- Introductory Page
- Name of the Proposed Business
AdLife® Family Care
- Name of Principal (s)
|Brian Johnson||Financial Manager|
|Samantha Cruize||Project Manager|
- Nature of Proposed Business
AdLife® Family Care is a family care service center.
- Statement of financing needed
The venture requires an initial investment of $800,000.
- Confidentiality Statement
The reader of AdLife® Family Care business plan acknowledges that the information provided is confidential. Therefore, under no circumstance should he/she disclose this data without the consent of the venture’s management team.
The contract in this business plan shall be governed by the laws of Oklahoma State and any other applicable national law.
- Executive Summary
AdLife® Family Care is a start-up healthcare center located in Oklahoma City, United States. The facility is expected to offer a wide range of family care amenities, including medical and dental services. The institution’s main target is middle and low-income earners in Oklahoma State, who are deprived of family healthcare services. The organization plans to fill this gap by launching its operations in the region. To achieve this initiative, AdLife® Family Care will firmly position itself in the healthcare market by providing quality and affordable care.
The idea of establishing a family healthcare center in Oklahoma City is based on thorough market analysis into the most medically underserved states in the U.S. A report issued by the United States Office of Personnel Management in 2014 enumerated some of areas that lacked access to primary care services, including Oklahoma, Illinois, and Louisiana (U.S. G.P.O). Data and reports from the region’s state of health department (Oklahoma, 2019) also revealed a shortage of dentists and other healthcare professionals in 2018. This is one of the leading causes of high infant mortality in the city. This shortage of health experts also adversely impacts rightful access to family healthcare services. We believe that AdLife® Family Care will play a significant role in controlling such deficiencies.
The proposal of the start-up is also based on the need to complement services offered by other family care centers. Our market analysis revealed an acute need for specialized family care facilities in the region. Some existing health institutions lack specialty areas. Hence, this inadequacy is related to high long-term healthcare costs and increased cases of medical complications due to lack of qualified staff. There are also concerns over the long queues in facilities, which implies delayed patient care and poor quality services. Part of our plan is to build an ideal working environment for our employees to retain a high labor force and attend to our patients’ needs on time.
The other market gap that AdLife® Family Care plans to bridge is healthcare costs. Our market research revealed high costs of health services in family care centers compared to public facilities. This phenomenon is driven by the limited number of family healthcare centers in the region. We believe that market forces of demand and supply shall impact medical charges once AdLife® Family Care launches its operations. Our entry into the healthcare market will create an equilibrium between demand and supply of healthcare services, which will, in turn, reduce medical charges, making family care services affordable to middle and low-income earners. Alternatively, reduced healthcare costs will be used as a tool to gain a competitive advantage in Oklahoma City.
Establishing AdLife® Family Care in Oklahoma State will position the institution in the healthcare market. Our first step is to fill the existing niches in the region and to build a good reputation among the people by offering quality services at lower costs. This will help the firm generate more income that will be used to expand our inpatient capacity, purchase additional medical equipment, and recruit more specialists. Profits generated during our operations in Oklahoma will also facilitate our plans for regional expansion to other states in the country, including Illinois, Missouri, and Idaho. This will enhance our recognition in the national arena.
- Industry Analysis
- Future Outlook and Trends
United States healthcare spending is expected to rise in the coming years. As a result, Accountable Care Associations are being established to facilitate a balance between patient care and healthcare costs (Lewis, Schoenherr, Fraze & Cunningham, 2019). This trend acts as a guide to AdLife® Family Care operations. We plan to aid the attainment of minimum medical charges while optimizing patient outcomes. There are also efforts by the government to reduce cases of medically underserved regions. Our proposed health care venture will facilitate the fulfillment of this plan at a regional level.
- Analysis of Competitors
AdLife® Family Care has very few competitors in Oklahoma. Centers that offer family care services include Family Medicine, Perry A. Klaassen, and Putnam North Family Medical Center. Therefore, market penetration will be easier. In addition, existing facilities experience scarcity in specialty areas, an aspect that makes our institution highly competitive. AdLife® Family Care will offer a wide range of specialized family care services to people living within and beyond its geographical location.
