In The Name of Allah, the Most Beneficent, the Most Merciful

Project on:

As submitted by:

Muhammad Mazhar Manzoor

CONTENTS
UNIT 1
1.1 Vision Statement 1
1.2 Mission Statement ..2
1.3 Executive Summary 3

UNIT 2
2
Introduction .....04
2.2 Industry Analysis .................................................................06
2.3 Description of Venture 09
2.4 Marketing Plan 12
2.5 Organizational Plan .14
2.6 Assessment of Risk .....16
2.7 Financial Plan ..18
2.8 Appendix .23

VISION

01

My vision is to be reputable entrepreneur in our society and giving some

facilities to our citizens within affordability of their class. I make some efforts
to accomplish our aim.
As i know every entrepreneur is going to start new business and needs
preparation for a most accurate business plans which help them out to have a
great opportunities in the chosen business. Business plans are nothing short of
a must. To get out and get experience, no matter how good the plan is, i 're
going to learn something once i try it. Most successful business has found a
low-cost way to experiment and know quickly whether it works. Therefore i
have map to work and make a future business plan to setup Health Care
Hospital at Karachi Pakistan.
Any business, but particularly a small business, must constantly adapt to
changing market conditions, new business tools, and new opportunities to
continue to grow and prosper its business so that in this report i will diagnosis
business situations that looking for growth opportunities. To develop our
business plan i focus on the following points.

How i organize this business. What will be the criteria of selection?

How i generate and avail resources to give business a practical picture.
What will be the main focuses during developing business plans?
What type of criteria i should focus to create actual representation.
How i manage this business in accordance to market situation.
What types of tools are necessary in developing business and business
plan?
What kinds of attempts are necessary to solve the problems arising
during and after the business plan?

Hence, in this report i analyze the situations and state of affairs to know
basically about the business developing strategies and business plans.

MISSION

02

"He who saved a life saved the Mankind - (Al-Quran)

To work with utmost devotion and boost up the standard of organization with in
flinching efforts in challenging conditions and situations. Main mission is to
step-in a practical world by creating a future business plan with the help of
application of concepts, tools, techniques i have studied so far. This business
plan will prove as a guide in future for us.
To work simultaneously, to respect opinions and view of others. To be reliable
& accountable for our own team participation. To work on assigned task &
challenges, accepting each member thoughts. I will identify, create a plan of
action utilizing everyones knowledge, soliciting input from all in the
organization. Being responsible and acknowledging each personal thought and
efforts put in by each member. To be successful as a team & as individuals."
To continually develop the potential by acquisition of key personal and
professional skills required for advancement into an executive management
position within organization. The value authenticity and joyfulness because
seeing these traits in another makes us feel comfortable around them and know
that i can trust them. I want to be one who others trust and feel comfortable
with, so i will show the authentic, joyful self more often.

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

03

Health care hospital currently exists to manage medical practices. These

services relieve medical professionals of tedious detail work, but rarely do they
offer a means to substantially maximize the practice's bottom line. Health care
Hospital will not only free office staff for more crucial tasks, but will also
maximize return from insurance carriers.
National statistics show only about 70 percent of insurance claims,
initially submitted on paper, and are ever paid by insurance carriers. With
electronic submission Physicians 1st Billing and Claims can increase the
percentage of claims paid to around 98 percent.
Additional statistics indicate that it currently costs a medical practice
beti en $8.00-$10.00 per claim to process insurance for their patients. Health
care Hospital can reduce these costs by 50 percent or more.
Statistics show turnaround on paper insurance claims to be 30, 60, even
90 days or longer, creating serious outstanding receivables for the practice. By
submitting claims electronically, Health care Hospital can generally have
money in the physician's hand within 14-18 days. Of course, this reduces
outstanding receivables proportionately and tremendously improves cash flow.
Statistics also show a 30 percent suspension/rejection rate for paper
insurance claims. This doesn't mean that the claims are never paid. What it does
mean is medical staff must hassle with insurance carriers over payment. With
the extensive editing performed on electronic maintain prior to their
transmission to carriers, this percentage is reduced to 2-3 percent. Claims are
submitted with a 98 percent accuracy rate.
Health care Hospital is contributing over 50,000 to this business. I are
requesting to borrow another 25,000. Please give this detailed business plan
your attention. The use of these funds is explained in the Start up section.

