It is suggested that entrepreneurs should start a venture for medical transcription with an in-hand contract that lasts for a period of 1-2 years. This would help to justify investments made in high cost infrastructure and capacity, an essential for this business. In an otherwise case, entrepreneurs may expect to have idle capacities for up to one year.

The main components for setting up a Medical Transcription unit include:

- Premises (Office Space), ergonomic furniture and adequate lighting and ventilation/air-conditioning and power backup.
- Servers with Networking
- Computers with audio capabilities (sound card and headphones) and foot-pedals.
- Specialized software
- Medical Transcription Programs
- Telecom connectivity (ISDN/Leased Line)

Like any other IT Enabled Services business, it is important to have a certain critical mass in terms of capacity to be able to generate volumes transactions. Research has shown that a given capacity of about 50 computers/ transcriptionists is the minimal requirement. This would translate to a total capacity of 150 people working in a total of three shifts of eight hours each.

In order to establish capacity for 50 people, there would be investment needed of about Rs. 45-50 lakhs. Further manpower costs (for 150 people) would add about Rs. 1.2-1.5 crore to the total costs. In other words, an entrepreneur would need to have available funding of approximately Rs. 1.5-1.75 crore to cover asset building and recurring expenses for first year of unhindered operation for about 150 people. Further, with the above capacity, there would be a working capital requirement of at least Rs. 20 lakhs.

Cost structure of a typical Medical Transcription company is normally found to be as below:

Particulars----------------------------------------Percentage of total

Cost of Sales/Marketing/Business Promotion_________18-20%
Operating/Administrative (including communication)___20-25%
Depreciation/Amortisation/Salaries_________________05-10%
Others________________________________________02-05%
Technology Absorption/Training___________________05-07%
Profit Before Tax*______________________________12-15%

Profits in this business are reasonable; they can be much higher or lower than indicated above.