Healthcare Business Plan Template
Written by Dave Lavinsky
There are several types of healthcare businesses, from family medical practices to urgent care centers to home health care agencies. Regardless of the type of healthcare business you have, a business plan will keep you on track and help you grow your healthcare business in an organized way. In addition, if you plan to seek funding, investors and lenders will use your business plan to determine the level of risk.
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Below is an effective business plan outline you should use to create a business plan for your healthcare company. Also, here are links to several healthcare business plan templates:
- Assisted Living Business Plan
- Counseling Private Practice Business Plan Template
- Dental Business Plan
- Home Health Care Business Plan
- Medical Practice Business Plan Template
- Medical Spa Business Plan Template
- Non Medical Home Care Business Plan Template
- Nursing Home Business Plan Template
- Pharmacy Business Plan
- Urgent Care Business Plan
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How to Write a Business Plan for a Healthcare Practice
If you want to start a healthcare practice or expand your current business, you need a successful business plan. The guide below details the necessary information for how to write each of the key components of a healthcare business plan.
Executive Summary
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your executive summary is to quickly engage the reader. Explain to them the kind of healthcare company you are running and the status. For example, are you a startup, do you have a healthcare business that you would like to grow, or are you operating a chain of healthcare businesses?
Next, provide an overview of each of the subsequent sections of your plan.
- Give a brief overview of the healthcare industry.
- Discuss the type of healthcare business you are operating.
- Detail your direct competitors. Give an overview of your target customers.
- Provide a snapshot of your marketing strategies. Identify the key members of your team.
- Offer an overview of your financial plan.
Company Analysis
In your company overview, you will detail the type of healthcare business you are operating.
For example, you might specialize in one of the following types of healthcare businesses:
- Primary care clinic: A clinic that provides basic medical care and treatment to patients of all ages.
- Specialty clinic: A clinic that focuses on providing specialized medical care for patients with specific conditions or diseases.
- Urgent care clinic: A clinic that provides immediate medical attention for non-life-threatening illnesses and injuries.
- Home health care agency: An agency that provides skilled nursing care, therapy services, and other medical services to patients in their homes.
- Hospice care provider: A provider that offers palliative care and support services to terminally ill patients and their families.
In addition to explaining the type of healthcare business you will operate, the company overview needs to provide background on the business.
Include answers to questions such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of patients treated, the amount of revenue received during the past six months, opening a second clinic location, etc.
- Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry or market analysis, you need to provide an overview of the healthcare industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the industry educates you. It helps you understand the market projections in which you are operating.
Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.
The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section:
- How big is the healthcare industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential target market for your healthcare practice? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Customer Analysis
The customer analysis section of your healthcare business plan should provide a detailed overview of the individuals or organizations you intend to serve. This information will help guide your marketing strategies, service offerings, and overall business operations.
Here are some examples of customer segments that healthcare businesses often target:
- Patients: Individuals seeking medical care, including primary care, specialty treatments, or preventive services.
- Payers: Insurance companies, government agencies (e.g., Medicare, Medicaid), and employers that cover healthcare costs.
- Healthcare Providers: Physicians, nurses, pharmacists, and other medical professionals who may need specialized services or products.
- Health Systems: Hospitals, clinics, and other healthcare organizations that require supplies, equipment, or consulting services.
- Government Agencies: Public health departments, regulatory bodies, and research institutions involved in healthcare policy and initiatives.
By thoroughly understanding your target customers, you can tailor your marketing efforts, product offerings, and service delivery to meet their unique needs and expectations. This will help you build strong relationships and drive business growth in the competitive healthcare industry.
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Competitive Analysis
Your competitive analysis should identify the direct and indirect competitors your business faces and then focus on the latter.
In the healthcare industry, direct competitors typically fall into the following categories:
- Similar Healthcare Practices: These are businesses that offer the same or similar medical services and target the same patient population. Examples include private medical practices, clinics, and hospitals.
- Health Insurance Providers: While not directly providing healthcare services, insurance companies can influence patient choices and competition within the healthcare market.
For each direct competitor, you should gather information on:
- Patient Demographics: Who do they serve (age, insurance status, geographic location)?
