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1.0 Executive Summary
The purpose of this business plan is to raise $1 million for the development of a dialysis center that will be based in San Francisco, California. Dialysis Center, LLC (“the Company”) was founded by Michael Smith. The business will provide comprehensive care for people that have nephrology issues and require ongoing treatment. The Company will coordinate with numerous healthcare providers in order to have a steady patient stream.
1.1 The Services
The primary revenue center for the business will come from providing dialysis services to the general public. The Company anticipates that most patients will visit the facility one to three times per week depending on what their nephrologist prescribes. The business will generate $300 per treatment.
The Company will retain a staff nephrologist that will allow the business to earn additional revenues by providing diagnostic services on site. This will provide the business with a competitive advantage over other centers in the market.
The third section of the business plan will further describe the services offered by the Dialysis Center.
1.2 Financing
At this time, Mr. Doe is seeking to raise $1 million via equity capital in order to develop the operations of the business. The terms of this funding are to be determined during negotiation. The funds will be used for the following:
• Development of the Dialysis Center location in San Francisco
• Dialysis equipment acquisitions.
• Working capital
• Initial marketing
The second section of the business plan will further document the usage of funds. Moving forward, the Company may acquire working capital lines of credit in order to further fuel the growth of the business. Given the highly secure nature of the Company’s revenue streams, the business would have no issues acquiring additional capital on an as needed basis.
1.3 Mission Statement
The Dialysis Center’s mission is to provide cost-effective dialysis and nephrology services to the residents of San Francisco.
1.4 Management Team
The Company was founded by Michael Smith. He is a highly experienced healthcare services entrepreneur that will be able to quickly bring the operations of the Dialysis Center to substantial profitability.
1.5 Sales Forecasts
1.6 Expansion Plan
Over the next three years, the Company will solidify numerous relationships with nephrologists, hospitals, and medical centers that will provide ongoing referrals. The Company may also develop at-home services, which would substantially boost the valuation of the business.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Dialysis Center, LLC.
2.2 Required Funds
At this time, $1,000,000 is sought in order to launch the revenue generating operations of Dialysis Center.
2.3 Investor Equity
This will be further discussed during negotiation.
2.4 Management Equity
This is to be determined.
2.5 Exit Strategy
Healthcare businesses, including dialysis centers, are highly valuable businesses given that they are able to remain profitable at all times. The Company could be sold for up to four times earnings after the third year of operations. Mr. Smith has no plans to divest this business for at least five years. A formal valuation would be conducted prior to the sale.
3.0 Dialysis Services
As stated in the executive summary, the Company will provide comprehensive dialysis services for the San Francisco general public. At any given time, it is expected that 10 people will use the facility. These sessions are expected to last three to five hours depending on the needs of the patient. The Company will charge approximately $300 per session. The Company will directly employ staff nurses that will monitor the patient’s progress as they go through the treatment.
The Company’s staff nephrologists will provide diagnostic and treatment services on site as well. The Dialysis Center will generate $600,000 per year from these services.
Moving forward, the Company may integrate at-home services. These sessions are typically shorter. Given the wealth of the San Francisco market, Management sees a substantial opportunity to develop this as a secondary revenue stream.
In regards to reimbursement, Management anticipates that 85% of its revenues will come from insurance while 15% will come from patient co-pays.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will focus on the dialysis center industry, the current economic climate, the competitive issues that the Company will face moving forward.
In regards to the economy, the United State is doing quite well. Inflation rates have begun to decline, and it is fully expected that interest rates will start to decline. The Federal Reserve has enacted outstanding policies that have helped decrease inflation without causing other economic issues.
However, any issues with the economy will not impact the Company’s ability to generate revenue. The demand among patients for nephrology care and dialysis services remains strong in any economic climate. The business will have controllable operating costs related to its dialysis operations, which will further contribute to the economic stability of this business.
4.2 Industry Analysis
Within the United States, there are 400 companies that provide dialysis services to the general public. Each year, these entities produce in excess of $29 billion. One of the trends within this industry is to offer at home dialysis services since this can be highly lucrative. At home treatments can cost as much as $45,000 per year.
The growth of this industry will remain strong over the next ten years. As more people from the Baby Boomer generation reach age 70 and over, the need for comprehensive dialysis and nephrology will increase. As such, the Company will be able to thrive once operations are established.
4.3 Customer Profile
It is difficult to determine the average patient of Dialysis Center, LLC as any person with kidney issues will need the services offered by the business. It is expected that most patients will be over the age of 50.
In this section of the analysis, you should focus on the size of your target market, the median household income, the median house value, and the percentage of people that are considered to be senior citizens. If you intend to do at-home dialysis services as well, you should determine the market’s ability to have patients pay $25,000 to $50,000 per year for this type of treatment.
4.4 Competition
Given the highly profitable nature of dialysis centers, within any major city there are a number of providers that render this service. In the competitive analysis section of the business plan, you should focus on the number of similar providers in your market. Additionally, you will need to determine their pricing.
In this business plan, one of the primary ways that we have shown a differentiating factor is by having a staff nephrologist provide services in tandem with the dialysis services offered. You can also expand on any other competitive advantages that your dialysis center will have over competitors.
5.0 Marketing Plan
In order to ensure a substantial amount of brand name visibility for Dialysis Center, LLC – the business will implement a number of marketing strategies that will attract the attention of nephrologist as well as other specialized physicians.
5.1 Marketing Objectives
• Maintain an outreach program that will create significant awareness for the Dialysis Center.
• Develop a mobile device friendly and search engine optimized website for the business.
• Develop referral relationships with patients that use the Company’s services.
5.2 Marketing Strategies
The Company will use a number of marketing strategies that will ensure that Dialysis Center, LLC will have an influx of patients as soon as the Company launches operations. Foremost, the business will send a substantial amount of sales literature to nephrologists that operate within the greater San Francisco market area. This will allow for immediate referrals among their patients to the center.
The Company will hire a professional web development firm to create a state-of-the-art website that will allow patients to understand the scope of dialysis and nephrology services that can be acquired at the location. This website will be appropriate for mobile devices. The business will also hire a regional SEO firm in order to ensure that the business can be discovered when relevant searches are conducted for dialysis centers.
To further increase traffic to the website, the Company will use pay per click marketing. This will immediately allow the Company’s website to be seen on the first page of search results when individuals complete queries for dialysis centers in San Francisco. As the business establishes its patient base, these expenditures will be scaled back.
Management will also enroll the Company as a member among professional organizations that focus on dialysis services and nephrology. This will further contribute to increased visibility among nephrologists, hospital administrators, and other potential partners.
5.3 Pricing
The Company will charge an average fee of $300 per dialysis session. In the event that the Company offers in-home services, the business will generate substantially higher fees (with revenue reach $45,000 per year for these services).
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
• The Company will acquire $1,000,000 to launch operations.
• The business’ revenue growth rate will be 17% during the first three years of operation.
• Payables will be settled monthly.
7.2 Sensitivity Analysis
Dialysis centers are wholly immune from negative changes in the economy. This is due to the fact that they provide a life critical service for their patients. Additionally, the business will have highly controlled operating costs, which will further ensure that Dialysis Center, LLC is able to remain profitable at all times. The majority of the Company’s revenue will come from insurance reimbursement.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.6 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
