BUSINESS PLAN
FOR THE ESTABLISHMENT AND OPERATION OF A
HOME HEALTHCARE AGENCY
IN KAMPALA, UGANDA BY MEDICAL PARTNERS HOME CARE MEDICAL PARTNERS HOME CARE LIMITED PLOT 2-4, BUWATE ROAD, KUNGU-NAJJERA, P.O. BOX 33975, KAMPALA, UGANDA.
Contact Phones: +256-794-597 753
[email protected] E‐Mail:
[email protected]
DECEMBER 2017
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document A. TABLE OF CONTENTS
S/NO.
DESCRIPTION
0.0
1.0
OVERVIEW
1.1 1.2 1.3 1.4 1.5
EXECUTIVE SUMMARY
PAGE 1
3
Objectives Keys to Success Our Services Our Vision Statement Our Mission Statement
4 6 6 6 6
COMPANY INFORMATION
8
Company Ownership Start-Up Summary Detailed Start-Up Cost Analysis Capital Generating Funding/Start-Up Capital
8 8 8 9
PRODUCTS AND SERVICES
11
Portfolio of Services SWOT Analysis
11 12
MARKET ANALYSIS
14
4.1 4.2 4.3
Market Trends Our Target Market Target Market Segment Strategy
14 14 15
4.4 4.5
Service Business Analysis Our Competitive Advantage
15 16
SALES AND MARKETING STRATEGY
18
Competitive Edge Sources of Income Sales Forecast Strategy Marketing Strategy and Sales Strategy Publicity and Advertising Strategy Our Pricing Strategy Payment Options
18 19 19 19 21 21 22
2.0
2.1 2.2 2.3 2.4 3.0
3.1 3.2 4.0
5.0
5.1 5.2 5.3 5.4 5.5 5.6 5.7
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6.0
Business Plan Corporate Document MEDICAL PARTNERS HOME CARE Business MANAGEMENT PLAN
23
6.1 6.2 6.3
Our Business Structure Roles and Respons Responsibilities ibilities Personnel Plan
23 24 26
FINANCIAL PLAN
27
Important Assumptio Assumptions ns Break-even Analysis Projected Profit and Loss Projected Cash Flow Projected Balance Sheet Business Ratios
27 27 29 30 31 32
SUSTAINABILITY AND EXPANSION STRATEGY
34
7.0
7.1 7.2 7.3 7.4 7.5 7.6 8.0
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document B. LIST OF TABLES
T/NO.
DESCRIPTION
PAGE
1
Key Project Performance Parameters
5
2
Detailed Start-Up Costs
9
3
Sales by Project Year
22
4
Personnel Plan
26
5
General Assumptio Assumptions ns
27
6
Break-Even Analysis in Project Year 5 (2022)
28
7
Pro Forma Profit and Loss (PY2 – PY4) PY4)
30
8
Pro Forma Cash Flow (PY2 – PY4)
31
9
Pro Forma Balance Sheet (PY2 – PY4) PY4)
32
10
Pro Forma Business Ratios (PY2 – PY4) PY4)
33
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document C. LIST OF FIGURES
F/NO.
DESCRIPTION DESCRIPTION
1
Projected Financial Performance Highlights
D.
PAGE
5
LIST OF FINANCIAL ANALYTICAL SCHEDULES
S/NO.
DESCRIPTION DESCRIPTION
PAGE
01:
Expanded Pro Forma Profit and Loss/Net Income Statement
35
02:
Statement Expanded Pro Forma Cash Flow Statement
36
03:
Expanded Pro Forma Balance Sheet Sheet
37
04:
Expanded Pro Forma Business Ratios
38
E.
LIST OF APPENDICES
A/NO.
DESCRIPTION
PAGE
I:
Checklist Checklist
40
II:
Uganda Map of Uganda
41
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
OVERVIEW
No doubt, the healthcare-cum-medical industry is perhaps one of the fastest growing and largest industries in the world; this is so because the wealth of any nation depends on the health of the nation. Obviously there is hardly any country where the health care industry is not handled with all seriousness. Basically, a healthcare provider is a health professional such as nurse or doctor et al or an establishment such as a hospital or a medical clinic or a healthcare center / facility that provides preventive, curative, promotional, rehabilitative or palliative healthcare / medical services in a systematic way to individuals, families or communities. While home healthcare services typically refers to a nursing visit or physician visit to a sick person at home for the purpose of assisting them with daily living cum therapy as regards their health or to provide treatment as required. These services are provided by certified home health care agencies. There market for home healthcare service providers in Uganda is growing fast as it is doing the same in most parts of the world. For instance, the World Health Organization (W.H.O) estimated that there are about 9.2 million physicians, 19.4 million nurses and midwives, 1.9 million dentists and other dentistry personnel, 2.6 million pharmacists and other pharmaceutical personnel, and over 1.3 million community health workers worldwide. This goes to show that the health care industry is indeed one of the largest segments of the workforce. Those who need the services of home healthcare services providers (nurse’s aides, personal assistance services, mental health counselors, chiropractors, home care agencies, medication management counselors, physical therapists, urban-based mobile aging workers, and rehabilitation counselors, home health caregivers or home caregivers) are not restricted to the old and the elderly but also young adults and all those who can afford the services. Generally, patients usually prefer that their physician or nurse or healthcare giver take care of them in the comfort of their homes when they can afford it especially in cases such a psychiatric cases, spine case and permanent or temporary disability et al. Over and above, the delivery of healthcare services at all level of the business value chain of the healthcare sector is the most visible part of any country’s healthcare system. When it comes to paying home healthcare service providers, the model that is adopted by the health sector usually hold sway. For instance, in Uganda, healthcare service
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
providers are either paid directly by the patient or sometimes the insurance company that covers the patient takes responsibility of the payment.
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
EXECUTIVE SUMMARY
Medical Partners Home Care Limited Home Healthcare Services is a standard and certified healthcare service provider that will be located in will be based in Kampala – Uganda and we will cover other important towns and cities in Uganda including Entebbe, Jinja, Masaka, Mbarara, Mbale, Kabale, Gulu, Lira, Fort Portal, Hoima and Arua et al (Refer to Appendix II: Map of Uganda ). We chose to operate in these
towns/cities because we know that our services will be in high demand due to the growing numbers of the aging population in these areas. Medical Partners Home Care Limited Home Healthcare Services will be created as a Ugandan-based Limited Liability Company based in Kampala, owned by its principal investors and principal operators. The initial office will be established in quality office space on Buwate Road t in Kungu, Najjera, which is in the outskirts of Kampala. By being located in Uganda’s capital Kampala, Medical Partners Home Care Limited Home Healthcare Services is within the vicinity of Uganda’s principal referral hospital at Mulago and also other key PNFP (Private-Not-For-Prof (Private-Not-For-Profit) it) hospital facilities at Mengo,
Nsambya and Rubaga, in addition to other new private hospitals within Kampala which will serve as referral bases for our agency. Medical Partners Home Care Limited Home Healthcare Services offers health care services such as preventive, curative, promotional, rehabilitative or palliative healthcare / medical services in a systematic way to individuals, families or communities. We are well trained and equipped to service the market segments that require only home-based services.
