This sample business plan has been made available to users of Business Plan Pro, business planning

software published by Palo Alto Software. Names, locations and numbers may have been changed,
and substantial portions of the original plan text may have been omitted to preserve confidentiality
and proprietary information.
You are welcome to use this plan as a starting point to create your own, but you do not have
permission to reproduce, resell, publish, distribute or even copy this plan as it exists here.
Requests for reprints, academic use, and other dissemination of this sample plan should be emailed
to the marketing department of Palo Alto Software at marketing@paloalto.com. For product
information visit our Website: www.paloalto.com or call: 1-800-229-7526.
Copyright Palo Alto Software, Inc., 1995-2009 All rights reserved.
Confidentiality Agreement
The undersigned reader acknowledges that the information provided by _______________ in this
business plan is confidential; therefore, reader agrees not to disclose it without the express
written permission of _______________.
It is acknowledged by reader that information to be furnished in this business plan is in all respects
confidential in nature, other than information which is in the public domain through other means
and that any disclosure or use of same by reader, may cause serious harm or damage to
_______________.
Upon request, this document is to be immediately returned to _______________.
___________________
Signature
___________________
Name (typed or printed)
___________________
Date
This is a business plan. It does not imply an offering of securities.
Table of Contents
Page 1
1.0 Executive Summary.............................................................................................................................1
Chart: Highlights ......................................................................................................................2
1.1 Objectives ...................................................................................................................................2
1.2 Mission ........................................................................................................................................2
1.3 Keys to Success ........................................................................................................................3
2.0 Company Summary.............................................................................................................................3
2.1 Company Ownership .................................................................................................................4
2.2 Start-up Summary ......................................................................................................................4
Table: Start-up .........................................................................................................................4
Chart: Start-up .........................................................................................................................5
3.0 Services................................................................................................................................................5
3.1 Information Management and Technology ..............................................................................6
3.1.1 Hardware........................................................................................................................6
3.1.2 Billing ..............................................................................................................................7
3.1.3 EMR (Electronic Medical Records).............................................................................7
4.0 Market Analysis Summary ..................................................................................................................8
4.1 Market Segmentation ................................................................................................................8
Table: Market Analysis ...........................................................................................................8
Chart: Market Analysis (Pie) ..................................................................................................9
4.2 Target Market Segment Strategy .............................................................................................9
4.3 Service Business Analysis........................................................................................................9
4.3.1 Competition and Buying Patterns .............................................................................10
5.0 Strategy and Implementation Summary ..........................................................................................10
5.1 Competitive Edge....................................................................................................................10
5.2 Marketing Strategy ..................................................................................................................10
5.2.1 Marketing Expenses ...................................................................................................12
Chart: Market Analysis (Bar) ......................................................................................13
5.3 Sales Strategy..........................................................................................................................13
5.3.1 Sales Forecast ............................................................................................................14
Table: Sales Forecast.................................................................................................14
Chart: Sales Monthly ...................................................................................................15
Chart: Sales by Year ...................................................................................................15
5.4 Milestones ................................................................................................................................15
Table: Milestones..................................................................................................................16
Chart: Milestones ..................................................................................................................16
6.0 Web Plan Summary ..........................................................................................................................16
6.1 Website Marketing Strategy ...................................................................................................17
6.2 Development Requirements ...................................................................................................17
7.0 Management Summary ....................................................................................................................17
7.1 Personnel Plan .........................................................................................................................18
Table: Personnel ...................................................................................................................18
8.0 Financial Plan ....................................................................................................................................18
8.1 Start-up Funding ......................................................................................................................20
Table: Start-up Funding........................................................................................................20
8.2 Break-even Analysis................................................................................................................21
Table: Break-even Analysis .................................................................................................21
Chart: Break-even Analysis .................................................................................................21
Table of Contents
Page 2
8.3 Projected Profit and Loss .......................................................................................................21
Chart: Profit Yearly ................................................................................................................22
Chart: Gross Margin Yearly..................................................................................................23
Table: Profit and Loss ..........................................................................................................24
Chart: Profit Monthly .............................................................................................................25
Chart: Gross Margin Monthly ...............................................................................................25
8.4 Projected Cash Flow ...............................................................................................................25
Table: Cash Flow ..................................................................................................................26
Chart: Cash ...........................................................................................................................27
8.5 Projected Balance Sheet ........................................................................................................27
Table: Balance Sheet ...........................................................................................................28
8.6 Business Ratios .......................................................................................................................28
Table: Ratios .........................................................................................................................29
Table: Personnel ........................................................................................................................................1
Table: Profit and Loss ...............................................................................................................................2
Table: Cash Flow .......................................................................................................................................3
Table: Balance Sheet ................................................................................................................................4
Table: General Assumptions ....................................................................................................................5
Table: Sales Forecast ...............................................................................................................................6
Park Square Family Medicine
Page 1
1.0 Executive Summary
As part of its ongoing efforts to improve access to health care in rural areas, General Medical
Center is subsidizing the start-up and first year of operations of a new family medicine
practice, Park Square Family Medicine. The business will be owned and managed by Dr. Nathan
Detroit, MD as a sole proprietorship. He will be responsible for ensuring the general health of his
patients and creating a viable and profitable business medical practice. Throughout the first
year, Dr. Detroit will work closely with advisers from General Medical to get the clinic on a
sound financial and operational footing, using this medical clinic business plan as a guiding
management tool.
Dr. Detroit will focus on diagnosing and treating conditions of all ages while emphasizing
preventative medicine and the overall health and wellness of his patients. The clinic will utilize
new equipment and a trained staff that will be able to optimize the care of each patient. He
understands that there are many factors that can affect health, including exercise, diet,
environment and heredity. Park Square Family Medicine will try to provide the most
comprehensive medical care possible in order to optimize the care and well-being of each
patient.
Dr. Detroit will also carry out minor procedures in his office, but only after both risks and benefits
have been explained and understood and written consent has been obtained from the patient.
Dr. Detroit will refer patients, when appropriate, to specialists and/or to hospitals for tests,
further treatment and therapy.
Dr. Detroit will be assisted by two employees: a medical assistant and a receptionist. Ongoing
training and support for these employees will be provided by General Medical Center throughout
the first year.
The marketing strategy involves a combination of print media advertising, website
development, networking, and promotional events, all aimed at residents living within 35 miles
of the clinic. With only five other family practitioners in town, we project a gradually increasing
patient load over the first several years, as we find out place in the community.
At first, the clinic will be dependent upon the support received from General Medical Center.
They will also cover Dr. Detroit's salary and payroll taxes for the first year of operations. As
patient volume increases, we will begin supporting our expenses from revenues. At the end of
the first year, the subsidies will cease, and Dr. Detroit's compensation will become one of the
clinic's expenses. We expect to incur operating losses in the first three years, but have planned
for a strong cash balance to keep the business running. We will begin making a small profit in the
fourth year.
