A variety of clinics
  • Retirement homes
  • Nursing agencies
  • Manufacturing
  • Pharmaceuticals
  • Training
  • Occupational health
  • Consultancy and software companies

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Examples of Primary Healthcare Businesses

From bicycle-delivered medicines to delivering babies, see how entrepreneurs are tapping in to primary healthcare.

To your door medicine delivery


Started in 2013, Iyeza Express is the brain-child of young entrepreneur Sizwe Nzima, that sees chronic medications at government hospitals and clinics delivered to patients’ doors. Nzima realised the need for the delivery service from helping his grandparents. He now has approximately 250 clients who pay R10 per collection.

Delivering bundles of joy affordably

Jacaranda Health is a Kenya-based social enterprise that is a fully self-sustaining and scaleable chain of maternity clinics. These clinics provide high quality maternity and child-health services to poor urban woman at costs that are between 30% and 70% cheaper than other facilities in the country.

See more at

Hello HealthCare

Hello HealthCare was formed in 2007 by five entrepreneurs, including York Zucchi. The company offers integrated healthcare services by pulling together different private healthcare sectors to provide primary healthcare.


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Start-up Advice

Alan Knott-Craig Answers Your Questions On Money And Partners

From starting the right business, to managing business partners and finding your magic number, there is a secret to happiness.

Alan Knott-Craig




If I get rich will I be happy? — JC Lately

Does money equal happiness? Mostly, yes. Research in the US shows that your happiness is proportionate to your earnings up until you earn $80 000 per annum. Thereafter, incremental income gains have a negligible effect on your happiness.

In other words: More money will make you happy as long as you’re poor. Once you break out of poverty and enter a comfortable middle-class existence, more money will not make you happier.

These are the top three for old folks:

  • I wish I’d spent more time with family.
  • I wish I’d taken more risks.
  • I wish I’d travelled more.

Therein lies the secret to happiness. Spend time with your family. Take risks. Travel.

But first, make money. Don’t do any of the above until you’re making enough money not be stressed about money.

Related: Your Questions Answered With Alan Knott-Craig

What is the magic number? — Mushti

The magic number is the amount of money you need to not worry about money ever again. If you don’t need toys like Ferraris, yachts and jets, the magic number is R130 million. Here’s the math: R130 million will earn R9,1 million in interest annually (assuming 7% interest). After tax that is R5,46 million.

Assuming you need 50% to maintain a good lifestyle, that leaves approximately R2,7 million for reinvestment, which is enough to keep your capital amount in touch with inflation for 50 years. The balance of R2,7 million (after tax) is for your living costs. In South Africa, R2,7 million will afford you a lifestyle that allows you to send your kids to a great school and university, to travel overseas a couple of times a year, and to live in a comfortable house.

Over time your living costs (and inflation) will eat into your capital amount. After 50 years you should be down to nil, assuming you earn zero other income in that time.

In 50 years, you will probably be dead. If you’re not dead, your kids will be able to support you (because they love you and they have a great university education).

I am the sole director of a company (the others still have full-time jobs and don’t want to be conflicted) and there is pro-rata shareholding based on our initial shareholder loans. However, I am putting in most of the hard work, together with one of the other actuaries. How best do I manage the director/shareholder dynamic? I obviously want to make as much progress as possible but there are times when I need the input from the others (and their responses aren’t always as quick as I would like). — Mike

If you have any perception of unfairness regarding effort/risk vs reward, deal with it NOW! You can’t do so later. The best approach is honesty. Call your partners together. Explain your thinking. Perhaps argue for 25% ‘sweat equity’ for yourself. Everyone dilutes accordingly. Ideally cut a deal whereby you have an option to pay back all their loans, plus interest, within six months, and you get 100% of equity (unless they quit their jobs and join full-time).

Equity dissent must be resolved long before the business makes money, otherwise it will never be resolved.

Related: Alan Knott-Craig’s Answers On Selling Internationally And Researching Your Idea

What do you think of WiFi in taxis?— Ntembeko

It’s a good idea, but not original. Before embarking on a start-up, you should survey the landscape for competitors. Just because there are none doesn’t mean no one has tried your idea.

It just means that everyone that tried has failed. You need to be 100% sure that you have some ‘edge’ that makes you different from everyone who came before you (and failed). Otherwise you will fail. What is your advantage that is different to everyone who came before?

