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Hospital Business Plan

Starting a hospital is a huge responsibility because taking care of millions of people in a year is difficult. If you are considering starting a hospital, then staffing, financial and business planning are necessary, for which a business plan is vital.

Need help writing a business plan for your hospital business? You’re at the right place. Our hospital business plan template will help you get started.

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• Fill in the blanks – Outline
• Financial Tables

How to Write A Hospital Business Plan?

Writing a hospital business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your Business:

Start your executive summary by briefly introducing your business to your readers.

Market Opportunity:

Products and services:.

Highlight the hospital services you offer your clients. The USPs and differentiators you offer are always a plus.

Marketing & Sales Strategies:

Financial highlights:, call to action:.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your business. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business Description:

Describe your business in this section by providing all the basic information. Describe what kind of hospital you run and the name of it. You may specialize in one of the following hospital businesses:

• General hospitals
• Specialty hospitals
• Teaching hospitals
• Children’s hospitals
• Outpatient clinics
• Rehabilitation hospitals
• Maternity hospitals
• Describe the legal structure of your hospital, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.

Mission Statement:

Business history:.

If you’re an established hospital, briefly describe your business history, like—when it was founded, how it evolved over time, etc.

Future Goals:

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

Start this section by describing your target market. Define your target market and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.

Competitive Analysis:

Market trends:.

Analyze emerging trends in the industry, such as changes in patient behavior or preferences, etc. Explain how your business will cope with all the trends.

Regulatory Environment:

Here are a few tips for writing the market analysis section of your hospital business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to patients. To write this section should include the following:

Describe your facilities:

Mention the hospital facilities your business will offer. This list may include,

• Intensive care
• Neonatal care
• You can also mention the number of beds & specialized units

Medical specialties:

Quality measures:.

This section should explain how you maintain quality standards and consistently provide the highest quality facility.

Additional Services:

In short, this section of your hospital plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique Selling Proposition (USP):

Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.

Marketing Strategies:

Sales strategies:, testimonial and success stories:.

Overall, this section of your hospital business plan should focus on patient acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your hospital business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & Training:

Operational process:, equipment & machinery:.

Include the list of equipment and machinery required for the hospital, such as operating rooms, tables, surgical lasers, surgical drills & saws, vital signs monitors, etc.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your hospital business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founders/CEO:

Key managers:.

Introduce your management and key members of your team, and explain their roles and responsibilities.

Organizational structure:

Compensation plan:, advisors/consultants:.

Mentioning advisors or consultants in your business plans adds credibility to your business idea.

This section should describe the key personnel for your hospital, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:.

Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.

Financing Needs:

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your healthcare business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample hospital business plan will provide an idea for writing a successful hospital plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our hospital business plan pdf .

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Frequently asked questions, why do you need a hospital business plan.

A business plan is an essential tool for anyone looking to start or run a successful hospital. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your hospital.

How to get funding for your hospital business?

There are several ways to get funding for your hospital, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

Small Business Administration (SBA) loan

Crowdfunding, angel investors.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your hospital?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your hospital business plan and outline your vision as you have in your mind.

What is the easiest way to write your hospital business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any hospital business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Hospital Business Plan Sample

Mar.14, 2017

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Table of Content

Do you want to start a Hospital business plan?

Starting a business can be very hard and a big responsibility. And starting one that benefits humanity can be an even greater responsibility. However, if you follow the correct steps and stay persistent, it can be very rewarding. Establishing a business like a hospital needs to be very thoroughly planned. 

The best way to plan a business is to write a business plan for the hospital. Adding all the right details of your business will attract investors to the business plan and this will help you in setting up your business. If you want to learn how to write a hospital business plan, you should go through as many samples as possible. 

Plans like nursing home business plan can be a great resource in understanding crucial things about the hospital business. In this business plan, we will be providing all the details for starting a hospital called Mercy Ltd. You can follow this sample to develop a plan for your business.

Executive Summary

2.1 business summary.

Mercy Ltd will be a private healthcare setup, owned and started by Gillian Hail. It will provide state-of-the-art services to all its patients. Additionally, it will also run a free clinic and fund services for those who don’t have enough money to get treatment. 

2.2 About the Management

As a hospital business requires the utmost attention to detail to run well, a business plan is needed ahead of time. It is similar to a business plan for a wellness center in that regard. To make the management of Mercy Ltd smooth, a hospital business development plan was needed. Therefore, we prepared this sample. 

If you want to develop an executive summary hospital business plan for your business, you can consult a healthcare business plan template. Otherwise, to write the business plan, you can also hire experts and guide them along. 

2.3 Customers of Mercy Ltd

Considering that Mercy Ltd is a healthcare center, its customers will primarily be patients seeking treatment or help with funding for treatment. They will belong to all domains and lifestyles. The primary customers will include:

• OPD Patients
• Emergency Care Patients
• Chronic Patients
• Treatment Fund Patients

2.4 Business Target

The target of Mercy Ltd is to become a trustworthy healthcare center where people can come to get immediate treatment whenever they need it. It will also be a long-term target to expand the business. The financial targets we want to meet within the first three years are mentioned below in this hospital business plan pdf.

Company Summary

3.1 hospital ownership.

The hospital will be owned and managed primarily by Gillian Hail. She completed her MD five years ago after which she served as a head neurosurgeon in a renowned hospital in Baltimore. She then assumed the position of a consultant to start her healthcare setup. 

3.2 Why the Hospital Business is Established

Gillian always wanted to make a difference and help people due to which she became a doctor. However, after working in a hospital for so many years, she realized that there was a greater need for a healthcare setup that could deal with patients faster. Therefore, she decided that she would open Mercy Ltd to provide quick care to patients and to gain funding for people whose insurance couldn’t cover them.  

3.3 How will Mercy be Established

Step1: Plan Everything

The first step before establishing any business, no matter what the domain or scope, is thorough planning. You will need to map everything required to start the business in a business plan for starting a hospital. Additionally, you will also need to develop a business plan for hospital expansion if you have any plans to extend the business in the future. The process won’t stop here because at some point, you will also be developing a business continuity plan hospital.

Step2: Get Funding

One of the main reasons to develop a startup hospital business plan is to get funds. As Mercy Ltd had the aim to help treat those who couldn’t afford usual hospital charges, Gillian paid special attention to this hospital business plan sample pdf to attract investors. 

Step3: Find a Location

To house the healthcare setup, Gillian chose a building in Baltimore. The lower two floors will be for the hospital whereas the top floor will be for management and for housing on-call doctors. 

Step4: Developing a Brand

It is essential to make your business as humane as possible so that your customers can relate to it. Therefore, Gillian not only focused on her business model to help people but also described it in a way that is understandable to its customers. 

Step5: Promote and Market

To get the word out about her unique business model, Gillian established a partnership with as many local and big hospitals as she could so they refer patients to Mercy Ltd for treatments.

To write a business plan for a hospital, one needs to be clear about the type of business they want to establish. And this is true for every business plan, be it a reiki practice business plan or a private hospital business plan pdf. 

To develop a hospital business plan sample, you will need to know the services you want to provide to your customers as your services will form the basis of your setup. Here, we have provided a hospital business plan template that you can follow when writing about the services of your business. You can also look at any other hospital business plan example for reference. 

We will provide all the basic outpatient facilities including diagnosis, testing, and providing immediate treatment to patients. This will apply to patients with simple ailments like infection, common cold, fever or pain, etc. 

• Emergency Services

Mercy Ltd will also provide emergency services to patients who have been involved in an accident and need immediate care for stabilization. We shall also provide ambulances to transport these patients to bigger hospitals for complete and thorough treatment and recovery. 

• Regular Treatment and Therapy

For the patients who have chronic ailments or pain and who need regular care and treatment, we will offer therapy sessions and a complete care package that they can use utilize regularly.

One of our core services will be to provide treatment funding to deserving patients. The cases and situations of the patients will be thoroughly analyzed to ensure that there is no problem.

Marketing Analysis of Hospital Company

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It can be very tricky to gain success as a new business. You need solid hospital strategic goals to ensure a clear direction in all the business operations. A good business owner needs to do a lot of research into hospital business development strategies before starting a business in this domain. 

A good business plan covers all details regarding the business such as hospital planning team and business model of the hospital. This information helps in showing the objectives of hospital planning to the investors. And all of this can only be achieved if you have a strong understanding of your target market. This includes your customers as well as your competitors. 

In this hospital marketing plan template, we have outlined all the marketing strategies that would be employed by Gillian to ensure the success of her business. You can follow this hospital business plan sample or a relevant plan like a massage therapy center business plan for more guidance. 

5.1 Market Trends

According to PolicyAdvice, the healthcare industry is one of the fastest-growing industries in the U.S. and the trend is expected to continue as the U.S. spends almost twice on healthcare when compared with other countries. Right now, the market share of the healthcare industry in the U.S. is at almost $10 billion and it is expected to rise. Therefore, healthcare is one of the best sectors to start a business.

5.2 Marketing Segmentation

The target customer groups of Mercy Ltd will be:

Business plan for investors

5.2.1 opd patients.

Our primary services are centered around situations where patients only need immediate care and have straightforward illnesses. Therefore, these patients with simple ailments will be the key customers of Mercy Ltd as they will utilize our services more often. 

5.2.2 Emergency Care Patients

Our second target customers will be the people who need immediate care after an accident such as a fall or a crash. Our main responsibility will be to stabilize these patients so that they can be safely transferred to hospitals for full care. 

5.2.3 Chronic Patients

We will also get business from people with chronic ailments who only need to go to hospitals for regular check-ups but find it hard to. We will provide them with in-house regular check-ups and treatment facilities so that they don’t have to spend too much time or energy on commute. 

5.2.4 Treatment Fund Patients

Lastly, one of our primary services is funding, we will also take up cases of patients who need money for treatment but due to some reasons are not able to. The funding for these patients will come from our investors as well as from 8% of our profits.

5.3 Business Target

• To become the best immediate care hospital in Baltimore.
• To expand our services across the US in the form of multiple small centers.
• To earn a net profit margin of $15k/month by the end of our second year.
• To be the first healthcare service that helps patients with funding.

5.4 Product Pricing

Our prices will be similar to that of our competitors. However, we will aim at boosting our efficiency through efficient load management.

Marketing Strategy

To become successful in a market as tough as healthcare, you will need to work on your hospital business strategy. This strategy will be reflected in your business plan for the hospital . You can also look at strategic plan example for hospital startup for reference. 

Understanding all aspects of planning in hospital will help you gain a better view of the market and get your business to succeed. So, whether it is a business plan for healthcare setup or a business plan for occupational therapy , you should look into the market for a stronger plan.

6.1 Competitive Analysis

• We have excellent and unique services
• Our customers can get basic healthcare in half the time as required by regular hospitals.
• We provide treatment funding to people who cannot afford it.
• Our customers can avail of our ambulance and emergency services through a quick phone call as well.

6.2 Sales Strategy

• We will get the word out through partnerships with hospitals.
• We will organize health awareness seminars to get us known.
• We will use social media for a wider reach.
• We will offer discounts to deserving people.

6.3 Sales Monthly

6.4 sales yearly, 6.5 sales forecast, personnel plan.

A good business plan for hospitals will reflect all the aspects of the setup thoroughly for better management. This even includes the workforce and employees that make it possible to run a setup. In this hospital business plan template, we will be looking at the employee and hiring structure of Mercy Ltd. 

7.1 Company Staff

• 1 Co-Manager to help in overall operations
• 8 Certified Doctors
• 3 General Cleaners
• 1 Technician to upkeep the machinery
• 1 HR Executive
• 2 Ambulance Drivers
• 2 Receptionists

Financial Plan

The success of a business and its smooth running depends on your research and asset management techniques.  Before stepping into the business world, you need to explore various hospital business plans. You need to ensure that you have enough finances to support your operations and range of services. This is where hospital financial planning comes in. 

To ensure that everything is running with balance and you’re not going into a loss, you will need to keep proper track of your finances. One way to deal with the overwhelming load of financial management is to make a financial plan. This can act as a guide for you to follow as the business progresses. 