Dr. Detroit will use all his experience and knowledge to create a successful and profitable
practice. He will leverage the years he spent in solo practice elsewhere to help model his new
business. His past experience in conjunction with his progressive and diversified approach to
each patient will allow him to rapidly grow a large and devoted patient base.
Park Square Family Medicine
Page 2
1.1 Objectives
The objectives for the first years of operation include:
To create a medical practice that will exceed patients' expectations
To provide high-quality health care to residents of the area
To create a medical practice that helps serve the community's needs
To form a health care practice that is able to survive off its own cash flow in 10
months or less
To increase the number of patients by 20% per year through superior performance and
word-of-mouth referrals
To develop a comprehensive website that includes online booking capability, as well as
additional information about the practice, hours, demographic information, health
information and much more
Collections of 95% or more and missed appointments under 5%
Average visits per month of 300 to 350 patients within the first 10 months and 400+
patients by the beginning of the second year
1.2 Mission
The mission of Park Square Family Medicine is to promote the health and well-being of the local
population by providing accessible, high-quality medical care for people of all ages. Park Square
Family Medicine is committed to providing services that will exceed the expectations of our
patients, resulting in a successful and profitable business.
Park Square Family Medicine
Page 3
1.3 Keys to Success
Patients
Focus on patient care
Educate patients on the importance of preventative care
Educate patients as to the importance of yearly check-ups
Implement an aggressive and accurate recall system in which to remind patients to have
regular check ups
Staff and Office Organization
Recognize that the office staff is as crucial, if not more crucial, than the physician(s) in
the success of the business
Create incentives by allowing the office staff to benefit from increased profits
generated by the office
Create a streamlined office system to minimize patients' waiting time
Finances
Keep a low overhead
Optimize the number of patients we can see in a hour while providing quality medical care
Use the latest in electronic billing and/or utilize an outside billing company
Use this medical clinic business plan to review and guide management decisions
Marketing and Sales
Aggressively market and create a presence in the community by giving high school
talks, ER calls, hospital talks and doing volunteer work, business society meetings, and
much more
Network to obtain referrals from other professionals, such ER doctors, Specialists,
Hospital Admissions
Have an office front on a busy street with accessible parking
Locate in an area with a high patient-to-doctor ratio
Locate in close proximity to the Medical Surgery Center with easy access to specialty
care
2.0 Company Summary
Park Square Family Medicine will offer general and preventative health care for all ages in this
area and the surrounding communities. The clinic will utilize a trained staff, new equipment,
sound medical training, a referral system and nearby hospital facilities in order to maximize the
care for each patient.
Location and Facilities
The start-up requirements include purchase of a building for use by the clinic. The building was
built in 1931 and has undergone a complete remodeling. The total office space will be
approximately 1,158 sq. feet and the lot size is 115.5' x 66'. There is also a storage shed which
is 10 x 12 ft. The office is located just off the main street and the office has blacktop parking
for eight cars plus a generous carport, as well as a wide driveway entrance for patient
Park Square Family Medicine
Page 4
convenience.
2.1 Company Ownership
Park Square Family Medicine will be created as a sole proprietorship owned and operated by Dr.
Nathan Detroit, MD.
2.2 Start-up Summary
It is estimated that start-up expenses will near $23,000. This amount of money will be used to
purchase office equipment, medical supplies, furniture, stationary, and other start-up
expenses. We will also need approximately $10,000 for cash on hand at start-up. Expenses and
initial cash requirements will be funded by General Medical Center.
Our long-term assets of $225,000 represent the purchase price of the building described
above. Dr. Detroit will finance this purchase with a 15-year loan, guaranteed by his personal
assets.
Table: Start-up
Start-up
Requi rements
Start-up Expenses
Legal & Accounti ng $500
Insurance $1,000
Marketi ng $2,000
Computer $3,000
Busi ness Li cense $32
Communi cati ons $150
Medi cal Equi pment $7,000
Offi ce Suppl i es $4,000
Offi ce Furni ture $2,000
Marketi ng Pl an $3,000
Regul atory Duti es/CLIA $50
Total Start-up Expenses $22,732
Start-up Assets
Cash Requi red $10,000
Other Current Assets $0
Long-term Assets $225,000
Total Assets $235,000
Total Requi rements $257,732
Park Square Family Medicine
Page 5
3.0 Services
In general, Park Square Family Medicine will provide general care for all ages, as well as providing
multiple procedures to create a complete health care solution. Park Square Family Practice will
provide procedures including but not limited to mole removals, biopsies, and trigger point
injections, and much more. We will also incorporate multiple modalities, such as cryotherapy,
hyfrecator, shaving, and excisional removal of lesions and biopsies. The costs will depend upon
the materials used, the physician's time and the amount designated for each procedure.
Park Square Family Medicine philosophy is that optimal health and performance can be attained
through the proper balance of exercise, nutrition, and education. Our goal is to educate our
patients as well as treat them. Therefore, our services will also provide group classes and
teaching sessions for our patients. Subjects could include nutrition, diabetes, hypertension,
and much more.
Park Square Family Medicine will focus on each individual case. After each procedure and
where appropriate, each patient will be offered education in rehabilitation, nutrition and
exercise as it relates to each particular case. Our goal is to create the most well-rounded
experience for each patient in order to optimize their health.
Park Square Family Medicine will maintain privacy according to HIPAA rules. All patients will be
welcome, including the ones with no insurance. No one will be turned down for medical care.
Our clinic will hold no prejudice to race, creed, color or socioeconomic status. Everyone will be
welcome for great medical care at Park Square Family Medicine.
Park Square Family Medicine will provide the following services, among others:
Gynecology:
Park Square Family Medicine
Page 6
PAP Tests
Annual Well Women Exam
Family Planning
Acute Gyn Problems
Pediatrics:
Newborn Care
Infant Care
Annual Physicals
Routine Services
Possible Immunizations
Dermatology:
Removal of minor lesions, skin tags, moles and warts
Biopsies of suspicious dermatological lesions and/or referral
Allergy Testing and shots
Tetanus
Pneumovax
Immunizations
Minor Surgery:
Laceration Repair
Lesion Removals
Hyfrecation for Lesions and Blemishes
Adult Medicine
Preventative and Routine Services
Diabetic Teaching
Nutritional/ Dietician Services
Exercise and Obesity Counseling
Cardiology:
EKGs
Possible Stress Testing (Future Service)
3.1 Information Management and Technology
In order to comply with HIPAA laws and improve efficiency of billing, we will use a secure,
networked, electronic medical records system.
3.1.1 Hardware
The clinic will use the most advanced computer, server and software systems, as well as
Park Square Family Medicine
Page 7
Internet connections, in order to optimize the potential EMR and PMS systems software as well
as in other software and network system utilized resulting in faster verification, efficient patient
information transfer, reduction in administrative costs, computer breakdown or malfunction, as
wells as allowing outside access for the physician in order to access important patient
information for hospital admissions and in other important situation where information is needed
about the patient in optimizing the care of the patient.