Consumers of our services will be those individuals and families in need of home health care and/or social services. These patients are usually referred by other health care professionals such as physicians, lawyers (advocates), insurance companies and health care facilities. Our agency has already developed an excellent reputation with many of these professionals, through the work of our Clinical Director, who has been providing home health care services through another agency for the past three years, and through the presentations we have made to the community via marketing tools and personal interactions. We are in the home healthcare services business to deliver excellent healthcare services to all those who will patronize our services. We will also ensure that in the line of carrying out our duty, we comply with the laws and health regulations in Kampala
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District and Uganda. Our employees are well-trained and qualified to handle the wide range of home health care services. Medical Partners Home Care Limited Home Healthcare Services will operate a 24 hours 7 days a week healthcare service; our office facility will be opened round the clock to attend to clients. We have a standard medical call center that is manned by trained health workers. Our work force is going to be well trained to operate within the framework of our organization’s corporate culture and also to meet the needs of all our customers. Medical Partners Home Care Limited Home Healthcare Services will ensure that all our patients-cum-customers are given first class treatment whenever they visit our store. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large the numbers of our customers’ base grows.
All pricing will be set according to Uganda’s health insurance regulations so pricing is not a major factor of consideration. Sales estimates project healthy revenues in the first year and modest increases through year three. Medical Partners Home Care Limited Home Healthcare Services is incorporated as a Limited Liability Company in the Republic of Uganda. The primary founder, Mr. William Ssegujja, (RN 2257948), is a is a registered nurse practitioner with a cumulative 18 years experience gained from working with 3 different home health agencies in the Commonwealth of Massachusetts, USA. The Company also includes other directors on its board who will help in the initial start-up funding of the business.
The company plans on taking on debt in the form of a six-year loan, and has no plans for additional a dditional debt as growth will be financed mainly through cash flow. Our plan includes assumptions of 100% sales on credit, and sufficient cash on-hand at startup to prevent any problems with cash flow. 1.1
Objectives
19,660 Home Health Care patients served by the end of first year (PY2). 2,180 Personal Injury Case Management Clients served by the end of first year (PY2). Respectable gross sales by the end of first year. 80% of Customer Satisfaction Surveys returned indicating satisfaction with services.
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
Table 1: Key Project Performance Parameters (US$) KPI/Year PY 2 PY 3
PY 4
PY 5
Sales Operating Profit Tax Net Profit / [Loss]
655,200 413,040 36,497 85,159
687,960 433,692 41,022 95,717
722,358 455,377 45,701 106,635
758,476 478,145 50,542 117,931
Gross Margin Operating Margin Net Margin Return on Investment Fixed Assets Turnover Debt Coverage Ratio Times Interest Earned Ratio
94.43% 31.39% 13.00% 20.28% 2.01 1.57 8.57
94.43% 31.39% 13.91% 22.79% 2.24 1.74 11.25
94.43% 31.39% 14.76% 25.39% 2.49 1.93 15.75
94.43% 31.39% 15.55% 28.08% 2.79 2.16 24.80
Break-even Point (BEP): Payback Period (Loan):
USD 336,785 at a capacity capac ity utilization of 44.40% 3.21 Years
NPV at 17%: IRR:
USD 204,452 32.87%
Figure 1: Financial Performance Highlights Sales
Gross Margin
Net Profit
800,000 700,000 600,000 500,000
$ S U 400,000
300,000 200,000 100,000 0 P Y 2 ( 2019)
PY 3 (2020)
P Y 4 ( 2021)
Year
5
PY 5 (2022)
PY 6 (2023)
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
1.2
Keys to Success
Professional quality of services offered Professional Reliability -- being available through on-call, and adequate staffing Effective collaboration with other community professionals (physicians, hospitals, and other organizations)
1.3
Our Services
Medical Partners Home Care Limited is in the business of ensuring that our patient / clients are well treated and taken care of and our services will be carried out by highly trained professional physicians, nurses, nurse’s aides, mental health counselors, chiropractors, medication management counselors, physical therapists, urban-based mobile aging workers, and rehabilitation counselors, home health caregivers and home caregivers who know what it takes to give our highly esteemed customers value for their money.
These are the home health care services that Medical Partners Home Care Limited Home Healthcare Services will be offering; Skilled Nursing Nursing Aide Social Work Occupational, Physical, Speech, and Respiratory Therapy Personal Injury Case Management Home Medication Management Personal Assistance Services
1.4
Our Vision Statement
Our vision is to become the number one choice when it comes to home healthcare service delivery in the whole of Kampala and also to be amongst the top 10 home health care service provider in Uganda within the next 10 years. 1.5
Our Mission Statement
Medical Partners Home Care Limited Home Healthcare Services is in business is to establish a first class home health care service company that will take care of both highly placed clients and lowly placed clients as long as they can afford our services. We want to become one of the leaders in the home health care services industry in Kampala, and in Uganda. 6
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
It is our goal to employ competent, caring, and well-trained individuals who are responsive to the needs of our patients, their families, and the communities we serve. Each staff member will meet the standard Uganda educational and training requirements for the services they provide. We encourage and support continued education of each service provider. In turn, our agency will provide staff with competitive compensation, an inviting work environment, and knowledgeable, trustworthy management and direction.
