What is a business plan?
Naturally, you may be wondering what a business plan is, and what it entails. Fortunately, we’re here to help you understand the ins and outs concerning effective business plans for healthcare, and what is required to help you hit the ground running. After all, coming from a health background, you may not have an in-depth understanding of what a business plan exactly is, and so we want to make sure that you become acquainted with the basics.
A business plan should cover the four major areas of your practice, which include sales, expenses, human resources, and financing. Doing so allows you to establish clear business goals, as well as provides a baseline for you to monitor and measure any progress. It’s a great way of holding you accountable, and it also acts as a reference point for when you may lose focus. Business plans are an essential part of your toolkit for learning, as you manage expectations and work towards overarching goals.
Why do you need a business plan?
At the end of the day, you are a business, and you need to be working towards specific goals that are achievable and measurable in order to generate a profit. Failure to do this can result in facing problems that incur large time and money costs, which could have been prevented and avoided with an effective business plan. It ensures sustainability and can help you make informed decisions regarding your operations, so you don’t waste energy and resources on options that are not viable. Sometimes, simply using business plans is a great way to articulate and specify goals, which is particularly important when working with other staff, as it makes sure that everyone is on the same page. When it comes to business stakeholders, transparent business goals are also highly significant.
Business plan formats
Business plans can vary in their formats, which means there’s no one right approach. You need to carefully evaluate the needs that are specific to your business, and apply them when thinking of your business. For instance, there’s the most common business plan, the ‘traditional’ plan, which can take a significant amount of time to write and can be over ten pages long. Typically venture capitalist firms and lenders use this plan, however, there is also the ‘lean’ business plan. This is a more condensed version that follows the exact same format, but instead, it only includes the most important information or the highlights. This is quite useful for new hires or for when current plans need to be modified for specific markets. The final plan, which is unlikely to be used for private healthcare businesses, is the ‘non-profit’ plan. Non-profit plans are for entities that are public or offer a social benefit, which emphasizes the impact the business will make. As you can see, there’s a range of approaches you could take when it comes to your plan, and each serves different purposes, so you must evaluate what’s best for you.
Key elements of a business plan for a private practice
To help you create the best business plan possible, we’ve outlined the requirements that you must incorporate. Implementing these healthcare tools and templates will greatly elevate the quality of your business, and ensure you cover all the essentials.
Mission and vision
One of the most important things to consider is to communicate the purpose of your healthcare practice. Not only is this vital for your understanding, but it’s also significant for business stakeholders, including any staff you may have. You should clarify your business pathway with all relevant information that others require. The mission and vision should highlight the reasons why you started practicing, how your practice sets you apart in treating patients, who you help, any specific concerns you can treat, as well as personal values. Remember to keep it to a few sentences!
Business description
You also need a business description that outlines a general overview of your business, such as your specialty, the healthcare approaches you use, the populations you work with, as well as any special skills that can set your business apart from competitors. You could also include how many current clients you see, as well as how many are seen in a week, and if you have any current staff members. Including all this information is beneficial for when you may seek loans, and being able to supply information about you personally is always a plus.
Research
It’s important that when you curate a business plan, you research fellow healthcare practitioners in your area of expertise. Taking the time to evaluate the market can help you make informed decisions when it comes to your treatment, offices, resources, and technology. Sometimes, it can reveal specific location needs, which helps identify where you may need to improve regarding skill development. Researching can ensure that you’re profitable with the decisions you make.
Financial plan
Creating a financial plan is an integral component of an overall business plan, as it helps you understand your cash flows and where you need to invest or reduce costs. In a financial plan, you need to include office rent, utilities, and products, as well as staff salaries, and software or technology fees. Once you’ve calculated your expenses, you can work out the minimum income needed to stay afloat and grow your business.
Marketing
You must attract and retain clients, and the best way to market your therapy business is to implement effective strategies. This can include building a social media presence with a good website, joining directories, advertising in flyers, newspapers, and radio stations, as well as creating blog posts to improve search engine optimization. The possibilities are endless!
Sample business plan: Therapy practice
To illustrate our previous points, we’ve included a therapy business plan for you to replicate within your own practice, and help you get started. Below is an example of a therapy clinic, and the following information provides a solid checklist for counselling practices, but can be generalized to any healthcare practice.
Practice Name: Smith Therapy
Website: www.smiththerapy.com
Date: April 2022
Mission:
Helping clients who experience depression, with a focus on young adults and cognitive behavioral therapy (CBT).
My Business Goals:
- Develop my knowledge of depression, and Major Depressive Disorder (MDD) to an advanced level
- Develop a clinical guide that can be published and purchased online
Income Goals:
- Client sessions - 6 clients per day x 4 days x 50 weeks x $110 per session = $132,000
- Clinical guide - $15 x 150 sales per year = $2,250
Total income year: $134,250
Expenses:
- Rent $3000
- Bank fees $200
- Legal $300
- Internet $500
- Insurance $400
- Repairs $200
- Advertising $1000
- Wages TBA
Total expenses: $5,600
Profit = $134,250 - 5,600 = $128,650 (allocated to retirement, wages, and taxes)
Also include any set-up costs such as laptops, websites, and other resources
Strengths:
- Writing content
- Administrative skills
- Research experience
Weaknesses:
- Marketing - Not my area of specialty, so need a free online course to understand the best methods
- Sole practitioner - Need to investigate income insurance
- Easily distracted - Need to manage goals and time management skills
Opportunities:
- No one else in my location offers depression services to young adults
- I can work with high schools in my area to advertise
Threats:
- Cash flow - Needs more research into a financial plan with consultants due to starting out
Marketing Plan:
- Contact and network with schools
- Facebook advertising
Take home message
Having a robust business plan is an integral component of every successful healthcare clinic, so you must spend time working on each section to ensure they’re up to scratch. We understand it can be overwhelming to start, as there are a lot of areas to consider, however, we hope you now have a more solidified understanding of the essentials. Business plans don’t have to be difficult, and when curated well, you’re sure to set yourself up for success, as they allow you to prioritize patient health and maintain a steady profit. With our business plan template, you will be able to plan the ins and outs of your business and elevate the likelihood of achieving your professional goals. You can stay on track, and work towards improving clinical outcomes and the overall flourishing of your business!
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