The Drug Rehab Center Business Plan and Financial Model allow you to make adjustments and see the results in real-time! Please see the video below!
1.0 Executive Summary
The purpose of this business plan is to raise $1,500,000 for the development of an inpatient drug rehabilitation center that will concurrently render outpatient services. Drug Rehab Center, LLC (“the Company”) was founded by Max Stevens. The facilities will feature eight suites that can accommodate up to 12 people at any given time. The business will provide detoxification and mental health treatments in order to help people that struggle with drug and alcohol addiction. The business is based in Chicago, Illinois.
1.1 The Services
As stated above, Drug Rehab Center, LLC will provide comprehensive treatment programs among people that are struggling with sobriety. The inpatient programs will be designed to help an individual detoxify from substances while providing them with the coping tools that they need in order to resume a healthy lifestyle. Individual and group therapy sessions will be held on a daily basis at the facilities.
In regards to payment, Management anticipates that each person that is enrolled in the 90 day program will incur a cost of $30,000. The business will coordinate billing with the client’s health insurance provider. In regards to outpatient treatment, these fees will be billed on a per hour basis. These costs will vary from $150 to $300 depending on whether the client is under the care of a psychologist or psychiatrist.
The third section of the business plan will further describe the services offered by the Drug Rehab Center.
1.2 Financing
At this time, Max Stevens is seeking $1.5 million in order to develop the operations showcased in this document. Of this capital, $250,000 is sought via a private investment. The $1,000,000 of debt financing will be used to acquire and renovate the Company’s facilities. The term of this loan is expected to be 30 years with an interest rate of 7%.
Additional uses of funds will include:
• Furniture, fixtures, and equipment for the Drug Rehab Center
• Professional fees and licensure via state governing agencies
• Working capital for the first twelve months of operation
If needed, Drug Rehab Center, LLC could easily acquire additional debt or equity capital as needed to further expand the number of rehabilitative facilities operated by the business. The Company could also receive specialized receivables financing based on the time delay between rendering care to a client and receipt of payment. This document assumes that no further capital injections will be needed during the course of this first three years of operation.
1.3 Mission Statement
Drug Rehab Center’s mission is to provide comprehensive rehabilitative services that are cost effectively rendered to people that struggle with substance abuse disorders.
1.4 Management Team
Max Stevens has more than 13 years of experience as an addiction treatment counselor. He will be able to develop Drug Rehab Center, LLC as a premier rehabilitative center in the greater Chicago metropolitan area market.
1.5 Sales Forecasts
1.6 Expansion Plan
Once the initial drug rehab facility reaches 100% occupancy, Management may seek to develop additional locations within the Midwestern United States. The business will continually hire additional psychologists and counselors that can render outpatient treatment services at the initial Chicago location.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Drug Rehab Center, LLC. The business has been formed as a limited liability company.
2.2 Required Funds
As discussed earlier, $250,000 is sought via private investment and $1 million is sought via a commercial mortgage.
2.3 Investor Equity
Mr. Stevens and an equity investor will determine this during their negotiations. It should be noted that Management does not expect that staff will receive any equity participations during the first three years of operation.
2.4 Management Equity
This is to be determined at a late date and time.
2.5 Exit Strategy
Drug rehabilitation centers are highly stable businesses. In any economic climate, people are going to continue to struggle with drug and alcohol abuse. As such, these businesses carry a significant price to earnings multiple. By the third year of operation, this business could have a valuation in excess of $2,000,000 which will include any real estate owned by Drug Rehab Center, LLC.
3.0 Operations
As discussed in the executive summary, Drug Rehab Center will be able to provide inpatient detoxification and rehabilitation services for up to 12 people at a time. The business will offer both single and double occupancy rooms. The grounds of the facilities will be immaculate and tranquil. There will be several gardens and fountains that will promote peace and reflection among clients. The business will charge $10,000 per month for its inpatient services. These fees may be higher depending on the detoxification needs of the client.
In regards to outpatient care, the business will have its staff psychologists and psychiatrists render treatment on a per-hour basis. These individuals will typically not have the same level of drug/alcohol dependency issues as someone needing inpatient treatment.
Management expects that the vast majority of the Company’s revenues will come from private insurance reimbursement as well as from publicly funded healthcare systems (primarily among older people that are experiencing drug dependency issues). Mr. Stevens understands that the cost of rehabilitation can be prohibitively expensive among people that do not have health insurance. In these events, the Company will provide both its inpatient and outpatient services on a sliding sale in order to ensure that those that are in need can get the proper treatment.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the drug rehabilitation industry, the client profile, and ongoing competitive matters that the business will face as it establishes its operations in Chicago.