Here, we are detailing the financial plan for Mercy Inc. You can also look at similar plans such as a non-medical home care business plan to get a hint. 

8.1 Important Assumptions

8.2 break-even analysis, 8.3 projected profit and loss, 8.3.1 profit monthly, 8.3.2 profit yearly, 8.3.3 gross margin monthly, 8.3.4 gross margin yearly, 8.4 projected cash flow.

a. How do you start a hospital business?

You can start a healthcare setup by reviewing the strategic management in hospitals. This will inform you if you can manage the plethora of responsibilities that come with every healthcare business. After that, you need to plan everything and execute the business operations in steps. For the planning stage, you can take help from the sample business plan provided above.

b. What is a hospital business plan?

A business plan for hospitals is a document that is developed before starting a venture. It is done to ensure that you take the right steps to make your business a success. It helps with planning, management, and problem resolution among other things. 

c. What are the 4 types of hospitals?

The basic 4 types of hospitals in the US according to JamaNetwork are:

• Community Hospitals
• Federal Govt Hospitals
• Non-Federal Psychiatric care
• Non-Federal Long-term care

The business plan hospital provided here was written for a private community hospital. 

d. How do I write a hospital proposal?

You can write a hospital proposal by going through the private hospital business plan provided above and following all the tips mentioned.

Download Hospital Business Plan Sample in pdf

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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Healthcare Business Plan Template

Written by Dave Lavinsky

There are several types of Healthcare businesses, from family medicine practices to urgent care centers to home health care agencies. Regardless of the type of healthcare business you have, a business plan will keep you on track and help you grow your healthcare business in an organized way. In addition, if you plan to seek funding, investors and lenders will use your business plan to determine the level of risk.

Download our Ultimate Business Plan Template here >

Below is the business plan outline you should use to create a business plan for your healthcare company. Also, here are links to several healthcare business plan templates:

• Assisted Living Business Plan
• Counseling Private Practice Business Plan Template
• Dental Business Plan
• Home Health Care Business Plan
• Medical Practice Business Plan Template
• Medical Spa Business Plan Template
• Non Medical Home Care Business Plan Template
• Nursing Home Business Plan Template
• Pharmacy Business Plan
• Urgent Care Business Plan

Finish Your Business Plan Today!

Healthcare business plan example outline, executive summary.

Although it serves as the introduction to your business plan, your executive summary should be written last. The first page helps financiers decide whether to read the full plan, so provide the most important information. Give a clear and concise description of your healthcare company. Provide a summary of your market analysis that proves the need for another healthcare business, and explain your company’s unique qualifications to meet that need.  

Company Analysis

Your company analysis explains your healthcare business as it exists right now. Describe the company’s founding, current stage of business, and legal structure. Highlight any past milestones, such as lining up clients or hiring healthcare providers with a proven track record. Elaborate on your unique qualifications, such as expertise in a currently underserved niche market.

Industry Analysis

The healthcare industry is incredibly large and diverse, but your analysis should focus on your specific segment of the market. Do you specialize in pediatric healthcare? senior healthcare? emergency medicine? family medicine? Figure out where your healthcare company fits in, and then research the current trends and market projections that affect your niche. Create a detailed strategy for overcoming any obstacles that you uncover.  

Customer Analysis

Who will your healthcare company serve? Are they families? The elderly? What is important to them in a healthcare business? How do they select a healthcare provider? Narrow down their demographics as closely as you can, and then figure out what their unique needs are and how you can fulfill them.

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Competitive Analysis

Your direct competitors are those healthcare companies that fulfill the same needs for the same target market as yours. Your indirect competitors are healthcare businesses that target a different market, or other companies that fulfill a different need for your target market. Describe each of your direct competitors individually, and talk about the things that set your healthcare company apart. Categorize your indirect competitors as a group and talk about them as a whole.  

Marketing Plan

A solid marketing plan is based on the four P’s: Product, Price, Promotion, and Place. The Product section describes the healthcare you sell along with any other services you provide. Price will change according to the specifics of the property, but you can delineate your fees here. Promotion is your means of getting new business. Place is your physical office location, along with your web presence and the areas where you sell. Another category, Customer retention, refers to the ways you will build loyalty.

Operations Plan

Your operations plan explains your methods for meeting the goals you set forth. Everyday short-term processes include all of the daily tasks involved in servicing clients. Long-term processes are the ways you will meet your defined business goals, such as expanding into new markets or new types of service.  

Management Team

The management team section highlights the backgrounds of the key members of your team. Focus on those aspects that prove your team’s ability to build and run a successful company. A business mentor or advisor can help fill in any gaps, provided you can identify the specific ways that your advisor will influence your company’s growth.  

Financial Plan

Investors and lenders heavily scrutinize the financial plan, but it is often the most challenging part of the business plan to write. Healthcare is a strong market, it usually not subject to economic turns. The financial plan requires you to detail your individual revenue streams by implementation timeline and relative importance, and disclose any sources of outside funding. You also need to summarize your past and future Income Statements, Cash Flow Statements, and Balance Sheets, based on key assumptions that must be both reasonable and verifiable based on an analysis of similar companies. You should also provide a solid exit strategy that shows your understanding of the market and your desire to capitalize on profitability.  

Your full financial projections should be attached in the appendix along with any other documents that support your claims, such as letters from key partners.

Healthcare Business Plan FAQs

What is the easiest way to complete my healthcare business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Healthcare Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of healthcare business you are operating and the status; for example, are you a startup, do you have a healthcare business that you would like to grow, or are you operating a chain of healthcare businesses?

Don’t you wish there was a faster, easier way to finish your Healthcare business plan?

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Other Helpful Business Plan Articles & Templates

Healthcare Business Plan Template

Written by Dave Lavinsky

Healthcare Business Plan

You’ve come to the right place to create your Healthcare business plan.

We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Healthcare companies.

Below is a template to help you create each section of your Healthcare business plan.

Executive Summary

Business overview.

Riverside Medical is a family medical clinic located in San Francisco, California. Our goal is to provide easy access to quality healthcare, especially for members of the community who have low to moderate incomes. Our clinic provides a wide range of general and preventative healthcare services, including check-ups, minor surgeries, and gynecology. Anyone of any age or group is welcome to visit our clinic to get the healthcare that they need.

Our medical practitioners and supporting staff are well-trained and have a passion for helping improve the health and well-being of our clients. We serve our patients not just with our knowledge and skills but also with our hearts. Our clinic was founded by Samantha Parker, who has been a licensed doctor for nearly 20 years. Her experience and compassion will guide us throughout our mission.

Product Offering

Riverside Medical will provide extensive general care for all ages, creating a complete healthcare solution. Some of the services included in our care include the following:

• Primary care: annual checkups, preventative screenings, health counseling, diagnosis and treatment of common conditions
• Gynecology: PAP tests, annual well-woman exam, and family planning
• Pediatrics: infant care, annual physicals, and immunizations
• Minor procedures: stitches, casts/splints, skin biopsies, cyst removals, and growth lacerations
• Health and wellness: weight loss strategies, nutrition guidance, hormone balance, and preventive and routine services

The costs will depend upon the materials used, the physician’s time, and the amount designated for each procedure. Medical bills will be billed either directly to the patient or to their insurance provider.

Customer Focus

Riverside Medical will primarily serve the community living and working within the San Francisco bay area. The city is diverse and growing and includes people of all ages, ethnicities, and backgrounds. Everyone is welcome to visit our clinic to receive the health care they need.

Management Team

Riverside Medical’s most valuable asset is the expertise and experience of its founder, Samantha Parker. Samantha has been a licensed family doctor for 20 years now. She spent the most recent portion of her career on medical mission trips, where she learned that many people are not privileged to have access to quality medical services. Samantha will be responsible for ensuring the general health of her patients and creating a viable and profitable business medical practice.

Riverside Medical will also employ nurses, expert medical staff, and administrative assistants that also have a passion for healthcare.

Success Factors

Riverside Medical will be able to achieve success by offering the following competitive advantages:

• Location: Riverside Medical’s location is near the center of town. It’s visible from the street with many people walking to and from work on a daily basis, giving them a direct look at our clinic, most of which are part of our target market.
• Patient-oriented service: Riverside Medical will have a staff that prioritizes the needs of the patients and educates them on the proper way how to take care of themselves.
• Management: Samantha Parker has a genuine passion for helping the community, and because of her previous experience, she is fully equipped and overqualified to open this practice. Her unique qualifications will serve customers in a much more sophisticated manner than our competitors.
• Relationships: Having lived in the community for 25 years, Samantha Parker knows many of the local leaders, newspapers, and other influences. Furthermore, she will be able to draw from her ties to previous patients from her work at other clinics to establish a starting clientele.

Financial Highlights

Riverside Medical is seeking a total funding of $800,000 of debt capital to open its clinic. The capital will be used for funding capital expenditures and location build-out, acquiring basic medical supplies and equipment, hiring initial employees, marketing expenses, and working capital.

Specifically, these funds will be used as follows:

• Clinic design/build: $100,000
• Medical supplies and equipment: $150,000
• Six months of overhead expenses (rent, salaries, utilities): $450,000
• Marketing: $50,000
• Working capital: $50,000

The following graph below outlines the pro forma financial projections for Riverside Medical.

Company Overview

Who is riverside medical, riverside medical history.

Samantha Parker started the clinic with the goal of providing easy access to good quality health service, especially to those members of the community with low to moderate income. After years of planning, she finally started to build Riverside Medical in 2022. She gathered a group of professionals to fund the project and was able to incorporate and register Riverside Medical with their funding support.

Since its incorporation, Riverside Medical has achieved the following milestones:

• Found clinic space and signed Letter of Intent to lease it
• Developed the company’s name, logo, and website
• Hired a contractor for the office build-out
• Determined equipment and fixture requirements
• Began recruiting key employees with previous healthcare experience
• Drafted marketing campaigns to promote the clinic

Riverside Medical Services

Industry analysis.

The global healthcare market is one of the largest and highest-valued industries in the world. According to Global Newswire, the global healthcare services market is currently valued at $7548.52 billion and is expected to reach $10414.36 billion in 2026. This growth is expected to continue for the foreseeable future.

The biggest drivers of industry growth throughout the next decade will be a continual increase in illnesses and diseases as well as a quickly aging population. With more people aging and needing daily/frequent care, hospitals and medical clinics are bound to be in even more demand than they already are.

One obstacle for the industry is the rising cost of care. Though this results in greater profits, more and more Americans cannot afford basic medical care. Therefore, they are opting out of procedures they believe are unnecessary or unimportant.

Despite the challenges of the next decade, the industry is still expected to see substantial growth and expansion.

Customer Analysis

Demographic profile of target market.

Riverside Medical will serve the residents of the San Francisco bay area as well as those who work in the area.

The population of the area experiences a large income gap between the highest earners and the lowest earners. Therefore, it is hard for middle and lower-class families to find quality care that is affordable. As a result, they are in need of the services that we offer and are looking for accessible medical care.

The precise demographics of San Francisco are as follows:

Customer Segmentation

Our clinic is a general family practice and will treat patients of all ages, incomes, physical abilities, races, and ethnicities. As such, there is no need to create marketing materials targeted at only one or two of these groups, but we can appeal to all with a similar message.

Competitive Analysis

Direct and indirect competitors.

Riverside Medical will face competition from other companies with similar business profiles. A description of each competitor company is below.

City Medical

Founded in 2008, City Medical is a membership-based, primary-care practice in the heart of the city. City Medical offers a wide range of primary care services for patients who subscribe to the practice for an annual fee. Patients enjoy personalized care, including office visits, as well as the diagnosis and treatment of common health problems. The patient membership fee covers the services listed below, and most care is received in-office. However, some additional services, such as lab testing and vaccinations, are billed separately. Furthermore, though the annual fee is convenient for some, it is too high for many families, so many are priced out of care at this facility.