ENTREPRENEURSHIP

04

ENTREPRENEURSHIP
To create a new business plan

INTRODUCTION
a.

NAME & ADDRESS OF BUSINESS

The name of business is Health - Care Hospital. In Pakistan a substantial

portion of the population reside in rural areas with low family incomes and
bare realization of importance of healthy living conditions. This document
guides planners to create consistent, complete, and efficient business plans. It is
meant to serve as a reference for all new business planning. Each opportunity is
unique, so elements of this guide which do not apply to a given business
opportunity may be omitted. It is looked at Gulistan-e-Jauhar Block-1 Karachi.

b.

NAME & ADDRESS OF OWNER

This business is organized by Muhammad Mazhar Manzoor who is

residing at Karachi.

c.

NATURE OF BUSINESS

This business will provide healthiness services to customers basis on small

business. The title, Health Information Technology, may not be one with which
you are familiar, but people employed in this field are a vital component of
every medical setting. You can find Health Information Technicians in every
hospital, outpatient clinic, nursing home, health insurance organization,
physician's office, hospice and mental health facility.

ENTREPRENEURSHIP

05

Health Information Technicians are the individuals who compile the data
for medical-related agencies. More importantly, they determine specifically

how that data is complied and reported to insurance companies, government

agencies and others. These individuals have the technical skills needed to
maintain the components of health information systems consistent with the
medical, administrative, ethical, legal, accreditation and regulatory
requirements of the health care delivery system.

d.

Statement of Financing Needed

The project is proposed to be financed with the financial assistance of

National Bank of Pakistan under Demand Finance Scheme in the form of local
currency loan Rs. 10.192 million, to be paid off over six years. This debt will
cover the purchase of land, equipment and construction of Building. The paid
up Capital of proposed firm would be Rs: 4,000,000/-. The proposed debt
equity ratio would be 60.76%: 39.24%.

e.

Statement of Confidentiality

This business is confidential and is the property of the owner listed

above. It is intended only for use by the persons to whom it is transmitted and
any reproduction or divulgence of any of its contents without the prior written
consent of the member of business is prohibited.

INDUSTRY ANALYSIS

INDUSTRY ANALYSIS

Future Outlook and Trends

06

In addition to developing a concurrent model of underlying medical care

trends, our objective was also to develop forecasting techniques using leading
indicator or economic scenario relationships to project future trends. These
models are constructed using software that detects trend variables and other
interventions on an automatic basic. The final variables that comprise the
statistical models of our medical trend history and resulting forecasts are: CPI
(excluding energy), Real Personal Income (with multiple lags generally of 3 to
5 years), and a variable to reflect the relative increase of Medicare vs. NonMedicare hospital inpatient per diems. These variables have consistently shown
a strong relationship over the nearly 15 years i have been doing this modeling.
These variables explain the annual growth in our medical care trend model,
along with a constant 3.5% per year of excess growth (trend variable) from
inception of our data. This is roughly consistent with the average excess
Medical GDP vs. Total GDP growth over this period. Hoi ver, in the early
1990s, our models began to over predict future trends. After some time our
software was able to identify a paradigm shift and to develop a reduction in the
annual "excess growth" from about 3.5% down to about 1% beginning in the
late 1980s. The other model variables remained relatively unchanged. I
attributed this reduction to the "managed care effect" since it happened
concurrently with the rapid "managed care" expansion at that time. This
reduction seems to have remained in effect at least through the late 1990s.

THE PROJECT
The Proposed project of Health care Hospital and will provide routine
and specialized medical care to the general public in the under fields.
1.
Operations
2.
Laboratory
3.
X-Ray.
4.
Labour Room
5.
Physiotherapy
6.
Dental
7.
Skins
8.
Neurology
9.
Orthopedics
10.
Eye
For the purpose of this appraisal the operational efficiency of the
proposed Hospital has been assumed to be 60% in the first year, 70, in the
second year, 80% in the third year, And 80% in the fourth year and Subsequent
07
INDUSTRY
NALYSIS
year
basing 330Adays
in a year.