Most importantly, the revenues of Drug Rehab Center, LLC are wholly immune from any negative changes in the economy. As a result of the opiate crisis, the demand for comprehensive rehabilitative care as a result of drug dependency has increased significantly. The business will be able to remain at or near 100% occupancy during all economic climates.
As a result of being able to accept insurance (public and private), the business will be able to maintain its profitability. The Company will implement appropriate financial controls in order to ensure that operating costs to not fluctuation on a month to month basis.
4.2 Industry Analysis
There are 7,000 companies that actively work with people, in an inpatient or outpatient setting, in order to assist them with their substance use issues. Each year, these entities produce more than $30 billion of revenue. The industry employs approximately 300,000 people.
The growth of this industry is expected to remain stronger than that of the economy in general. It is estimated that nearly 20 million people struggle with substantive substance abuse issues in the United States. As outpatient treatments become more common for substance abuse, Drug Rehab Center, LLC is in a strong position to expand in this segment of the market as its inpatient operations reach full capacity.
4.3 Customer Profile
Substance abuse is experienced by people of all ages and socioeconomic classes. Any individual can struggle with addiction. As such, it is somewhat difficult to quantify the average client that will participate in the Company’s inpatient and outpatient programs. Generally, it is expected that most people will have an annul household income exceeding $80,000 and will be enrolled in private health insurance.
Mr. Stevens has specifically selected the Chicago area market for the Drug Rehab Center given its large population. This is also one of the wealthiest market areas in the country. Given these two facts, the business will be able to remain at capacity for both its inpatient and outpatient operations.
Here, you can further identify specific attributes about your target market and why a new drug rehab center is needed.
4.4 Competition
As substance abuse is a ubiquitous problem throughout every town and city, there have been a number of new market entrants that provide comprehensive rehabilitation for people that struggle with addiction. Drug Rehab Center will maintain a strong differentiating factor given its ability to provide both inpatient and outpatient services. This will also ensure that all people can afford specific types of treatment for their specific needs. The business will also differentiate itself by providing immaculate grounds and round-the-clock support for its inpatient clients.
Here, you can further expand the reasons why your drug rehab center will be able to thrive in your specific market. You can also discuss pricing advantages that you may have over other centers in your area.
5.0 Marketing Plan
The Company will use a number of marketing strategies that will create awareness among referring healthcare professionals as well as the general public in Chicago. These marketing strategies will be heavily online driven as most people now find their rehabilitation center through these channels.
5.1 Marketing Objectives
• Develop ongoing referral relationships with addiction treatment specialists throughout Chicago.
• Implement numerous strategies that will create online visibility for the Drug Rehab Center’s website.
• Maintain referral relationships with social workers.
5.2 Marketing Strategies
Most importantly, referrals among addiction treatment specialists, psychologists, psychiatrists, and social workers will ensure that Drug Rehab Center, LLC is able to remain near capacity at all times. In many cases, a referral from these practitioners is required in order to receive insurance reimbursement. The Company will foster these relationships throughout the life of the business.
The business will have a number of videos created that showcase the Drug Rehab Center, its grounds, rooms, and other features of the campus. These videos will be uploaded to video sharing platforms (with a focus on YouTube). In time, these videos will be used in television advertising that will be conducted among cable channels specific for the Chicago area market. The Company will coordinate television advertisements with a regional firm that can help the business place videos on cable channels.
As stated above, one of the most important components of the Company’s overall marketing strategy will come from online sources. Drug Rehab Center’s website will feature walk-throughs of each room while providing in depth information regarding addiction treatment protocols. Additional information that is featured on the website will focus on the types of insurance that the Company accepts. The website will undergo a process known as search engine optimization so that it can be more quickly found when addiction treatment centers are sought in the Chicagoland metropolitan area.
5.3 Pricing
For inpatient services, the Company will charge $30,000 for 90 days of treatment. Outpatient services will produce $150 to $300 per hour. It should be noted that a sliding scale will be implemented among people that cannot afford these rates.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• The business will acquire $250,000 from a private investor and $1.25 million via a commercial mortgage.
• The interest on the loan will be 7%.
7.2 Sensitivity Analysis
Drug Rehab Center’s revenues are wholly immune from negative changes given that people will continue to struggle with drug and alcohol issues. This is especially true during difficult economic climates as more people turn to unhealthy coping mechanisms. The ongoing demand and the controllable operating costs of the Drug Rehab Center’s operations will ensure profitability while paying the mortgage each month.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
