Businesses Again Many Hospitals Have Taken Steps to Create a Business Continuity Plan

MAR.14, 2017

Hospital Business Plan Sample

Do you want to start a Hospital business plan?

Starting a business can be very hard and a big responsibility. And starting one that benefits humanity can be an even greater responsibility. However, if you follow the correct steps and stay persistent, it can be very rewarding. Establishing a business like a hospital needs to be very thoroughly planned.

The best way to plan a business and all of its details are to write a business plan for hospital. Adding all the right details and values of your business will attract investors to business plan and this will help you is getting your business set up. If you want to learn how to write a hospital business plan, you should go through as many samples as you can.

Plans like nursing home business plan can be a great resource in understanding everything you need to plan for in your hospital business. In this business plan, we will be providing all the details for starting a hospital called Mercy Ltd. You can follow along with this sample to develop a plan for your business.

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Executive Summary

2.1 Business Summary

Mercy Ltd will be a private healthcare setup owned and started by Gillian Hail. It will provide state-of-the-art services to all its patients. Additionally, it will also run a free clinic and find services for those who don't have enough funds to get treatment.

2.2 About the Management

As a hospital business requires the utmost attention to detail to run well, a business plan is needed ahead of time. It is similar to a business plan for a wellness center in that regard. To make the management of Mercy Ltd smooth, a hospital business development plan was needed. Therefore, we prepared this sample.

If you want to develop an executive summary hospital business plan for your business, you can consult a healthcare business plan template. Otherwise, to write the business plan, you can also hire experts and guide them along.

2.3 Customers of Mercy Ltd

Considering that Mercy Ltd is a healthcare center, its customers will primarily be patients seeking treatment or help with funding for treatment. They will belong to all domains and lifestyles. The primary customers will include:

• OPD Patients
• Emergency Care Patients
• Chronic Patients
• Treatment Fund Patients

2.4 Business Target

The target of Mercy Ltd is to become a trustworthy healthcare center where people can come to get immediate treatment whenever they need it. It will also be a long-term target to expand the business. The financial targets we want to meet within the first three years of start are mentioned below in this hospital business plan pdf.

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Company Summary

3.1 Hospital Ownership

The hospital will be owned and managed primarily by Gillian Hail. She completed her MD five years ago after which she served as a head neurosurgeon in a renowned hospital in Baltimore. She then assumed the position of a consultant to start her healthcare setup.

3.2 History

Gillian always wanted to make a difference and help people due to which she became a doctor. However, after working in a hospital for so many years, she realized that there was a greater need for a healthcare setup that could deal with patients faster. Therefore, she decided that she would open Mercy Ltd to provide quick care to simple patients and would also gain funding for people who were struck by an ailment or accident, but their insurance couldn't cover for them.

3.3 How will Mercy be Established

Step1: Plan Everything

The first step before establishing any business, no matter what the domain or scope, is thorough planning. You will need to map out everything required to start the business in a business plan for starting a hospital. Additionally, you will also need to develop a business plan for hospital expansion if you have any plans to extend the business in the future. The process won't stop here because at some point, you will also be developing a business continuity plan hospital. However, in the begging, it is necessary to give full attention to get the business off the ground.

Step2: Get Funding

One of the main reasons to develop a startup hospital business plan is to get funds. As Mercy Ltd had the aim to help treat those who couldn't afford usual hospital charges, therefore, Gillian paid special attention to this hospital business plan sample pdf to attract investors.

Step3: Find a Location

To house the healthcare setup, Gillian chose a building in Baltimore. The lower two floors will be for the hospital whereas the top floor will be for management and to house on-call doctors.

Step4: Developing a Brand

It is essential to make your business as human as possible so that your customers can relate to it. Therefore, Gillian not only focused on her business model to help people but also describe it in a way that is understandable to its customers.

Step5: Promote and Market

To get the word out about her unique business model, Gillian established a partnership with as many local and big hospitals as she could so they could refer patients to Mercy Ltd for simple and free treatments as well as funding.