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
COMPANY INFORMATION
Medical Partners Home Care Limited is a new Home Health and Social Service agency in its start-up stages. Our agency will be located in the outskirts of Kampala city in Uganda and will base there to provide the following services to patients and clients from all the other other major towns and cities cities of Uganda including: including: Entebbe, Jinja, Masaka, Mbarara, Mbale, Kabale, Gulu, Lira, Fort Portal, Hoima and Arua et al: Skilled Nursing Nursing Aide Social Work Occupational, Physical, Speech, and Respiratory Therapy Personal Injury Case Management
2.1
Company Ownership
Medical Partners Home Care Limited Home Healthcare Services is a limited liability company owned and operated by Mr. William Ssegujja (RN 2257948). 2.2
Start-Up Summary
Medical Partners Home Care Limited Home Healthcare Services is in its start-up stage, and consequently there are start-up costs and funding issues to address. The Start-Up Table, below, indicates in detail those costs which include the following: BUSINESS DEVELOPMENT RENTAL EXPENSE MEDICAL EQUIPMENT MEDICAL SUPPLIES OFFICE EQUIPMENT OFFICE SUPPLIES NURSING SUPPLIES
The table also demonstrates Assets needed for start-up and addresses potential funding sources which are to include cash investments made by each Owner, as well as a sixyear 8% loan which will be needed in order to cover start-up start -up costs. 2.3
Detailed Start-Up Cost Analysis
The items listed below are the basics that Medical Partners Home Care Limited Home Healthcare Services will need when starting our home health care services business in Uganda, although costs might vary slightly; 8
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
Table 2: Detailed Start-Up Costs EXPENSE ITEM
Registration Fee
AMOUNT (USD)
750
Legal Expenses (Licenses and Permits)
1,500
Marketing Promotion Expenses
3,580
Consultant's Fees
1,500
Computer Software (Accounting Software, Payroll Software, CRM Software, Microsoft Office, QuickBooks Pro, drug interaction software, Physician Desk Reference software) Insurance (general liability, workers’ compensation and property casualty)
7,000
Office Re-modeling Costs (construction of racks and shelves)
3,400 15,000
Other Start-Up Expenses including stationery ($500) and phone and utility deposits ($2,500) Operational Costs for the first 3 months (salaries of employees, payments of bills et al)
81,200
Start-Up Inventory Costs (stocking with a wide range of products)
90,000
2,500
Storage Hardware (bins, rack, shelves)
3,720
Cost for Nurse and Drugs Supplies (Injections, Bandages, Scissors, et al)
3,000
Cost for Medical Equipment
50,750
Cost of Purchase of Ambulance and Other Vehicles
60,000
Cost of Purchase of Furniture & Gadgets (Computers, Printers, Telephone, TVs, tables and chairs et al) Cost of Launching a Website
4,000
Cost of Opening Party
7,000
Miscellaneous
700 10,000
TOTAL
345,600
We would need an estimate of US$ 420,000 to successfully set up our home health care services company in Kampala – Uganda. Please note that this amount includes the salaries of all the staff for the first month of operation. operation. 2.4
Generating Funding/Start-Up Capital
Medical Partners Home Care Limited Home Healthcare Services is a private business that is solely owned and financed by Mr. William Ssegujja. We do not intend to welcome any external business partner which is why we have decided to restrict the sourcing of the start – up capital to 3 major sources.
These are the areas Medical Partners Home Care Limited Home Healthcare Services intends to generate our start – up capital; Generate part of the start – up capital from personal savings
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
Source for soft loans from family members and friends Apply for loan from my Bank
N.B: We have been able to generate about US$ 120,000 of our personal savings and we are at the final stages of obtaining a loan facility of US$ 300,000 from our bank.
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
PRODUCTS AND SERVICES 3.1
Portfolio of Services
Medical Partners Home Care Limited Home Healthcare Services offers premier home health care that includes skilled nursing, nursing aide, social work, occupational therapy, speech therapy, and respiratory therapy and wellness services. We also
provide personal injury case management services which include assessmen a ssessment, t, planning, resource linkage, reporting and professional services (court testimony, etc.). We tailor our services to meet the needs of each one of our patients, including those with complex clinical diagnoses. Physical Therapy [PT] Our physical therapists help patients to regain their strength and balance, prevent falls, increase range of motion, and decrease pain. Through therapeutic exercise programs, patients can increase their strength, muscle function, coordination, endurance, and mobility. This is especially important after a fall, injury, or surgery. Occupational Therapy [OT] Our occupational therapists help patients to safely and independently perform activities of daily living, including cooking, bathing and dressing. Using a wide range of interventions, our therapists adapt tasks and modify the environment to enhance each patient’s ability to function in their physical and s ocial environment. They provide sensori-motor treatments for strength, endurance, range of motion, coordination and balance, as well as therapeutic activities for memory, orientation, cognitive integration and daily life skills. Speech Therapy [ST]
Our speech language pathologists design treatment plans to address communication problems, memory loss and swallowing dysfunction. These treatment plans can focus on comprehension skills for written and verbal communication as well as cognitive status, which may include memory, orientation and reasoning skills. For patients with swallowing disorders, speech language pathologists also work to address oral muscle strength and function for speaking and for safe eating and drinking. Respiratory Therapy [RT] Our respiratory therapists care for patients with breathing and cardiopulmonary disorders. Their treatment plans are designed to return each patient to his or her optimal pulmonary function while promoting an understanding of the disease process. This may include a pulmonary medication regimen and education, airway clearance 11
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
modalities, ventilator, tracheostomy and oxygen weaning protocols, lung expansion and coughing techniques, and pulmonary muscle training. 3.2
SWOT Analysis
Medical Partners Home Care Limited Home Healthcare Services has an ambition to become one of the leading home healthcare service providers in Uganda which is why we are willing to take our time to cross every ‘Ts’ and dot every ‘Is’ as it relates to our business. We want our home healthcare services company to be the number one choice of all residents of Kampala and the other major towns and cities in Uganda. We know that if we are going to achieve the goals that we have set for our business, then we must ensure that we build our business on a solid foundation. We must ensure that we follow due process in setting up the business.
Even though our Chief Medical Director (owner) has a robust experience in health management services, public health and medical research, we have still gone ahead to hire the services of business consultants that are specialized in setting up new businesses to help our organization conduct detailed SWOT analysis and to also provide professional support in helping us structure our business to indeed become a leader in the healthcare industry. This is the summary of the SWOT analysis that was conducted for Medical Partners Home Care Limited Home Healthcare Services;
Strength: Our strength lies in the fact that we have a team of well qualified professionals manning various job positions in our organization. As a matter of fact, they are some of the best hands in the business in the whole of Kampala. Our location, the business model we will be operating on, opening 24 hours daily and 7 days in a week, multiple payment options, well equipped medical call center and our excellent customer service culture will definitely count as a strong strength for us.
Weakness: Our perceived weakness lies in the point that we are just starting out and we may not have the required finance to sustain the kind of publicity that we intend giving the business and also the finance needed for the acquiring helicopter to facilitate rapid response in cases of medical emergencies emergencies..
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
Opportunities: The opportunities that are available to home healthcare services providers are unlimited considering the fact that we have a growing aging population in Uganda and we are going to position our business to make the best out of the opportunities that will be available to us in Kampala.
