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1.0 Executive Summary
The purpose of this business plan is to showcase the development and growth of a dermatology practice based in Chicago, Illinois. Dermatology Practice, LLC (“the Company”) was founded by Jill Stevens, MD. The practice will operate in two capacities. First, Dr. Stevens will render the full scope of dermatology care specific for medical ailments. Second, the business will provide cosmetic dermatology including Botox and related procedures. At this time, the Company is seeking $200,000 via an SBA loan to commence operations.
1.1 The Services
The primary revenue center for the Company will come from providing dermatological treatments for people that have skin issues and diseases. The business will focus heavily on providing preventative treatments, especially as it relates to skin cancer. The business will accept all forms of insurance (including from publicly funded healthcare systems) and patient co-pays.
A major profit driver of the practice will come from specialized cosmetic services. These services will include injections as well as specialized services such as laser removal of tattoos.
Chapter three of this document will outline the services offered by Dr. Stevens and her staff.
1.2 Financing
In order to launch the operations of the Dermatology Practice, a capital infusion of $200,000 is needed. The funds will be primarily used for:
- Medical equipment acquisitions
- Medical office development in Chicago
- General FF&E
- Working capital
Given the immense economic stability of dermatology practices, the Company could easily secure additional funding for growth as needed. The business, in the event that is economically viable to do so, could acquire a business expansion loan especially if the Company acquires an existing dermatologist’s practice.
1.3 Mission Statement
Dr. Stevens’ mission is to provide comprehensive dermatological care and surgery that improves the lives of patients.
1.4 Management Team
Jill Stevens, MD is a highly trained dermatologist that has eight years of professional experience. She is board certified, and is fully licensed in the State of Illinois to render medical services. She will be able to develop a substantial client base in this market.
1.5 Sales Forecasts
1.6 Expansion Plan
Over the next three years, the Company will continue to hire staff dermatologists as well as physicians’ assistants that are properly trained to provide dermatological treatment. As stated above, the Company may acquire an existing practice within Chicago that could be integrated into the business’ operations.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Dermatology Practice, LLC.
2.2 Required Funds
Jill Stevens, MD will acquire $200,000 to develop the practice in Chicago.
2.3 Investor Equity
No outside equity is required at this time to establish the Dermatology Practice.
2.4 Management Equity
As a matter of law, Jill Stevens MD will retain a 100% ownership interest unless a partner dermatologist is hired in the future.
2.5 Exit Strategy
Should Dr. Stevens decide to retire, she will coordinate with a partner or staff dermatologist in order to transition the business to their ownership. It is expected that the Dermatology Practice would have a sales price equal to approximately the previous year’s revenue or about three times the previous year’s profits.
3.0 Dermatological Medical Services
The Company will provide comprehensive care for a wide range of medical disorders affecting the skin. Dr. Stevens and staff physicians’ assistants will directly render all services. Common procedures that services that will be rendered at the practice include:
- Acne treatment
- Biopsies
- Cryosurgery
- Laser Surgeries including tattoo removal
- Skin cancer screening and removal
- Wart removal
For these services, the Company will generate most of its revenues from insurance reimbursement and copays. Cosmetic procedures that that practice will offer will include chemical peels, injections, phototherapy, laser treatments, and other services that create a more youthful look while contributing to healthier skin. These treatments and services will be exclusively paid for by patients as they are not covered by insurance.
As will be discussed in the fifth section of this document, the Company will offer a number of community skin cancer treatments free of charge once per month. This will drastically boost the visibility of the practice within the Chicago metropolitan area.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
Dermatology practices are always able to remain profitable in any economic climate. This is due to the fact that people will continue to have skin afflictions that need to be treated by a qualified dermatologist. Most importantly, these businesses are able to receive a substantial portion of their aggregate revenues from insurance reimbursement. This allows patients to properly afford their medical care.
As it relates to the economy in general, the state of this matter is reasonably strong. Interest rates are starting to decline, and real wages (as compared to inflation) are increasing. The overall outlook for the economy is positive. As a result of the immense demand for both clinical and cosmetic dermatology in Chicago, the business will be able to produce a positive cash flow.
