Business Plans Flashcards
What is a business plan?
A document describing every aspect of the business
A road map providing directions so a business can plan its future and minimize disruptions
Illustrates potential for success
Is a guide to help define and meet your business goals - provides focus and supports decision making
Why is a business plan necessary? Reduces risk by
Forcing evaluation of:
Market, demand, competition
Strategies (structure, marketing, distribution)
Finance
Why is a business plan necessary? Identifies….
resource conflicts - strategies that can be afforded with available resources
Why is a business plan necessary? Evaluate business from perspective of
business owner, entrepreneur, risk taker
Why is a business plan necessary? Loans
What needs to be financed and at what amount
When and for how long need the finances
How will business generate enough money to repay the loan and cover expenses
Also for financial projections and analysis
Can also assist with strategic planning - evaluating future opportunities, adding new service or business expansion
Why is a business plan necessary? Others
Creates a regular business review and course correction process
Agreement of parties
Established a value on a business for sale or legal purposes
A business plan is what type of document
A living document! - Can change throughout the life of a business
Audience of the business plan
Partners - all components
Bank - financial, cash flow to pay loans
Venture capitalist - people, experience (outside investor)
When is a business plan prepared?
After the market assessment!
As early as possible when deciding to start a business
During life of business to evaluate new service, expansions
What makes a business plan successful
Illustrates managements ability to make business successful Shows profitability Presents well thought out idea Clear and concise Logical structure to it Presentation is important
Key elements - what is something that is at the beginning, but is written last? and what does it include?
Executive summary
Business description Mission, values, vision Objectives Future Keys to success (what sets you apart)
Key elements - Company summary
Ownership
Start up summary –> expenses, assets starting with, cash
Location and description of facility
Key elements - Services and size
Description - will you be general? or any specialties?
Size and projection (2, 5, 10 year)
Future services
Key elements - Operations
Modalities
Equipment
Tx rooms, tables
Technology, software
Key elements - Marketing plan
Plan within the plan
Key elements - Organizational structure
Management
Owner’s responsibilities and % management
Professional staff (DPT - PT - PTA…)
Administrative staff
Key elements - Strategy and Implementation Summary
Pricing strategy (charges - esp. for those not covered by insurance) Sales strategy (how services will be divided up, like what will be fee for service vs. CMS) Milestones with table (charting out a timeline - for when you will do things)
Key elements - Financial plan
Cash flow - most important! Like a checkbook
Projected profit/loss, balance sheet, sales forecast
Purpose of loan (if you are seeking one)
Method of payment
Debt service coverage calculation
Used by lenders to determine repayment ability
For every dollar of debt, how much do you have available to pay that debt?
1.15 to 1 is good
1.2 to 1 is even better
PT business within another organization
What is their expectation of how your business fits with theirs - legally and financially
How does it include or exclude your business
What are their business goals and plan? mission?
What risks are you assuming
Pt volume goals they have
Marketing - include or exclude you
Is your PT business name separate
Organizational structure
The bid process can be a path to
obtaining a contract
What does RFP stand for
Request for proposal
Bids and RFPs - what are they
Very detailed and specific
They are requesting you to submit a proposal to meet their needs
Bids and RFPs - what will they include
Items to submit
Q and A
References, testimonials, curriculum vitae
Deadlines - questions, response
Delivery method
READ THEM CAREFULLY - you should have questions
What should you so as you read through the RFP
Assemble questions to submit - you need to find out info ahead of time to prepare the best proposal you can
RFP - sources for answers to your questions
Prospect - might be given a deadline to submit written questions
Network of your own contacts (use judgment)
Call prospect (use judgment)
Public records or request a copy of prior quotes
RFP - what you want to know
Why out to bid What is important to them in a provider Who is current PT provider Unhappy or happy with current? Volume by CPT code, injury rate, re-injury rate Types of injuries Lost work days, hours, Cost of a lost work day
RFP - more questions you could ask
Current compensation # PT visits by diagnosis past X years Ergonomic analysis, workshops Safety program Work comp carrier, case manager Any physicians involved Company info, contacts Hours requested Which services provided? What equip they have Contract term they want - renewals
RFP - the decision to bid
Do we want to do it? Consider financial and non financial
Can we do it? If so, how?
What does a proposal look like
Brief cover letter - who you are, brand, ask for the business, contact person
What does a proposal include
Answers to all questions
Who you are, benefits the prospect will receive, value you bring
Effective and termination dates, renewals
Services provided, excluded
Charges
Promotional material
Analysis of current PT provider stats vs. best practice or benchmarks
Summary should be compelling
Caution - it can become public info!
Next steps - after building proposal
You could be chosen as finalist - need to make finalist presentation
Award of contract
Kickoff meetings
Contract negotiation
Importance of contracts
Key pieces of relationships in writing
Refer to during relationship
Both parties agree
Exists after agreeing individuals are gone
Basis of doing business
Establishes parameters of each party’s obligations and establishes remedies
Use attorney
Contract processes
Varies depending
Standard contract may be offered, revised
Ensure key components are covered, dates
If contract is result of bid, refer to bid specs
Use attorney
Might be negotiated
Sign and date (both parties)
Typical contract components (stickiest parts)
Indemnification - if they won’t remove, make it mutual
Services provided, services excluded
Duties of the other party
Your duties
Typical contract components - Compensation
Include time period the charges are in effect By CPT? by hour? Special services (ergonomic analysis?)
Typical contract components - Term of agreement and renewal
One year
Advanced written notice of rate change
Mutual agreement
Typical contract components - others
Payment
Termination with cause, without cause
4 keys to successful negotitation
Preparation
You never know until you ask
Consider your bargaining power
Resolution, agreement