Bay Doctors

Bay Doctors is a primary care practice that provides highly personalized medical care in the office or patients’ homes. Bay Doctors includes a team of dedicated healthcare professionals with dual residency in Emergency Medicine and Internal Medicine. The practice offers same-day/next-day appointments, telemedicine, office visits, and home visits. Some of the medical care services they provide are primary care, urgent care, emergency care, gynecology, pediatrics, and minor procedures.

Community Care

Established in 1949, Community Care is a non-profit regional healthcare provider serving the city and surrounding suburbs. This facility offers a wide variety of medical services, including 24-hour emergency care, telemedicine, primary care, and more. In addition to their medical care, they have a wide variety of fundraising activities to raise money to operate the hospital and help families cover the costs of their care.

Competitive Advantage

Riverside Medical enjoys several advantages over its competitors. These advantages include:

Marketing Plan

Brand & value proposition.

The Riverside Medical brand will focus on the company’s unique value proposition:

• Client-focused healthcare services, where the company’s interests are aligned with the customer
• Service built on long-term relationships
• Big-hospital expertise in a small-clinic environment

Promotions Strategy

The promotions strategy for Riverside Medical is as follows:

Riverside Medical understands that the best promotion comes from satisfied customers. The company will encourage its patients to refer their friends and family by providing healthcare benefits for every new client produced. This strategy will increase in effectiveness after the business has already been established.

Direct Mail

The company will use a direct mail campaign to promote its brand and draw clients, as well. The campaign will blanket specific neighborhoods with simple, effective mail advertisements that highlight the credentials and credibility of Riverside Medical.

Website/SEO

Riverside Medical will invest heavily in developing a professional website that displays all of the clinic’s services and procedures. The website will also provide information about each doctor and medical staff member. The clinic will also invest heavily in SEO so the brand’s website will appear at the top of search engine results.

Social Media

Riverside Medical will invest heavily in a social media advertising campaign. The marketing manager will create the company’s social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographics.

Riverside Medical’s pricing will be lower than big hospitals. Over time, client testimonials will help to maintain our client base and attract new patients. Furthermore, we will be able to provide discounts and incentives for lower-income families by connecting with foundations and charities from people who are interested in helping.

Operations Plan

The following will be the operations plan for Riverside Medical.

Operation Functions:

• Samantha Parker is the founder of Riverside Medical and will operate as the sole doctor until she increases her patient list and hires more medical staff. As the clinic grows, she will operate as the CEO and take charge of all the operations and executive aspects of the business.
• Samantha is assisted by Elizabeth O’Reilly. Elizabeth has experience working as a receptionist at a fast-paced hospital and will act as the receptionist/administrative assistant for the clinic. She will be in charge of the administrative and marketing aspects of the business.
• Samantha is in the process of hiring doctors, nurses, and other medical staff to help with her growing patient list.

Milestones:

The following are a series of path steps that will lead to the vision of long-term success. Riverside Medical expects to achieve the following milestones in the following twelve months:

3/202X Finalize lease agreement

5/202X Design and build out Riverside Medical location

7/202X Hire and train initial staff

9/202X Kickoff of promotional campaign

11/202X Reach break-even

1/202X Reach 1000 patients

Financial Plan

Key revenue & costs.

Riverside Medical’s revenues will come primarily from medical services rendered. The clinic will either bill the patients directly or their insurance providers.

The major cost drivers for the clinic will include labor expenses, lease costs, equipment purchasing and upkeep, and ongoing marketing costs.

Funding Requirements and Use of Funds

Key assumptions.

Below are the key assumptions required to achieve the revenue and cost numbers in the financials and to pay off the startup business loan.

• Year 1: 120
• Year 2: 150
• Year 3: 200
• Year 4: 275
• Year 5: 400
• Annual lease: $50,000

Financial Projections

Income statement, balance sheet, cash flow statement, healthcare business plan faqs, what is a healthcare business plan.

A healthcare business plan is a plan to start and/or grow your healthcare business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Healthcare business plan using our Healthcare Business Plan Template here .

What are the Main Types of Healthcare Businesses?

There are a number of different kinds of healthcare businesses , some examples include: Nursing care, Physical home health care, or Home health care aides:

How Do You Get Funding for Your Healthcare Business Plan?

Healthcare businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Healthcare Business?

Starting a healthcare business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Healthcare Business Plan - The first step in starting a business is to create a detailed healthcare business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your healthcare business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your healthcare business is in compliance with local laws.

3. Register Your Healthcare Business - Once you have chosen a legal structure, the next step is to register your healthcare business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your healthcare business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Healthcare Equipment & Supplies - In order to start your healthcare business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your healthcare business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

Other Helpful Business Plan Templates

Nonprofit Business Plan Template Non-Emergency Medical Transportation Business Plan Template Medical Practice Business Plan Template Home Health Care Business Plan Template

How To Write a Business Plan for Hospital in 9 Steps: Checklist

By alex ryzhkov, resources on hospital.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

Welcome to our blog post on how to write a business plan for a hospital! In today's rapidly growing healthcare industry, starting a hospital that focuses on providing quality, personalized medical services is a promising venture. According to recent statistics, the global healthcare market is projected to reach a value of $12.3 trillion by 2026, with a compound annual growth rate of 6.7%. This presents a great opportunity for entrepreneurs looking to make a difference in the lives of patients and contribute to the advancement of healthcare technology.

Before diving into the details of writing a business plan for your hospital, it's crucial to identify the market need and demand for this type of healthcare facility. Conducting a thorough market research will help you understand the current trends and assess the potential demand for specialized medical services. By analyzing competition and industry trends, you can gain insights into successful strategies and differentiate your hospital from others.

Developing a solid financial plan is essential for securing funding and partnerships. It involves outlining the hospital's projected revenue, expenses, and investment requirements. By preparing a comprehensive financial plan, you can demonstrate the viability and profitability of your venture to potential investors or lenders.

Defining the hospital's vision, mission, and values sets the foundation for its overall purpose. This helps in establishing a clear direction and guiding the decision-making process. Creating an organizational structure and identifying key roles ensures smooth operations and effective management of resources.

Formulating a comprehensive marketing strategy is crucial for attracting patients and building strong referral networks. It involves defining your target audience, identifying the best channels to reach them, and creating compelling messaging that highlights the unique benefits of your hospital.

Lastly, assessing the legal and regulatory requirements is vital to ensure compliance with healthcare laws and regulations. This includes obtaining the necessary licenses, permits, and certifications to operate your hospital.

By following these nine steps, you will be well-equipped to write a comprehensive business plan for your hospital. Stay tuned for our upcoming blog posts, where we will dive deeper into each step to provide you with practical insights and actionable tips.

Identify The Market Need And Demand

One of the first and most crucial steps in writing a business plan for a hospital is to identify the market need and demand for the services you intend to provide. Understanding the needs and preferences of potential patients is essential for developing a successful hospital that can effectively meet their healthcare requirements.

To gather this important information, conducting a thorough market research is key. This research should focus on the local healthcare landscape, demographics, and the specific services and medical treatments currently available in the area. By analyzing this data, you can identify any gaps or unmet needs in the market that your hospital can fulfill.

During the market research process, it is also important to evaluate the demographic trends and population dynamics in the area. Understanding factors such as age distribution, income levels, and prevalent medical conditions can help you tailor your services to the specific needs of the target population.

By thoroughly understanding the market need and demand for your hospital's services, you can develop a business plan that is aligned with the needs of the community you aim to serve. This will help ensure the success and sustainability of your hospital in the long run.

Conducting a Thorough Market Research

Conducting thorough market research is an essential step in developing a business plan for a hospital. This research will help you gain a clear understanding of the market need and demand, enabling you to make informed decisions about your hospital's offerings and target audience.

When conducting market research for a hospital, consider the following:

• Identify your target market: Determine the specific demographic and geographic characteristics of the population you intend to serve. This will help you tailor your services and marketing efforts accordingly.
• Analyze market trends: Stay updated with the latest trends in the healthcare industry. Identify emerging technologies, treatments, and practices that can distinguish your hospital from the competition.
• Assess competition: Study your competitors' offerings, pricing strategies, and marketing tactics. This will allow you to identify gaps in the market and position your hospital uniquely.
• Explore patient preferences: Understand what patients value when it comes to healthcare services. Conduct surveys or interviews to gather insights on their preferences, expectations, and experiences with existing healthcare providers.
• Evaluate regulatory factors: Familiarize yourself with the legal and regulatory requirements applicable to hospitals in your region. This includes licensing, documentation, and compliance with healthcare regulations.

Tips for Conducting Market Research for a Hospital

• Utilize online resources: Make use of online databases, industry reports, and market research tools to gather data on healthcare trends, market size, and consumer behavior.
• Engage with industry experts: Seek guidance from healthcare professionals, consultants, and experts who have in-depth knowledge of the industry. Their insights can provide valuable guidance during the research process.
• Consider qualitative and quantitative research: Combine qualitative methods like interviews and focus groups with quantitative techniques such as surveys and data analysis. This will provide a comprehensive understanding of your target market.
• Continuously update your research: Regularly review and update your market research to stay on top of industry developments and changing market dynamics. This will help you adapt your business plan accordingly.

By conducting thorough market research, you will be equipped with the necessary information to develop a business plan that aligns with the needs and expectations of your target market. This research will serve as a foundation for making informed decisions and ultimately contributing to the success of your hospital.

Analyze Competition And Industry Trends

One crucial step in developing a successful business plan for a hospital is to thoroughly analyze the competition and industry trends. This analysis provides valuable insights into the current market and helps identify opportunities and potential challenges that the hospital may face. Below are some important points to consider during this analysis:

Identify competitors: Begin by identifying existing hospitals and medical facilities that may be direct competitors. Research their offerings, facility size, capacity, and reputation within the community. Understanding their strengths and weaknesses will help you position your hospital effectively.

Study industry trends: Stay up-to-date with the latest trends in the healthcare industry. Identify key innovations, advancements in medical technology, and emerging treatments or services that could impact the hospital's success. This will help you adapt and stand out in a rapidly evolving industry.

Analyze market demand: Evaluate the current and projected demand for healthcare services in the target area. Consider factors such as population growth, demographic trends, and the prevalence of specific medical conditions. Understanding market demand will help in planning the hospital's service offerings and staffing requirements.

Evaluate competitive advantages: Identify what sets your hospital apart from the competition. This could include specialized services, unique treatment approaches, advanced technology, or a focus on personalized patient care. Highlighting these competitive advantages in your business plan will attract potential patients and investors.

• Use online resources, industry publications, and professional networks to gather information on competitors and industry trends.
• Engage with healthcare professionals, potential patients, and community members to gain insights into their expectations and preferences.
• Consider conducting surveys or focus groups to gather more specific feedback and opinions on the market and competition.
• Regularly revisit and update the analysis of competition and industry trends to stay ahead of the curve and maintain a competitive edge.

Develop A Solid Financial Plan

A solid financial plan is crucial for the success of any business, including a hospital. It provides a roadmap for achieving financial stability and sustainability. Here are some important steps to take when developing a solid financial plan for a hospital:

• Estimate costs and revenue: Start by estimating the costs involved in setting up and running the hospital. This includes expenses such as equipment, facility construction or lease, staff salaries, operational costs, and marketing expenses. Additionally, analyze the expected revenue sources, such as patient fees, insurance reimbursements, and potential partnerships or collaborations.
• Financial projections: Utilize the market research and competition analysis to make informed financial projections. This will include forecasting the number of patients, expected reimbursement rates, and expected revenue growth over a specific period of time. Be sure to consider factors such as seasonality, demand fluctuations, and potential economic changes.
• Budget allocation: Once you have estimated costs and revenue and made financial projections, prioritize how you will allocate your budget. Consider allocating resources for essential needs such as medical equipment, technology, employee training, marketing, and community outreach programs. Create a detailed budget plan that includes both recurrent and capital expenses.

Tips for developing a solid financial plan:

• Consult with financial advisors or experts in the healthcare industry to ensure accuracy and validity of financial projections.
• Consider different funding sources, such as private investors, loans, grants, or public funding programs specifically targeting healthcare projects.
• Account for contingency funds to handle unexpected expenses or emergencies.
• Regularly revisit and update your financial plan to reflect changing market conditions, trends, and regulatory requirements.