BUILDING
The Building proposed to be constructed will have covered area of
11992 Sqft on Multi Story Building the Total Cost of the project building is
estimated at Rs: 13.441 million.

EQUIPMENTS

The total cost of the equipment proposed to be purchased is estimated at

Rs: 11.253 million based on the quotations received from different machinery
suppliers in response to invitation published in the daily news papers calling
tenders for supply of equipments for the proposed hospital.

UTILITIES
a.

WATER:

b.

POI R:

c.

PERSONNELS: The hospital will employ 90 persons comprising,

The requirement of water will be met from public Health

Engg: Div KARACHI water tank capacity of 5000 gallons will be
constructed.
The poi r requirement is estimated 100 KW which will be
obtained from KESC.
nurses, technicians, and administrative staff.

OBJECTIVES
Important objective of an effective medical health-care system is to
ensure the availability of facilities for early prevention, diagnosis and treatment
of various aliments and diseases which afflict us from time to time. The
concern for health standards is of such crucial importance, that government in
all the major countries, key health service facilities, registration of medical
products are closely monitored by appropriate governmental agencies and
standards of quality control are rigidly enforced. As such, hospitals primarily,
as an Institution most conveniently and readily stand in position to meet the
above objectives professionally and in a sustained way. Even private hospital
when monitored properly can function and operate under high degree of
standards of comply with the basic objectives of the health policies.

COMPETITORS ANALYSIS:
The purpose of this step is to assess the competition by understanding what the
competitor is doing and can do and determining its relative strengths and i
aknesses. The outcomes of this analysis will aid in focusing on appropriate
program development opportunities. Competitor analysis requires identifying:
geographic location of competitors
the competitor's service mix
INDUSTRY
ANALYSIS
the competitor's market share

whether the competitor is for-profit or not-for-profit

the competitor's capabilities and hospital resources

the competitor's physician resources
existence of other freestanding competitors
methods competitors use to attract patients
areas where the competitor is most vulnerable

08

potential moves or strategy shifts the competitor will make as a result of

the new service
the competitor's pricing structure

In Karachi the main competitor is Aga Khan Hospital because who give the
more facilities of every one but Low income persons can not afford because its
very expensive.

MARKET SEGMENTATION
The business of hospital is segmented in accordance with location and income
pattern of peoples. Location is concern as the low area working class is given
preference and small pattern income people are also concerned as preferable.

INDUSTRY FORECASTS (BAR)

INDUSTRY ANALYSIS
INDUSTRY ANALYSIS
Potential
Customers

Growth

2003

2004

2005

2006

2007

CAGR

Physicians

2%

867

800

893

906

920

1.49%

Dentist

2%

179

183

187

191

195

2.16%

Other
Total

2%

18

18

18

18

18

0.00%

1.58%

1,064

1,081

1,098

1,115

1,133

1.58%

DESCRIPTION OF VENTURE

DESCRIPTION OF VENTURE
Services

09

Our position in the market will be a full-service medical reimbursement

business with individual pricing. As stated previously, our goal is one-stop
shopping for medical practices when it comes to administrative functions.
Health care system Electronic Claims Service's policy is to customize our
charges based on the work i do, and the needs of each office. I find that each
practice is unique and, therefore, i do not quote a "standard charge" for
services.
A detailed description of the electronic submission process follows. The
data necessary to submit claims will be downloaded from the medical office
and input into specialized computer software. The software performs certain
generic edits on the data and stores the information. When a batch of claims is
complete for an office, it is time to transmit to the national clearinghouse. The
data travels via modems and telephone lines to the clearinghouse where the
data is edited a second time. These edits are performed on each claim before
they are transmitted on to the carrier, thus guaranteeing accuracy and payment
in most cases. Upon receiving the insurance claim from the clearinghouse, the
carriers process the claim and send payment directly to the medical practice.
With electronic transmission to the clearinghouse and on to the carrier,
computerized data verification, and elimination of most of the human element,
the process of claims payment is greatly simplified and accelerated. Physicians
will no longer wait 30, 60 or 90 days for payment, but will have money in their
hands usually within 14-18 days. As practices begin experiencing the benefits
of electronic submission, many will see the advantage of out-sourcing other
administrative functions.