Start-up Expenses
Legal	$152,400
Consultants	$0
Insurance	$25,100
Rent	$35,100
Research and Development	$10,000
Expensed Equipment	$52,200
Signs	$3,400
TOTAL START-UP EXPENSES	$278,200
Start-up Assets	$251,400
Cash Required	$181,000
Start-up Inventory	$35,100
Other Current Assets	$251,000
Long-term Assets	$217,000
TOTAL ASSETS	$935,500
Total Requirements	$1,213,700
START-UP FUNDING
Start-up Expenses to Fund	$278,200
Start-up Assets to Fund	$935,500
TOTAL FUNDING REQUIRED	$1,213,700
Assets
Non-cash Assets from Start-up	$1,222,000
Cash Requirements from Start-up	$115,000
Additional Cash Raised	$50,000
Cash Balance on Starting Date	$35,000
TOTAL ASSETS	$1,422,000
Liabilities and Capital
Liabilities	$18,200
Current Borrowing	$0
Long-term Liabilities	$0
Accounts Payable (Outstanding Bills)	$61,500
Other Current Liabilities (interest-free)	$0
TOTAL LIABILITIES	$79,700
Capital
Planned Investment	$1,213,700
Investor 1	$0
Investor 2	$0
Other	$0
Additional Investment Requirement	$0
TOTAL PLANNED INVESTMENT	$1,213,700
Loss at Start-up (Start-up Expenses)	$128,600
TOTAL CAPITAL	$1,342,300
TOTAL CAPITAL AND LIABILITIES	$1,422,000
Total Funding	$1,213,700

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Services

To write a business plan for a hospital, one needs to be clear about the type of business they want to establish. And this is true for every business plan, may it be a reiki practice business plan or a private hospital business plan pdf.

To develop a hospital business plan sample, you will need to know the services you want to provide to your customers as they will form the basis of your setup. Here, we have provided a hospital business plan template that you can follow when writing about the services of your business. You can also look at any other hospital business plan example for reference.

• OPD

We will provide all the basic outpatient facilities including diagnosis, testing, and providing immediate treatment to patients. This will apply to patients with simple ailments like infection, common cold, fever or pain, etc.

• Emergency Services

Mercy Ltd will also provide emergency services to patients who have been involved in an accident and need immediate care for stabilization. We shall also provide ambulances to transport these patients to bigger hospitals for complete and thorough treatment and recovery.

• Regular Treatment and Therapy

For the patients who have chronic ailments or pain and need regular care and treatment, we will offer therapy sessions and a complete care package that they can use regularly instead of needing to go to other hospitals.

• Funding

One of our core services will be to provide treatment funding to deserving patients. The cases and situations of the patients will be thoroughly vetted to ensure that there is no problem.

Marketing Analysis of Hospital Company

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It can be very tricky to gain success as a new business. You need solid hospital strategic goals to ensure that your business is taken care of from the start. A good business owner needs to do a lot of research into hospital business development strategies before starting a business in this domain.

A good business plan covers all details regarding the business, including things like hospital planning team and business model hospital. This information helps in showing the objectives of hospital planning to the investors. And all of this can only be achieved if you have a strong understanding of your target market. This includes your customers as well as your competitors.

In this hospital marketing plan template, we have outlined all the marketing strategies that would be employed by Gillian to ensure the success of her business. You can follow this hospital business plan sample or something related like a massage therapy center business plan for more guidance.

5.1 Market Trends

According to PolicyAdvice, the healthcare industry is one of the fastest-growing industries of the US and the trend is expected to continue as the US spends almost twice as compared to other countries on healthcare. Right now, the market share of the healthcare industry in the US is at almost $10 Billion and it is expected to rise. Therefore, healthcare is one of the best sectors to start a business in.

5.2 Marketing Segmentation

The target customer groups of Mercy Ltd will be:

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5.2.1 OPD Patients

Our primary services are centered around situations where patients only need immediate care and have straightforward illnesses. Therefore, these patients with simple ailments will be the key customers of Mercy Ltd as they will utilize our services in almost half the time as any other hospital.

5.2.2 Emergency Care Patients

Our second target customers will be the people who need immediate care after an accident such as a fall or a crash. Our main responsibility will be to stabilize these patients so that they can be safely transferred to required hospitals for full care.

5.2.3 Chronic Patients

We will also get business from people with chronic ailments who only need to go to hospitals for regular check-ups but find it hard to. We will provide them with in-house regular check-ups and treatment facilities so that they don't have to spend too much time or energy on commute.

5.2.4 Treatment Fund Patients

Lastly, one of our primary services is funding, we will also take up cases of patients who need money for treatment but because of one reason or another are not able to. The funding for these patients will come from our investors as well as 8% of our profits.