- Market Segmentation
AdLife® Family Care focuses on middle and low-income markets. This population is highly deprived of family health services. In addition, it comprises of individuals with different health insurance status, a group that we plan to target during our operations. Our facility aims at providing care to such people with private, Medicaid, and Medicare insurance plans.
- Industry and Market Forecasts
There are anticipated changes in healthcare spending across the globe. Das (2019) projected that “15% of global healthcare will be tied to value-based models.” This change will particularly occur in countries such as the United States and France, which incur substantial healthcare costs. Our proposed venture plans to adopt this change during the initial stage of development, where pricing will be subject to the quality of care. This strategy will enable the facility to position itself in the national and global industry.
- Description of Venture
- Product (s) and Service (s)
AdLife® Family Care will offer a broad range of specialized family care services at affordable costs. They will include dental and medical care. The facility will also meet the needs of inpatients and outpatients by ensuring a 30-bed capacity and acquisition of modern hospital equipment, such as diagnostic machines, Intensive Care Unit, and High Dependency Care Unit. AdLife® Family Care will enhance the availability of quality and affordable services for people living in Oklahoma by recruiting sufficient professional healthcare providers in all specialty areas.
- Background of Entrepreneur
The venture is owned by three shareholders, Seth McCain, Brian Johnson, and Samantha Cruize. Seth, the venture’s CEO, is a nursing graduate of Chamberlain College of Nursing. His knowledge and experience in this profession will facilitate the running of the establishment. Brian, one of the facility’s investors, is a business graduate of Baltimore University. He will serve as a financial manager in the institution. Samantha Cruize has a degree in project management and three years experience in a fast-growing health center in the United States. She will monitor medical inventory levels, participate in recruitment of workforce, and oversee daily operations in AdLife® Family Care.
- Production Plan
- Service Process
AdLife® Family Care will be involved in the provision of family care services in Oklahoma State. Patients who visit the hospital will be screened for healthcare issues. Clients diagnosed with medical problems will be referred to corresponding specialty areas. Patients who suffer from severe medical complications will be admitted to our inpatient facility, where they will be monitored for a few days as they receive treatment.
- Physical Plant, Machinery, and Equipment
The facility will be located in Oklahoma State. Medical equipment will be acquired to facilitate operations in the center.
- Suppliers of Raw Materials
AdLife® Family Care will require a constant flow of medical supplies. These materials will be purchased from Abbott Laboratories, a medical device company located in Chicago, Illinois. Buying all the raw materials from one firm will build mutual trust and enhance the chances of receiving price discounts.
- Operations Plan
AdLife® Family Care will operate in four specialty areas, including women’s care, dental services, medical services, and a pediatric unit. All the departments will remain open throughout the year. Healthcare providers will work in shifts to ensure that inpatients are adequately monitored during the night. Telephone consultations will also be available for emergency family care services.
- Flow of Order
AdLife® Family Care focuses on ensuring the availability of sufficient workforce to facilitate the provision of quality care. Our nurse-to-patient ratio is expected to remain at 1:2 in ICU, and 1:3 in other specialty areas, such as dental units, pediatric, and women’s care. Besides, a constant flow of drugs in the facility’s pharmacy will be enhanced to create convenience and ensure that patients can access their prescribed medication within the center at affordable prices.
The facility will invest significantly in technology to facilitate operations in specialty areas. Hence, around $400,000 will be spent on the purchase and lease of specialized equipment. They will include diagnostic machines and medical kits used in ICU and HDCU.
- Marketing Plan
- Pricing and distribution
AdLife® Family Care will capitalize on price transparency. A simple pricing strategy will be adopted to prevent inflated rates for family care services. In this case, health care costs will reflect the value offered to our patients. Hence, to achieve this, charges for different specialty areas will be published on the facility’s website. This will enhance consumer awareness of their medical bills before service delivery.
Furthermore, to deliver the promise of reduced healthcare costs, our venture will adopt a streamlined system of operation. Additional administrative overheads will be avoided at various stages of our activities to ensure that our medical charges reflect the value of services offered. Reduced costs will increase our customer base, as more patients will be willing to pay less for quality care.