TOTAL
COST
RENDERED

OF

SERVICES

DESCRIPTION COST
ON:

1st
Year

2nd 3rd
Year year

4th
year

5th
year

Major Operation
Minor Operation
Eye Treatment
Out door Patients
(Ent. Dental, Skin, TDC)
Laboratory
Physic Therapy
Ambulance Service
Other (X-Rays, Ech ECG)
Total

428
428
72
190

612
610
102
278

798
798
134
360

1010
1008
170
452

1060
1062
176
476

166
2
28
142
1456

240
4
40
204
2090

306
4
52
264
2716

392
6
66
332
3436

440
6
72
356
3648

DESCRIPTION OF VENTURE

10

SIZE OF BUSINESS
This business will provide medical services on the reasonable charges to
small size businesses, which consist on 50-90 employees, are performing their
duties.

OFFICE EQUIPMENTS
A.

B.

EQUIPMENT TO BE LOCALLY PURCHASED

1.

Major Instruments

2.

Small Instruments

3.

Hospital Kitchen

4.

Eye Speculum

5.

Cataract Knife (imported)

EQUIPMENT TO BE IMPORTED
1.

Main OT Instruments

2.

Blain Forceps

3.

Laboratory

4.

X-Ray and Ultrasound Machine

5.

D.C Generator 240 KVA

DESCRIPTION OF VENTURE

C.

11

OFFICE EQUIPMENT
1.

Computer for Records

2.

Inter Com: System

3.

Typewriter

PERSONNEL / STAFF
1.

Consultants

2.

Seniors Doctors

3.

R.M.O (Doctors Male)

4.

R.M.O (Doctors Female)

5.

Nurses

6.

X-R (Radiologist)

7.

Lab Technician

8.

Ward Boy

9.

Manager Finance

10.

Receptionist / Tel: Operator

BACKGROUND OF ENTREPRENEURS
An entrepreneur must take risks with his/ her own capital in order to sell and
deliver products and services while expending greater expending greater energy
than the average businessperson in order to innovate. He / she able to face with
daily stressful situation and other difficulties. He / she will also able to
establish a balance beti en ethical exigencies, economic expediency and social
responsibility.

12

MARKETING PLAN

MARKETING PLAN
PRICING
TREATMENT
Major Operation
Minor Operation
Eye Treatment
Delivery
Out door Patients
(Ent. Dental, Skin,
TDC)
Laboratory
Physic Theraphy
Ambulance Service
Other (X-Rays, Ech
ECG)

CHARGES (Rs)
10,000
7,000
1500
6,000
500
280
600
300
500

DISTRIBUTION
As i know this factor provides utility to the consumer, that is makes a services
convenient to purchase when it needed. Environmental issues may also be
important in distribution strategy. Special considerations and regulations
regarding drug products are very essential to distribute with the help of this
strategy and to provide the products and services to low income customer
within affordable rates. I will use different channels in order to provide
services to our valuable customers on the basis of services provided strategy.

PROMOTION
MARKET
AND
JUSTICATION

ECONOMIC

As such naturally all efforts are made to keep the family medical care
expenses at the loi st possible levels in spite of high incidence of diseases and
low life expectancy rates as compared to other developed Counties.

MARKETING PLAN

13

The concept of periodic medical check-ups and preventive medical therapy is

not given the importance that is considered necessary in the developed
Countries. It is only when the ailments/ diseases affect the patients physical and
functional capacities, that medical guidance and treatment is considered
necessary. Hospitalization of patients generally is restored to only in extreme
and unavoidable situations.
Hoi ver, with rise in per capita income, improvements in living
standards and increasing a awareness of the important of health conditions, the
medical and health care needs in the country have undergone significant
changes and development during the past two decades. Hospital/medical cares
institutions have undergone sustain tail reinforcement to meet the requirements
of modern health-care and services particularly in the rural areas.