3.1.2 Billing
Park Square Family Medicine will utilize an outside electronic medical billing company. This will
allow the medical practice to focus primarily on patient care satisfaction. The electronic
medical billing company will use electronic claim billing and filing, which in turn will allow us to
fully utilize the benefits of electronics claim filing (i.e. faster payment for processing insurance
claims) while at the same time allowing us to maximize valuable clinic time and man power. The
billing company charges 7% of the total expenses collected.
3.1.3 EMR (Electronic Medical Records)
Park Square Family Practice is strongly considering EMR, in order to secure the success and
efficiency of the office. Below are a few of the benefits and features we may expect to gain
from utilizing the EMR system. This technology is expected to increase the systematic
approach for each patient, while at the same time decreasing risk while maximizing profits. We
feel that all of these technological enhancements will increase our chances of success.
BENEFITS:
Increases Revenue by allowing more patient to be seen without working harder or longer,
improves collections through management of referral and eligibility data, tracks managed care
contracts, managed care payments/bonuses, provides valuable tools to generate research
income, and provides for coding optimization.
Reduces Expenses by reducing transcription costs, data analysis costs, paper storage and
access costs, staff costs, and paper/forms costs.
Reduces Risks by improving the quality of documentation, maintaining security and integrity of
data, checks for drug interactions, helps to analyze payer relationships, and helps keep
documentation and coding in compliance with laws.
Improves Quality by improving documentation, presenting and managing protocols, tracking and
summarizing indicators, alerting providers, and helping to track recalls.
GENERAL FEATURES:
Park Square Family Medicine
Page 8
Document Generation
Workflow Management
Image Management
Electronic Superbill and Billing System Interface
Coding Optimization
Referral Management
Eligibility Verification
Contract Management
Outcomes Analysis
Lab Order Entry/ Lab Result Reporting
Follow-up/Recall Tracking
Patient Instructions
Fax Capability
Prescription Generation
Graphing
Voice Recognition Option
Advanced Security
Electronic Data Interchange (EDI)
Mobile Solutions
Scheduling Option
4.0 Market Analysis Summary
According to the 2005 local area "Economic and Demographic Profile Report," there is an
increasing demand for cost-effective health care in the nation and in our region. Specifically, the
local population (within 35 miles) is predicted to grow approximately 3.5% per year and has a
population roughly around 160,000 people as of 2004.
4.1 Market Segmentation
The largest age group in our area in 2004 was between 40-49, with 31,714 people. Residents
over 60 make up a higher percentage of the population in here than the regional average.
Since we will be open to patients of all ages, our market segmentation breaks potential
patients out into local population (within 35 miles) and patients from the surrounding region
(within 70 miles).
There are currently 4-5 family practitioners in town, with 15,000 people living within 4 miles.
These are favorable statistics that offer an excellent patient-to-doctor ratio, in addition to the
limited number of surrounding family medical practices.
Table: Market Analysis
Market Anal ysi s
Year 1 Year 2 Year 3 Year 4 Year 5
Potenti al Customers Growth CAGR
Local Popul ati on 4% 160,000 165,600 171,396 177,395 183,604 3.50%
Surroundi ng Regi on Popul ati on 4% 300,000 310,500 321,368 332,616 344,258 3.50%
Total 3.50% 460,000 476,100 492,764 510,011 527,862 3.50%
Park Square Family Medicine
Page 9
4.2 Target Market Segment Strategy
Park Square Family Medicine will locate and focus its efforts on the entire local population (within
35 miles). Our segmentation strategy is geographic for a number of reasons:
The rural and semi-rural patients of this area will not, and often cannot, travel more
than 30 miles to see a doctor. They would rather "wait it out" on all but urgent matters.
Our clinic is a general family practice, and will treat patients of all ages, incomes, physical
abilities, races, and ethnicities. As a family clinic, 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.
The expected growth of the local population, at 3.5% a year, makes this an ideal location
for a broadly geographic marketing approach.
4.3 Service Business Analysis
Park Square Family Medicine is part of the larger medical industry, in particular "Offices and
Clinics of Medical Doctors." Private medical practices are numerous, generally small (1 - 4
physicians) and may provide either general or specialist services. They are well-suited to rural
and semi-rural areas, which often do not have a large enough population to make a hospital or
larger medical group a viable proposition.
There are currently five family practitioners in this town of 15,000, with 160,000 potential
patients within 35 miles. These are favorable statistics that offer an excellent patient-to-
doctor ratio for marketing efforts.
Park Square Family Medicine
Page 10
4.3.1 Competition and Buying Patterns
In general, competition among fellow family practitioners our town and the surrounding area is
small. The growing population base and the limited number of doctors creates a great potential
for meeting our patient load goals.
When choosing a family doctor, most patients look for someone knowledgeable and skilled who
will listen carefully to their health concerns. They are more likely to return to a doctor
whose location and hours are convenient and accessible, who have short waiting times for
getting appointments and sitting in the waiting room, whose staff is friendly and helpful, and who
work effectively with their insurance provider.
The relative importance of each of these factors will vary by patients' age range, medical needs,
and level of sophistication in managing their own health.
5.0 Strategy and Implementation Summary
Our strategy for a successful start is based on quickly creating a high profile and name
recognition within the community through public speaking, networking, promotional events, and
print advertising. These marketing tools will be followed up with a sales strategy that relies on
a pleasant and accessible location, well-trained, highly motivated employees, and a
commitment to provide the best care and patient experience possible in every interaction. The
advantage of this strategy is that every element of it is within our control.
With few local doctors for this community, competition will be less of a concern than will
education of potential patients about the benefits of seeing any doctor at all, and encouraging
preventive health care.
5.1 Competitive Edge
Park Square Medical Center will have an competitive edge based on position, timing, quality of
care, availability to patient, after-hour care, weekend hours, quality time, pleasant staff and
office environment. All of these factors will result in patient satisfaction and high referral rates.
In general, competition among fellow family practitioners in our town and the surrounding area
is small. The growing population base and the limited number of doctors creates a strong
opportunity.
5.2 Marketing Strategy
Upon opening up a new General Practice such as Park Square Family Medicine, it is important
to create momentum before the actual day of opening. In conjunction with a Marketing and
Advertising Group this momentum will be created 1 month prior to the opening date. We will
first try to get our name recognized in conjunction with promoting the location and the
Park Square Family Medicine
Page 11
services we can offer.
We feel that the most important way to become established is create a presence among the
community. The best way to create this is through a combination of the strategies outlined
below, in order to accomplish greater visibility to prospective patients and institutions.
Marketing Materials
All written materials used to promote the medical office will share a professional and polished look
and feel. Our office will carry our own leaflets, to be made available to all patients, containing
factual information about the services provided. This leaflet will also contain some biographical
information, location, photos and other promotional material. This leaflet will be used to help
promote Park Square Family Medicine both as handouts for patients within the clinic, as well as
potential patients outside the clinic.
The clinic will provide multiple education brochures from the AAFP. We will have an area
where health information will be displayed and dispersed in the form of packets and brochures. In
addition, patient information handouts will also be available via the EMR system and the website.