- Healthcare Services: What specific services do they offer (primary care, specialty care, diagnostic testing)?
- Pricing Strategy: How do they determine fees and insurance reimbursements?
- Unique Selling Points: What sets them apart from others (specialization, location, technology)?
- Weaknesses: Where do they fall short in terms of patient satisfaction, service quality, or efficiency?
With regard to the last two questions, think about your answers from the customers’ perspective. And, don’t be afraid to ask your competitors’ customers what they like most and least about them.
Indirect competitors in the healthcare industry include:
- Retail Clinics: Convenient, walk-in clinics often located in pharmacies or big-box stores.
- Telehealth Services: Remote medical consultations and treatment via video or phone.
- Home Health Agencies: Providing care in patients’ homes.
- Health and Wellness Centers: Offering preventive care, fitness programs, and nutrition counseling.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Do you offer unique or specialized treatments or procedures?
- How can you provide superior patient care, convenience, and satisfaction?
- Are you leveraging advanced technology to improve efficiency and outcomes?
- Do you offer flexible appointment times, convenient locations, or telehealth options?
- Can you provide quality care at competitive prices or with affordable payment plans?
Think about ways you will outperform your competition and document them in this section of your plan.
Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a healthcare business plan, your marketing strategy should include the following:
Product: In the product section, you should reiterate the type of healthcare practice that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, if you’re opening a primary care clinic, you might offer a range of services such as physical exams, vaccinations, treatment of common illnesses, and preventive care.
Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the services you offer and their prices.
Place: Place refers to the site of your recruiting company. Document where your company is situated and mention how the site will impact your success. For example, Is your clinic located in a convenient area with easy access to public transportation? Discuss how your site might be the ideal location for your customers.
Promotions: The final part of your recruiting company marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:
- Advertise in local papers, radio stations and/or magazines
- Reach out to human resources executives
- Distribute direct mail pieces to your target audience
- Engage in email marketing
- Advertise on social media platforms
- Improve the SEO (search engine optimization) with target keywords on your website
Operations Plan
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows. Everyday short-term processes include all of the tasks involved in running your healthcare practice, including:
- Patient check-in and check-out: Efficiently managing patient arrivals and departures.
- Appointment scheduling: Coordinating patient appointments to minimize wait times.
- Medical record management: Maintaining accurate and up-to-date patient records.
- Insurance verification and billing: Ensuring accurate insurance coverage and billing procedures.
- Medication management: Prescribing, dispensing, and tracking medications.
- Clinical procedures: Performing routine medical examinations, screenings, and treatments.
- Staff training and development: Providing ongoing education and support to employees.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to:
- Expand your patient base: Increase the number of patients served by the practice.
- Implement new technologies: Adopt advanced medical equipment and software.
- Obtain accreditation: Achieve recognition from relevant accrediting bodies.
- Open additional locations: Expand the practice to serve a wider geographic area.
- Develop new services: Offer specialized medical services or treatments.
Management Team
To demonstrate your healthcare practice’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in managing healthcare practices. If so, highlight this experience and expertise. But, also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a healthcare business.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.
Income Statement
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, what is the expected number of patients per month/year? What is the average revenue generated per patient visit? What are the expected reimbursement rates from various insurance providers? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets
Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your healthcare business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement
Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit, but run out of money and go bankrupt.
When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a healthcare practice:
- Personnel: Salaries and wages for physicians, nurses, administrative staff, and support staff
- Rent or mortgage: Costs associated with office space or facilities
- Insurance: Professional liability insurance, property insurance, and other insurance coverage
- Medical supplies and equipment: Costs of medical supplies, medications, and equipment
- Utilities: Electricity, water, gas, and other utilities
- Marketing and advertising: Costs associated with promoting the healthcare business
- Professional fees: Fees for legal services, accounting services, and consulting services
- Regulatory compliance: Costs associated with meeting regulatory requirements (e.g., HIPAA, CLIA)
- Technology: Costs of computer systems, software, and IT support
- Office expenses: Costs of office supplies, printing, and other administrative expenses
Attach your full financial projections in the appendix of your plan, along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or letters of support from community leaders or potential patients.
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