CONTROLS
Control allover the hospital staff and market situation this responsibility
is owner of the hospital.
Access controls
o
o
o

Limit number of visitors to those essential for patient support.

Screen all visitors at point of entry to facility for signs and
symptoms of influenza.
Limit points of entry to facility; assign clinical staff to entry
screening.

ORGANIZATIONAL PLAN

14

ORGANIZATIONAL PLAN
FORM OF OWNERSHIP
Owner of the hospital should experience consists of three years of
administrative experience, 13 years managerial experience in the Building
Materials industry. As a manager, owner of the Hospital gained experience in
marketing, back-office operations, sales, and managing people. Owner will use
this experience in managing the Marketing and Sales departments. Owner of
the hospital must have the experience of medical field.

AUTHORITY OF PRINCIPALS
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o

Administration/senior management (including fiscal officer)

Legal counsel/risk management
Infection control/hospital epidemiology
Hospital disaster/emergency coordinator
Engineering/physical plant/industrial hygiene/institutional safety
Nursing administration
Medical staff (including outpatient areas)
Intensive-care unit
Emergency department
Laboratory services
Respiratory therapy
Nutrition and food services
Pharmacy
Environmental services (housekeeping, laundry)
Public relations
Security
Materials management
Education/training/staff development
Occupational health
Diagnostic imaging
Information technology

MANAGEMENT TEAM BACKGROUND

In conjunction with the design of the organization the entrepreneur will
need to assemble the right mix of people to assume the responsibilities outlined

in the organization structure. There are some important issues to address before
assembling and building the management team. In essence the team must be
15
able
to accomplish threePfunctions:
ORGANIZATIONAL
LAN

Execute the business plan.

Identify fundamental changes in the business as they occur.

Make adjustment to the plan based on changes in the environment and

market that will maintain profitability.

Background of entrepreneur must be from medical field in order to

accomplish the business easily.

ROLE AND RESPONSIBILITIES OF

MEMBERS
Healthcare Facility Responsibilities:

Develop planning and decision-making structures for responding to

pandemic infection.
Develop written plans that address: disease surveillance, hospital
communications, education and training, triage and clinical evaluation,
facility access, occupational health, use and administration of vaccines
and antiviral drugs, surge capacity, supply chain and access to critical
inventory needs, and mortuary issues.
Participate in pandemic infection response exercises and drills, and
incorporate lessons learned into response plans.

State and Local Responsibilities:

Develop statewide and local or regional plans to manage an influenza

pandemic.
Assist healthcare facilities in conducting exercises and drills to test
healthcare response issues and build partnerships among healthcare and
public health officials, community leaders, and emergency response
workers.
Develop a communications infrastructure to facilitate and ensure the
timely dissemination and transfer of information beti en the healthcare
and public health sectors.
Address legal issues that can affect staffing and patient care.

LIFE EXPECTANCY

Life expectancy in the country is 63 years. This is low compared to

advanced counties of the world hoi ver; the life expectancy in the country has
been steadily improving.

ASSESSMENT OF RISK

16

ASSESSMENT OF RISK
EVALUATE My AKNESS OF BUSINESS
(HOSPITAL)
Specialty hospital rival strongly contend that such facilities unfairly
undermine the fiscal viability of full service community hospitals, to the
publics ultimate detriment. By losing better-reimbursed cases to specialty
hospitals (which, it is argued, result from alleged physician conflicts of
interests rather than greater efficiencies or consumer preferences), community
hospitals will become unable to cross-subsidize indigent care and other
unprofitable services with the revenue now flowing to the new competitors.
Whether such subsidization is itself an economically negative and inefficient
practice that merits deference is a topic for actual debate, as is the proper way
to calculate the relative community contribution of tax paying specialty
hospitals when compared with tax-exempt facilities. Such debate seems likely
to reverberate among policymakers for the foreseeable future.

