1.0 Executive Summary
The purpose of this business plan is to showcase the ongoing development and expansion of a specialized medical laboratory that will focus on DNA sample testing. DNA Testing Lab, LLC (“the Company”) was founded by Taylor Morrison. At this time, the Company is seeking $50,000 from an investor and $250,000 from a lending institution to commence operations. The business will provide several forms of DNA analysis for the general public, medical entities, and law enforcement agencies. The business is based in Las Vegas, Nevada.
1.1 The Services
The business will provide individuals with the ability to have their DNA sequenced. A major component of these operations will consist of paternity testing services. The business will work with family attorneys in the Las Vegas area in order to receive referrals when litigation of this type of matter is occurring. The business will charge a fee of $500 for these services.
The business will also partner with medical entities (including hospitals) and law enforcement agencies that outsource their DNA testing needs. Once these ongoing relationships are solidified, the business will generate highly predictable streams of revenue from these ongoing operations.
The third section of the business plan will further document the services provided by DNA Testing Lab, LLC.
1.2 Financing
As discussed above, DNA Testing Lab will require a private investment of $50,000 and a loan of $250,000. The terms of the equity portion of the capital will be discussed during negotiation. This business plan assumes that the Company will receive a 10 year loan carrying an 8% interest rate on the debt capital. The funds will be primarily used for the following:
• Medical laboratory equipment
• Laboratory development in Las Vegas
• Working capital
• Initial marketing
Moving forward, DNA Testing Lab could easily acquire ongoing rounds of capital for expansion given the highly predictable income generated from ongoing DNA testing services. This document assumes that the Company will expand its operations using the retained earnings of the business.
1.3 Mission Statement
DNA Testing Lab’s mission is to provide comprehensive DNA testing services for the general public, medical firms, attorneys, and law enforcement agencies within Las Vegas.
1.4 Management Team
Taylor Morrison is a highly skilled scientist that has extensive experience conducting DNA services. He will be able to aggressively expand the operations of the business over the first three years.
1.5 Sales Forecasts
1.6 Expansion Plan
The Company will continually expand its relationships with hospitals, physicians, and attorneys within the greater Las Vegas market area. The business will also continually hire new technicians that can process a greater number of DNA samples on a daily basis in order to boost billings.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
DNA Testing Lab, LLC. The business is registered as a limited liability company in the State of Nevada.
2.2 Required Funds
The aggregate of the $300,000 funding will be used as follows:
2.3 Management and Investor Equity
This will be further discussed during negotiation.
2.4 Exit Strategy
As DNA testing laboratories generate highly predictable revenues, these companies are highly valuable in the private market. The Company could be sold for up to five times earnings by the fifth year of operation. Management has no long term plans to divest the business as he intends to aggressively expand the Company over a substantial of time.
3.0 Services
The Company will offer a wide range of testing capabilities specific to DNA samples. The business will have walk-in hours among people that want to have paternity testing completed. The business’ website will have online booking functionality so that people can make appointments for services as well.
In addition to paternity testing, the business will also offer the following types of DNA sequencing:
- Autosomal DNA Testing
- Y-DNA Testing
- Mitochondial DNA Testing
A major aspect of the Company’s growth will come from its partnership with medical entities and law firms. Given the wide applicability of DNA testing in today’s world, Management sees a substantial opportunity to create highly predictable streams of revenue through these ongoing relationships.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
Currently, the economy is doing very well. Interest rates as well as the rate of inflation are declining. The monetary policies implemented by the US Federal Reserve as well as global central banks have contributed to a proper correction in the economy. The economic outlook is positive for the foreseeable future.
It should be noted that any issues with the economy will not impact the Company’s ability to generate revenue. The demand for DNA testing for a wide range of reasons and applications remains strong at all times. The high gross margins generated from each test will further ensure that the business is able to remain profitable in any economic climate.
4.2 Industry Analysis
There are currently 2,500 businesses that are actively involved with providing laboratory testing services specific for medical samples including DNA. These businesses aggregately generate $8 billion per annum of revenue.
The growth of this industry is expected to remain strong in the coming years. Medical technologies are now allowing for people to have an understanding of potential health issues that may result of hereditary illness. Additionally, the business will be able to partner with law firms and law enforcement agencies that require ongoing testing of DNA samples.
4.3 Customer Profile
DNA Testing Lab, LLC will provide its services to a wide range of individuals (seeking paternity testing), medical entities, law firms, and law enforcement agencies throughout Las Vegas and Nevada. Among individuals that will use the Company’s services, the following profile is noted:
• Household income of $50,000 to $100,000
• Is seeking paternity testing
• Will spend $500 on their test
In regards to medical entities and law related entities, any firm that works in a medical, legal, or law enforcement capacity can become a client of the firm.
4.4 Competition
The Company will face ongoing competition from regional, state, and national level firms that also provide DNA testing. Most importantly, the Company will have highly controllable operating costs, which will ensure that the business can remain pricing competitive at all times. The Company’s ability to offer onsite paternity testing will also be a major differentiating factor for the business as well as its ability to offer several different types of DNA testing services.
5.0 Marketing Plan
The Company will use numerous forms of marketing to promote ongoing contracts among medical entities, law firms, and law enforcement agencies to use the DNA testing services offered. Most importantly, the Company will use direct outreach programs that will ensure that the business is able to foster these ongoing relationships.
5.1 Marketing Objectives
• Conduct direct outreach programs with law enforcement agencies and other government agencies that need ongoing DNA testing services.
• Maintain referral relationships with law firms and hospitals.
• Maintain a moderate regional presence among individuals that need a paternity test.
5.2 Marketing Strategies
DNA Testing Lab will engage a number of marketing strategies that will ensure that the business receives ongoing orders for tests throughout the Las Vegas market. Foremost, the Company’s sales staff will be tasked with creating ongoing relationships with hospitals, medial practices, law firms, sheriff’s departments, and other law enforcement agencies in order to receive contracts to provide these services on an ongoing basis. Once these arrangements are solidified, the business will only need to maintain a modest market presence in order to further the operations of the business.
The Company will maintain an expansive online presence that will feature functionality where individuals can book an appointment for a DNA test to be completed. This website will undergo search engine optimization so that when searches for this type of testing is conducted for the Las Vegas market – the business will frequently appear in the search results. The business will also maintain a presence on Facebook, Instagram, and LinkedIn. Specific for LinkedIn, the business will use targeted advertisements among people that are involved in the healthcare, legal, or law enforcement professions.
To a more modest extent, the business will distribute advertisements among regional professional publications as well as lifestyle publications in the Las Vegas market.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• DNA Testing Lab will acquire $250,000 (via a loan) and $50,000 (via an investment) to commence operations.
• The business will generate highly predictable income from its testing services.
7.2 Sensitivity Analysis
The Company’s revenues are not sensitive to negative changes in the economy. This is due to the fact that people, companies, and government agencies will continue to need comprehensive DNA testing for a number of applications. The business will have highly controllable operating costs, which will ensure that the business is able to remain profitable and pricing competitive.
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
