Total Body Management

Business Plan

November 13, 2009

Auzair Meo, Brandon McClellan, Kimberly Johnson, Michael Losch, Santrell Marsh
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Table of Contents

1. Executive Summary and Mission Statement……………………………page 2

2. Business Objective and Keys to Success………………………………...page 3

3. Types of Services and Market Analysis…………………………………page 4

4. Market Analysis Summary (cont’d)

Financial Analysis………………….……………………………………..page 5

5. Financial Analysis (cont’d)……………………………………………pages 5-7

6. References…………………………………………………………………page 8
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Executive Summary:

(THE RENEWAL CENTER) is a rehabilitation institute designed, geared, and

maintained for those individuals who require physical therapy in getting back to their

normal lives. Strokes tend to leave their victims severely debilitated and in need of help

in several major life areas. THE RENEWAL CENTER is here to assist all patients who

require physical therapy as a result of either injury or surgeries, including stroke patients,

regain normal life functions. The goal is not only improvement but optimization of the

victim’s life from the point of initial contact with THE RENEWAL CENTER.

Located in Lake Forest, IL, THE RENEWAL CENTER offers state of the art

rehabilitation and physical therapy equipment along with a nurturing and skilled staff.

The entire staff has one goal in mind, to ensure the customer’s recovery to its greatest

extent. This is done by offering physical, emotional, mental and spiritual support

throughout the entire process.

Lake Forest, IL is the ideal location due to its particular demographic layout.

Along with being easy to access, Lake Forest offers the perfect backdrop for a total body

recuperative process.

THE RENEWAL CENTER understands that paying for rehabilitation services is

always a concern for stroke victims and their loved ones. Also, THE RENEWAL

CENTER understands that covering payments is not always a priority during these crises

as well. That is why several payment options are offered to our customers to ensure an

ease of mind while recovering.

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Mission Statement:

To help stroke survivors and their families recover in a cost effective, safe, and
productive way as we strive to get them back to their normal activities of daily living.

Objectives:

• To offer a holistic, or "whole person," treatment approach by meeting the physical

and emotional needs of our clients and their family members.
• To develop and maintain a strong referral source through networking with other
professionals, such as Specialists, Hospital Admissions, and local physicians.
• To invest in high tech equipment providing high-quality rehabilitation care to our
clients.
• 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, preventative care, and much more
• Collections of 95% or more and missed appointments under 5%
• Average visits per month of 200 patients within the first 10 months and begin to
see an increase in patients by the beginning of the second year

Keys to Success:
The success of our customers and ultimately our business relies on the following:

• Heal: Being a rehabilitation service institute, Total Body Management’s

focus is on healing the complete patient, not just the body, but the mind and
soul as well. Our customers come to THE RENEWAL CENTER expecting
treatment, and THE RENEWAL CENTER will do everything in its power to
provide them with it.
• Listen: THE RENEWAL CENTER recognizes the need to listen to the
customer. Only the customer can tell our experts where it hurts, how much,
and when. If a certain recovery program is not working, THE RENEWAL
CENTER will go back to the drawing board, sit down with the patient, and
map out a new route to try.
• Professional: At all times, all THE RENEWAL CENTER staff will act in a
professional, fair, and skilled manner. The staff is an extension of the
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management and everything that has gone into THE RENEWAL CENTER,
and is expected to provide exemplary service to all of its clients.
• Protect: THE RENEWAL CENTER also feels the need to undertake a
teaching role to the surrounding community. By offering seminars and health
lectures THE RENEWAL CENTER will provide the knowledge to the
community to be aware of potential health problems and their cures.
• Network: Since the facility is brand new, it will not have any existing
patients. THE RENEWAL CENTER will rely on word of mouth and external
physician referrals. Networking with other institutes is a priority in order to
build a consistent patient base and to stay competitive.2

Total Body Management Physical Therapy Services:

• Diagnosis of physical deficits

• Gait Training
• Transfer training for both patient and caregivers
• Proprioception/balance
• Total Body strengthening
• Adaptive device training
• Return to work conditioning
• Safety in-services
• Aerobic conditioning
• Patient and family education
• Extremity range of motion
• Core stabilization
• Flexibility training
• Tone management
• Coordinated care between physicians, insurance, and family

Market Analysis Summary

Total Body Management will be located in Lake Forest, Illinois. Our facility will

provide many rehabilitative services for stroke survivors including home therapy sessions

for those homebound. Considering the numbers of rehabilitative facilities that strictly

provide services to those who are victims of stroke are limited in the state of Illinois we

have decided that this will be our targeted market. Our research has shown that there are

only 26 primary stroke facilities in the state, which mostly are located in the Chicago
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area. At the moment there are approximately 20 more facilities seeking certification from

the Joint Commission to be certified providers of stroke victims.

Due to the fact that we are a new facility we currently do not have existing

patients. So, in order to conduct business efficiently through our organization we plan to

network with emergent care departments of hospitals, other physical therapy centers that

are not capable of providing advanced or specialized care to stroke victims, primary care

doctors, cardiologist, orthopedist, neurologist, and other healthcare professionals for

referrals. To separate ourselves from the competition we will need to offer higher quality

of care and convince physicians to suggest us to their patients needing physical therapy.

We need to have the latest technologies and have the capacity to do things that other

clinics cannot because of resources. Again, our focus needs to be on doctors and patients

word of mouth. If we can convince doctors that our service is superior, it will go a long

way towards securing a patient base.

Our organization will have certification, but unlike the other facilities seeking or

already certified we are not in a hospital setting where space will eventually become

limited and patients will have to be moved. THE RENEWAL CENTER is better than

these other certified facilities because we also provide specialized long term home care

services for our patients with limited mobility, which would also be financially

beneficial.

Lake Forest has only 20,990 residents. However it will be important for our clinic

to tap into neighboring communities for patients. Fortunately, Lake Forest is located

within minutes of the 41 and 94 freeways, which will facilitate this goal and allow for
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patients to come from within a 10 mile radius which would include Waukegan to the

north and Highland Park to the south.1

Financial Analysis

The following charts will describe the profitable growth opportunity that Total

Body Management has in the next 5 years. Depicted in the Projected Cash Flow

Statement, is a realistic pattern of growth with increased customer usage and referral

from physicians. These are the givens with a $200,000 investment, paid back at the

annual rate of 7% over 10 years.

Capital expenditures: $75,000 year one

$25,000 year two
Average number of patients per therapist per month: 200
Average charge per patient: $220
Average reimbursement per patient: $105

Projected Cash Flow Statement for Total Body Management (In Dollars)

Year 2010 2011 2012 2013 2014

Initial Investment $200,000
Net Revenue 500,000 756000 1008000 1260000 1260000
Cash Operating Expenses 386100 513600 681600 880100 901100
Capital Expenditures 75000 25000 0 0 0
Depreciation Expense 7500 10000 10000 10000 10000
Net Operating Income 106,400 232,400 316,400 369,900 348,900
Depreciation Expense 7500 10000 10000 10000 10000
Project Cash Flows 113,900 242,400 326,400 379,900 358,900
Interest Expense 8475 8475 8475 8475 8475
Loan Payments 20000 20000 20000 20000 20000
Annual Present Vale of Cash Flows 85,425 213,925 297,925 351,425 330,425

These averages for reimbursement have been averaged from the various payers

including Medicare, BCBS, Atena, Cigna, and other such 3rd party payers. With a

therapist working a normal 40-hour week, on average they can see 10 patients per day

allowing for the conservative average of 200 per month. As the clinic grows, you will
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see therapists are added, which increases expenses, but also increases the profits overall.