4.2 Industry Analysis
Within the United States, there are 11,000 individuals that are board certified dermatologists. The vast majority of these individuals work in a solo practitioner capacity or within the group practice setting. Each year, these entities generate in excess of $7 billion. Including physicians, the industry employs approximately 35,000 people.
The ongoing growth of dermatology practices is expected to remain strong given that people have greater access to capital and want to have specialized cosmetic procedures completed on a regular basis. Additionally, as people become older – their risk of having skin cancer substantially increases. As such, these businesses will continue to enjoy substantial industry growth over the next ten years.
4.3 Customer Profile
Any person that lives in Chicago and has a skin condition is a potential patient of the Dermatology Practice. Acne, skin cancer, eczema, rashes, and related skin issues are prevalent among people of all ages. In regards to the Company’s cosmetic services, the following profile will be used in marketing operations:
- Annual household income of $75,000+
- Will spend $1,000 to $3,000 per cosmetic procedure
- Predominantly female (80% of the expected patient base for these services.
In the customer profile section of the business plan, you will need to showcase the market size, household income, and demand for dermatology services. Of special importance to this section is to determine the number of people at risk for skin cancer. This will help estimate the anticipated patient flow for your dermatology practice.
4.4 Competition
Dermatology practices rarely face complicated competitive issues given that the demand for these types of services often exceeds the number of providers in any given market. These practices often schedule procedures and visits months in advance. The primary discussions regarding competition that should be addressed in your business plan will focus on cosmetic-focused services. Here, you will need to discuss why the cosmetic dermatology services your practice is offering are better than those of other providers. You can also discuss pricing advantages that you may have when providing this type of service.
5.0 Marketing Plan
The ongoing marketing required by the Dermatology Practice will be moderate throughout the life of the business. As these services are in substantial demand (especially in wealthy market areas like Chicago), informing the general public about the practice and its services will drive a substantial patient flow from the onset of operations.
5.1 Marketing Objectives
- Host free clinics that provide skin care screening to the Chiago general public.
- Advertise cosmetic procedures and the Dermatology Practice among lifestyle publications geared towards the targeted demographic.
- Maintain a presence online that includes a website, a presence on social media, and ongoing online focused public relations campaigns.
5.2 Marketing Strategies
In regards to the Company’s online marketing operations, the business will work with a highly experienced web development firm that specializes in working with healthcare providers. The platform will showcase the entire suite of dermatological services available (both clinical and cosmetic). The website will be easily viewable on computer screens, tablets, and mobile devices. The business will also engage in a moderate search engine optimization strategy that will be conduced by a Chicago based firm. As part of these operations, the Company’s retained SEO firm will engage in online public relations strategies that will have articles about the practice created. These articles will then link back to the practice’s website. Overtime, this will increase the domain authority (DA) of the business, which will for organic traffic to come to the website.
The Dermatology Practice will also engage in aggressive use of social media. As many people within the targeted demographics use popular platforms to find businesses, the Company sees a substantial opportunity to develop and expand its client base through this type of marketing. The Company will use targeted advertisements specific for the Chicago metropolitan area.
Once per month, the Company will host free cancer screenings so that people of all walks of life can ensure that they do not have skin cancer. These events will be held on the weekend at the Dermatology Practice’s office. This will create immense brand name awareness for the practice. The Company will promote these events on its website as well as all social media pages.
Dr. Stevens will also participate in regional medical gatherings. Given her extensive experience as a practicing dermatologist, she will be able to life her professional profile and that of the business by providing keynote addresses and participating in Q&A sessions for the community.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
The following points are noted in regards to the financial proformas of the Dermatology Practice:
- Dr. Stevens will invest $50,000 towards the development of the practice.
- A $20,0000 SBA loan will be used to launch operations.
- Cosmetic procedures will account for 30% of revenues.
7.2 Sensitivity Analysis
Even in a recession, the Dermatology Practice will be able to generate revenues, profits, and a positive cash flow. The demand for these services is not subject to economic change, especially as it relates to treating serious conditions such as skin cancer. Additionally, the cosmetic focused operations of the business will produce immense profits on a monthly basis.
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