Threat: Just like any other business, one of the major threats that we are likely going to face is economic downturn and unfavorable government policies (low budget funding to the healthcare sector in Uganda is one of them). It is a fact that economic downturn affects purchasing power. Another threat that may likely confront us is the arrival of a new and bigger / well established home healthcare brand in same location where our outlet is located.
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
MARKET ANALYSIS 4.1
Market Trends
The health industry is indeed a thriving and dynamic industry; with the aid of technology, it is becoming easier to treat, manage and cure some ailments that before now are not easy to handle. No doubt there are many ways of providing healthcare services in this changing era since the place of delivery may be in the patient home, the community, the workplace, or in health facilities. Before now the practice for home healthcare service providers was to restrict their services only to face-to-face delivery; a practice where a home health care provider and patient saw each other physically most especially in the home of the patient. But in recent times, the trend has changed especially with the advent of improvised / modern telecommunications technology. It is now easier for home healthcare service providers to leverage on technology to take care of their patients / clients. The achieve this by communicating with their patient over the phone, video conferencing, the internet, email, text messages, and all other medium through which non-face-to-face communication can be achieved. No doubt the home healthcare industry will continue to grow and become more profitable because as Uganda’s average life expectancy keeps increasing and t he aging population keeps on expanding it is expected to drive increasing demand for this specialized service. 4.2
Our Target Market
Medical Partners Home Care Limited Home Healthcare Services is in business to
service a wide range of customers in Kampala – Uganda and other major towns/cities such as Entebbe, Jinja, Masaka, Mbarara, Mbale, Kabale, Gulu, Lira, Fort Portal, Hoima and Arua et al. We will ensure that we target self – pay customers (who do not have health insurance cover), and those who have health insurance cover. Generally, those who need home healthcare services ranges from those with the elderly people, to those non-acute cases who have just been discharged from hospital and need close medical follow-up after discharge, those who are bedridden to those who have mental / psychiatric challenges and any other ailment that the physician deems that the use of therapy, regular medical counseling and health management.
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
The fact that we are going to open our doors to a wide range of customers does not in any way stop us from abiding by the rules and regulations governing the home health care industry in Uganda. Our staff is well – trained to effectively service our customers and give them value for their monies. Our customers can be categorized into the following; Elderly people Expectant Mothers Injured Sports Men and Women Disabled / Physically Challenged People People why mental / psychiatric challenges The aged who might suffer from severe joint pains and every other age categories who falls under the conditions listed by the physician.
4.3
Target Market Segment Strategy
Because our agency specializes in home health care and community-based social services, we will focus on those market segments where we know our services are most needed. Focusing on those market segments that require only home-based services will greatly decrease overhead, since additional office space will not be required. 4.4
Service Business Analysis
Medical Partners Home Care Limited Home Healthcare Services is a combined Home Health Care and Social Service Agency serving mostly around Kampala – Uganda. Home health care and social services are typically utilized by individuals and families, with service referrals coming most often from other professionals (i.e. physicians, hospitals, advocates, etc.).
There are currently about eight other home health agencies serving the Kampala area (Bedside Nursing and Caretaking Services , Amani Domestics (U) Limited, Kawempe Home Care, Saint Jennifer Foundation, Trahas Bedside Care, Nurses on Call Services Limited, Golden Age Elderly Homes Uganda and the South-African company MediKing International), but we are unique in that we plan to offer community-based social services as well as home health care. 4.4.1 Competition and Buying Patterns 4.4.1
The key factor considered by both consumers and referring professionals when purchasing home health care is trust in the professional reputation, reliability and quality of services provided by the home health Agency. 15
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
Pricing of home health services does not usually influence consumers' choices, as most home health services are reimbursed by private insurance companies, and reimbursement rates are set by those entities. Pricing of personal injury case management services is a more important factor, as these services are paid for as negotiated on a case-by-case basis at an hourly rate. When pricing personal injury case management services, we will explain to the client that we estimate the total number of hours needed to complete services liberally, rather than bidding low and then exceeding the anticipated total bid price for services. Consumers of both home health care services and personal injury case management services rarely compare service providers directly. Usually they follow word-of-mouth recommendations,, especially when those recommendations come from their physicians. recommendations Perhaps the most important element for assessing competition in the Home Health and Social Service fields is how to persuade other professionals to repeatedly refer their clients to our agency for services. As our agency demonstrates outstanding patient care, current and pertinent qualification of service providers, and professional organization and business management, we believe that we will be able to capture the majority of the home health care and personal injury case management market in our designated region. 4.5
Our Competitive Advantage
Aside from the competitions that exist amongst various home health care service providers, they also compete against other healthcare services providers such as hospitals, health centers and community clinics et al. To be highly competitive in the home healthcare industry means that you should be able to deliver consistent quality patient service and should be able to meet the expectations of the physicians that referred patients to you. Medical Partners Home Care Limited Home Healthcare Services is coming into the market well prepared to favorably compete in the industry. Our office facility is well positioned (centrally positioned) and visible, we have enough parking space with good security.
Our staff is well groomed in all aspects of home healthcare service delivery and all our employees are trained to provide customized customer service to all our clients. our services will be carried out by highly trained professional physicians, nurses, nurse’s aides, mental health counselors, chiropractors, medication management counselors, 16
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
physical therapists, urban-based mobile aging workers, and rehabilitation counselors, home health caregivers and home caregivers who know what it takes to give our highly esteemed customers value for their money. We are going to be one of the few home healthcare service providers in the whole of Uganda that will run a standard medical call center for 24 hours a day and 7 days a week. We have enough trained health workers that are ready to run r un a shift system. Medical Partners Home Care Limited Home Healthcare Services we will ensure that we offer a wide range of home health care services such as Skilled Nursing, Nursing Aide, Social Work, Occupational, Physical, Speech Therapy, and Respiratory Therapy and Wellness Services, Personal Injury Case Management, Home Medication Management, and Personal Assistance Services. We will also ensuring that all our patient / clients are well treated and taken care of.
