Medical Practice Business Plan
If you want to start a new medical practice or expand your current medical practice, you need a solid business plan.
The following medical practice business plan template gives you the key elements to include in a successful medical practice business plan.
Medical Practice Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is a new private medical practice located in [location]. Our goal is to provide affordable healthcare to individuals and families living in the area and surrounding communities. We offer general and preventative healthcare for all ages, including checkups, screening tests, and immunizations.
Our medical practitioners and supporting staff are well-trained and have a passion for improving the health and well-being of our clients. We serve our patients not just with our knowledge and skills but also with our hearts. We aim to help our patients experience the best healthcare possible while maintaining relationships that last a lifetime.
Services Provided
[Company Name] will focus on providing primary care services to every family member, from infants to adults. Some of the general and primary care services we provide include:
- Immunizations: flu shots, measles, mumps, polio, etc.
- Annual checkups
- Pediatrics: checkups, developmental screening, immunizations, etc.
- Health screenings: blood pressure, cholesterol, depression, diabetes, etc.
- General health counseling
[Company Name] will work with local and national insurance companies to ensure that every family can afford our services. After billing insurance, [Company Name] will provide payment plan options so that no individual or family is overwhelmed by their medical bills.
Customer Focus
[Company Name] will primarily serve the community within a 20-mile radius of our location. This community is primarily middle-class and contains a large number of families. The demographics of these customers are as follows:
- 82,401 residents
- 52% married
- 39% with children under 18
- Average income of $57,000
- Median age: 37 years
Management Team
[Company Name] is owned and operated by [Founder’s Name], who has been working as a doctor at local hospitals for [X] years. Throughout her career, she has worked for hundreds of patients and families with all their general and preventative care needs. Though she has never run a private medical practice herself, she has worked in the industry long enough to gain an in-depth knowledge of the business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- Our location is in a high-volume area with easy access from multiple residential and commercial areas.
- [Founder’s Name] has a good reputation in the local medical community, which will attract patients and insurance companies.
- The management team has a track record of success in the medical community.
- [Company Name] will offer preventative and primary care services for an affordable price.
- [Company Name] will contain knowledgeable and friendly staff that will keep patients coming back.
Financial Highlights
[Company Name] is currently seeking $400,000 to launch. Specifically, these funds will be used as follows:
- Clinic design/build: $100,000
- Medical supplies and equipment: $130,000
- Working capital: $170,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a private medical practice located in [location]. We offer general and preventative health care for all ages. We offer immunizations, pediatrics, health screenings, and more. Our medical practitioners and supporting staff are well-trained to improve the health and well-being of our patients.
[Company Name] is run and owned by [Founder’s Name], who has been a doctor in the local medical community for [X] years. She has helped hundreds of patients and families with their general healthcare needs throughout her career. She also has gained knowledge and experience in the operations and marketing aspects of the medical business, which will prove indispensable for this private practice.
[Company Name]’s History
After years of working with patients in hospital settings, [Founder’s Name] decided to establish a private practice. She wanted to develop a closer relationship with her patients, which was difficult to achieve while working in a large hospital. With this goal in mind, [Founder’s Name] incorporated [Company Name] as an S-corporation on [date of incorporation].
Since incorporation, [Company Name] has achieved the following milestones:
- Found a clinic space and signed a Letter of Intent to lease it
- Developed the company’s name, logo, and website at [website]
- Hired a contractor for the office build-out
- Determined equipment and fixture requirements
- Began recruiting key employees with previous healthcare experience
- Drafted marketing campaigns to promote the practice
[Company Name]’s Products/Services
[Company Name] will focus on providing primary care services to every family member, from infants to adults. The costs will depend upon the materials used, the physician’s time, and the amount designated for each procedure. Some of the general and primary care services we provide include:
- Immunizations: flu shots, measles, mumps, polio, etc.
- Annual checkups
- Pediatrics: checkups, developmental screening, immunizations, etc.
- Health screenings: blood pressure, cholesterol, depression, diabetes, etc.
- General health counseling
[Company Name] will maintain privacy according to HIPAA regulations. All patients will be welcome, including those without insurance. However, we expect most patients to utilize their insurance plans to pay their costs. [Company Name] will work with local and national insurance companies to ensure that every family can afford our services. After billing insurance, [Company Name] will provide flexible payment plan options so that no individual or family is overwhelmed by their medical bills.