Developing a solid financial plan requires a thorough understanding of the healthcare industry, market dynamics, and financial management principles. It's essential to invest time and effort into this step to lay a strong foundation for the hospital's financial success.

Secure Funding and Partnerships

Once you have developed a solid financial plan, the next crucial step in starting a hospital is securing funding and building partnerships. This stage is vitally important as it determines the financial stability and sustainability of your hospital.

1. Identify potential funding sources: Start by exploring various funding options available to you. This may include approaching investors, applying for grants and loans, or seeking partnerships with other organizations. Assess the pros and cons of each option to determine the best fit for your hospital.

• Prepare a comprehensive business plan and financial projections to convince potential investors or lenders of your hospital's viability.
• Consider partnering with organizations that share a similar mission and vision to leverage their expertise, resources, and infrastructure.

2. Craft a compelling funding proposal: Develop a persuasive funding proposal that clearly outlines your hospital's mission, goals, financial needs, and potential benefits for investors or partners. Emphasize the unique value proposition and the impact your hospital can make in the healthcare industry.

3. Build strategic partnerships: Collaborate with other healthcare organizations, research institutions, or technology companies to access resources, expertise, and specialized services. Look for complementary strengths that align with your hospital's vision and objectives.

• Network within the healthcare industry to build connections and explore potential partnership opportunities.
• Consider joining professional associations or attending industry conferences to connect with potential partners.

4. Establish trust and credibility: Demonstrate your hospital's potential by showcasing the qualifications and expertise of your team, highlighting successful case studies, or sharing testimonials from satisfied patients or partners. Establishing credibility is crucial to attract investments and create fruitful partnerships.

5. Think beyond financial support: While securing funding is a primary concern, also consider the value that partners can bring beyond monetary contributions. Look for partners who can offer strategic guidance, business acumen, or access to a broader network of healthcare professionals and resources.

6. Seek legal and financial advice: Consult legal and financial experts to ensure that your funding and partnership agreements are robust and legally sound. They can assist in negotiating favorable terms and protecting your hospital's interests.

By carefully navigating the funding and partnership landscape, you can secure the necessary resources and allies to propel your hospital towards success. Remember, building strong partnerships is not just about financial support but also finding collaborative opportunities that align with your hospital's vision and values.

Define The Hospital's Vision, Mission, And Values

Defining the vision, mission, and values of your hospital is crucial for establishing its identity and guiding its direction. These elements serve as the foundation for your organization and shape its culture, goals, and strategies.

When crafting the vision statement , consider the long-term aspirations and purpose of your hospital. It should succinctly describe the desired future state and the impact you aim to make in the community. This statement should inspire and motivate both your staff and patients.

The mission statement clarifies the fundamental purpose and reason for the existence of your hospital. It outlines the primary services you will provide and the target population you aim to serve. This statement should be concise and clearly communicate the value you intend to deliver.

The values of your hospital outline the guiding principles and beliefs that underpin your organization's culture and conduct. These principles should align with the overall mission and vision. They provide a framework for decision-making, as well as help ensure consistency in providing patient care.

Tips for Defining Your Hospital's Vision, Mission, and Values:

• Involve key stakeholders, including staff, patients, and community members, in the process to gain diverse perspectives and foster a sense of ownership.
• Keep your statements concise and easily understandable to ensure clarity and coherence.
• Ensure that your vision, mission, and values are in line with the market need identified and the unique value proposition of your hospital.
• Regularly revisit and refine your vision, mission, and values to adapt to changes in the healthcare landscape and the evolving needs of your patients.

By clearly defining your hospital's vision, mission, and values, you establish a strong foundation that guides decision-making, fosters a sense of purpose among your staff, and communicates the unique value your hospital brings to the community.

Outline The Organizational Structure And Key Roles

In order to effectively run a hospital, it is crucial to clearly outline the organizational structure and identify the key roles within the healthcare facility. This will help ensure smooth operations, effective communication, and proper allocation of responsibilities. Here are some important steps to consider when outlining the organizational structure and key roles:

• Identify the leadership positions: Start by identifying the key leadership positions that will oversee the hospital's operations. This typically includes roles such as Chief Executive Officer (CEO), Chief Medical Officer (CMO), and Chief Nursing Officer (CNO).
• Define the departments: Next, outline the various departments within the hospital, such as administration, nursing, finance, human resources, and medical services. Each department should have a designated leader responsible for managing day-to-day operations and ensuring departmental goals are met.
• Establish reporting lines: Clearly define the reporting lines within the organizational structure to ensure efficient communication and decision-making processes. Indicate who reports to whom, and establish a hierarchical structure that promotes accountability and clarity.
• Identify key roles: Determine the key roles within each department and specify the responsibilities and qualifications for each position. This may include physicians, nurses, therapists, administrative staff, and other healthcare professionals required to deliver quality care.
• Promote teamwork and collaboration: Emphasize the importance of teamwork and collaboration among different departments and roles within the hospital. Encourage regular meetings, cross-functional projects, and open communication channels to foster a culture of cooperation and interdisciplinary care.
• Delegate authority: Delegate authority and empower individuals within their respective roles to make decisions and take ownership of their responsibilities. This encourages autonomy and accountability, and enables efficient problem-solving and decision-making processes.
• Consider developing an organizational chart to visually represent the hierarchical structure and reporting lines within the hospital.
• Regularly review and update the organizational structure to ensure it aligns with the evolving needs of the hospital and changing healthcare landscape.
• Communicate the organizational structure and key roles to all employees to ensure clarity and understanding of their responsibilities and reporting lines.

By carefully outlining the organizational structure and key roles, a hospital can establish a strong foundation for effective management, collaboration, and seamless delivery of quality healthcare services.

Formulate A Comprehensive Marketing Strategy

A comprehensive marketing strategy is essential for successfully promoting and positioning your hospital in the healthcare industry. It involves identifying your target audience, creating effective messaging, choosing the right marketing channels, and continuously evaluating and adapting your strategies to ensure maximum reach and impact.

When formulating your marketing strategy, keep the following key aspects in mind:

Tips for Formulating A Comprehensive Marketing Strategy:

• Identify your target audience: Determine the demographics and characteristics of the patients you want to attract. This enables you to tailor your marketing efforts towards their specific needs and preferences.
• Create compelling messaging: Develop a clear and persuasive message that highlights the unique value proposition of your hospital. Emphasize the personalized care, cutting-edge technology, and evidence-based treatment you offer.
• Choose the right marketing channels: Utilize a mix of traditional and digital marketing channels to reach your target audience effectively. Consider strategies such as search engine optimization (SEO), social media marketing, email campaigns, and referral programs.
• Build strong relationships: Cultivate relationships with referring physicians, healthcare professionals, and community organizations. Establish partnerships to increase referrals and enhance your reputation within the healthcare community.
• Monitor and evaluate: Regularly measure the effectiveness of your marketing efforts by tracking key performance indicators (KPIs). Analyze data, gather feedback, and adapt your strategies accordingly to ensure maximum impact and return on investment.

A comprehensive marketing strategy plays a vital role in attracting patients, establishing your hospital's brand, and maintaining a competitive edge in the healthcare industry. By understanding your target audience, crafting compelling messaging, choosing the right channels, and continuously evaluating your strategies, you can position your hospital as a trusted provider of high-quality and personalized medical services.

Assess Legal And Regulatory Requirements

Ensuring compliance with legal and regulatory requirements is crucial when setting up a hospital. This step involves researching, understanding, and meeting the various laws and regulations that govern the healthcare industry.

• Obtain necessary licenses and permits: Familiarize yourself with the licensing requirements specific to hospitals in your jurisdiction. Determine the necessary permits and certifications required to operate legally.
• Comply with healthcare regulations: Understand and comply with regulations related to patient privacy, data protection, health and safety standards, and medical waste management. Implement appropriate policies and protocols to ensure compliance.
• Stay updated with healthcare laws: Keep abreast of any changes or updates in healthcare laws and regulations that may have an impact on your hospital. This includes staying informed about reimbursement policies, billing regulations, and insurance requirements.
• Secure professional licenses and certifications: Ensure all healthcare professionals working at the hospital possess valid licenses and certifications. Perform necessary background checks and verification procedures to maintain quality and patient safety standards.
• Implement proper documentation and record-keeping practices: Establish systems for accurate and organized documentation to comply with medical record-keeping requirements. Adhere to guidelines for the storage, retention, and disposal of medical records.
• Seek legal counsel: Consult with healthcare attorneys or legal experts with experience in the healthcare industry to navigate the complex legal landscape.
• Stay updated with changes: Regularly review and update your knowledge on relevant laws and regulations to ensure ongoing compliance.
• Establish a compliance team: Assign responsibilities to a dedicated compliance team or officer to monitor and enforce adherence to legal and regulatory requirements.

In conclusion, developing a business plan for a hospital requires careful consideration and thorough research. By following the nine steps outlined in this checklist, you can ensure that your hospital is well-prepared to meet the market demand, provide high-quality care, and comply with legal and regulatory requirements. By focusing on personalized medical services, leveraging cutting-edge technology, and adopting a multidisciplinary approach to treatment, your hospital can strive towards providing the best possible outcomes for patients.

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Business Plan Template for Hospitals And Healthcare Providers

• Great for beginners
• Ready-to-use, fully customizable Subcategory
• Get started in seconds

In the fast-paced and ever-evolving world of healthcare, having a solid business plan is essential for hospitals and healthcare providers to thrive. ClickUp's Business Plan Template for Hospitals and Healthcare Providers is specifically tailored to meet the unique needs and challenges of the healthcare industry.

With this template, hospital administrators and healthcare providers can:

• Outline strategic goals and objectives to guide the organization's growth
• Develop accurate financial projections to ensure financial stability and success
• Create targeted marketing strategies to attract and retain patients
• Streamline operational processes to improve efficiency and quality of care

Don't let the competitive and regulated market hold you back. Get started with ClickUp's Business Plan Template and take your hospital or healthcare organization to new heights.

Business Plan Template for Hospitals And Healthcare Providers Benefits

When using the Business Plan Template for Hospitals and Healthcare Providers, you can benefit from:

• Streamlined planning process that saves time and effort
• Clear strategic goals that align with your organization's mission and vision
• Accurate financial projections that help secure funding and attract investors
• Effective marketing strategies to reach and attract patients
• Efficient operational processes that optimize patient care and resource allocation
• Compliance with industry regulations and standards
• Improved decision-making and risk management
• Increased organizational growth and competitiveness in the healthcare market.

Main Elements of Hospitals And Healthcare Providers Business Plan Template

When creating a business plan for hospitals and healthcare providers, ClickUp's Business Plan Template has you covered with its comprehensive features:

• Custom Statuses: Track the progress of your business plan with statuses like Complete, In Progress, Needs Revision, and To Do, ensuring transparency and accountability throughout the planning process.
• Custom Fields: Utilize custom fields such as Reference, Approved, and Section to add additional information and categorize different sections of your business plan, making it easy to navigate and update.
• Custom Views: Access different views like Topics, Status, Timeline, Business Plan, and Getting Started Guide to gain a holistic understanding of your business plan, track its progress, visualize timelines, and refer to helpful resources.
• Collaboration and Organization: Leverage ClickUp's collaborative features, including task assignments, comments, and file attachments, to ensure seamless collaboration among team members while keeping all relevant documents and discussions in one place.
• Integration and Automation: Connect ClickUp with other tools using ClickUp's integrations and automate repetitive tasks with ClickUp's Automations, saving you time and effort in managing your business plan.

With ClickUp's Business Plan Template, hospitals and healthcare providers can effectively strategize, analyze, and execute their plans for growth and success in the healthcare industry.

How To Use Business Plan Template for Hospitals And Healthcare Providers

If you're a hospital or healthcare provider looking to create a comprehensive business plan, follow these six steps using ClickUp's Business Plan Template:

1. Define your vision and mission

Start by establishing your hospital or healthcare provider's vision and mission. What is the ultimate goal you're trying to achieve? What values do you want to prioritize? This step will help you set the tone for your business plan and guide your decision-making process.