The net revenue may be subject to change depending upon legislative changes in

reimbursement, which could raise or lower the average rate, but in terms of 2009 dollars

and current reimbursement information, these figures are accurate.

The next chart, Projected Statement of Operations for Total Body Management,

details breakdowns of costs including capital expenditures, salary/benefits, etc… It again

shows the increase cost associated with hiring of staff and the other expenses that brings

about. The rent has already been negotiated with the landlord of the facility, and other

estimates actually overestimated to account for inflation and to ensure the “worst case”

scenario of total operating expenses. The salaries/benefits start at approximately 44% of

the expenses in the first year and increases to 60% in year 5 of the overall operational

expense. This will be monitored closely as the use of a physical therapy assistant will be

considered for future hires, but patient care cannot be sacrificed in order to increase

profitability.

Projected Statement of Operations for Total Body Management (In Dollars)

Year 2010 2011 2012 2013 2014
Unrestricted Revenues, Gains, and Other Support
Net Patient Revenues 500000 756000 1008000 1260000 1260000
Other Revenues 6000 10000 12000 15000 16000
Total Revenues 506000 766000 1020000 1275000 1276000

Expenses
Salaries/Benefits 210,000 310,000 420,000 545,000 560000
Supplies 75,000 100,000 150,000 220,000 225000
Capital Expenditures 75,000 25,000 0 0 0
Rent 72000 72000 78000 78000 78000
Cleaning 4800 4800 4800 4800 4800
Utilities 12000 12000 12500 12500 13000
Phone/Internet 6000 6000 6000 6500 6500
Insurance 6000 7000 8000 9000 9500
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Equipment Maintenance 300 300 300 300 300

Travel 0 1500 2000 4000 4000
Other Expenses 12000 16000 20000 23000 25000
Total Expenses 473,100 554,600 701,600 903,100 926,100

Operating Income 32,900 211,400 318,400 371,900 349,900

Excess Revenues over Expenses 32,900 211,400 318,400 371,900 349,900

The outlook for this business is healthy. The assets should be greater then the

liabilities as long as the patients come through the door. Accounted for the assets are the

cash on hand, the profits from the preceding year added to the next. This could change as

dividends or bonuses are paid out, but that is yet to be determined.2

References

1. Graham, Judith. "Right ER may be key after stroke." Chicago Tribune. 20 May
2009. Web. 13 Nov 2009.
<http://archives.chicagotribune.com/2009/may/20/local/chi-stroke-center-
20-may20>.
2. Physical Therapy Massage Business Plan." Bplans.com. Palo Alto Software, Web.
13 Nov 2009.
<http://www.bplans.com/physical_therapy_massage_business_plan/appen
dix_fc.cfm>.

Grading criteria

Timely submissions of idea and plan that meet the criteria

5 points
specified
Concise executive summary 5 points
Cogent content 5 points
Style and presentation (including flow, format, spelling,
5 points
grammar)
Timely participation in discussions and voting of business
5 points
plans
TOTAL 25 points

Project Feedback
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I enjoyed reading your plan and thought you did a good job overall. In terms
of scoring the paper, I have looked to see that you followed the basic
guidelines and understood the concepts of a business plan. You received the
following breakdown of points and the participation points will be determined
individually by your participation on the Teamwork Evaluation Form and Extra
Credit points will be determined based on the Executive Summary discussion
Forum and Voting.

Idea Submission – 5 points

Executive Summary – 5 points

Content – 5 points

Style – 5 points

General Comments:

Excellent work from the development of your idea of providing specialty

advanced primary care to stroke victims, which are both holistic and cost-
effective—an organization that is both patient-centered, local, business-like, and
financially viable. This is an idea that is needed and can be more fully developed
in the health care market, which makes it very interesting. You demonstrated
how you could make this idea work. You presented the plan very well. On the
financial side, you did a nice job of laying numbers out. It is a small project and
you seemed to present supporting information in the limited pages allowed. Your
style had good flow and continuity of thought.