III. Industry Analysis
Healthcare is a human right that everyone deserves access to. The medical industry will always be a necessity, especially as long as people have access to good insurance. Therefore, the medical industry is expected to continue to grow as the population increases and more people rely on private practices to help them with their health concerns.
Furthermore, the demand for private physicians has been on the rise. Hospitals have run out of room, and nurses and doctors have been overworked. This has led to an increased demand for more medical professionals and private practices that can help lessen the load of larger hospitals.
Moreover, the pandemic instilled the importance of quality healthcare and practices in the general population. We expect that people all around the world will now put in more effort towards caring for their health and getting the care and screenings they need.
Market trends and analysis confirm these trends. According to Facts & Factors, the global private medical market is expected to experience a compound annual growth rate (CAGR) of 12.5% over the next five years. This is enormous growth that is rarely exhibited in other industries. Furthermore, there is a growing demand for more primary care physicians as the general population aims to prevent developing chronic and preventable diseases. According to Grand View Research, the primary care market will experience a CAGR of 3.2% over the next 10 years, which is also moderate growth.
With such a demand for more medical practices and a greater emphasis on general health, we believe that [Company Name] is starting at the right time and will see great success.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the community residents of [location] and its surrounding areas.
The community of [location] has thousands of middle-class individuals and families seeking an affordable medical practice to take care of all their health concerns.
Customer Segmentation
Our clinic is a general private medical practice that will treat patients of all ages, incomes, physical abilities, races, and ethnicities. However, there are a few customer segments that we will focus on:
- Middle-Class Individuals: Many middle-class individuals avoid getting healthcare because the costs can be overwhelming. Our practice will attract these individuals with our affordable services, insurance partnerships, and flexible payment plans.
- Hospital Patients: Patients that use hospital services often end up paying far more than they should for basic healthcare. Even if they use insurance, patients still get nickel and dimed when simply getting a health screening or immunization. Furthermore, they rarely have a genuine relationship with their doctor since hospital doctors have so many patients. [Company Name] aims to attract patients who are fed up with these costs and are looking for long-lasting relationships with their medical team.
- Families: Families look for medical practices that can treat everyone in the family. This is far more convenient and affordable than going to multiple doctors. Our clinic will offer pediatrics for young children as well as general healthcare for any adults in the family, all in the same space.
V. Competitive Analysis
Direct & Indirect Competitors
The following businesses are located within a 5-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
City Metro Hospital
Founded in 1968, City Metro Hospital is one of the most popular hospitals in [location]. Thousands of residents get all their primary care and emergency care needs taken care of with City Metro. It provides almost every service you can think of and enlists the help of thousands of doctors, nurses, and other expert medical professionals.
Though City Metro Hospital will continue to thrive, it does not foster an environment designed for long-lasting relationships. Since the pandemic, the hospital has been overwhelmed with patients and a staff shortage. This has led to doctors seeing thousands of patients and enormous wait times. [Company Name] will offer a more intimate setting where patients and doctors can create a long-lasting relationship that spans decades.
Quality Doctors
Quality Doctors is a private medical practice that provides highly personalized medical care. Quality Doctors includes a team of dedicated healthcare professionals with dual residency in emergency medicine and internal medicine. The practice offers same-day/next-day appointments, telemedicine, office visits, and home visits. Services offered by Quality Doctors include primary care, urgent care, and virtual visits.
Like City Metro Hospital, Quality Doctors is a large care system that cares for thousands of patients. This means that patients also do not get a close relationship with their doctor, which many crave. Furthermore, Quality Doctors has put much of its money and services toward emergency care in recent years and reduced its primary care services. Patients who want a lasting relationship with a primary care doctor will feel more welcome with [Company Name].
Johnson Community Care
Established in 1949, Johnson Community Care is a private medical practice with multiple locations. Patients all around the state of [state] can receive care at any location near them. Each site provides primary care services, emergency care, pharmacy services, and lab testing. Instead of heading to multiple locations to get all of these services, patients can get all their healthcare needs taken care of in one building.
Though Johnson is a highly successful medical practice, its major downfall is that it only provides services to those with its unique insurance plan. Therefore, anyone who has insurance through another company or plans provided by their employer cannot receive care at Johnson without paying out-of-network prices. [Company Name] will partner with many insurance companies and provide flexible payment plans to help as many patients as possible.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s location is in a high-traffic area that is easily accessible to thousands of residents. It’s visible from the street with many people walking and driving to and from work on a daily basis.