Use a Doc in ClickUp to clearly outline your vision and mission statement.

2. Conduct market research

To create an effective business plan, you need to understand the market you're operating in. Research your target audience, competitors, and industry trends. Identify gaps in the market that your hospital or healthcare provider can capitalize on and develop strategies to differentiate yourself.

Use the Table view in ClickUp to collect and analyze market research data.

3. Set strategic goals

Once you have a clear understanding of the market, it's time to set strategic goals for your hospital or healthcare provider. These goals should align with your vision and mission and address the needs of your target audience. Consider goals related to patient care, operational efficiency, financial growth, and community engagement.

Use Goals in ClickUp to set and track your strategic goals.

4. Develop operational plans

Now that you have your strategic goals in place, it's time to develop operational plans to achieve them. This includes outlining your organizational structure, staffing requirements, service offerings, marketing strategies, and financial projections. Be sure to consider any regulations or compliance requirements specific to the healthcare industry.

Use tasks in ClickUp to break down your operational plans into actionable steps.

5. Implement performance metrics

To ensure the success of your hospital or healthcare provider, it's crucial to measure and monitor your performance. Identify key performance indicators (KPIs) that align with your strategic goals and regularly track and analyze them. This will help you identify areas for improvement and make data-driven decisions.

Use Dashboards in ClickUp to visualize and track your performance metrics.

6. Regularly review and revise

A business plan is not set in stone. It's important to regularly review and revise your plan as your hospital or healthcare provider evolves. Stay up to date with industry trends, reassess your goals, and make necessary adjustments to stay competitive and meet the changing needs of your patients and community.

Set recurring tasks in ClickUp to schedule regular reviews and revisions of your business plan.

Get Started with ClickUp’s Business Plan Template for Hospitals And Healthcare Providers

Hospital administrators and healthcare providers can use the ClickUp Business Plan Template for Hospitals and Healthcare Providers to streamline their strategic planning and ensure the success of their organization.

First, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to create a comprehensive business plan:

• Use the Topics View to organize different sections of your business plan, such as executive summary, market analysis, financial projections, and more
• The Status View allows you to track the progress of each section, ensuring that everything is on track and completed on time
• Utilize the Timeline View to visualize the timeline of your business plan, making it easier to manage deadlines and milestones
• The Business Plan View provides a holistic overview of your entire plan, allowing you to review and edit it easily
• Use the Getting Started Guide View to provide instructions and guidelines for team members who are new to the business plan
• Customize the template by adding the custom fields Reference, Approved, and Section to provide additional information and track progress
• Update statuses as you work on each section, marking them as Complete, In Progress, Needs Revision, or To Do
• Monitor and analyze the progress of your business plan to ensure that it aligns with your goals and objectives
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Business Plan For Hospital

Congratulations on taking the first step in creating a business plan for hospital. This is an essential step towards entrepreneurial success and a well-crafted business plan will provide a solid foundation for your business venture!

Whether you're a budding entrepreneur with a brilliant idea or a seasoned business owner looking to expand, a thoughtfully constructed business plan will help you plan and navigate towards business prosperity.

In this comprehensive guide, we will walk you through the essential elements of creating a business plan for hospital that captures your vision as well as attracting investors, partners, and customers alike. From defining your mission and identifying your target market to formulating financial projections and developing a robust marketing strategy, our aim is to empower you with the knowledge and tools needed to turn your aspirations into a reality.

So whether you're just starting out or you're looking to revamp your existing business plan, read on for everything you need to know.

Why is a business plan important?

A business plan will help you think about your hospital business like you’ve never done before. This thinking will help you clarify important elements like your long-term goals and objectives. You can then work backwards from your goals to develop strategies and marketing campaigns to help make these objectives a reality.

A business plan will also help you think about your customers in great detail. You will be able to understand their wants and needs, where they hang out, and exactly how you will target them. This clarity will enable you to focus on developing the products or services they want.

Finally, if you are seeking outside capital such as investment or a bank loan, a well-thought-out business plan will show them you are serious about your business and you have developed a clear and thorough plan of action to achieve success.

A Business Plan For Hospital - The Key Parts

The executive summary, your company description, market analysis, products and services.

• Marketing Strategy
• Operational Plan
• Financial Projections

Risk Analysis

• Funding Request and Use of Funds (if applicable)
• Additional Information

An executive summary of your business plan for hospital is a brief overview of your business plan.

This is the first thing that potential investors or lenders will see, so it is crucial that you make a good impression. Keep this section short and highlight the key points of your plan.

What should an executive summary include?

• Overview of the Business
• Mission Statement
• Key Objectives
• Summary of Products/Services
• Financial Highlights and Funding Requirements (if applicable)

Remember potential investors don’t always have huge amounts of time to read your document so make sure that you condense the critical information, enabling the reader to make quick and well-informed judgments. Tips for the Executive Summary

Wait until you’ve written the whole business plan and then come back and complete the executive summary. This way you will know your business plan for hospital inside and out so you can highlight the key elements of the document. Remember the Executive Summary will shape the reader's initial perception of the business and whether they continue reading the document.

If you are looking for any tips on how to improve any section of your business plan, check out our Learning Zone , which has several in-depth guides on each section of the business plan.

The Company Description section of your hospital business plan is crucial as it offers a comprehensive overview of your business. This section provides essential information about your company's history, mission, vision, legal structure, location, and key milestones. It allows readers to gain a clear understanding of your company's fundamental characteristics and the context in which it operates.

When crafting your company description, make sure to include the following key elements:

• Business Name and Legal Structure: Clearly state the legal name of the company and its legal structure.
• Business History: Provide a brief overview of how the business came into existence. Highlight key milestones or events that shaped the company's growth and development.
• Mission and Vision Statements: Present the company's mission statement, which outlines its purpose and primary goals. Additionally, share the vision statement, which describes the long-term vision and objectives for your business.
• Products and Services: Briefly explain the products or services your business offers, emphasising their unique selling points and how they address customer needs.
• Competitive Advantages: Clearly state the competitive advantages that differentiate your business from others in the market. This could include unique features, patents, proprietary technology, or a strong brand presence.
• Location and Facilities: Provide details about the physical location of your business and any facilities required to operate successfully.

Tips for writing the company description section:

• Interweave storytelling into the company's history, tell the reader about your passion for the business and the journey you’ve been on to get to this point.
• Include strong visuals and infographics.
• Avoid jargon and keep the writing style clear and concise.
• Focus on your company's unique selling point (USP) and how that makes you stand out in the marketplace.
• Back up this information with customer testimonials if possible.

The market analysis section of your hospital business plan is essential for understanding the competitive landscape and the overall business environment. It is crucial to execute this section effectively as it demonstrates your in-depth knowledge of the market dynamics. This process will enable you, as an entrepreneur, to identify opportunities, mitigate risks, and develop strategies for success.

To conduct a good market analysis, it is important to have a deep understanding of the industry you are operating in. This information will help you make informed decisions about your product or service offerings, marketing strategies, and pricing.

Key elements to include in your market analysis section:

• Industry Overview: Provide a general overview of your industry. Describe the industry's size, growth rate, major players, and key trends. Include relevant statistics and data to support your claims.
• Target Market and Customer Segmentation: Clearly define your target market and outline the specific customer segments you aim to serve. Identify the needs, preferences, and behaviours of each segment.
• Competitor Analysis: Identify direct and indirect competitors in the market. Analyse their strengths, weaknesses, market share, and strategies. Highlight areas where your business differentiates itself from competitors.
• Market Trends and Opportunities: Explore current and future trends in the industry and market. Assess how these trends can impact your business positively and identify potential opportunities for growth.
• SWOT Analysis (optional): Consider including a SWOT analysis specific to your market. This can help you understand your business's strengths, weaknesses, opportunities, and threats in the context of the market.

How to nail the market analysis section?

• Differentiation: Focus on highlighting how your business differentiates itself from competitors, really try to drum home this point.
• Market Surveys or Interviews: Adding surveys or interviews and adding the key findings and quotes in the Market Analysis to support your claims will help reinforce the plans in your document.
• Competitive Matrix: a competitive matrix visually comparing your business against key competitors based on factors such as price, features, and customer service. This matrix is a great visual method highlighting your competitive advantages.
• Emerging Technologies or Trends: Identifying potential disruptions and how your company is prepared for them shows a great understanding of market dynamics and trends.

Looking for more inspiration on how to make your market analysis section even better, then check out our in-depth business market analysis guide.

In this section, we will highlight the core products and services that make your hospital business unique and valuable. It is essential to showcase what sets you apart from the competition and why your offerings are exceptional. This information is especially important for potential investors, partners, and customers who are keen to understand what sets your business apart in the market.

When describing your products and services ensure you include the following information:

• Description of Products/Services: Provide a clear and concise description of each product or service your business offers. Explain their primary function and how they address customer needs.
• Unique Selling Proposition (USP): Highlight the unique features or benefits that make your products or services stand out from competitors. Clearly state why customers should choose your offerings over alternatives.
• Product/Service Life Cycle: Describe where each product or service stands in its life cycle (e.g., introduction, growth, maturity, decline) and outline plans for updates or new offerings in the future.
• Intellectual Property (if applicable): If your business has any intellectual property (e.g., patents, trademarks, copyrights) related to your products or services, mention them in this section.

Extra elements to make this section stand out:

• Customer Use Cases: Present real-life customer use cases or success stories that illustrate how your products or services have solved specific problems for customers. Use compelling narratives to engage readers.
• Product Roadmap: If applicable, include a product roadmap that outlines future updates, enhancements, or new offerings. This showcases your business's commitment to innovation and continuous improvement.
• Quality and Testing Standards: Discuss the quality standards your business adheres to and any testing processes you conduct to ensure the reliability and performance of your offerings.
• Pricing Strategy: Integrate your pricing strategy into this section. Explain how you've determined the pricing of your products or services, considering factors like production costs, competition, and value to customers.
• Environmental and Social Impact: If your products or services have positive environmental or social implications, highlight them in this section. Increasingly, customers appreciate businesses that contribute positively to society.

The Marketing Strategy Section

Key Information to Include Within the Marketing Strategy Section:

• Marketing Goals and Objectives: Clearly state the marketing goals you aim to achieve. Focus on how you will increase brand awareness and drive customer conversions or leads.
• Target Market Strategy: Describe the specific strategies you will use to reach and engage with your target customers. This could involve digital marketing, traditional advertising, or other channels.
• Pricing Strategy: Explain how your pricing will attract the target market and how it compares to competitors' pricing.
• Promotion and Advertising Plan: Outline the promotional activities and advertising campaigns you plan to execute. Include details about social media marketing, content marketing, email campaigns, and other promotional tactics.
• Sales Strategy: Describe your sales process and how you plan to convert leads into paying customers. Mention any sales team structure and their responsibilities if applicable.
• Customer Relationship Management (CRM) Approach: Discuss how you intend to build and maintain strong relationships with your customers to encourage repeat business and loyalty.

Getting Creative with the Market Strategy Section

• Create a visual marketing timeline.
• Outline influencer or brand ambassador partnerships if applicable.
• Detail key metrics and KPIs.

By infusing creativity and innovative marketing ideas with sound fundamental marketing, you can really make this section stand out and impress potential investors and partners.

The Operation Plan Section

While marketing activities may seem more exciting, operational planning is essential for the success of your hospital business. This section focuses on the day-to-day operations and internal processes that drive your business forward. By providing a comprehensive roadmap of your resources, workflows, and procedures, you can instill confidence in potential investors that your business is well-equipped for growth.

