CREATE A BUSINESS PLAN
Business plans are important for our careers and personal businesses. Before I got in the Health Care Management program, I needed to be able to write a business plan at my job with CHS, but I really didn’t know how. Many of CHS’ hospitals were paying for ventilator and respiratory device preventive maintenance service at a cost ranging between $125-$700 per device for the same exact device depending on the vendor, location, and type of device. I pitched the idea to my National Director of Biomedical Services that we use our Biomedical Electronics Technicians to perform the service in-house versus contracting it out or paying time and materials to an OEM (Original Equipment Manufacturer) or 3rd party independent service organization. I added up the current cost we were paying and compared it to the cost we could be paying if we performed all of these services with our own labor. It was an immediate savings of millions of dollars per year. [unique_solution]My supervisor′s direct supervisor said we needed to present the idea as a business plan to the Division Presidents, Vice Presidents of Finance, and VPs of Operations and the CEOs, CFOs and COOs at the hospitals. Neither one of us were prepared to present this project as a business plan to all of these high level corporate, division, and hospital leaders where many of them had Masters degrees in Hospital Administration or MBAs. Once I got the Stephen Watson textbook and saw the simple explanation of the components of a Business plan in Chapter 11, beginning on page 26, I sent it to several Division Presidents. One Division Finance VP was so impressed by the quality of my work that she sent it to the CFO for the entire CHS corporation which was a big deal because at the time this man was the head CFO for all 215 hospitals. We had a great deal of facilities opt into our program and we were able to create millions of dollars on savings for the corporation. I’ve also assisted in the formation of several nonprofits through the utilization of the business plan format in Chapter 11. I use this format myself and I’ve had several friends use it as well when they’ve come to me for advice regarding starting a business. Project Instructions Read Chapter 11, pages 259-265 Think of a business you want to start, a business a friend wants to start, or a service line you’d like to start at your company; or you can think up a hypothetical business or service line if you don’t have any future business ideas, friends with business ideas or service line ideas for work. Create the following sections- Market Analysis-Perform a market analysis. It’s a little different when you are trying to do a market analysis like what we did regarding removing outside cost and replacing it with company labor versus starting a service line or a company. The books explains this in depth in the Market Analysis section on page 262. Our own hospitals, respiratory therapists, respiratory therapy directors and administrative teams were our customers. Our competition was the outside service organizations being paid to perform the service we were offering to perform. Company Desсrіption-create a company or business unit desсrіption. Organization and Management-Discuss the Organization and Management or your company, service line or business unit. Marketing and Sales Department-With our internal service line reducing external costs we followed a top down approach, where we began with the Division VPs of Finance and showed them the millions of dollars in cost savings and explained that many of our employees worked for many of the same companies we are paying to perform the service, so they set up meetings for us to pitch our ideas to the CEOs, CFOs, and COOs at the hospitals. Desсrіption of Service or Product Line Funding Request-In our example, our funding request included a cost analysis and a return on investment. We created an excel sheet with all ventilators at each CHS hospital, the current cost being paid to service these devices and we totaled that cost per hospital and we totaled the cost for each Division so each Division VP and each hospital administrator could get an understanding of what the benefit of the program was to them. The main purpose of this section was to request or funding so we included the required training and test equipment, which totaled about $5-10,000 per facility depending on the current level of training or test equipment owned by the facility and the cost savings ranged from 7-20k annually. Financials Appendix Executive Summary- Even though it is listed first in the components of a Business plan on page 261 and it’s the first thing you see in a business plan, you will now write the executive summary after you’ve written your entire business plan. It is exactly what the title says it is-it is a summary of your business plan written for an executive that may want a 50,000 foot view of what you are doing in the beginning and this executive may or may not care to read all of the details if the service line or business is chosen. For example, not many people want to get into the details of medical system design or life support equipment service organizations so we need to make them a one page section that summaries all of our sections. Read more about this on page 261-262.