STRENGTHS
Their strengths are:
Experience.
Education.
Large client base.
From the perspective of free market competition, the end of the moratorium
can be viei d as a healthy and beneficial step. Viei d through this lens, a
specialty hospital is an efficient, technologically advanced focused factory in
the positive spirit of free market capitalism predict. The removal of needless
government barriers to entry will, in this view, greatly benefit the consuming
public by applying necessary market discipline to all providers, which will be
particularly beneficial in an age of consumer driven health care and increased
individual financial responsibility for personal health expenditures.

ASSESSMENT OF RISK

17

NEW TECHNOLOGIES
The computer software that is the crux of Health Care Hospital
reimbursement business is state of the art. Health Care Hospital is running in
Windows 98. The software was specifically developed as a tool for medical
reimbursement consultants. This is important because some software being sold
is written to manage a doctor's office and does not necessarily incorporate all
functions that are needed for consultants. The software also includes the latest
features needed for managed care organization management, including tables
for the numerous fee schedules which may be required and customized reports
to evaluate contacts.
When annual clinical strategic planning has started and hospital leaders
have begun to analyze or reaffirm what clinical services they want to offer the
community, the hospital can then conduct credible technology strategic
planning. Key elements of this planning involve an initial audit of existing
technologies for fit with current or desired clinical services, plan for
replacement and selection of new technologies, setting priorities for technology
acquisition, and developing a process to implement equipment acquisition and
monitor ongoing utilization. "Increasingly, hospitals are designating a senior
manager (e.g., and administrator, the director of planning, the director of
clinical engineering) to take the responsibility for technology assessment and
planning. That person should have the primary responsibility for developing the
strategic plan with the help of key physicians, department managers, and senior
executives.

CONTINGENCY PLANS
For physicians as i ll as established hospitals the overriding decision from
which other specific strategy will flow, is the basic but ultimate choice of being
for or against specialty hospital development in an overall sense. This
strategic determination may be reminiscent of parallel debates which occurred
during the earlier development of a distinct. In that context, many hospital
systems initially chose to oppose any development by joined physicians under
any circumstances, but ultimately decided to pursue mutually beneficial joint
ventures when it became apparent, sometimes at significant cost that the
problem would not simply go away by itself. In many such instances,
creating strategic alliances proved to be a more effective step for all
stakeholders rather than choosing sides for a fight to the finish.
A similar path seems likely to unfold for specialty hospitals. In any event, the
overriding yes or no strategic decision may have lasting repercussions

involving more than simple opposition to a possible threat or pursuit of short

term economic gain. Such a decision should certainly be made in a
dispassionate and i ll informed manner by all concerned parties.
18
FINANCIAL PLAN

FINANCIAL PLAN
SOURCES AND APPLICATION OF
FUNDS
Sources of Funds
Mortgage
Loan
Personal Funds
Net Income From operations
Add: Depreciation
Total Funds Provided

100,000
50,000
46,000
20,000
216,000

Application of
Funds
Purchase of Equipment
Inventory
Transportation
Phone
System
Total Fund expended
Net increase in working capital

50,000
90,000
40,000
2,000
182,000
34,000
216,000

19

FINANCIAL PLAN

PRO FORMA INCOME STATEMENT

FOR THE PERIOD ENDED 30-JUNE-2008
Sales
Less: sales return
Net Sales

Less
:

500,000
-20,000
480,000

Cost of Goods Sold

Merchandise Inventory (Beg)

Add:

Net Purchases

Purchases
Add:
Transportation
Delivered purchases
Less: Purchases return
Net purchases
Total merchandise available for sale
Less: Merchandise Inventory (End)
Cost of good sold
Gross Profit

Less
:

300,000
60,000
360,000
-30,000
330,000
390,000
-90,000
-300,000
180,000

Operating Expenses

Salaries Expenses
Rent Expenses
Income Tax Expense
Advertising Expense
Depreciation Expense
Utilities Expenses
Total Operating Expense
Income from business operation