Here are some key items to include in your operational plan:

• Organisational Structure: Describe the organisational structure of the company, including key roles and responsibilities.
• Key Personnel and Team: Introduce key team members and their qualifications. Highlight how their expertise contributes to the success of the business.
• Operational Workflow and Processes: Provide a high-level step-by-step overview of delivering your product or service, from production to delivery or distribution.
• Resource Requirements: Outline the key resources required to run the business, such as equipment, technology, facilities, and human resources.
• Quality Control and Assurance: Explain how the company ensures the quality and consistency of its products or services, and how it addresses any potential issues.
• Supply Chain Management (if applicable): If the business involves sourcing materials or products from suppliers, describe the supply chain management process.
• Legal and Regulatory Compliance: Discuss any legal or regulatory requirements specific to the industry and how the company ensures compliance.

How to add value to the Operation Plan section:

• Use visuals to outline organisation structures and workflows.
• Outline contingency plans, for example how the company is prepared for supply chain shortages or price shocks.
• Efficiency, efficiency, efficiency. Describe how you have driven efficiency gains for the business.
• Have you considered your business's environmental impact? If so, mention within this section.

The operational section of a business plan does have the potential to be dryer than more exciting elements such as marketing, however, by incorporating creative elements and forward-thinking workflows you can help keep reader engagement high.

The Financial Projections

The Financial Projections section can make or break a business plan. Always include well-researched and accurate projections to avoid undermining your business plan and losing out on potential investment. What to include in the financial projections section:

• Sales Forecast: Provide a detailed projection of the company's sales revenues for each product or service category over the forecast period.
• Expense Projections: Outline the expected operating expenses, including costs related to production, marketing, salaries, rent, utilities, and any other significant expenses.
• Profit and Loss (P&L) Statement: Present a comprehensive Profit and Loss statement that summarizes the business's revenue, cost of goods sold (COGS), gross profit, operating expenses, and net profit or loss for each year of the forecast.
• Cash Flow Projection: Include a cash flow statement that outlines the inflows and outflows of cash over the forecast period. This will help identify potential cash flow gaps.
• Break-Even Analysis: Perform a break-even analysis to determine the point at which the business's total revenue equals total costs, indicating when it becomes profitable.

How to add value to your financial projections section:

• Be prepared to defend your assumptions with data. If you are planning for a high-growth % make sure you can justify this assumption. If in doubt the more conservative the better.
• Include visuals that help readers quickly grasp the trends and patterns in revenue, expenses, and profits.
• Offer different scenarios based on varying assumptions. For example, present a conservative, moderate, and aggressive growth scenario.
• Include key financial ratios like gross margin, net profit margin, and return on investment (ROI).

The Funding Request and Use of Funds Section

This section outlines the financial requirements of the company and how the requested funds will be utilised to support its growth and operations.  Providing potential investors or lenders with a clear picture of how their money will be used will improve the business case for the funds and provide further confidence to investors. What to include in this section?

• Funding Request Amount: State the specific amount of funding you are seeking to obtain from investors, lenders, or other sources.
• Use of Funds: Provide a detailed breakdown of how the requested funds will be allocated across different aspects of the business. Common categories include product development, marketing, operational expenses, hiring, equipment, and working capital.
• Timeline of Funds Utilisation: Outline the timeline for utilising the funds. Specify when and how the funds will be disbursed and the expected milestones or deliverables associated with each funding phase.
• Expected Return on Investment (ROI): If applicable, include information on the expected ROI for investors. Highlight the potential for financial gains or equity appreciation over time.
• Repayment Plan (if applicable): If seeking a loan, provide a clear repayment plan that outlines the repayment period, interest rate, and the proposed schedule for repayment.

How to maximise this section?

• Create a visual timeline for key milestones such as the initial investment and key payback periods.
• Outline risk mitigation plans to instil confidence.
• Reiterate the company's long-term vision and how the funds can help achieve these goals.

As you near the end of your hospital business plan, it is crucial to dedicate a section to outlining potential risks. This section holds immense significance as it can greatly influence the confidence of potential investors. By demonstrating your market awareness and addressing challenges head-on, you can instill trust and credibility.

When conducting a risk analysis for your hospital car rental business plan, consider including the following:

• Identification of Business Risks: Enumerate the key risks and uncertainties that could affect the business. These risks can be internal (e.g., operational, financial) or external (e.g. market changes, regulatory changes, economic downturns).
• Impact Assessment: Analyse the potential impact of each identified risk on the business's operations, finances, and reputation. Rank the risks based on their severity and likelihood of occurrence.
• Risk Mitigation Strategies: Present specific strategies and action plans to mitigate each identified risk. Explain how you will proactively address challenges and reduce the negative impact of potential risks.
• Contingency Plans: Describe contingency plans for worst-case scenarios, outlining how the business will respond and recover from significant risks if they materialise.

How to make your risk analysis stand out?

• Add context with real-life examples. Are there similar businesses that have dealt with risks successfully in a similar manner to your strategy? This will add credibility to this section.
• Create adaptive strategies that demonstrate your business’s flexibility and adaptability.
• Outlining the responsible person for each risk and how they own it, giving further confidence in your risk management strategies.

Some additional information you may want to include in your business plan for hospital:

• Customer Surveys and Feedback
• Letters of Support or Intent
• Legal Documents (e.g., licenses, permits)
• Resumes of Key Team Members

A Business Plan For Hospital Wrapping It All Up

A business plan is one of the most important documents that you will create about your business. It can literally be the difference between securing additional finance or missing out. Developing your business is not an easy task, however, the opportunity to think about your business in such detail will no doubt help you develop new and important insights along with new ideas and strategies. With all sections of your business plan and especially the financial plan, be prepared to defend your position to potential investors or lenders. This means that you should never publish anything that you can’t back up with additional data or rationale. Business Plans are not created overnight so take the time to research and think about each section properly, always try to support your claims and strategies with market insight and data. We hope you’ve enjoyed reading this guide, if you are looking for more tips on creating a business plan check out our learning centre .Good luck with your next business endeavour! Action Planr

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Psychological Health Center Business Plan

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Amesbury Psychological Center

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Amesbury Psychological Center (the Center) is a multidisciplinary behavioral health care practice that offers mental health and substance abuse services to the communities of the Merrimack Valley. Our focus is to provide cost-effective, quality treatment. Our mission is to create, promote, and maintain a positive customer relationship with our clients, Anna Jaques Hospital (AJH), payors, associates and staff, and our community.

The market for behavioral health services is healthy, as will be shown by the growth the existing Center has experienced during the past two and a half years. Massachusetts has recently passed a mental health parity bill that will become effective in month one. The bill requires insurance companies to develop benefits for biologically based behavioral health disorders similar to those provided for health disorders. This should help sustain the anticipated projected growth. Currently, the Outpatient Psychiatric Center is referring approximately four phone calls a day to other providers.

The key to success for this turnkey project includes:

• An ability to transfer existing hospital behavioral health contracts to the Center.
• Credentialing clinicians in a timely manner.
• Obtaining initial working capital.
• Contracting with clinicians using reasonable rates.
• Developing and implementing a successful billing and collection system.
• Listening to all customers and attempting to meet their needs.
• Obtaining a medicaid provider number.

The business plan provides a map for sustaining growth, improving revenue collections, and increasing our bottom line to produce a profit.

1.1 Objectives

Goal 1: To continuously develop, strengthen, and improve services offered by the Center.

• Strengthen the current payor mix by developing and maintaining strategic alliances with five major behavioral health managed care companies.
• Identify and develop strategic alliances with three community human service and addiction agencies.
• Identify and foster strategic alliances and networks with eight community medical group practices.
• Transfer and/or hire 80% of staff two months before starting date.
• Identify and implement a billing system two months before starting date.
• Improve the expected receipts rate by 40% over the previous year.
• Increase all  services offered through the Center by 80% over the previous year.
• Arrange working capital for the initial phase of the turnkey venture.

Goal 2: To strengthen the Center’s commitment to excellence.

• Enhance customer service by offering three in-service trainings related to client satisfaction with treatment, accessibility, and staff-client interactions.
• Continuously assess referral base satisfaction through the use of a referral base satisfaction survey.
• Continuously assess client satisfaction from three perspectives: accessibility, environmental factors, and treatment-related factors.

1.2 Mission

To promote the well-being of the individuals and families in the Merrimack Valley community by providing accessible, quality mental health and substance abuse/addiction care for children, adolescents, adults, and their families, utilizing a service system that emphasizes trust, respect, confidentiality, and compassion. We are committed to quality mental health care that is provided in a collaborative effort with consumers’ overall health strategies and an array of medical services. We are further committed to the philosophy that we exist for the customer/client.

1.3 Keys to Success

• Secure working capital by start of project.
• Be profitable on a forward basis by the seventh month of the first fiscal year.
• Be cash flow positive by the seventh month of operation.
• Being affiliated with a well-respected community acute-care hospital.
• Managed Care friendliness through cooperation, accessibility, and clinical focus.
• Community awareness of services provided by the Center.
• Ascertain a medicaid provider number and developing an interim plan to function during the application phase.
• Staff commitment to excellence as evidenced by the Center’s growth and customer satisfaction.
• Accessibility and responsiveness to the needs of the Center’s customers.
• Functioning as an organization that is fluid, responsive, and willing to change in order to meet the frequent shifts of the behavioral health industry.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

The Amesbury Psychological Center is a for-profit behavioral health company located in Amesbury, Massachusetts. It was founded by the privatization of an existing mental health center that was a part of the Anna Jaques Hospital psychiatry program. The transfer of clients to the Center from the Outpatient Mental Health and Addiction Center was an effort to provide for uninterrupted, continued quality services to its present consumers, and expand its network of providers to ensure further growth. The transition to a privatized center enables the residents of the Merrimack Valley area to have continued access to a quality, accessible mental health center.

Although the Center is a new company, it is taking over the operation of an existing full-service mental health center. Prior to the privatization of the Outpatient Mental Health and Addictions Center, the Center was part of Anna Jaques Hospital’s Psychiatric Services Program. This program offered an array of behavioral health services which included both inpatient and outpatient services. Currently, there are approximately 565 active cases. There are another 233 inactive cases that use the Center’s services on an as-needed basis. The Center is located at the Amesbury Health Center, a facility owned by Anna Jaques Hospital. The Amesbury Health Center, formerly a city-owned community hospital, is a four-story brick building. It has been modified to accommodate a child inpatient unit and medical office spaces, including the mental health center.

The outpatient center began as a psychopharmacology center at Anna Jaques Hospital. During 1995, the psychopharmacology center moved to the Amesbury Health Center. At that time, the center expanded to include an Addictions Program.

In 1998, the Center further expanded to offer psychotherapy services. The psychotherapy component consisted of individual, couple, family therapies, and specialized groups. The composition of staff was multidisciplinary and included independently licensed/certified mental health centerians and certified addiction treatment specialists. During this time, the Center was licensed by the Department of Public Health to offer specialized addiction services that included a Second Offenders Program, an Addiction Counseling program, and an Intensive Outpatient Program. The licensing enables the Center to collaborate with other state and community agencies working with substance abuse/addiction populations, resulting in further growth for this program.

Since 1996 the number of visits/procedures has continued to grow to its present day tallies. The total number of visits for 1996 was 1,471, in 1997 it was 1,869, in 1998 it was 3,399, and in 1999 it was 6,158. The projected number of units of service for 2000 is 5,700. Although units of service have increased by 45% over the past two years, the net revenue has decreased per unit of service. As volume has increased, expenses per unit of service has fallen from $88 in 1996 to $52 in 1999. Since 1998, operating expenses have been under control and reasonably proportionate to units of service provided.

2.1 Company Ownership

The Center is a privately-owned sub-chapter S corporation formed to privatize, manage, and offer mental health and substance abuse services to the community of the Merrimack Valley. It is solely owned by its principal operator, John Nestor, Ph.D., M.P.A. It has been chartered and the name has been reserved with the Secretary of State’s office.

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2.2 Company Locations and Facilities

The Center is located in Amesbury, Massachusetts, and has been in the same location since 1996. The location is excellent because the Center is easily accessible by automobile or public transportation, and has ample parking. The psychological center has its own entrance on the south side of the building, ensuring moderate privacy and confidentiality. The Center has been recently refurbished by the hospital and there is space available for growth. Leasing arrangements are yet to be negotiated, though $10-$12 dollars a square foot is the customary rate as quoted by local realtors. The Center will ask the hospital to subsidize rent for the first two years of operation, representing their support to ensure the success of this project.