There will be a number of patient-friendly brochures, videos, mailings, and other materials used
to promote the medical office. We will have multiple ads in magazines and newspapers, as well as
a commercial to announce the opening of Park Square Family Practice.
Park Square Family Medicine will employ commercials, mail-outs that may include new patient
discounts, yellow pages, magazines, newspapers, and other forms of advertising.
Promotional Events
We will set up an open house for surrounding businesses and potential patients to let them see
our new clinic. During these open houses, we will provide HTN readings, glucose testing, and
much more. We will consider having a blood drive in coordination with the local hospitals and Red
Cross.
Park Square Family Medicine will hold health information workshops with the help of community
organizations for the general public at Park Square Family Medicine, as well as in local and
public areas of interest. Our goal will be to bring new patients into the clinic but to also create
word of mouth. New patients will have time to ask questions about medicine and new patients
will be introduced to the new clinic. Our goal is to meet and promote the clinic to as many
people before the opening of the clinic, as well as after the clinic is open.
Networking
Park Square Family Medicine will become a member of the business community. We will join and
attend key business events that will help promote our new business. We will also promote
ourselves in local business directories. We will also network through various organizations, such
as local churches, the Lyons club, the Rotary club, as well as the country club in order to
promote and generate further interest in our services.
Park Square Family Medicine will incorporate reciprocal advertising with other nearby healthcare
facilities, such as opticians, chiropractors, and hospitals. Park Square Family Medicine will
obtain additional patients via ER referrals.
Park Square Family Medicine
Page 12
Accessibility
Park Square Family Medicine will adopt several strategies to ensure patient satisfaction and word
of mouth advertising. First our hours will include after after-hours care and allow patients to
come into clinic after they get off work. We will also be open on Saturdays. This means there will
be several days that we will be open till 7:00 P.M. and that we will also be open on Saturdays.
5.2.1 Marketing Expenses
Print Distribution:
Newspaper A: A newspaper that serves the local region. A weekly circulation reaching
approximately 40,000 homes and apartments. Additional papers circulated to businesses for
handout distribution. Estimated ad space for an 8 inch color ad: $445.00 per circulation.
Requests for placement 25% surcharge. Discounts given for frequency.
Magazine B: a monthly magazine that is mailed to approximately 40,000 residents within our
area. Quarter Page Ad: $656.00 / Ad with 3 month contract, $627.00/ Ad with 6 month
contract, $568.00/Ad with 12 month contract.
Professional Directory C: They will have advertising opportunities in their Professional Directory
that is published in the Fall. I do not have pricing details guaranteed. Estimate a Quarter Page
Ad: $1,100.00/Year
Commercial Advertising:
Effective campaign would include 100-150 spots per month. Several cable channels to target. 30
second spots range between: $50-75.00/ Spot. Primetime setting is $65.00- $100.00/Spot.
Direct Mail Marketing:
Targeting a specific prospect and demographic. Designing a targeted campaign, printing, and mail
processing: Estimate: $00.75/piece processed. Effective direct mail campaign ranges between
5,000-10,000. Mailing to the same market 3 times over a six month period.
Park Square Family Medicine
Page 13
5.3 Sales Strategy
The sales process begins when a patient calls us, comes in for an appointment, or
accompanies a family member to an appointment. In every interaction, we must be accessible,
courteous, knowledgeable, and helpful.
Location:
The clinic will be located in the heart of town. Patients will easily be able to find the clinic. Signs
will be posted in strategic places to help assure patients comfort in finding our location. We
feel that our location is a great asset and will strengthen our future success.
Flexible Hours:
Park Square Medical Clinic will adopt several strategies to ensure patient satisfaction and word
of mouth advertising. First, our hours will include after after-hours care and allow patients to
come into clinic after they get off work. We will also be open on Saturdays. This means there will
be several weekdays that we will be open till 7:00 P.M. and that we will be open on
Saturdays. We will also take walk-ins in order to provide the best possible convenience for the
patient.
Environment, Appearance, Etiquette and Overall Patient Experience:
The building will have a bright and cheerful appearance with flowers and plants to decorate the
outside and inside of the office. There will be colorful and informative signs that will help them
find the clinic. Upon arriving and entering the clinic the patient will be greeted with a smile.
Patients' needs and concerns will be addressed and they will be asked politely to have a seat in
the waiting room. Upon arrival to the waiting room they will experience comfortable seating, good
lighting, soft music or T.V, reading material and the general comforts appreciated by any patient.
The walls will have beautiful art and there may even be a fish tank. The clinic rooms will be
professional, clean and organized and the walls will be decorated with medical posters that will
Park Square Family Medicine
Page 14
help explain the most common conditions. During the consultation the doctor will have a white
coat and tie and will conduct himself in a professional and courteous manner. After the
consultation, the doctor or the nurse will escort the patient to the front where all further
arrangements will be made. A courtesy reminder card will be filled our for patients' convenience.
Pricing Strategy:
The pricing for consultations and visits, as well as any procedures will be billed according to
industry standards. We will be consistent with our competitors and the national averages.
Most pricing will be dependent upon agreements with the five largest insurers in the area.
Sales Literature:
The clinic will provide multiple education brochures from the AAFP. We will have an area where
information will be displayed and dispersed in the form of packets and brochures. In addition,
information handouts will also be available via the EMR system and website.
5.3.1 Sales Forecast
The first month prior to opening will be used to get the new office in order, set up
appointments and begin marketing activities. The following months Park Square Medical Clinic will
continue advertising and will use less and less assistance from General Medical Center until the
second year, when the subsidy will cease. The following tables basically represent the amount of
money that the practice expects to be making.
Note that we list no direct cost of sales. This is standard for the medical office industry, since all
medical supplies and waste disposal (needles, gauze, etc.) are handled as monthly supply orders,
not inventory. These expenses can be found in the projected Profit and Loss statement.
Table: Sales Forecast
Sal es Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Sal es
Pati ent Care $148,000 $220,000 $250,000 $270,000 $290,000
Other $0 $0 $0 $0 $0
Total Sal es $148,000 $220,000 $250,000 $270,000 $290,000
Di rect Cost of Sal es Year 1 Year 2 Year 3 Year 4 Year 5
Not appl i cabl e - see expenses $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0
Subtotal Di rect Cost of Sal es $0 $0 $0 $0 $0
Park Square Family Medicine
Page 15
5.4 Milestones
We have established some basic milestones to keep the business plan priorities in place.
Responsibility for implementation falls on the shoulders of Dr. Detroit. This Milestones table will be
updated as the year progresses using the actual tables. New milestones will be added as the
Park Square Family Medicine
Page 16
first year of operations commences.