Market Analysis
Potential Customers	Growth	Year 1	Year 2	Year 3	Year 4	Year 5	CAGR
OPD Patients	40%	56,100	67,320	80,784	96,941	116,329	10.00%
Emergency Care	37%	44,100	52,920	63,504	76,205	91,446	10.00%
Chronic	15%	26,100	31,320	37,584	45,101	54,121	10.00%
Treatment Fund	8%	20,100	24,120	28,944	34,733	41,679	11.00%
Total	100%	146,400	175,680	210,816	252,979	303,575	10%

5.3 Business Target

• To become the best immediate care hospital in Baltimore
• To expand our services across the US in form of multiple small centers
• To earn a net profit margin of $15k/month by the end of our second year
• To be the first healthcare service that helps patients with funding

5.4 Product Pricing

Our prices will be similar to that of our competitors. However, we will provide twice the speed of regular hospitals that are usually too burdened.

Marketing Strategy

To become successful in a market as tough as healthcare, you will need to work on your hospital business strategy. This strategy will be reflected in your business plan hospital. You can also look at strategic plan example hospital for reference.

Understanding all aspects of planning in hospital will help you gain a better view of the market and help your business succeed. So, whether it is a business plan for healthcare setup or a business plan for occupational therapy, you should look into the market for a stronger plan.

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6.1 Competitive Analysis

• We have excellent and unique services
• Our customers can get help in almost half the time as regular hospitals for basic healthcare
• We provide treatment funding to people who cannot afford it
• Our customers can avail of our ambulance and emergency services through a quick phone call as well

6.2 Sales Strategy

• We will get the word out through partnerships with hospitals
• We will use social media for a wider reach
• We will offer discounts to deserving people

6.3 Sales Monthly

6.4 Sales Yearly

6.5 Sales Forecast

Sales Forecast
Unit Sales	Year 1	Year 2	Year 3
OPD	1,550	1,643	1,742
Emergency Services	1,350	1,431	1,517
Regular Treatment	1,400	1,484	1,573
Therapy	850	901	955
TOTAL UNIT SALES	5,150	5,459	5,787
Unit Prices	Year 1	Year 2	Year 3
OPD	$350.00	$406.00	$470.96
Emergency Services	$250.00	$290.00	$336.40
Regular Treatment	$350.00	$406.00	$470.96
Therapy	$250.00	$290.00	$336.40
Sales
OPD	$542,500.00	$667,058.00	$820,214.52
Emergency Services	$337,500.00	$414,990.00	$510,271.70
Regular Treatment	$490,000.00	$602,504.00	$740,838.92
Therapy	$212,500.00	$261,290.00	$321,282.18
TOTAL SALES	$1,582,500.00	$1,945,842.00	$2,392,607.32
Direct Unit Costs	Year 1	Year 2	Year 3
OPD	$100.00	$110.00	$115.50
Emergency Services	$100.00	$110.00	$115.50
Regular Treatment	$90.00	$99.00	$103.95
Therapy	$80.00	$88.00	$92.40
Direct Cost of Sales
OPD	$155,000.00	$180,730.00	$201,152.49
Emergency Services	$135,000.00	$157,410.00	$175,197.33
Regular Treatment	$126,000.00	$146,916.00	$163,517.51
Therapy	$68,000.00	$79,288.00	$88,247.54
Subtotal Direct Cost of Sales	$484,000.00	$564,344.00	$628,114.87

Personnel plan

A good business plan for hospitals will reflect all the aspects of the setup thoroughly for well-management. This even includes the workforce and employees that make it possible to run a setup. In this hospital business plan template, we will be looking at the employee and hiring structure of Mercy Ltd.

7.1 Company Staff

• 1 Co-Manager to help in overall operations
• 8 Certified Doctors
• 4 Nurses
• 3 General Cleaners
• 1 Technician to upkeep the machinery
• 1 HR Executive
• 2 Ambulance Drivers
• 2 Receptionists

7.2 Average Salary of Employees

Personnel Plan
	Year 1	Year 2	Year 3
Manager	$30,000	$33,000	$36,300
Certified Doctors	$245,000	$269,500	$296,450
Nurses	$125,000	$137,500	$151,250
Cleaners	$62,500	$68,750	$75,625
Technician	$22,500	$24,750	$27,225
HR Eecutive	$22,500	$24,750	$27,225
Ambulance Drivers	$42,500	$46,750	$51,425
Receptionists	$42,500	$46,750	$51,425
Total Salaries	$592,500	$651,750	$716,925

Financial Plan

The success of a business and its smooth running depends on a lot more than hospital business plans. You need to ensure that you have enough finances to support your operations and range of services. This is where hospital financial planning comes in.