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SALES AND MARKETING STRATEGY
Medical Partners Home Care Limited Home Healthcare Services will focus on the entire Uganda but with our main focus on Kampala (the capital city) and the key towns/cities in Uganda including: Uganda including Entebbe, Jinja, Masaka, Mbarara, Mbale, Kabale, Gulu, Lira, Fort Portal, Hoima and Arua et al . Within this geographical area we will target two specific programs: home health care personal injury case management
Within each area, we have two target markets: the actual client, and the regional physicians, health care facilities, lawyers (advocates) and insurance companies who refer them to our services. services. 5.1
Competitive Edge
There are currently about eight other home health agencies serving the Kampala area (Home Bedside Nursing Caretaking Services , Amani Domestics (U) Limited, Kawempe Care, Saint and Jennifer Foundation , Trahas Bedside Care, Nurses on Call Services Limited, Golden Age Elderly Homes Uganda and the South-African company MediKing International); Mr. William Ssegujja, our Administrative Director/Principal Investor, is a registered nurse practitioner (RN 2257948) with a cumulative 18 years experience gained from working with 3 different home health agencies in the Commonwealth of Massachusetts, USA in various capacities and has learned many of the day-to-day administrative functions that make a home health care agency successful. Mr. William Ssegujja has built a reputation for outstanding customer service, and it is our belief that he will transfer his strong reputation and field expertise to help to build a strong client base in Kampala – Uganda even before our start-up date. Medical Partners Home Care Limited Home Healthcare Services will also stand out in integrating community-based social services, such as Personal Injury Case Management, with our more traditional home health care. This broader base will allow us to access additional clientele and payor bases, adding to our financial stability. This integration also leaves room in the long-term for the addition of other social services, such as Family Counseling, Psycho-Educational Services, and Mental Health Case Management. Management.
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MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
5.2
Sources of Income
Medical Partners Home Care Limited Home Healthcare Services will ensure that we do all we can to maximize the business by generating income from every legal means within the scope of our industry. Below are the sources we intend exploring to generate income for Medical Partners Home Care Limited Home Healthcare Services; Skilled Nursing Home Services
Nursing Aide Home Services Social Work Occupational, Physical, and Speech Therapy Home Services Personal Injury Case Management Home Services Home Medication Management Personal Assistance Services 5.3
Sales Forecast
It is important to state that our sales forecast is based on the data gathered during our feasibility studies, market survey and also some of the assumption a ssumptionss readily available on the field. Below are the sales projections that we were able to come up with for the first three years of operations; First Year (PY 2)-: $468,000 (From Self – Pay Clients / Patients): $187,200 (From Health Insurance Companies) Second Year (PY 3)-: $458,640 (From Self – Pay Clients / Patients ): $229,320 (From Health Insurance Companies) Third Year (PY 4)-: $433,415 (From Self – Pay Clients / Patients): $288,943 (From Health Insurance Companies) N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above. Please note that the above projection might be lower and at the same time it might be higher. 5.4
Marketing Strategy and Sales Strategy
Medical Partners Home Care Limited Home Healthcare Services will use a referral network from doctors, surgeons, hospitals, and post operative clinics. As such, it is imperative that the Medical Partners Home Care Limited Home Healthcare Services develop these relationships with other medical professionals for the local supply 19
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
portion of the business. Many insurance carriers and Medicare/Medicaid require that a physician authorize the purchase of certain home healthcare services. Medical Partners Home Care Limited Home Healthcare Services will use both traditional and experimental forms of marketing to inform, educate, and sell the Company’s service. Traditional means of advertising will include print and media advertising. Finally, the business will maintain an internet website that will provide each prospective client or current primary caregiver (friend or family member) with a complete brochure of the background and services provided by Medical Partners Home Care Limited Home Healthcare Services. This website may also feature a log-in for clients and their families to track incurred expenses and update billing information. This functionality would not be developed until the business is profitable and a cost benefit analysis is performed. However, this is becoming a common trend among medical service and care providers, and Management will develop these ancillary benefits to retain a strong competitive advantage. advantage. The marketing and sales strategy of Medical Partners Home Care Limited Home Healthcare Services will also be based on generating long-term personalized relationships with customers. In order to achieve that, we will ensure that we offer top notch all – round home health care services at affordable prices compared to what is obtainable in Kampala. All our employees will be well trained and equipped to provide excellent and knowledgeable home health care services and customer service. We know that if we are consistent with offering high quality home health care service delivery and excellent customer service, we will increase the number of our customers by more than 25 percent for the first year and then more than 40 percent subsequently. subsequently. In summary, Medical Partners Home Care Limited Home Healthcare Services will adopt the following sales and marketing approach to win customers over; Introduce our business by sending introductory letters to residence, business owners and corporate organizations Advertise our business in community based newspapers, local TV and local radio stations List our business on yellow pages ads (local directories) Leverage on the internet to promote our business Engage in direct marketing Leverage on word of mouth marketing (referrals)
Enter into business partnership with hospitals, government agencies and health insurance companies. 20
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
Attend health care related exhibitions / expos. 5.5
Publicity and Advertising Strategy
We in the home health care car e services business – aim to become one of the market leaders and also to maximize profits hence we are going to explore all available conventional and non – conventional means to promote our home healthcare services business. As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate communicate our brand to the general public. Here are the platforms we intend leveraging on to promote and advertise Medical Partners Home Care Limited Home Healthcare Services; Place adverts on both print (community based newspapers and magazines) and electronic media platforms Sponsor relevant community health programs (CSR) Leverage on the internet and social media platforms like; Instagram, Facebook ,
twitter, YouTube, Google + et al to promote our brand Install our Bill Boards on strategic locations all around Kampala City. Engage in road shows from time to time Distribute our fliers and handbills in target areas Ensure that all our workers wear our branded shirts and all our vehicles and ambulances are well branded with our company’s logo et al.