Table: Milestones
Mi l estones
Mi l estone Start Date End Date Budget Manager Department
Desi gn and pl ace fi rst ads 9/1/2005 11/1/2005 $2,000 Dr. Detroi t & Jack PSFM & GMC
Cl ose on Bui l di ng 10/1/2005 10/2/2005 $225,000 Dr. Detroi t PSFM
Redecorate and Furni sh Cl i ni c 10/1/2005 11/15/2005 $13,000 Dr. Detroi t PSFM
Instal l and Test EMR system 11/1/2005 12/15/2005 $4,000 Dr. Detroi t & Jan PSFM & GMC
Si gn contract for medi cal bi l l i ng 11/1/2005 11/1/2005 $0 Dr. Detroi t PSFM
Empl oyee trai ni ng 12/1/2005 12/31/2005 $3,950 Dr. Detroi t & Li z PSFM & GMC
Fini sh Pri nted Materi al s 12/1/2005 12/31/2005 $3,500 Dr. Detroi t & Jack PSFM & GMC
Monthl y Fi nanci al Revi ew wi th
GMC
1/2/2006 12/31/2006 $0 Dr. Detroi t, Li z, &
John
PSFM & GMC
Monthl y Operati onal Revi ew
wi th GMC
1/2/2006 12/31/2006 $0 Dr. Detroi t & Li z PSFM & GMC
Hol d Open Houses 1/2/2006 1/31/2006 $500 Dr. Detroi t PSFM
Begi n fi rst appoi ntments 2/1/2006 2/10/2006 $0 Dr. Detroi t PSFM
Track Pati ent Load, fi rst three
months
2/1/2006 5/1/2006 $0 Dr. Detroi t PSFM
Total s $251,950
6.0 Web Plan Summary
Park Square Family Medicine will have a clinic website where patients can learn about our
clinic, health information, location, map, hours of operation, biographical information about the
physician, procedures and much more. We will also consider educational videos for diabetes,
hypertension and many other important health issues facing society today, as well as specific
Park Square Family Medicine
Page 17
health issues facing the local area.
6.1 Website Marketing Strategy
The website marketing strategy will be focused on increasing placement in search engines. The
practice and website will focus on the local population. We will develop strategies to create links
from local websites in the community to our business. Information about the website will be on
the office brochure, cards and future advertisements.
6.2 Development Requirements
The website will be created by two companies, one to design the "front-end" and another
which will implement it as a working site. The user interface will consist of a clean and simple
design in which to comfortably navigate. The major content of the site will be information
about the practice, hours, location, general medical information, insurance accepted and
hospitals covered. The "front-end" design will be created in Fireworks MX software and the
back-end design will be created in MYSQL and PHP. The website will be hosted on a dedicated
server. Future development may include a registration database for new patients and a
question and answer forum.
7.0 Management Summary
Park Square Family Medicine will initially have two employees: a receptionist and a medical
assistant. They will both be paid hourly wages and have health and dental benefits. As the
practice grows, we will add additional personnel to help with referrals and additional
responsibilities that will be needed at that time.
During the first year, Park Square Family Medicine's physician (the clinic owner) will work full-time
at the clinic, but will be paid directly by General Medicine, and all of his benefits and payroll
taxes will be paid by them. Starting in the second year, the physician/owner will draw
his salary directly from Park Square Family Medicine.
We will create a policy and procedures manual that will act as a guide and reference to sick pay,
leave, vacation, hourly wages, payment, etc. The philosophies and guidelines in this manual
will help maintain proper organizational structure.
There will be a mandatory staff meeting on Wednesdays at 12:00 noon. There will be a pre-
written list of items that will address ways to improve the practice. Everyone is expected to
attend. All employees, including the doctor, will be expected to continue to better themselves
in regards to both skills and knowledge. The staff of the clinic will have specific duties that
they will perform on a daily basis. They will be responsible for their individual duties and must
complete them in a systematic time-efficient manner.
Once a month, Dr. Detroit will meet with each employee individually, and review their goals and
performance for the month. Employees will have access to administrative consultants at
General Medical for the first year, and will be expected to follow the suggestions that come
out of joint meetings with Dr. Detroit and the consultants. Employees who consistently do a poor
job will be written up and after two write-ups will be put on suspension. If the employee again
Park Square Family Medicine
Page 18
fails to correct the problem that employee will be dismissed. All write-ups will occur in the
presence of a witness and will be recorded.
7.1 Personnel Plan
Employees will enjoy full medical and dental benefits. They will have a good salary that
corresponds to their level of skill and total contribution to the medical practice. As our
business grows and become stronger, we will offer a 401k plan. We may first start with a
Simple IRA plan. The final goal is to create a profit-sharing opportunity in which to foster loyalty,
longevity and contentment in the workplace.
Table: Personnel
Personnel Pl an
Year 1 Year 2 Year 3 Year 4 Year 5
Physi ci an sal ary $0 $110,000 $110,000 $110,000 $110,000
Recepti oni st $18,000 $20,000 $22,000 $23,000 $24,000
Medi cal Assi stant $21,600 $21,600 $21,600 $23,000 $24,000
Heal th Insurance $2,000 $2,000 $2,000 $2,000 $2,000
Dental Insurance $2,000 $2,000 $2,000 $2,000 $2,000
Vi si on Insurance $2,000 $2,000 $2,000 $2,000 $2,000
Workman's Comp $1,800 $1,800 $1,800 $1,800 $1,800
Total Peopl e 3 3 3 3 3
Total Payrol l $47,400 $159,400 $161,400 $163,800 $165,800
8.0 Financial Plan
It is estimated that start-up expenses will be $22,732. This amount of money will be used to
purchase office equipment, medical supplies, furniture, stationary, and other start-up
expenses. This amount, and a starting cash balance of $10,000, will be financed by General
Medical Center.
In addition, we are in the process of acquiring a building worth $225,000 with a 15 year
mortgage, which will be repaid from the company's cash flows. As a sole proprietorship, this
loan is guaranteed by Dr. Detroit's personal assets, and General Medical Center does not
assume responsibility for it.
The physician's salary will be paid by General Medical throughout the first year. They will also
provide us with $24,000 a month for business expenses, for 12 months.
At the end of the first year, subsidies from General Medical will end. Although sales are projected
to increase steadily, and the physician will take reduced salary in the second through fourth
years, we project a loss in the second and third years. This is due to the loss of expense
subsidies, and the additional expense of the physician's salary and related taxes. We expect to
begin breaking even in the fourth year, and have budgeted a cash balance to carry us through
the years of loss.
Important notation/limitations in viewing the financial plan:
1. The physician salary is considered a constant in the first year and therefore has not been
Park Square Family Medicine
Page 19
included in this overall financial plan.
2. The $32,732 in start-up subsidies, and the $288,000 in first-year subsidies is forgiven and
not subject to reimbursement unless Park Square family medicine fails...which will not
happen. "Failure" is defined in the grant agreement as inability to achieve patient load
goals for five months in a row during the first year.
Park Square Family Medicine
Page 20
8.1 Start-up Funding
The start-up requirements, with the exception of the building loan, are to be financed by General
Medical Center. This is in addition to the $288,000 they will be providing over a 12 month
period as expense subsidies in the first year, and the physician's salary for the first year.
The purchase of the building will be financed by the owner, Dr. Detroit, with a 15-year
mortgage (listed under Long-term Liabilities). This loan will be repaid from the clinic's cash
flows and guaranteed with his personal assets.
