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Recipe for Creating an Effective Business Plan

By: Fred Buck

If you want to start your own practice, a business plan can be an indispensable tool for solidifying support with your lender and sharing your goals with contractors and vendors. A typical plan details the business objectives, management functions, operational features, marketing goals and financial projections for your proposed practice.

A good business plan is based on sound logic and careful research, and can take some time to complete. However, the recipe for creating a business plan is standard across industries. Use one of the free templates available online (see wellsfargo.com/practicefinance) to help you organize your development and research.

Components of the business plan Executive Summary

The Executive Summary serves as an introduction to you and your business venture, and can include the following:

  • Mission statement. Outline your practice or business philosophy - the principles and values that guide your practice (for example, "I believe all children deserve the best medical care available"), as well as the rationale for building your practice.
  • Practice description. Provide a brief overview of your practice and services, including where your practice will be located, your ideal patient, and any specialty services you offer.
  • Financing requirements. Provide a summary of the capital you will need to get your practice up and running.

Practice Description

The Practice Description goes into greater detail about the structure of your business, your qualifications for managing the business, and your business resources. This section should illustrate that you have the personal know-how and means to help ensure practice success, including:

  • Practice history. Provide a description of your professional experience to date including where you went to school, when you graduated, and any experience you've gained through associateships.
  • Management team and key personnel. Identify the principals ultimately responsible for your practice's financial performance, as well as key team members and their roles, your professional advisors and how they can help you grow your business and your business structure, including its legal entity and health insurance mix.

Market Research

The Market Research section demonstrates that your practice is based on a solid grasp of the local market and your potential for success and can include:

  • Market description. Describe who lives in your practice community, and what sort of growth is predicted for this area over the next 10 years.
  • Prospective customer. Describe your ideal patient, including needs.
  • Competitive environment and analysis. Define how many other doctors with your specialty are practicing in the area and the range of services they provide.
  • Competitive advantage. What benefit or advantage will your practice offer that competitors in the area do not?

Marketing Plan

The Marketing Plan describes the internal and external marketing activities you plan to use to attract patients and grow your practice. For example:

  • How will you create awareness and keep your patients coming back?
  • How will you set yourself apart from the competition?
  • What is your marketing budget for the next year?
  • What is your marketing mix? Do you have a balance between print advertising, promotions, referrals, email, and other elements of marketing?

Operations

The Operations section details the day-to-day functions and requirements of your practice, and can include the following:

  • Location and premises. Include why you chose your location, the number of operatories you will have, and whether you will own or lease the space
  • Hours of operation. Describe what the work week looks like for every employee and associate.
  • Staffing. Include recruitment plans, staff roles, compensation and personnel policies. Identify the resources you are using to create job descriptions.
  • Equipment and supplies. Describe the equipment required now and in the future, and who your major suppliers will be.

Financial Forecast

The Financial Forecast is probably the most difficult section to complete, as well as the most important. The financing package you receive from your lender may be based on the numbers in your forecast, so it is important that you do your homework and make these calculations as accurate as possible:

  • Income and cash flow projection for the first 12 months of practice operation.
  • Capital and operating expenses -- the total funds needed to build and operate your practice. Be specific and include categories, such as contractor costs, loan payments, staff salaries, rent, utilities, lab fees, supplies and other minor expenses.
  • Project financing -- detail your projected expenditures and how much you need in financing to build and launch your practice, and the terms you are looking for. Include any personal assets you will be contributing to the project.

Consult with your advisors to ensure your business plan is realistic and set an annual date to review and refresh your plan. Building a business plan today may help you build a bright and successful career.

About the Author

Fred Buck is the Regional Manager West for Wells Fargo Practice Finance. As an experienced consultant and finance professional, he speaks nationally to healthcare professionals advising in practice planning strategies for emerging and established practitioners. His industry background offers practitioners a unique perspective as they approach some of the most important decisions in their professional lives. With more than 25 years of healthcare experience, Wells Fargo Practice Finance specializes in helping healthcare professionals acquire, start and expand their practices with various financing options and a signature Practice Success Program. You can contact him at fred.buck@wellsfargo.com or 800-861-5984

View all articles by Fred Buck


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All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.