The Center occupies approximately 2,200 square feet. It has nine clinical offices and group rooms. There is a larger reception area that is separated by a divider, allowing for a child and adult reception area. Included in the square footage is a small staff kitchen, a staff bathroom, and a business/intake office. The offices are handicapped accessible. There is a public unisex, handicapped-accessible bathroom within close proximity to the Center, and one within the building.

Leasing arrangements are in process. Based upon a financial analysis and financial projections, the hospital will need to subsidize rent for the first two years if the project is to succeed. It is our goal to obtain a three-year lease from the Anna Jaques Hospital with an option to renew a second three-year lease. The present location is not critical to the success of the business. After three years we will review our rental options, the need for additional space, and other available facilities in the geographical area prior to renewing the contract.

The Center provides an array of quality mental health and substance abuse/addiction services to individuals, couples, and families. The service population includes people of all age ranges. Specifically, services include psychopharmacology, psychotherapy, substance abuse programs, and contracted mental health services. A multidisciplinary staff provides quality treatment of mood disorders, anxiety disorders, attention deficit hyperactivity disorders, behavioral disorders, post traumatic stress disorders, stress management, substance abuse disorders, and gambling addiction disorders.

3.1 Service Description

There are four components of the Center that interact closely with each other, and also with the consumer’s primary care physician, when appropriate. The philosophy of treatment recognizes the totality of the individual in his or her life situation. This includes the interconnection of multiple dimensions from biomedical to spiritual, as well as external relationships of the individual to the family and larger social groups.

• Psychopharmacology: This service is provided by licensed and board certified psychiatrists (MD/DO) and certified nurse specialists (RNCNS). Persons utilizing this service may or may not be in therapy, but need medication to stabilize the presenting symptoms and to facilitate a return to the person’s previous level of functioning. All age groups are treated. The average number of sessions is ten per year. Treatment is tailored to the needs of the individual and guided by an individualized treatment plan based on a comprehensive biopsychosocial assessment of the individual and their family, if appropriate. Rates are contracted.
• Psychotherapy: This intervention is provided by independently licensed certified nurse specialists, psychologists, licensed mental health counselors, and licensed, independent social workers. The format of these services are individual, couple, family, and/or group sessions. All age groups are treated. The average number of sessions is eight per year. Treatment is tailored to the needs of the individual and is guided by an individualized treatment plan based on a comprehensive biopsychosocial assessment of the individual and his/her family, if appropriate. Rates are contracted.
• Substance Abuse/Addiction: Substance Abuse and Addiction treatment centerians provide professionally-directed evaluation, treatment, and recovery services to persons with substance related disorders. Interventions are provided by licensed independent practitioners and/or certified alcohol and addiction counselors. These services are provided through individual and group modalities. The program consists of a four-week program that meets nine contact hours per week. Services are designed to treat the individual’s level of illness severity and to achieve significant changes in an individual’s addictive behavior. Treatment is tailored to the needs of the individual and guided by an individualized treatment plan based on a comprehensive biopsychosocial assessment of the individual and his/her family, if appropriate. Rates are contracted.
• Contracted Services: Services provided to consumers within this category are generally provided off-site at another facility. The services are provided with associated staff and billed via the Center at contracted rates. Services include: consultation, psychotherapy, psychopharmacology, and addiction services.

3.2 Competitive Comparison

The Center provides quality, accessible service. The key to differentiation is to promote and evidence the mission of the Center to our customers in a meaningful and understandable manner. It is clear that we will not be able to compete doing “business as usual.” Our approach will be customer directed. Our customers will be able to discern our intangible, as well as our tangible, benefits. Our dedicated focus on all our customers will place us ahead of our competitors. When compared with its competitors, the Center stands out in several respects:

• Environment. The Center is managed-care friendly; we provide prompt and accurate information as well as good communication. The Center has a shared treatment philosophy. Our services are accessible and cost effective.
• Marketability. When marketing our services to managed-care companies and preferred provider organizations, we take into consideration their needs. For example: group vs. individual treatment, family vs. individual treatment, after-hours accessibility, access on weekends, use and tracking of outcome measures, and customer satisfaction.
• Value-added Customer Contact. The Center provides free phone or face-to-face contact with therapists prior to treatment as a means of initiating a therapeutic relationship.
• Location and Ease of Access to Facility. The Center is easily accessible by both automobile and public transportation. It has a private entrance which provides confidentiality. It is accessible to the physically challenged and there is ample free parking.
• Promotion. Our customer-first philosophy will help attract new customers and maintain existing ones.
• Self-Assessment. A major thrust of the Center is to continuously self-assess our mode of operating in order to evaluate how user friendly the Center is for clients, referral sources, payor, staff and associates, and others.
• Integrated Delivery System. The Center has familiarity, understanding, and willingness to work closely with other health care providers. We are affiliated with an integrated health and behavioral health care system encompassing inpatient, partial, and outpatient services.

3.3 Sales Literature

At the time of this writing, our logo, brochure, business cards, and advertising are in the process of being developed. Our focus will be on selling the Center’s perceived qualities and intangibles.

3.4 Fulfillment

The key of fulfillment will be provided by the philosophy and principals of the business. The core values are customer focus, quality treatment, and professional expertise, as is evidenced by associates and staff performance, compassion, trust, and hard work.

3.5 Future Services

Market analysis summary how to do a market analysis for your business plan.">.

In this age of health care reform and increased use of contracts with health maintenance organizations (HMOs), preferred provider organizations (PPOs), and other groups, the demand for behavior health care providers continues to decline. This phenomenon, being driven by behavioral health “carve outs,” has created a competitive clinical market, resulting in customer service being a critical factor. From this particular perspective, the customer identified as payor is: self-payor, medicare, medicaid, and managed care companies. They clearly drive the large percentage of referrals within the industry.

The Center has identified several behavioral health payors who have a strong foothold in the Merrimack Valley area. They include: Tufts HMO and Tufts Affiliated Health Programs, Harvard/Pilgrim Health Care, Medicare, Medicaid/MBHP, Magellan/MBC, Magellan Lucent, United Behavioral Health, Behavior Health Network, managed care company (MCC)/Cigna, US Health Care, and Health Care Value Management (indemnity products). Consumers participating in these programs are drawn from the communities of the Merrimack Valley and Southern New Hampshire area. Within this service area it is estimated that HMOs provide insurance for approximately 51% of the population.

It should be noted that there is an abundant supply of behavioral health providers/institutions within the Merrimack Valley and Southern New Hampshire. They include: psychiatric hospitals, residential facilities, outpatient group practices that vary from public to private organizations, and solo practitioners. Customer service, then becomes an even more critical factor. To obtain and maintain a foothold in the behavioral health market will necessitate the provision of optimal, accessible, quality customer service.

The Center has four primary customers, each with their own specific needs. These include:

4.1 Target Market Segment Strategy

If the Center is going to survive and grow, we must market our services aggressively. As previously noted, our referral base is primarily driven by managed care companies, medicare and medicaid, indemnity products and self-payors. Within the Merrimack Valley geographical area, HMOs have approximately 51% of the covered lives. Focusing on and identifying the needs of these five referral sources is critical for our growth.

4.1.1 Market Trends

Trends which began with health care reengineering and the introduction of managed health care will continue during the next decade. There will continue to be change within this industry, but change will be less dramatic than the health care revolution of the 1980s and 1990s. Managed care companies will continue to influence fee structures and restructure the provider network.

With the advent of mental health parity in Massachusetts, utilization rates and reimbursement rates should improve. Under the mental health parity law, insurance companies are not allowed to cap mental health services for biologically based mental health disorders. Co-payments cannot escalate during the course of treatment for these disorders.

Managed care organizations (MCOs) are beginning to review provider compensation packages with the intent of increasing  compensation rates. Rates have been flat for the past ten years.

4.1.2 Market Growth

As noted in a previous section, the growth rate for the Center during the past three years has been significant. There is no identified reason indicating that this will change. We are currently referring out four to five phone calls per day. Within the geographical area, it takes approximately six to eight weeks to get an appointment with a psychiatrist. For psychotherapy, it takes approximately seven to eight days to get an appointment. With the use of additional staff and creative scheduling, some of these challenges can positively impact the bottom line.

Dr. Marc Shay, an adult psychiatrist, has recently become an associate of the Center. He has committed to 12 hours per week, resulting in an increase of services by 48 units per week. His schedule is filled for the next three weeks as of July 10, 2000. He will begin work on July 17, 2000. We are also in the process of negotiating with a clinical nurse specialist to work 12 hours per week. Her specialty is with children and adolescents. Her starting date is estimated to be early September 2000.

4.1.3 Market Needs

Previously, we have identified the significant aspects of services offered by the Center. Of these services, children and adolescent services are in greatest demand by all referral sources. This gives strength to the four segments of our delivery service system which address these needs. Additionally, there is significant population growth in the Merrimack Valley and southern New Hampshire areas, and this growth is projected to continue over the next decade.

4.2 Service Business Analysis

The behavioral health care industry consists of inpatient programs, residential and partial programs, outpatient group practices, and outpatient solo practices. For the purposes of this business plan, we will focus on multidisciplinary group practices, both public and private. Within the geographical area designated as the service area for this business plan, the industry participants include: North Essex Mental Health Center, Arbour/HRI Counseling Services, Harris Street Associates, and Harborside Psychological Center.

4.2.1 Main Competitors

To identify the principal behavioral health competitors within the Merrimack Valley, it is important to have an understanding of the behavioral health industry as it has been transformed by the influence of health care restructuring. There are primarily four types of behavioral health facilities: (1) psychiatric hospitals, (2) residential facilities, (3) outpatient group practices, and (4) solo practices. The primary competitors of the Center fall within the third category, outpatient group practices. These practices can be further categorized as public, not-for-profit facilities, and for-profit private practice facilities that include homogeneous group practices and multidisciplinary group practices.

Not-for-Profit Facility

1. North Essex Mental Health Center

North Essex Mental Health Center, Inc., Newburyport, Massachusetts with a satellite office in Haverhill, Massachusetts. Three years ago, this facility was bought by a subsidiary of Northeast Health Systems of Beverly, Massachusetts. This facility is a community mental health center whose primary consumer is the medicaid population. The center has been providing behavioral health services in the Merrimack Valley area for over 20 years. This center has grown significantly in the last 10 years, culminating in the opening of an Amesbury office. North Essex Mental Health Center is the dominant provider in the Northeast area of Massachusetts. They are the emergency services provider for MBHP and have contracted with the AJH to provide emergency services to their emergency room. Their payor mix is composed of medicare, medicaid, self pay, and some MCOs.

a. Strengths:

• Bureaucratic flexibility
• Affiliations programming
• Availability of home-based and school-based services

b. Weaknesses:

• Size (considered to be arrogant by some area professionals resulting in a negative perception in the community)  
• High staff turnover
• Politically well connected
• Large pool of resources to draw from
• Staff availability to respond to request for proposals (RFPs) and request for quotations (RFQs)

d. Strategies To Thwart Competition:

• Develop reputation for providing quality services
• Respond to the needs of referral sources
• Respond and demonstrate respect to consumer
• Develop niche markets
• Continuum of services available from inpatient, to partial, to intensive outpatient services
• Availability of child/adolescent psychopharmacologist
• Increase visibility of, and procedures offered by, the Center
• Strong referral base from physicians practicing within the AJH health care system

2. Arbour/HRI Counseling

HRI/Arbour Psychological Center is a moderate-size, for-profit mental health center. It is a full-service multidisciplinary center, offering mental health services to children, adolescents, and adults. It was recently procured by Arbour Mental Health Systems. This center has recently invested money to refurbish a facility that houses their geropsychiatry program. Their payor mix is spread among Medicare, Medicaid, self pay, and MCOs

• Good location in downtown Haverhill
• Affiliations
• Programming: geropsychiatry partial hospitalization program
• Community respectability
• Unknown at this time

c. Potential Impact of Strengths:

• Part of a large system
• Strong referral base
• Programming/outreach home-based legal services

d. Strategies to Thwart Competition:

• Develop reputation for providing quality services 
• Continue services available, from inpatient, to partial, to intensive outpatient services
• Increase visibility of, and procedures offered by, the Center

3. Harris Street Associates

Harris Street Associates is a multidisciplinary group practice providing mental health services to the Newburyport and Haverhill communities. It was established over fifteen years ago by several local psychiatrists and psychologists. Their payor mix has been primarily with MCOs, with some indemnity programs. It has had a rocky financial history, culminating in being bought by H.E.S. For the past three years, H.E.S. has attempted to turn around the financial status of the agency without success. It was recently announced that the center is closing on October 30, 2000.