AdLife® Family Care will indulge in price discounting. This is an ongoing trend in Oklahoma City, where facilities such as Surgery Centers charge less for medical procedures. Similarly, our proposed venture will offer discounted prices for specialized care. This move will attract a broader customer base from the region and other surrounding areas. Patients will also benefit highly from this promotion.
The proposed venture will control the use of Medicaid and Medicare services. We plan to avoid bundled payment systems, which facilitate an increase in medical costs. While there will be no discrimination against beneficiaries of such insurance plans, AdLife® Family Care will ensure that bills dispatched to third party payers reflect the value obtained for family care services.
- Organizational Plan
- Form of Ownership
Our proposed venture qualifies as a partnership, registered with the United States patent and trademark office. Its operations are based on a legal agreement between three investors, to provide family care services in Oklahoma. Profits and losses generated by the facility will be shared among these proprietary owners.
- Partners and Authority of Principals
Seth, Brian, and Samantha are the main shareholders of AdLife® Family Care. The nature of the legal agreement gives the partners equal rights to:
- Participate in the management of the facility
- Be consulted before decisions are made
- Share in the profits and losses of the venture
- Access data related to the partnership agreement
- Management Team Background
The management will comprise of the three shareholders. The team constitutes individuals with an educational background in nursing, business, and project management.
- Roles and Responsibilities of members
- Seth, the CEO, will be in charge of decision making at the corporate level. Some of these decisions will involve the acquisition of resources and plans for expansion. The scope of his authority will be subject to the outlined legal agreement.
- Brian Johnson, the facility’s financial manager, will be responsible for preparing financial reports, ensuring that acquired funds are utilized appropriately, and advising the management team on strategies to optimize the reduction of healthcare costs.
- Samantha Cruize, a project manager in the institution, will be in charge of monitoring medical inventory levels, overseeing new healthcare projects, and supervising other employees.
Other members will include family health specialists, surgeons, nurses, pharmacists, and laboratory technicians, whose responsibilities will be outlined in the facility’s handbook.
- Assessment of Risk
- Weaknesses of Venture
AdLife® Family Care may be subject to regulatory risks, which are common in the healthcare sector. Some speculations that these regulatory changes will affect licensing, capitalization, and pricing of healthcare services in the facility are evident. The venture may also face financing risks. In the initial stage of operation, the center plans to utilize lease financing in different transactions, such as lease-to-own and acquisition of working capital. Such funding approach is prone to market risks. Therefore, adverse changes in the financial and derivatives market would impact the proposed financing plan.
The facility may also face technology risks. For instance, medical equipment acquired during start-up may become obsolete after use over a specified period. Such changes may affect the overall productivity in the institution, especially in areas which heavily rely on technology.
- Contingency Plans
- Minimize acceptance of Medicaid and Medicare plans to control regulatory risks that may impact payment of services in the facility.
- Use alternative means of financing such as angel investments to raise working capital in the healthcare center.
- Financial Plan
- The venture will overcome challenges during the initial stage of development.
- No significant changes will occur in the financial market.
- Interest rates and inflation will remain unchanged during the years of operation.
- Pro forma Income Statement
Pro forma Income Statement
AdLife® Family Care
For Year One
|Revenue||Year 1 (‘000)|
|Cost of Procedures
Total Costs of Procedures
Salaries and wages
|General Administrative Expenses
Salaries and wages
Total Operating Expenses
|Net Income Before Tax||$199|
- Cash flow Projections
|Year 1||Year 2|
Lease of property
- Pro forma balance sheet
- Sources and Application of Funds
The three shareholders will spend $800,000, which will be invested in three tranches. The first portion of $250,000 will be used to lease property, purchase office furniture, and hospital management software. $400,000 will be used to buy specialized medical equipment. The remaining $150,000 will be spent on sourcing of supplies, who will be contracted in the first quarter of the first year. In the seventh year of operation, an additional $150,000 will be raised through a short term bank loan.
Validation of the Business Plan
As it is evident from the business plan, AdLife® Family Care should enter the market place. Its operations will fill the existing niches, including scarce specialized family care facilities, long queues, poor quality services, and shortage of healthcare experts. Early entrance will also help the facility to position itself in the industry.