Read ‘Be A Hero’ today


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Start-up Advice

What You Need To Know About The Lean Start-up Model

The Lean Start-up philosophy was developed by Eric Ries, a Silicon Valley-based entrepreneur who also sat on venture capital advisory boards. He published The Lean Startup in 2011, igniting a movement around a new way of doing business.





The model follows key precepts that include:

Taking untested products to market

The fact that too many start-ups begin with an idea for a product that they think people want, spending months (or even years) perfecting that product without ever testing it in the market with prospective customers.

When they fail to reach broad uptake from customers, it’s often because they never spoke to prospective customers and determined whether or not the product was interesting. The earlier you can determine customer feedback, the quicker you can adjust your model to suit market needs.

The ‘build-measure-learn’ feedback loop is a core component of lean start-up methodology

The first step is figuring out the problem that needs to be solved and then developing a minimum viable product (MVP) to begin the process of learning as quickly as possible. Once the MVP is established, a start-up can work on tuning the engine. This will involve measurement and learning and must include actionable metrics that can demonstrate cause and effect.

Utilising an investigative development method called the ‘Five Whys’

This involves asking simple questions to study and solve problems across the business journey. When this process of measuring and learning is done correctly, it will be clear that a company is either moving the drivers of the business model or not. If not, it is a sign that it is time to pivot or make a structural course correction to test a new fundamental hypothesis about the product, strategy and engine of growth.

Lean isn’t only about spending less money

It’s also not only about failing fast and as cheaply as possible. It’s about putting a process in place, and following a methodology around product development that allows the business to course correct.

Progress in manufacturing is measured by the production of high quality goods

The unit of progress for lean start-ups is validated learning. This is a rigorous method for demonstrating progress when an entrepreneur is embedded in the soil of extreme uncertainty. Once entrepreneurs embrace validated learning, the development process can shrink substantially. When you focus on figuring the right thing to build — the thing customers want and will pay for, rather than an idea you think is good — you need not spend months waiting for a product beta launch to change the company’s direction. Instead, entrepreneurs can adapt their plans incrementally, inch by inch, minute by minute.


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Start-up Advice

Start-Up Law:  I’m A Start-up Founder. Can I Pay Employees With Shares?

Bulking up employee salaries with equity is a common method to attract, retain and incentivise top talent.




Every early stage start-up company battles with restricted cash flow and not being able to pay market related salaries to their employees. Bulking up employee salaries with equity is a common method to attract, retain and incentivise top talent.

Can I pay salaries with shares?

South African labour laws require that employees be paid certain minimum wages, and “remuneration”, as defined within the Basic Conditions of Employment Amendment Act, either means in ‘money or in kind’.  ’In kind’ does not include shares or participation in share incentive schemes, as determined by the Minister of Labour. As such, there is no room for start-ups to completely substitute paying salaries with shares or share options. However, there is no restriction in topping up below market related salaries with equity via an employee share ownership plan (‘ESOP‘).

Related: 7 Ingredients Of Small Business Success Online

Employee Share Ownership Plans

There are a variety of ways in which employees can be incentivised, and it will always be important for the start-up founders to consider what goal they wish to achieve by incentivising their employees.

ESOPs can be structured in several ways, for example: employees may be offered direct shareholding in the company, options for the acquisition of shares in the future; or alternatively, a phantom / notional share scheme can be set up.

ESOPs permit employees to share in the company’s success without requiring a start-up business to spend precious cash. In fact, ESOPs can contribute capital to a company where employees need to pay an exercise price for their share options or shares.

The primary disadvantage of ESOPs is the possible dilution of the Founder’s equity. For employees, the main disadvantage of an ESOP compared to cash bonuses or bigger salaries, is the lack of liquidity. If the company does not grow bigger and its shares does not become more valuable, the shares may ultimately prove to be worthless.

Related: 7 Strategies For Development As An Entrepreneur

Key Features

Some key features to consider when setting up an ESOP are:

  • ELIGIBILITY – who will be allowed to participate? Full time employees? Part-time employees? Advisors?
  • POOL SIZE – what percentage of shares will be allocated to incentivise employees?
  • RESTRICTIONS – will employees be able to sell their shares immediately?
  • VESTING – will there be a minimum period that service employees will have to serve with the start-up to receive the economic benefit of his or her shares?

Employee share ownership plans are great corporate structuring mechanisms for attracting and retaining employees, as well as fostering an understanding of the company ethos and encouraging loyalty and productivity. It is essential when implementing an ESOP that all the tax implications are considered and that the correct structure and legal documentation are in place.

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