Magazine article Medical Economics

12 Steps to a Comprehensive Business Plan

Magazine article Medical Economics

12 Steps to a Comprehensive Business Plan

Article excerpt

All good business plans answer the same basic questions. But there are a number of acceptable ways to format them. Here's one possibility. You can adapt it as your project requires.

1. Executive summary

Write this section last, after you've spent time working the numbers and becoming thoroughly acquainted with your plan. Limit it to two pages, and make it as compelling as you can. Describe the product or service and the location(s) where it will be provided. Be sure to highlight any features that give the venture a competitive advantage. Explain how much money you seek, in what form, and for what purpose.

2. Vision statement

In clear, succinct language, articulate the company's vision statement, which is a broad declaration of purpose and goals.

3. Market assessment

Describe the overall market and developing industry trends; your target market, its current size, and its potential for growth over at least the next three years; and your potential customers. Be sure to state the assumptions you've based your projections on. You may want to discuss how industry trends, technical developments, or changes in customers' needs will shape the future. Analyze your competition's strengths and weaknesses and their impact on your venture. Remember that investors want to know how well you understand the market and your competitors.

4. Core business strategy

Explain why your business idea makes sense, given the market conditions and competitive climate. Outline your objectives in terms of market share (perhaps by patient type), projected gross and net income, and debt to equity ratio. If it's applicable, define the number of commercial patients vs. Medicare and Medicaid patients. It may also make sense to list provider numbers and types, particularly if you plan to add providers over time.

5. Strengths and weaknesses

Pump up the positives about your practice, says Janice G. Cunningham, attorney-consultant with The Health Care Group in Plymouth Meeting, Pa. Under "weaknesses," highlight solvable problems. Say, for instance, you can't accomplish your objectives without a much better computer system. But be honest. It's better to meet potential objections head on, and dispel them in the business plan, than ignore them. It gives you much more credibility.

6. Full defintion of the product

Define what you're offering and what distinguishes it from similar services or products competitors offer. Maybe you're the only one in the region offering an experienced case-management team. Explain why this feature gives you a competitive advantage. Also explain the resources or the systems you need to sustain the edge.

7. Full definition of the customer

Who are you targeting? Are you offering something the customer might seek for himself (like a cure for impotence), or a service reimbursable by insurance companies? …

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