Table: Start-up Funding
Start-up Fundi ng
Start-up Expenses to Fund $22,732
Start-up Assets to Fund $235,000
Total Fundi ng Requi red $257,732
Assets
Non-cash Assets from Start-up $225,000
Cash Requi rements from Start-up $10,000
Addi ti onal Cash Rai sed $0
Cash Bal ance on Starti ng Date $10,000
Total Assets $235,000
Li abi l i ti es and Capi tal
Li abi l i ti es
Current Borrowi ng $0
Long-term Li abi l i ti es $225,000
Accounts Payabl e (Outstandi ng Bi l l s) $0
Other Current Li abi l i ti es (i nterest-free) $0
Total Li abi l i ti es $225,000
Capi tal
Pl anned Investment
Grant from Marshal l Medi cal $32,732
Other Investment $0
Addi ti onal Investment Requi rement $0
Total Pl anned Investment $32,732
Loss at Start-up (Start-up Expenses) ($22,732)
Total Capi tal $10,000
Total Capi tal and Li abi l i ti es $235,000
Total Fundi ng $257,732
Park Square Family Medicine
Page 21
8.2 Break-even Analysis
The Break-even Analysis shows that in the first year (with no physician salary), we need bring in
$11,605 in revenue per month to break even. We will pass this mark by the sixth month.
However, in the second and third year, with increased expenses including the physician's
salary, and increased patient load, we will need to bring in roughly $21,400 per month to break
even. We do not anticipate reaching this level of patient care payment until the middle of the
fourth year, which will end with a modest profit.
Table: Break-even Analysis
Break-even Anal ysi s
Monthl y Revenue Break-even $11,013
Assumpti ons:
Average Percent Vari abl e Cost 0%
Esti mated Monthl y Fi xed Cost $11,013
8.3 Projected Profit and Loss
The profit and loss statement shows our increasing ability to cover the expenses of the business
over the first year. Although we will operate at a loss for much of this year, our cash balance will
be maintained by subsidies from General Medical.
In the second year, Park Square Family Medicine will assume the full expense of the physician/
Park Square Family Medicine
Page 22
owner's salary, as well as related payroll taxes. This increase, combined with small increases in
operating expenses due to increased patient load, will keep us operating at a loss in the
second and third year, but we expect to begin turning a small profit in the middle of the fourth
year. Again, these losses will not cause us to go into a negative cash position at any point.
Without the physician/owner's compensation, we would show a profit of $85,000 in the second
year, and $114,000 in the third year. Should patient load not meet expectations in these
years, the owner will reduce his own salary to keep the business on track.
Park Square Family Medicine
Page 23
Park Square Family Medicine
Page 24
Table: Profit and Loss
Pro Forma Profi t and Loss
Year 1 Year 2 Year 3 Year 4 Year 5
Sal es $148,000 $220,000 $250,000 $270,000 $290,000
Di rect Cost of Sal es $0 $0 $0 $0 $0
Other Costs of Sal es $0 $0 $0 $0 $0
Total Cost of Sal es $0 $0 $0 $0 $0
Gross Margi n $148,000 $220,000 $250,000 $270,000 $290,000
Gross Margi n % 100.00% 100.00% 100.00% 100.00% 100.00%
Expenses
Payrol l $47,400 $159,400 $161,400 $163,800 $165,800
Marketi ng/Promoti on $36,000 $10,000 $10,000 $10,000 $10,000
Depreci ati on $0 $0 $0 $0 $0
Payrol l Taxes $0 $0 $0 $0 $0
Medi cal Suppl i es $6,750 $8,000 $9,000 $9,500 $10,000
Offi ce Suppl i es $4,500 $5,000 $5,500 $6,000 $6,200
Pri nti ng $2,000 $2,000 $2,000 $2,000 $2,000
Other Professi onal Servi ces $1,000 $1,000 $1,000 $1,000 $1,000
Answeri ng Servi ce $3,000 $3,000 $3,000 $3,000 $3,000
Tel ephone $2,000 $1,500 $1,500 $1,500 $1,500
Medi cal Waste $2,000 $2,100 $2,200 $2,300 $2,400
Repai rs and Mai ntenance $1,500 $1,500 $1,500 $1,500 $1,500
Jani tori al Servi ce $1,500 $1,500 $1,500 $1,500 $1,500
Dues Books and Subscri pti ons $1,000 $1,000 $1,000 $1,000 $1,000
Medi cal Bi l l i ng $20,000 $20,000 $20,000 $20,000 $20,000
Commerci al Insurance $3,500 $3,500 $3,500 $3,500 $3,500
Total Operati ng Expenses $132,150 $219,500 $223,100 $226,600 $229,400
Profi t Before Interest and Taxes $15,850 $500 $26,900 $43,400 $60,600
EBITDA $15,850 $500 $26,900 $43,400 $60,600
Interest Expense $20,875 $18,000 $15,000 $13,500 $13,500
Taxes Incurred $0 $0 $0 $0 $0
Net Profi t ($5,025) ($17,500) $11,900 $29,900 $47,100
Net Profi t/Sal es -3.40% -7.95% 4.76% 11.07% 16.24%
Park Square Family Medicine
Page 25
8.4 Projected Cash Flow
This table shows the ongoing financial relationship between General Medical and Park Square
Family Medicine. Park Square Family Medicine will receive $24,000 dollars a month to subsidize
business expenses over the first 12 months. This plan does not show physician's compensation
Park Square Family Medicine
Page 26
for the first year, which will be paid directly from General Medical to Dr. Detroit.
Table: Cash Flow
Pro Forma Cash Fl ow
Year 1 Year 2 Year 3 Year 4 Year 5
Cash Recei ved
Cash from Operati ons
Cash Sal es $14,800 $22,000 $25,000 $27,000 $29,000
Cash from Recei vabl es $71,730 $168,096 $212,540 $234,693 $252,693
Subtotal Cash from Operati ons $86,530 $190,096 $237,540 $261,693 $281,693
Addi ti onal Cash Recei ved
Sal es Tax, VAT, HST/GST Recei ved $0 $0 $0 $0 $0
New Current Borrowi ng $0 $0 $0 $0 $0
New Other Li abi l i ti es (i nterest-free) $0 $0 $0 $0 $0
New Long-term Li abi l i ti es $0 $0 $0 $0 $0
Sal es of Other Current Assets $0 $0 $0 $0 $0
Sal es of Long-term Assets $0 $0 $0 $0 $0
New Investment Recei ved $288,000 $0 $0 $0 $0
Subtotal Cash Recei ved $374,530 $190,096 $237,540 $261,693 $281,693
Expendi tures Year 1 Year 2 Year 3 Year 4 Year 5
Expendi tures from Operati ons
Cash Spendi ng $47,400 $159,400 $161,400 $163,800 $165,800
Bi l l Payments $96,925 $80,381 $76,815 $76,333 $77,034
Subtotal Spent on Operati ons $144,325 $239,781 $238,215 $240,133 $242,834
Addi ti onal Cash Spent
Sal es Tax, VAT, HST/GST Pai d Out $0 $0 $0 $0 $0
Pri nci pal Repayment of Current Borrowi ng $0 $0 $0 $0 $0
Other Li abi l i ti es Pri nci pal Repayment $0 $0 $0 $0 $0
Long-term Li abi l i ti es Pri nci pal Repayment $30,000 $30,000 $30,000 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0
Di vi dends $0 $0 $0 $0 $0
Subtotal Cash Spent $174,325 $269,781 $268,215 $240,133 $242,834
Net Cash Flow $200,205 ($79,685) ($30,675) $21,560 $38,859
Cash Bal ance $210,205 $130,520 $99,845 $121,405 $160,264
Park Square Family Medicine
Page 27
8.5 Projected Balance Sheet
The Balance Sheet shows our liabilities and assets, including the cumulative Cash Balance from
the previous table. The Paid-in Capital of $320,732 represents subsidies from General Medical
Center during the Start-up period and the first year of operations. This is a grant, and does
not have to be repaid unless the clinic fails - defined in the grant agreement as failure to
achieve patient load goals for five months in a row.
