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1.0 Executive Summary
The purpose of this business plan is to raise $150,000 for the development of a psychology practice while showcasing the expected financials and operations over the next three years. Psychology Practice, Inc. (“the Company”) is a New York based corporation that will provide general psychological in a stand alone facility to customers in its targeted market. The Company was founded by Dr. John Doe.
1.1 Operations
Dr. Doe will render psychology services to adults and children within the greater targeted community. These services include treatment for a host of disorders as well as family and marriage counseling.
The Company will also recognize revenues from ancillary services such as life coaching and services related to general mental well being.
The third section of the business plan will further describe the services offered by the Psychology Practice.
1.2 The Financing
Dr. Doe is seeking to raise $150,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate. The financing will be used for the following:
Development of the Company’s Psychology Practice location.
Financing for the first six months of operation.
Capital to purchase FF&E and computers.
Dr. Doe will contribute $25,000 to the venture.
1.3 Mission Statement
Dr. Doe’s mission is to become the recognized leader in its targeted market for general mental health services that are allowed be rendered by a psychologist.
1.4 Management Team
The Company was founded by Mr. John Doe. Mr. Doe has more than 10 years of experience as a psychologist. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.
1.6 Expansion Plan
The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Doe intends to implement marketing campaigns that will effectively target individuals and families within the target market.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Psychology Practice, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, Psychology Practice, Inc. requires $150,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Dr. Doe is not seeking an investment from a third party at this time.
2.4 Management Equity
John Doe owns 100% of Psychology Practice, Inc.
2.5 Exit Strategy
If the business is very successful, Dr. Doe may seek to sell the practice to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of Psychology Practice, Inc. Based on historical numbers, the business could fetch a sales premium of up to 2 to 3 times earnings.
3.0 Operations
The primary source of revenue for the business will be the mental health services provided by Dr. Doe. The Company will offer many of the services that are common within this specialty including treatment of mental health issues, family issues, and general life issues.
In the future, Dr. Doe will seek to hire additional psychologists and counselors that will expand the practice organically through increased patient flow. These associate practitioners may eventually acquire the practice from Dr. Doe upon his retirement or relocation.
The practice will receive a bulk of its payments from co-pays and reimbursements from insurance companies.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the psychology practitioner industry, the customer profile, and the competition that the business will face as it progresses through its business operations.
Current, the economic climate is moderate. The economy is undergoing a transition period due to changes in global trade policy. At this time, interest rates have remained steady due to appropriate and measured policies by central banks. While there has been volatility, this is expected to subside as the economy adapts to these changes.
However, Psychology Practices operate with great economic stability as people will continue to require mental health care despite deleterious changes in the general economy.
4.2 Industry Analysis
Within the United States there are approximately 200,000 medical practices (including mental health practices that are operated by psychologists) that comprise of one or more doctors or practitioners that act in a private practice capacity. Each year, these practices generate more than $190 billion dollars of revenue and employ more than 1.8 million people (including the practitioners and physicians). The growth of this industry has remained in lockstep with the growth of the general population. Approximately 5% of these doctors retire each year. Approximately 20,000 psychologists enter private practice each year.
4.3 Customer Profile
Psychology Practice’s average client will be a middle class man or woman living in the Company’s target market. Common traits among clients will include:
Annual household income exceeding $50,000
Lives or works no more than 15 miles from the Company’s practice location.
Has medical insurance.
Has issues relating to mental health or general mental well being.
4.4 Competitive Analysis
This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.
5.0 Marketing Plan
Psychology Practice, Inc. intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Company.
5.1 Marketing Objectives
Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth.
Establish relationships with doctors within the targeted market.
5.2 Marketing Strategies
Mr. Doe intends on using a number of marketing strategies that will allow the Psychology Practice, Inc. to easily target men, women, and families within the target market. These strategies include traditional print advertisements and ads placed on search engines on the Internet. Below is a description of how the business intends to market its services to the general public.
Psychology Practice, Inc. will also use an internet based strategy. This is very important as many people seeking local services, such as mental health services, now the Internet to conduct their preliminary searches. Mr. Doe will register the Psychology Practice with online portals so that potential customers can easily reach the business. The Company will also develop its own online website.
The Company will maintain a sizable amount of print and traditional advertising methods within local markets to promote the general mental health and counseling services that the Company is selling.
5.3 Pricing
In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
7.0 Financial Plan
7.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
Psychology Practice, Inc. will have an annual revenue growth rate of 16% per year.
The Owner will acquire $150,000 of debt funds to develop the business.
The loan will have a 10 year term with a 9% interest rate.
7.2 Sensitivity Analysis
In the event of an economic downturn, the Company will not see a major decline in revenues. General mental health services are in demand regardless of the general economic climate as they are an essential service for health.
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statement
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 Breakeven Analysis
7.9 Business Ratios