- Patient-oriented service: [Company Name] will have a staff that prioritizes the needs of the patients and educates them on the proper way to take care of themselves.
- Management: [Founder’s Name] has a genuine passion to help the community. Because of her previous experience and reputation in the medical community, she is fully equipped to open this practice.
- Relationships: [Founder’s Name] has developed strong connections with her patients and fellow staff during her career. Many patients have expressed interest in following [Founder’s Name] to her new practice, and some former colleagues have shown interest in working for the clinic. [Founder’s Name] also has relationships with medical equipment suppliers and insurance companies.
- Client-focused healthcare services, where the company’s interests are aligned with the customer
- Service built on long-term relationships
- Big-hospital expertise in a small-clinic environment
- Moderate pricing for all preventative and general health services
- Immunizations
- Healthcare counseling
- Preventative health and wellness checkups
- Health screenings
- Setting up and cleaning up treatment and screening rooms
- Marketing
- Bookkeeping
- Social media management
- Hiring and training staff
- Maintenance functions
- Staff management and scheduling
- Booking appointments
- Checking patients in
- Other general administrative functions
- Administrative Assistants (1 to start)
- Maintenance Personnel (1 to start)
- Nurses (2 to start)
- Doctors (1 to start)
- Clinic design/build: $100,000
- Medical supplies and equipment: $130,000
- Working capital: $170,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the company’s unique value proposition:
Promotions Strategy
[Company Name] will target all residents of [location] within a 20-mile radius. The company’s promotions strategy to reach the most clientele include:
Referrals
[Company Name] understands that the best promotion comes from satisfied patients. The clinic will encourage its patients to refer their friends and family by providing healthcare benefits for every new client produced. This strategy will increase in effectiveness after the business has already been established.
Social Media
We will maintain a social media presence to attract local clients looking for a new doctor or medical practice. We will post information about our team, services, and general health tips for better wellness. To create a genuine connection with our patients, we will also use social media to engage with them and answer any questions they may have about our practice.
Website
[Company Name] will have an informative and attractive website featuring all its services and referrals from other satisfied patients. The website will be highly informative and be designed in a way that is friendly and eye-catching.
SEO
[Company Name] will invest in a high SEO presence so that the clinic is listed at the top of the Google or Bing search engine when a potential patient is researching private medical practices in [location].
Insurance Partnerships
[Company Name] will partner with local and national insurance companies. These services will recommend our clinic when their customers search for nearby medical practices.
Direct Mail
[Company Name] will use a direct mail campaign to promote its brand and draw clients. The campaign will blanket specific neighborhoods with simple, effective mail advertisements highlighting the credentials and credibility of [Company Name].
Pricing Strategy
[Company Name]’s pricing will be significantly lower than big hospitals. We will partner with as many insurance companies as possible to ensure that our patients’ medical care is covered. For services not fully covered by insurance, we offer a flexible payment program, so patients are not overwhelmed by their medical bills.
VII. Operations Plan
Functional Roles
[Company Name] will need to fulfill the following functional roles to execute its business plan and ensure the company’s success:
Health Care Functions
Administrative Functions
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is owned and operated by [Founder’s Name], who has been working as a doctor at local hospitals for [X] years. Throughout her career, she has worked with hundreds of patients and families and taken care of all their general and preventative care needs. Though she has never run a private medical practice herself, she has worked in the industry long enough to gain an in-depth knowledge of the business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
[Company Name] will also employ nurses, expert medical staff, and administrative assistants that are passionate about helping the local community.
Hiring Plan
[Founder’s Name] will serve as the company CEO and president. In order to launch the business, we need the following additional personnel:
IX. Financial Plan
Revenue and Cost Drivers
The revenues for [Company Name] will come from the fees it will charge the patients and their insurance for the health care services it provides.
The cost drivers for the company will be the payroll of the staff, lease on the office building, medical supplies and equipment, and marketing costs.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $400,000 to launch. The capital will be used for clinic design, equipment, salaries, marketing expenses, and working capital.
Specifically, these funds will be used as follows:
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of patients | Average |
|---|---|
| FY 1 | 100 |
| FY 2 | 120 |
| FY 3 | 150 |
| FY 4 | 200 |
| FY 5 | 225 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