The change in Cash Balance in the second and third years reflects the end of the first year
subsidies from General Medical, and Park Square Family Medicine's payment of the physician's
compensation. This decrease in assets is balanced by the repayment of our building loan. We
expect Net Worth to begin rising again in years four and five.
Park Square Family Medicine
Page 28
Table: Balance Sheet
Pro Forma Bal ance Sheet
Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current Assets
Cash $210,205 $130,520 $99,845 $121,405 $160,264
Accounts Recei vabl e $61,470 $91,374 $103,834 $112,141 $120,448
Other Current Assets $0 $0 $0 $0 $0
Total Current Assets $271,675 $221,894 $203,679 $233,546 $280,712
Long-term Assets
Long-term Assets $225,000 $225,000 $225,000 $225,000 $225,000
Accumul ated Depreci ati on $0 $0 $0 $0 $0
Total Long-term Assets $225,000 $225,000 $225,000 $225,000 $225,000
Total Assets $496,675 $446,894 $428,679 $458,546 $505,712
Li abi l i ti es and Capi tal Year 1 Year 2 Year 3 Year 4 Year 5
Current Li abi l i ti es
Accounts Payabl e $8,700 $6,419 $6,304 $6,271 $6,337
Current Borrowi ng $0 $0 $0 $0 $0
Other Current Li abi l i ti es $0 $0 $0 $0 $0
Subtotal Current Li abi l i ti es $8,700 $6,419 $6,304 $6,271 $6,337
Long-term Li abi l i ti es $195,000 $165,000 $135,000 $135,000 $135,000
Total Li abi l i ti es $203,700 $171,419 $141,304 $141,271 $141,337
Pai d-i n Capi tal $320,732 $320,732 $320,732 $320,732 $320,732
Retai ned Earni ngs ($22,732) ($27,757) ($45,257) ($33,357) ($3,457)
Earni ngs ($5,025) ($17,500) $11,900 $29,900 $47,100
Total Capi tal $292,975 $275,475 $287,375 $317,275 $364,375
Total Li abi l i ti es and Capi tal $496,675 $446,894 $428,679 $458,546 $505,712
Net Worth $292,975 $275,475 $287,375 $317,275 $364,375
8.6 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 8011, Offices and Clinics of Medical Doctors, are
shown for comparison.
Park Square Family Medicine
Page 29
Table: Ratios
Rati o Anal ysi s
Year 1 Year 2 Year 3 Year 4 Year 5 Industry Profi l e
Sal es Growth n.a. 48.65% 13.64% 8.00% 7.41% 5.64%
Percent of Total Assets
Accounts Recei vabl e 12.38% 20.45% 24.22% 24.46% 23.82% 13.11%
Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 54.55%
Total Current Assets 54.70% 49.65% 47.51% 50.93% 55.51% 68.11%
Long-term Assets 45.30% 50.35% 52.49% 49.07% 44.49% 31.89%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Current Li abi l i ti es 1.75% 1.44% 1.47% 1.37% 1.25% 21.29%
Long-term Li abi l i ti es 39.26% 36.92% 31.49% 29.44% 26.70% 21.02%
Total Li abi l i ti es 41.01% 38.36% 32.96% 30.81% 27.95% 42.31%
Net Worth 58.99% 61.64% 67.04% 69.19% 72.05% 57.69%
Percent of Sal es
Sal es 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margi n 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Sel l i ng, General & Admi ni strati ve Expenses 103.40% 107.95% 95.24% 88.93% 83.76% 52.19%
Adverti si ng Expenses 0.00% 0.00% 0.00% 0.00% 0.00% 0.31%
Profi t Before Interest and Taxes 10.71% 0.23% 10.76% 16.07% 20.90% 3.12%
Mai n Rati os
Current 31.23 34.57 32.31 37.24 44.30 1.72
Qui ck 31.23 34.57 32.31 37.24 44.30 1.36
Total Debt to Total Assets 41.01% 38.36% 32.96% 30.81% 27.95% 49.35%
Pre-tax Return on Net Worth -1.72% -6.35% 4.14% 9.42% 12.93% 18.06%
Pre-tax Return on Assets -1.01% -3.92% 2.78% 6.52% 9.31% 35.67%
Addi ti onal Rati os Year 1 Year 2 Year 3 Year 4 Year 5
Net Profi t Margi n -3.40% -7.95% 4.76% 11.07% 16.24% n.a
Return on Equi ty -1.72% -6.35% 4.14% 9.42% 12.93% n.a
Acti vi ty Rati os
Accounts Recei vabl e Turnover 2.17 2.17 2.17 2.17 2.17 n.a
Col l ecti on Days 76 141 158 162 163 n.a
Accounts Payabl e Turnover 12.14 12.17 12.17 12.17 12.17 n.a
Payment Days 27 35 30 30 30 n.a
Total Asset Turnover 0.30 0.49 0.58 0.59 0.57 n.a
Debt Rati os
Debt to Net Worth 0.70 0.62 0.49 0.45 0.39 n.a
Current Li ab. to Li ab. 0.04 0.04 0.04 0.04 0.04 n.a
Li qui di ty Rati os
Net Worki ng Capi tal $262,975 $215,475 $197,375 $227,275 $274,375 n.a
Interest Coverage 0.76 0.03 1.79 3.21 4.49 n.a
Addi ti onal Rati os
Assets to Sal es 3.36 2.03 1.71 1.70 1.74 n.a
Current Debt/Total Assets 2% 1% 1% 1% 1% n.a
Aci d Test 24.16 20.33 15.84 19.36 25.29 n.a
Sal es/Net Worth 0.51 0.80 0.87 0.85 0.80 n.a
Di vi dend Payout 0.00 0.00 0.00 0.00 0.00 n.a
Appendix
Page 1
Table: Personnel
Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Physician salary 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Receptionist 0% $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Medical Assistant 0% $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Health Insurance 0% $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167
Dental Insurance 0% $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167
Vision Insurance 0% $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167
Workman's Comp 0% $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150
Total People 3 3 3 3 3 3 3 3 3 3 3 3
Total Payroll $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950
Appendix
Page 2
Table: Profit and Loss
Pro Forma Profit and Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $0 $0 $4,000 $6,000 $9,000 $12,000 $14,000 $16,000 $18,000 $21,000 $24,000 $24,000
Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Gross Margin $0 $0 $4,000 $6,000 $9,000 $12,000 $14,000 $16,000 $18,000 $21,000 $24,000 $24,000
Gross Margin % 0.00% 0.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Expenses
Payroll $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950
Marketing/Promotion $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Medical Supplies $0 $0 $0 $750 $750 $750 $750 $750 $750 $750 $750 $750
Office Supplies $0 $0 $0 $500 $500 $500 $500 $500 $500 $500 $500 $500
Printing $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167