4. Harborside Psychological Center

Harborside Psychological Center is located in Newburyport, Massachusetts. It is a multidisciplinary mental health group practice. Until recently, their service focus has been psychotherapy with children, adolescents and adults. Currently, this center has added pharmacology to their list of services. Their payor mix is composed of MCOs and employee assistance programs (EAPs).

• Location quite good in downtown Newburyport
• Multidisciplinary composition of the Center
• Not close to public transportation
• Not visibly known to the public
• Psychopharmacology time is limited
• Strong referral base with MCOs
• Develop niche markets, especially with children and adolescents

4.3 Market Segmentation

The market segmentation can best be understood from an analysis of the clinical services being offered by the Center. Presently, three services are offered: psychotherapy, pharmacology, and substance abuse/addiction treatment. When the Center commences its operations, a fourth service will be implemented: behavioral health contracts. Contracts are different from the previous three segments in that the services are provided offsite at another facility.

All services are offered to all age groups, with a modality of treatments that include individual, couple, families, and group. Some customers will use only one service at a time, while others will use a mix of the various services simultaneously.

Strategy and Implementation Summary

The Center will focus its market activities on two market areas: the communities of Merrimack Valley, and Southern Hew Hampshire. Services will include psychotherapy, psychopharmacology, and substance abuse/addiction services.

The target customers are the consumers of mental health services (i.e. individuals, couples, families, and groups). The composition breakdown is approximately 50% adults and 50% children, adolescents, and families. The second target customer are the payors. They are an integral piece of this turn key project. The payors are basically the gatekeepers for referrals and authorizations.

5.1 Sales Strategy

The Center’s sales strategy will target potential purchasers and referral sources of our services, from:

• Managed Care Companies (5-6)
• Preferred Provider Organizations (2-3)
• Medical Groups (5)
• Community Agencies (3)
• Consumers/Clients

Wherever possible, our niche marketing approach will be linked to our sales strategies.

5.1.1 Sales Forecast

The following chart and table depict the Center’s forecasted sales. During the first year, we expect a yearly growth rate of approximately 100%  from the previous fiscal year. Since existing associates will remain with the Center, and several associates from a closed center will join us and bring at least sixty percent of their current caseload with them, the forecast is reasonable. The Center is in the process of negotiating with Harbor Schools to provide mental health services, resulting in 3,300 additional units of service. The sales forecast is also based on the assumptions that we meet projected staffing patterns, managed care contracts are transitioned to the Center without difficulty, and a Medicaid provider number is obtained without complications.

Operationally, the Center is prepared to handle growth. Support staff is in place, as are other necessary environmental resources. The immediate problem would be to transfer patients from one center to another. Through a planned transition program being driven by the therapists, it should occur without too much difficulty or confusion.

The chart and table depict a modest 18% growth rate for the second year, and a 23% growth rate for the third year. The second year growth rate will be the result of adding additional therapy hours. The third year growth will be a result of adding therapy contracts. We are in the process of negotiating with Harbor Schools to provide on sight therapy services.

5.2 Value Proposition

If the Center is going to compete effectively, it will need to clearly define its value-added benefits. Our goal is to meet and exceed the needs of our customers: consumers, staff and associates, payors, consultants, and other referral sources. Previously, we discussed the needs of our customer. These needs will drive the value-added philosophy and marketing strategy.

5.3 Competitive Edge

Our competitive edge is our associates and staff affiliations. Our associates and staff spread the company proposition, “our mission is to meet/exceed customer’s expectations.” Our affiliations with the Anna Jaques Hospital and other medical group practices allows us to interface easily with a strong referral base. Hard work, integrity, accessibility, experience, quality service, and customer satisfaction are the factors influencing our competitive edge. When the customers call the Center, they will get a real person, not a voice mail message.

5.4 Marketing Strategy

Target marketing of our services is critical to growth. Strategies will include:

• An emphasis on customer-driven, quality service
• Building a relationship business
• Focusing on five behavioral health payors
• Identify and build a niche market

Marketing tools will include: direct mail, print and audio advertising, public speaking, and relationship building with identified managed care corporations and persons.

5.4.1 Promotion Strategy

Multiple strategies will be used to promote the Center. Throughout the promotional strategy, our focus will be on selling the Center. The types of promotions will include:

• Participation in activities related to treated disorders at the center, e.g., National Depression Screening Day.
• Developing a  brochure, logo, and business cards to promote the Center.
• Networking with various health care providers, community agencies, and state agencies.
• Media advertisement, especially to announce the professional affiliation of a new associate or new program.
• Use of follow-up letters to referral sources.
• Offering informational workshops to the public.
• Networking with the media to facilitate articles about the Center.
• Join small business groups/organizations as a means of increasing public awareness.

5.4.2 Positioning Statement

It is our goal to enhance our image and reputation by being responsive, accessible, and by providing quality treatment. By building relationships, we will cultivate our image with case managers and network managers of identified managed care organizations.

5.4.3 Pricing Strategy

Pricing for the services provided by the Center is market driven. Our fee structure is based upon a survey of existing MCOs and other payors. In order to operate profitably under these prices, it is imperative that the Center monitor and control costs. Behavioral health industry watchers believe that there is at least a 15% range of variation in what certain managed care companies will pay different providers for a given service. Our goal is to obtain the highest price within the competitive range by convincing the payor that we have a service to offer which exceeds that of our competitor. A possible example of this is creative bundling.

5.5 Strategic Alliances

Strategic alliances are critical to the goals of the Center, and include selling more services and strengthening our relationship with all our customers. If we are to meet our strategic goals, we must have a strong, continued alliance with Anna Jaques Hospital. Concurrently, we must strengthen and develop our relationship with our referral networks, especially medical groups within the Anna Jaques System and the surrounding community.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

The Center’s organizational structure is based upon a shared services model. The founding president/director of the Center has an accumulated twenty years of administrative, management, and clinical experience in the human service and behavioral health industry. The management philosophy is based upon open-book management, shared responsibility, and mutual respect.

6.1 Organizational Structure

The founding president/director will manage the company. Since the company is organized as a shared service model, relationships will be a key variable in setting the direction of the Center. There will be an advisory board composed of four leaders in the field of behavioral health, managed care, organizational dynamics, and a consumer.

An advisory management group, consisting of the Center’s staff, will meet on a regular basis to review the Center’s financial structure, identify customer relations issues, and develop future goals for growth, marketing, and sales. This group will be assigned the task of developing a plan to implement and integrate a Continuous Quality Improvement (CQI) component and culture into a private practice Shared Service Model (SSM). A customer relations committee will be formed to brainstorm, formulate ideas, plan and implement activities to enhance levels of satisfaction among all customers. The organizational chart follows:

6.2 Management Team

The proposed personnel team includes the individuals listed below. It will involve one to three consultants, a five member advisory board composed of professionals, and a consumer and CQI team composed of associates and staff. Dr. John Nestor will be the president and director. He has an extensive employment history in program start-up, budgeting, and program development. The advisory board includes:

**Names have been removed for confidentiality

6.3 Management Team Gaps

At present, we are in the process of identifying a financial services company and consultants for several other areas.

6.4 Personnel Plan

The personnel plan reflects the needs of a shared service model for a multidisciplinary behavioral health center. It should be noted that benefits are provided to those personnel designated as salaried or hourly employees who work more than 30 hours per week. Associates will be paid a predetermined percentage of their collectible fees. Employees will be paid every two weeks. Associates will be able to draw the first paycheck and reconcile the second paycheck each month.

Human resources, legal, fiscal billing, and marketing/sales will be out sourced. We are in the process of identifying a human resource company and a billing/collection company. The billing company will be paid a percent of fees collected with a goal of collecting at least 93% of that billed. Thought will be given to other risk variables to be included in the contract. The costs for the Human Resource services are not determined as of this writing.

The president/director’s compensation will be a combined package that includes 75% administrative salary and 25% from clinical work.

Financial Plan investor-ready personnel plan .">

The financial plan for this turn key project is presented in detail in the following sections. There are three important factors in the financial plan:

• Reducing the days in receivables and improving the quality of receivables,
• Improving cash flow, and 
• Significant growth the first year and modest growth the second and third year.

7.1 Important Assumptions

There are several assumptions related to this turn key project.

• The economy continues at its present rate, without major recession.
• Expected receipts will improve dramatically by out sourcing billing and collections.
• The current climate for these services will continue.
• Behavioral health contracts will be transferred to the Center without difficulty.
• Center clinical associates will be credentialed in a timely manner, or the Center will be able to credential by “job description.”
• Our staffing patterns and facilities will be able to handle the projected growth.
• The average days of receivable will be 67 or less.
• Unlike inpatient behavioral health services, managed care manages the services but has not attempted to cap them. It is assumed that this trend will continue. There are also signs that managed care companies are moving away from micromanaging these services.
• A mutually-agreed upon plan will be devised to prepare for the transition of medicaid clients to the Center.

The following table summarizes the general financial assumptions.

7.2 Key Financial Indicators

The following benchmark chart indicates our key financial indicators for the first three years of operation. We see significant growth during fiscal year 2001, as compared to the previous fiscal  year. Units of service are projected to increase by approximately 75%. The growth during fiscal year 2001 is reasonable in that the existing pharmacology will continue with the pharmacology and three pharmacology/therapists will transfer to the pharmacology with their clients from a center that is closing in the community. A recent medical graduate psychiatrist will join our Center as of July 2000. We will recruit one to two pharmacology nurse specialists during the fiscal year 2001. The Center will double in size during its first fiscal year, as compared to its previous level of operation. During the second fiscal year the growth rate will be approximately 18%. During the third year of operation it will grow at a rate of 23%. This growth will be a result of securing contracts with local human service agencies. Although the rate of expected receipts remains the same during the next two years, it is expected to improve during the third year with new contracts, and experience and familiarity with the new billing system. A financial goal is to be debt-free by the end of the fourth year of operation.

Similiarly, collection days remains the same during the next three years. However, efforts will be made to improve this variable with the use of electronic billing.

As sales of services increase, operating costs will rise as well. Every effort will be made to contain these costs proportionately. There are no actual or projected significant increases evident. The variable costs will increase during the third year as we need to hire new staff for the projected contracts. The hiring will not be concluded until the contracts are signed so as to avoid any unnecessary spending.

7.3 Break-even Analysis

The following chart and table summarize the Center’s Break-even Analysis. These figures and assumptions are fairly well represented since they are based upon actual historical data. Cost control and production improvement will ensure profitability.

7.4 Projected Profit and Loss

The following table shows the projected profit and loss statement. Projected sales increased from approximately $530,000 the first year of operation to more than $637,000 the second year and more than $842,000 the third year. The third year growth is a result of additional units of service gained through a contract with a local residential program.

7.5 Projected Cash Flow

The following chart and table summarize the Center’s cash flow. The projections are a combination of short-term borrowing and Center receipts. Cash flow is obviously critical to the Center’s success. The monthly cash flow, as shown in the table, generally improves from month to month. The chart and table reveal a positive cash flow as operations move beyond the seventh month and steadily continues thereafter. 

7.6 Projected Balance Sheet

The following table shows the projected balance sheet. The monthly estimates are included in the appendix.

7.7 Business Ratios

The following table shows the projected business ratios as determined by the Standard Industry Classification (SIC) Index code 8063 for the mental health center industry.

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