To ensure that everything is running with balance and you're not going into a loss, you will need to keep proper track of your finances. One way to deal with the overwhelming load of financial management is to make a financial plan. This can act as a guide for you to follow along as the business progresses.

Here, we are detailing the financial plan for Mercy Inc. You can also look at similar plans such as a non-medical home care business plan to get a hint.

8.1 Important Assumptions

General Assumptions
	Year 1	Year 2	Year 3
Plan Month	1	2	3
Current Interest Rate	8.12%	8.20%	8.26%
Long-term Interest Rate	8.40%	8.44%	8.47%
Tax Rate	24.03%	24.21%	24.60%
Other	0	0	0

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8.2 Break-even Analysis

Break-Even Analysis
Monthly Units Break-even	5340
Monthly Revenue Break-even	$132,500
Assumptions:
Average Per-Unit Revenue	$231.00
Average Per-Unit Variable Cost	$0.62
Estimated Monthly Fixed Cost	$163,800

8.3 Projected Profit and Loss

Pro Forma Profit And Loss
	Year 1	Year 2	Year 3
Sales	$1,582,500	$1,945,842	$2,392,607
Direct Cost of Sales	$484,000	$564,344	$628,115
Other	$0	$0	$0
TOTAL COST OF SALES	$484,000	$564,344	$628,115
Gross Margin	$1,098,500	$1,381,498	$1,764,492
Gross Margin %	69.42%	71.00%	73.75%
Expenses
Payroll	$592,500	$651,750	$716,925
Sales and Marketing and Other Expenses	$145,000	$148,000	$156,000
Depreciation	$2,300	$2,350	$2,500
Leased Equipment	$0	$0	$0
Utilities	$2,900	$3,000	$3,100
Insurance	$2,100	$2,100	$2,100
Rent	$2,900	$3,000	$3,200
Payroll Taxes	$24,000	$25,000	$27,000
Other	$0	$0	$0
Total Operating Expenses	$771,700	$835,200	$910,825
Profit Before Interest and Taxes	$326,800	$546,298	$853,667
EBITDA	$326,800	$546,298	$853,667
Interest Expense	$0	$0	$0
Taxes Incurred	$65,360	$109,260	$170,733
Net Profit	$261,440	$437,038	$682,934
Net Profit/Sales	16.52%	22.46%	28.54%

8.3.1 Profit Monthly

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

Pro Forma Cash Flow
Cash Received	Year 1	Year 2	Year 3
Cash from Operations
Cash Sales	$51,000	$55,080	$59,486
Cash from Receivables	$22,000	$23,760	$25,661
SUBTOTAL CASH FROM OPERATIONS	$73,000	$79,570	$85,936
Additional Cash Received
Sales Tax, VAT, HST/GST Received	$0	$0	$0
New Current Borrowing	$0	$0	$0
New Other Liabilities (interest-free)	$0	$0	$0
New Long-term Liabilities	$0	$0	$0
Sales of Other Current Assets	$0	$0	$0
Sales of Long-term Assets	$0	$0	$0
New Investment Received	$0	$0	$0
SUBTOTAL CASH RECEIVED	$74,000	$79,000	$85,000
Expenditures	Year 1	Year 2	Year 3
Expenditures from Operations
Cash Spending	$42,000	$42,000	$45,000
Bill Payments	$27,000	$28,000	$31,000
SUBTOTAL SPENT ON OPERATIONS	$69,000	$70,000	$76,000
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out	$0	$0	$0
Principal Repayment of Current Borrowing	$0	$0	$0
Other Liabilities Principal Repayment	$0	$0	$0
Long-term Liabilities Principal Repayment	$0	$0	$0
Purchase Other Current Assets	$0	$0	$0
Purchase Long-term Assets	$0	$0	$0
Dividends	$0	$0	$0
SUBTOTAL CASH SPENT	$69,000	$74,520	$80,482
Net Cash Flow	$21,000	$23,000	$25,000
Cash Balance	$27,000	$30,000	$33,000