Other Professional Services $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83
Answering Service $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250
Telephone $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167
Medical Waste $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167
Repairs and Maintenance $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125
Janitorial Service $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125
Dues Books and Subscriptions $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83
Medical Billing 15% $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667
Commercial Insurance $292 $292 $292 $292 $292 $292 $292 $292 $292 $292 $292 $292
Total Operating Expenses $10,075 $10,075 $10,075 $11,325 $11,325 $11,325 $11,325 $11,325 $11,325 $11,325 $11,325 $11,325
Profit Before Interest and Taxes ($10,075) ($10,075) ($6,075) ($5,325) ($2,325) $675 $2,675 $4,675 $6,675 $9,675 $12,675 $12,675
EBITDA ($10,075) ($10,075) ($6,075) ($5,325) ($2,325) $675 $2,675 $4,675 $6,675 $9,675 $12,675 $12,675
Interest Expense $1,854 $1,833 $1,813 $1,792 $1,771 $1,750 $1,729 $1,708 $1,688 $1,667 $1,646 $1,625
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($11,929) ($11,908) ($7,888) ($7,117) ($4,096) ($1,075) $946 $2,967 $4,987 $8,008 $11,029 $11,050
Net Profit/Sales 0.00% 0.00% -197.19% -118.61% -45.51% -8.96% 6.76% 18.54% 27.71% 38.13% 45.95% 46.04%
Appendix
Page 3
Table: Cash Flow
Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received
Cash fromOperations
Cash Sales $0 $0 $400 $600 $900 $1,200 $1,400 $1,600 $1,800 $2,100 $2,400 $2,400
Cash fromReceivables $0 $0 $0 $0 $120 $3,660 $5,490 $8,190 $10,860 $12,660 $14,460 $16,290
Subtotal Cash fromOperations $0 $0 $400 $600 $1,020 $4,860 $6,890 $9,790 $12,660 $14,760 $16,860 $18,690
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-termLiabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-termAssets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000
Subtotal Cash Received $24,000 $24,000 $24,400 $24,600 $25,020 $28,860 $30,890 $33,790 $36,660 $38,760 $40,860 $42,690
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures fromOperations
Cash Spending $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950 $3,950
Bill Payments $266 $7,978 $7,958 $7,978 $9,166 $9,145 $9,124 $9,103 $9,083 $9,062 $9,041 $9,020
Subtotal Spent on Operations $4,216 $11,928 $11,908 $11,928 $13,116 $13,095 $13,074 $13,053 $13,033 $13,012 $12,991 $12,970
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-termLiabilities Principal Repayment $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-termAssets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $6,716 $14,428 $14,408 $14,428 $15,616 $15,595 $15,574 $15,553 $15,533 $15,512 $15,491 $15,470
Net Cash Flow $17,284 $9,572 $9,992 $10,172 $9,404 $13,265 $15,316 $18,237 $21,127 $23,248 $25,369 $27,220
Cash Balance $27,284 $36,856 $46,848 $57,019 $66,423 $79,688 $95,004 $113,241 $134,368 $157,616 $182,985 $210,205
Appendix
Page 4
Table: Balance Sheet
Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances
Current Assets
Cash $10,000 $27,284 $36,856 $46,848 $57,019 $66,423 $79,688 $95,004 $113,241 $134,368 $157,616 $182,985 $210,205
Accounts Receivable $0 $0 $0 $3,600 $9,000 $16,980 $24,120 $31,230 $37,440 $42,780 $49,020 $56,160 $61,470
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $10,000 $27,284 $36,856 $50,448 $66,019 $83,403 $103,808 $126,234 $150,681 $177,148 $206,636 $239,145 $271,675
Long-termAssets
Long-termAssets $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-termAssets $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000
Total Assets $235,000 $252,284 $261,856 $275,448 $291,019 $308,403 $328,808 $351,234 $375,681 $402,148 $431,636 $464,145 $496,675
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $0 $7,713 $7,693 $7,673 $8,861 $8,841 $8,821 $8,801 $8,781 $8,760 $8,740 $8,720 $8,700
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $7,713 $7,693 $7,673 $8,861 $8,841 $8,821 $8,801 $8,781 $8,760 $8,740 $8,720 $8,700
Long-termLiabilities $225,000 $222,500 $220,000 $217,500 $215,000 $212,500 $210,000 $207,500 $205,000 $202,500 $200,000 $197,500 $195,000
Total Liabilities $225,000 $230,213 $227,693 $225,173 $223,861 $221,341 $218,821 $216,301 $213,781 $211,260 $208,740 $206,220 $203,700
Paid-in Capital $32,732 $56,732 $80,732 $104,732 $128,732 $152,732 $176,732 $200,732 $224,732 $248,732 $272,732 $296,732 $320,732
Retained Earnings ($22,732) ($22,732) ($22,732) ($22,732) ($22,732) ($22,732) ($22,732) ($22,732) ($22,732) ($22,732) ($22,732) ($22,732) ($22,732)
Earnings $0 ($11,929) ($23,838) ($31,725) ($38,842) ($42,938) ($44,013) ($43,067) ($40,100) ($35,113) ($27,104) ($16,075) ($5,025)
Total Capital $10,000 $22,071 $34,162 $50,275 $67,158 $87,062 $109,987 $134,933 $161,900 $190,887 $222,896 $257,925 $292,975
Total Liabilities and Capital $235,000 $252,284 $261,856 $275,448 $291,019 $308,403 $328,808 $351,234 $375,681 $402,148 $431,636 $464,145 $496,675
Net Worth $10,000 $22,071 $34,162 $50,275 $67,158 $87,062 $109,987 $134,933 $161,900 $190,887 $222,896 $257,925 $292,975
Appendix
Page 5
Table: General Assumptions
General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-termInterest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
Appendix
Page 6
Table: Sales Forecast
Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Patient Care 0% $0 $0 $4,000 $6,000 $9,000 $12,000 $14,000 $16,000 $18,000 $21,000 $24,000 $24,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $0 $0 $4,000 $6,000 $9,000 $12,000 $14,000 $16,000 $18,000 $21,000 $24,000 $24,000
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Not applicable - see expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0