5.6
Our Pricing Strategy
Medical Partners Home Care Limited Home Healthcare Services will work towards ensuring that all our services are offered at highly competitive prices compared to what
is obtainable in Uganda today. On the average, home health care service providers usually leverage on the fact that a good number of their clients do not pay the service charge from their pockets; private insurance companies are responsible for the payment. In view of that, it is easier for home health care service providers to bill their clients based on their t heir discretion. However, in some cases home health care service providers also adopt the hourly billing cum per visit billing method. For example, it is easier and preferable for home healthcare services providers to bill personal injury case management services by the hour as against a fixed price. 21
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
5.7
Payment Options
At Medical Partners Home Care Limited Home Healthcare Services, our payment policy is all inclusive because we are quite aware that different people prefer different payment options as it suits them. Here are the payment options that will be available in every of our outlets; Payment by cash
Payment via Point of Sale (POS) Machine Payment via online bank transfer (online payment portal) Payment via Mobile money Check (only from loyal customers)
In view of the above, we have chosen banking platforms that will help us achieve our payment plans without any itches. Table 3: Sales by Project Year (PY2 – PY4) SALES FORECAST Sales Home Health Care Sales Personal Injury Case Management Sales TOTAL SALES Direct Cost of Sales Home Health Care Sales Personal Injury Case Management Sales Sub-Total Direct Cost of Sales
22
PY 1
PY 2
PY 3
$626,140 $29,060 $655,200 PY 1 $32,872 $3,632 $36,504
$657,447 $30,513 $687,960 PY 2 $34,516 $3,814 $38,329
$690,319 $32,039 $722,358 PY 3 $36,241 $4,004 $40,246
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
6.0
MANAGEMENT PLAN 6.1
Our Business Structure
Medical Partners Home Care Limited Home Healthcare Services is a business that will be built on a solid foundation. From the outset, we have decided to recruit only qualified professionals (physicians, nurses, nurse’s aides, mental health counselors,
chiropractors, medication management counselors, physical therapists, county aging workers, and rehabilitation counselors, home health caregivers and home caregivers) to man various job positions in our organization. We are quite aware of the rules and regulations governing the health care industry which is why we decided to recruit only well experienced and qualified employees as foundational staff of the organization. We hope to leverage on their expertise to build our business brand to be well accepted in the Kampala area and the whole of Uganda. When hiring, we will look out for applicants that are not just qualified and experienced, but honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (the owners, workforce, and customers). As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of five years or more. These are the positions that will be available at Medical Partners Home Care Limited Home Healthcare Services; Chief Medical Director / Chief Executive Officer Physicians / Chiropractors / Medication Management Counselors / Physical
Therapists Pharmacist Nurses / Nurse’s Aides / Mental Health counselors Information Technologist (Contract) Home Health Caregivers / Home Caregivers /Urban-based Mobile Aging Workers / Rehabilitation Counselors Sales Agent Cashier (Counter Agent). Cleaners
23
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
6.2
Roles and Responsibilities
Chief Medical Director / Chief Executive Officer: Responsible for providing direction for the business Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
Attend to high profile clients and severe medical cases Responsible for fixing prices and signing business deals Responsible for recruitment Responsible for payment of salaries Responsible for signing checks and documents on behalf of the company Evaluates the success of the organization
Physicians / Chiropractors / Medication Management Counselors / Physical Therapists (3) Responsible for providing professional medical services to our patients
Responsible for offering occupational, physical, speech, and respiratory r espiratory therapy Responsible for handling medical emergencies
Pharmacist (1): Responsible for managing the daily activities in the company (dispensary store) providing advice about health issues, symptoms and medications in response to customer enquiries Responsible for recruiting, training and managing staff Responsible for processing prescriptions and dispensing medication Responsible for ordering, selling and controlling medicines and other stock
Responsible for meeting medical representatives Responsible for managing the organizations’ budgets Responsible for keeping statistical and financial records r ecords Responsible for preparing publicity materials and displays Handle marketing services Interfaces with third – party providers (vendors) Handle any other duty as assigned by the CEO
Nurses / Nurses’ Aides / Mental Health Counselors (10) Responsible for managing our patients in their various homes Handles personal injury case management Responsible for offering home medication management services
24
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
Sales Agents (4) Manage external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones Model demographic information as it relates to those who need our services Source for clients for the company Responsible for promoting the company’s image Responsible for creating marketing and sales strategies, etc. Represents the organization in some strategic business meetings Handle any other duty as assigned by the floor manager (Pharmacist)
Information Technologist (1) Manage the organization website Handles ecommerce aspect of the business Responsible for installing and maintenance of computer software and hardware for the organization Manage logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
Manage the organization’s CRM software application Handles any other technological and IT related duties.
Cashier (Counter Agent): Receives payments on behalf of the organization Issues receipt to customers Prepare financial report at the end of every working week Handles financial transaction on behalf of the company Interfaces with our bankers Responsible for payment of tax, levies and utility bills
Handles any other duty as assigned by the office
Cleaners (6): Responsible for cleaning the store facility at all times Ensure that toiletries and supplies don’t run out of stock Cleans both the interior and exterior of the office facility Handle any other duty as assigned by the office manager
25
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
6.3
Personnel Plan
Table 4: Personnel Plan S. No.
Job Description
No.
Rate (USD)
Monthly Total (USD)
Annual Total (USD)
A. Senior Level Management
1
Chief Executive Officer (CEO)
1
3,000
3,000
36,000
2 3
Physicians/Chiropractor Physicians/Chir opractors/PTs s/PTs Pharmacist
3 1
1,500 1,500
4,500 1,500
54,000 18,000
4
Nurses/Nurses' Nurses/Nurses ' Aides/MHCs
10
1,000
10,000
120,000
5
Sales Agents
4
800
3,200
38,400
6
Information Technologists
1
1,200
1,200
14,400
7
Cashier (Counter Agent)
1
600
600
7,200
8
Drivers
2
300
600
7,200
9
Cleaners TOTAL
6 29
200
1,200 25,800
14,400 309,600
26
7.0
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
FINANCIAL PLAN
We want to finance growth mainly through cash flow. We recognize that this means we will have to grow more slowly than we might like. The most important factor for our financial plan is collection of receivables. Our home health care services will be reimbursed primarily by self-pay home health care service consumers and by private health insurance companies as a secondary source of income. History indicates that these payors are sometimes slow to reimburse and receivables can get hung up in the automated payment system if not tracked closely. As we broaden our scope of services to include a larger payor base, these lags in collection of receivables will have less impact on cash flow. Our figures are based on start-up capital as shown in the Start-up and Start-up Funding tables; we will consider an additional loan if needed. 7.1