Add:

60,000

50,000
45,000
10,000
7,000
20,000
2000
-134,000
46,000

Other Income
Interest income
Net Profit

7000
53,000

20

FINANCIAL PLAN

PRO FORMA BALANCE SHEET

AS ON JUNE 30-2008
Equities

Assets

Share Holder Equities

Authorized Capital
500,000 ord share @ Rs 10

Fixed Assets

= 50,00,000

Machinery
12,00,000
Less: Allowance for depreciation(200,000) 10,00,000
Preliminary Expense
6,000
Furniture
30,000

Issued & Paid up Capital

Add: Current Assets
80,000 ord share @ 10
Add: Retain Earning
Total Share Holder Equity

800,000
150,000
950,000

Add: Liability
Bond Payable
Account Payable
Cash dividend Payable

200,000
30,000
40,000

Cash at Bank
Account Receivable
Office Supplies
Prepaid Utilities
Merchandise Inventory (End)
Prepaid Rent

75,000
85,000
12,000
2000
90,000
10,000

Add: Reserves & Fund

Reserve for Plant Expenses
Reserve for Contingencies

Total Equities

50,000
40,000

13,10,000

Total Assets

13,10,000

21

FINANCIAL PLAN

PRO FORMA CASH FLOW

For the Year Ended June 30 - 2008
Cash Flow from Operating Activities
Net Income
Adjustment for (non cash item)
Add:
Depreciation
Amortization of Patents

Increase in Account Receivable

Decrease in Inventory
Decrease in Account Payable
Net Cash Generated from operating

53,000

20,000
5,000

-75,000
90,000
-35,000

25,000
78,000

-20,000
58,000

Cash Flow From Investing Activities

Purchase of Equipment (60,000 - 40,000 + 10,000)
Net Cash flow from Investing
activities

-30,000
28,000

Cash Flow From Financing Activity

Payment of Debt
Received from issue of share
Cash Dividend Paid
Net Cash used by financing activities
Net Increased in cash
Add: Cash & Cash equivalent at beginning
Cash & Cash equivalent at ending

FINANCIAL PLAN

-20,000
50,000
-40,000
-10,000
18,000
50,000
68,000

22

Break-even Analysis
The break-even analysis shows that Health Care Hospital has a good
balance of fixed costs and sufficient sales strength to remain healthy. As with
any business, the first few months will show negative financial numbers.
Break Even Analysis
Break Even =

Fixed Cost
Sp - VC
300,000
100,000 - 40,000
300,000
60,000

Break Even

Sales
Variable Cost
C.M
Fixed Cost
Net Income

APPENDIX

50,000

5000 * 10

500,000
-400,000
100,000
-100,000
0

23

APPENDIX

FINAL THOUGHTS
Marketing and networking are two of the biggest ingredients that are
included in starting a new business. The problem is that marketing and
networking along with other skills are needed to be a successful entrepreneur.
These are not generally taught in exercise physiology undergraduate programs
at colleges and universities. Therefore, it is strongly recommended that in
order for exercise physiology as a profession to blossom to its full capacity,
exercise physiologist must learn how to market themselves to the public. If
they can create a demand in the public sector for our services, i can then obtain
credibility in the publics eyes.

OPPORTUNTIES
Opportunities now abound in the specialty hospital field, certainly for
proponents and, to some extent, for opponents as Ill. Subject to careful
assessment of economic (e.g., reimbursement) and business (e.g., managed care
contract availability) issues, physicians, hospitals and entrepreneurs are now
free under federal law to pursue specialty hospital development to meet
perceived consumer demand.
In contrast, specialty hospital detractors may ill switch their focus to
individual state legislatures in an effort to gain legal protection that was
rejected by CMS at the federal level. Whether by expanding state mini-Stark
physician referral prohibitions, creating new certificate of need requirements or
otherwise, there will probably be legislative efforts to limit development in
some jurisdictions. A clear legal analysis of local requirements will become
essential to developing a specialty hospital strategy whether pro or con in
any event.