8.5 Projected Balance Sheet

Pro Forma Balance Sheet
Assets	Year 1	Year 2	Year 3
Current Assets
Cash	$275,000	$308,000	$338,800
Accounts Receivable	$24,000	$26,880	$30,213
Inventory	$4,300	$4,816	$4,900
Other Current Assets	$1,000	$1,000	$1,000
TOTAL CURRENT ASSETS	$282,000	$315,840	$355,004
Long-term Assets
Long-term Assets	$10,000	$10,000	$10,000
Accumulated Depreciation	$19,400	$21,728	$24,444
TOTAL LONG-TERM ASSETS	$24,400	$27,328	$30,744
TOTAL ASSETS	$294,000	$329,280	$370,440
Liabilities and Capital	Year 4	Year 5	Year 6
Current Liabilities
Accounts Payable	$18,700	$20,944	$23,541
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
SUBTOTAL CURRENT LIABILITIES	$19,000	$21,280	$23,919
Long-term Liabilities	$0	$0	$0
TOTAL LIABILITIES	$15,000	$16,800	$18,883
Paid-in Capital	$30,000	$30,000	$31,000
Retained Earnings	$53,000	$57,770	$63,547
Earnings	$193,400	$210,806	$231,887
TOTAL CAPITAL	$285,000	$310,650	$341,715
TOTAL LIABILITIES AND CAPITAL	$300,000	$329,280	$370,440
Net Worth	$293,400	$319,806	$351,787

8.6 Business Ratios

Ratio Analysis
	Year 1	Year 2	Year 3	INDUSTRY PROFILE
Sales Growth	7.25%	8.03%	8.90%	3.00%
Percent of Total Assets
Accounts Receivable	9.21%	10.20%	11.31%	9.80%
Inventory	5.39%	5.97%	6.62%	9.90%
Other Current Assets	2.11%	2.34%	2.59%	2.40%
Total Current Assets	149.80%	151.00%	152.00%	158.00%
Long-term Assets	11.55%	11.60%	11.64%	12.00%
TOTAL ASSETS	100.00%	100.00%	100.00%	100.00%
Current Liabilities	4.90%	4.94%	4.98%	4.34%
Long-term Liabilities	0.00%	0.00%	0.00%	0.00%
Total Liabilities	7.59%	7.65%	7.72%	7.38%
NET WORTH	100.45%	101.25%	102.19%	110.00%
Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	94.60%	97.15%	99.87%	99.00%
Selling, General & Administrative Expenses	93.56%	96.09%	98.78%	97.80%
Advertising Expenses	1.52%	1.56%	1.60%	1.40%
Profit Before Interest and Taxes	41.50%	42.62%	43.81%	33.90%
Main Ratios
Current	34	35	36	32
Quick	33	33.8	34.645	33
Total Debt to Total Assets	0.18%	0.18%	0.17%	0.40%
Pre-tax Return on Net Worth	74.08%	74.89%	75.00%	75.00%
Pre-tax Return on Assets	96.30%	101.12%	106.17%	111.30%
Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	33.56%	34.60%	35.67%	N.A.
Return on Equity	55.80%	57.53%	59.31%	N.A.
Activity Ratios
Accounts Receivable Turnover	7.7	7.8	7.8	N.A.
Collection Days	100	100	100	N.A.
Inventory Turnover	32.4	34.02	35	N.A.
Accounts Payable Turnover	15.6	16	16.3	N.A.
Payment Days	27	27	27	N.A.
Total Asset Turnover	2.5	2.5	2.6	N.A.
Debt Ratios
Debt to Net Worth	-0.04	-0.03	-0.04	N.A.
Current Liab. to Liab.	1	1	1	N.A.
Liquidity Ratios
Net Working Capital	$244,000	$257,664	$272,093	N.A.
Interest Coverage	0	0	0	N.A.
Additional Ratios
Assets to Sales	0.85	0.87	0.89	N.A.
Current Debt/Total Assets	1%	0%	0%	N.A.
Acid Test	29	29.12	29.16	N.A.
Sales/Net Worth	2.1	2.2	2.2	N.A.
Dividend Payout	0	0	0	N.A.

FAQ

1. How do you start a hospital business?

You can start healthcare set up by reviewing the strategic management in hospitals. This will inform you if you can manage the plethora of responsibilities that come with every healthcare business.

2. What is hospital business plan?

A business plan for hospitals is a document that is developed before starting a venture. It is done to ensure that you can take the right steps to make your business a success. It helps with planning, management, and problem resolution among other things.

3. What are the 4 types of hospitals?

The basic 4 types of hospitals in the US according to JamaNetwork are:

• Community Hospitals
• Federal Govt Hospitals
• Non-Federal Psychiatric Care
• Non-Federal Long-term care

The business plan hospital provided here is for a private community hospital.

4. How do I write a hospital proposal?

You can write a hospital proposal by going through the private hospital business plan provided above and following all the tips mentioned.

Download Hospital Business Plan Sample in pdf

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