Important Assumptions
The General Assumptions table, below, shows our important (and conservative) annual assumptions concerning interest interest rates, tax rates, and personnel burden. In addition: 1. We assume a strong economy, without major recession. 2. We assume, of course, that there are no significant unforeseen changes in the government policy that dictates health insurance reimbursement reimbursement of Home Health Care Services. Table 5: General Assumptions Item/Project Year (PY)
PY 2
Plan Month Current Interest Rate Long-term Long-ter m Interest Rate Tax Rate Other
7.2
1 10.00% 8.00% 30.00% 0
PY 3
2 10.00% 8.00% 30.00% 0
PY 4
3 10.00% 8.00% 30.00% 0
Break-even Analysis
The Break-even Analysis below is based on monthly fixed costs and an Average per Unit Variable Cost. This assumption about cost of sales may at first look low, but in our service-based business, payroll is included with other operating expenses in our fixed monthly amounts, so the variable costs relate to the only other cost of service provided: mileage to and from service locations. 27
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
At these levels, we need to bill and collect the amount shown below per month to cover our per month costs. We don't really expect to reach break-even until a few months into the business operation. Table 6: Break-even Analysis in Project Year 5 (2022) Expense Items
Variable Cost
Fixed Cost
Total Cost
Direct Cost of Sales Payroll Payroll Taxes Heat and Lights Phone Cell Phones Water and Garbage Internet Access Professional Profession al Liability Insurance Workman's Comp Insurance Premises and Content Insurance
31,693 268,801 40,320 1,563 2,605 1,563 521 232 6,946 463 463
10,564 89,600 13,440 521 868 521 174 116 3,473 232 232
42,258 358,401 53,760 2,084 3,473 2,084 695 347 10,419 695 695
Advertising and Marketing Meals and Entertainment Entertainment Professional Development Office Equipment and Supplies
926 463 926 3,704 16,930 10,419 0 0 388,537
463 232 463 1,852 5,643 3,473 22,797 9,600 164,263
1,389 695 1,389 5,557 22,574 13,892 22,797 9,600 552,800
Contracted Therapists: OT/PT/ST/RT
Nursing Supplies Depreciation Financial Expenses TOTAL
Sales Value of Production
= USD 758,476
Break-even Sales =
164,263 (FC) 1 – 388,537 (VC) 758,476 (SR)
Break-even Sales =
US$ 336,785
=
164,263 1 –0.5122
=
164,263 0.7286
Capacity utilization required to Break-even = USD 336,785 x 100 = 44.40% USD 758,476 Margin of Safety = 100% – 44.40% = 55.60%. 28
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
7.3
Projected Profit and Loss
Our projected profit and loss is shown in the following table, with sales increasing throughout the three years of the plan, and profits are notable even for the start-up phase of this business per month. We are projecting growth and total annual sales very conservatively, with high projected expenses. Our cost of sales is relatively low, as this is a service agency and the primary costs involved in providing the services are those related to payroll. The costs of sales reflect the cost of mileage reimbursem reimbursement ent to employees, because the services we provide are home- and community-based and require travel to and from service locations. The Profit and Loss table also contains our expenses for independently contracted physical, occupational, speech and respiratory therapists, as well as the owner's aftertax draws. Key Assumptions: First Year Patients: Self-Pay/Health Insurance Rate: Sales Growth Rate per annum: Operating Costs Growth Rate per annum:
21,840 US$30/Head 5% 5%
29
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document Table 7: Pro Forma Profit and Loss (PY2 – PY4) In US$ Project Year (PY)
PY 1
PY 2
Sales
Direct Cost of Sales Other Costs of Sales TOTAL COST OF SALES
Gross Margin
PY 3
PY 4
655,200
687,960
722,358
36,504 0 36,504
38,329 0 38,329
40,246 0 40,246
618,696
649,631
682,112
94.43%
94.43%
94.43%
309,600 46,440 1,800 3,000 1,800 600 300 9,000 600 600
325,080 48,762 1,890 3,150 1,890 630 315 9,450 630 630
341,334 51,200 1,985 3,308 1,985 662 331 9,923 662 662
1,200 600 1,200 4,800 19,500 12,000 413,040 205,656 205,656 24,000 60,000
1,260 630 1,260 5,040 20,475 12,600 433,692 215,939 215,939 19,200 60,000
1,323 662 1,323 5,292 21,499 13,230 455,377 226,736 226,736 14,400 60,000
36,497 85,159
41,022 95,717
45,701 106,635
13.00%
13.91%
14.76%
Gross Margin % Operating Expenses (USD)
Payroll Payroll Taxes Heat and Lights Phone Cell Phones Water and Garbage Internet Access Professional Liability Insurance Workman's Comp Insurance Premises and Content Insurance Advertising and Marketing Meals and Entertainment Professional Development Office Equipment and Supplies Contracted Therapists: OT/PT/ST/RT Nursing Supplies Total Operating Expenses Profit Before Interest and Taxes
EBITDA Interest Expense Loan Repayments Taxes Incurred Net Profit
Net Profit/Sales
7.4
Projected Cash Flow
The following cash flow p projections rojections show the annual amounts only. Collection of accounts receivable from our sales on credit will greatly affect our cash flow. Cash flow projections are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month, and the other the monthly cash balance. The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendix. 30
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document Table 8: Pro Forma Cash Flow (PY2 – PY4) In US$ Project Year (PY)
PY 1
PY 2
PY 3
PY 4
Costs (US Dollars) A. Cash inflow
420,000
1. Financial resources total
420,000
_
_
_
2. Sales revenue total
_
655,200
687,960
722,358
-420,000
-792,504
-607,676
-631,698
-420,000
-217,664
-10,633
-11,175
_
-449,544
-472,021
-495,622
a) Interest
_
-24,000
-19,200
-14,400
b) Repayments
_
-60,000
-60,000
-60,000
4. Corporate tax
_
-36,497
-41,022
-45,701
5. Dividends 4% on equity
_
-4,800
-4,800
-4,800
C. Surplus / deficit
0
-137,304
80,284
90,660
D. Cumulative cash balance
0
-137,304
-57,020
33,640
B. Cash outflow
655,200
687,960
722,358
1. Total assets schedule including replacements 2. Operating Costs (Cost of Sales) 3. Debt Service
7.5
Projected Balance Sheet
The balance sheet in the following table shows managed but sufficient growth of net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendix.
31
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document Table 9: Pro Forma Balance Sheet (PY2 – PY4) In US$ CAPITAL EMPLOYED:
PY 1
PY 2
Share Capital
PY 3
PY 4
120,000
120,000
120,000
85,159
180,876
287,511
205,159
300,876
407,511
300,000
300,000
240,000
180,000
300,000
505,159
540,876
587,511
170,000
165,750
161,500
157,250
Medical Equipment
50,750
45,675
40,600
35,525
Office Equipment & Furniture
14,720
11,776
8,832
5,888
Vehicles
60,000
48,000
36,000
24,000
295,470
223,201
210,932
198,663
4,530
309,704
353,078
407,379
37,462
39,335
41,302
162,042
170,144
178,651
Bank Balance and Cash
18,160
18,818
19,519
Other Current Assets
92,041
124,781
167,907
CURRENT LIABILITIES:
27,746
23,134
18,530
3,746
3,934
4,130
24,000
19,200
14,400
4,530
281,958
329,944
388,848
300,000
505,159
540,876
587,511
Retained Earnings Shareholder's Equity/Deficit
Long-Term Liabilities
EMPLOYMENT OF CAPITAL:
Buildings & Infrastructure
LONG-TERM ASSETS: CURRENT ASSETS:
Accounts Receivable Stock (Inventory)
Accounts Payable Current Portion of Long-term Liabilities NET CURRENT ASSETS: TOTAL CAPITAL/ NET WORTH
7.6
Business Ratios
The following table shows the projected business ratios, and a comparison of our ratios with standards for the home health care industry (SIC code 8082.000). We expect to maintain healthy ratios for profitability, risk, and return.
32
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document Table 10: Pro Forma Business Ratios (PY2 – PY4) In US$ Project Year (PY)
PY 2
Sales Growth
PY 3
INDUSTRY PROFILE
PY 4
0.00%
5.00%
5.00%
3.71%
Other Current Assets Total Current Assets Long-term Assets
7.03% 17.27% 58.12% 41.88%
6.97% 22.12% 62.60% 37.40%
6.82% 27.71% 67.22% 32.78%
21.90% 45.48% 69.58% 30.42%
TOTAL ASSETS Current Liabilities Long-term Liabilities
100.00% 5.21% 56.30%
100.00% 4.10% 42.55%
100.00% 3.06% 29.70%
100.00% 35.62% 21.27%
61.50% 94.79%
46.65% 95.90%
32.76% 96.94%
56.89% 43.11%
100.00% 94.43% 62.86% 0.18% 13.00%
100.00% 94.43% 62.86% 0.18% 13.91%
100.00% 94.43% 62.86% 0.18% 14.76%
100.00% 100.00% 85.34% 0.70% 0.35%
11.16 5.32 56.30% 24.08% 22.83%
15.26 7.91 42.55% 25.28% 24.24%
21.98 12.34 29.70% 25.93% 25.14%
1.52 1.20 62.84% 1.09% 2.93%
Percent of Total Assets Accounts Receivable
Total Liabilities NET WORTH Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios
PY 2
Net Profit Margin Return on Equity Activity Ratios
PY 3
PY 4
13.00% 41.51%
13.91% 31.81%
14.76% 26.17%
n.a n.a
Accounts Receivable Turnover Collection Days Accounts Payable Turnover Payment Days
1.75 30 1.20 30
1.75 30 1.20 30
1.75 30 1.20 30
n.a n.a n.a n.a
Total Asset Turnover Fixed Assets Turnover Debt Ratios
1.23 2.01
1.22 2.24
1.19 2.49
n.a n.a
Debt to Net Worth Current Liability to Liability Liquidity Ratios
0.59 0.09
0.44 0.10
0.31 0.10
n.a n.a
$213,917 8.57
$224,363 11.25
$235,341 15.75
n.a n.a
0.81 4.50% 5.32 1.30
0.82 3.40% 7.91 1.27
0.84 2.38% 12.34 1.23
n.a n.a n.a n.a
0.00
0.00
0.00
n.a
Net Working Capital Interest Coverage (Times Interest Earned Ratio) Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout
33
8.0
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
SUSTAINABILITY AND EXPANSION STRATEGY
The future of a business lies in the numbers of loyal customers that they have the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop. One of our major goals of starting Medical Partners Home Care Limited Home Healthcare Services is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to sell our home health care services a little bit cheaper than what is obtainable in the market and we are ar e well prepared to survive on lower profit margin for a while. Medical Partners Home Care Limited Home Healthcare Services will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken care of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
34
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
Schedule 01: Expanded Pro Forma Profit and Loss/Net Income Statement (PY2 – PY6) In US$ PY 1
Project Year (PY)
PY 2
Sales
PY 3
PY 4
PY 5
PY 6
655,200
687,960
722,358
758,476
796,400
36,504 0 36,504
38,329 0 38,329
40,246 0 40,246
42,258 0 42,258
44,371 0 44,371
Gross Margin
618,696
649,631
682,112
716,218
752,029
Gross Margin % Operating Expenses Expenses (USD)
94.43%
94.43%
94.43%
94.43%
94.43%
Payroll
309,600
325,080
341,334
358,401
376,321
46,440
48,762
51,200
53,760
56,448
1,800 3,000 1,800 600
1,890 3,150 1,890 630
1,985 3,308 1,985 662
2,084 3,473 2,084 695
2,188 3,647 2,188 729
Direct Cost of Sales Other Costs of Sales TOTAL COST OF SALES
Payroll Taxes Heat and Lights Phone Cell Phones Water and Garbage
300
315
331
347
365
Professional Liability Insurance Workman's Compensation Insurance Premises and Content Insurance
Internet Access
9,000 600 600
9,450 630 630
9,923 662 662
10,419 695 695
10,940 729 729
Advertising and Marketing Meals and Entertainment
1,200 600
1,260 630
1,323 662
1,389 695
1,459 729
Professional Development Office Equipment and Supplies
1,200 4,800
1,260 5,040
1,323 5,292
1,389 5,557
1,459 5,834
19,500 12,000 413,040
20,475 12,600 433,692
21,499 13,230 455,377
22,574 13,892 478,145
23,702 14,586 502,053
205,656
215,939
226,736
238,073
249,976
205,656 24,000 60,000
215,939 19,200 60,000
226,736 14,400 60,000
238,073 9,600 60,000
249,976 4,800 60,000
Taxes Incurred Net Profit
36,497 85,159
41,022 95,717
45,701 106,635
50,542 117,931
55,553 129,623
Net Profit/Sales
13.00%
13.91%
14.76%
15.55%
16.28%
Contracted Therapists: OT/PT/ST/RT Nursing Supplies Total Operating Expenses Profit Before Interest and Taxes
EBITDA Interest Expense Loan Repayments
35
MEDICAL PARTNERS HOME CARE Business Business Plan Corporate Document
Schedule 02: Expanded Pro Forma Cash Flow Statement (PY2 – PY6) In US$ Period Year
Construction
PY 1
Full Capacity PY 2
PY 3
PY 4
PY 5
PY 6
*Sal val
Total
Costs (US Dollars) A. Cash inflow
420,000
1. Financial resources total
420,000
_
_
_
_
_
2. Sales revenue total
_
655,200
687,960
722,358
758,476
796,400
-420,000
-792,504
-607,676
-631,698
-657,089
-743,917
523,502
-420,000
B. Cash outflow
655,200
687,960
722,358
758,476
796,400
4,040,394 420,000 3,620,394 -3,329,382
1. Total assets schedule including replacements
-217,664
-10,633
-11,175
-11,744
-72,341
523,502
-220,054
_
-449,544
-472,021
-495,622
-520,403
-546,424
0
-2,484,014
a) Loan Interest
_
-24,000
-19,200
-14,400
-9,600
-4,800
0
-72,000
b) Loan Repayments
_
-60,000
-60,000
-60,000
-60,000
-60,000
0
-300,000
4. Corporate tax
_
-36,497
-41,022
-45,701
-50,542
-55,553
0
-229,314
5. Dividends 4% on equity
_
-4,800
-4,800
-4,800
-4,800
-4,800
0
-24,000
2. Operating Costs (Cost of Sales) 3. Debt Service
