BUSINESS PLAN

FOR THE ESTABLISHMENT OF A

NURSE REGISTRY SERVICE

Plan Outline

1. Business Concept

- Objectives
- Target market/ marketing area
- Future of this market
- Type of business structure/alternatives

2. Financial Plan

- Sales and profits objectives

- Start-up requirements

3. Personnel/ Administrative Plan

- Recruitment objectives/hiring criteria

- Salary and incentive pay structure
- Executive/consultant compensation

4. Competition

5. Working Capital

CONFIDENTIALITY AGREEMENT

This business plan ("the Plan") is intended as a tool for discussion.

However, investor acknowledges that certain information contained herein might
have proprietary value to the proponent/preparer of this plan. Wherefore,
Investor agrees to keep confidential all information contained in this plan.
Investor promises not to use such information in competition with the registry
service subject of this plan.

Date __________ _______________________________

Signature of Investor
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I. BUSINESS CONCEPT

Prefatory Statement

This Business Plan ("the Plan") will outline the major short and long range
objectives in establishing a registry nurse service ("Registry"). Since the actual
process of planning is cumulative, requiring the inputs of those interested in the
success of the business, it is by no means a complete blue-print of the business.
Rather, it is intended as a discussion tool. Comments, criticisms, and
suggestions are always welcome.

Objectives

This registry's main objective is to establish a supplemental nursing

service providing professional personnel primarily to hospitals, and eventually (if
economically feasible) to nursing homes, industrial areas, and private homes
(private duty).

Traditionally, registry services were established to provide personnel in

almost all areas of nursing care. The reason is purely economics. It is commonly
perceived that special area personnel are paid 20-30% more than their
counterparts in the floor. This translates into 20-30% more expected profits for
the registry for exerting practically the same placement efforts. As will be
explained below, the registry we plan to establish would have a definite
advantage in entering into the market, even in the lucrative special areas.
Moreover, with a registry that is well-connected and/or well-promoted, it can also
dominate the placement of personnel in the non-special areas.

One distinct advantage of offering placement in all areas is the availability

of personnel with varied backgrounds and training. For purposes of eventually
establishing a reputation in quality special area placement, it is imperative that
we pick from a wide variety of qualified professionals. From such talent pool,
there should be no problem in handpicking an elite group to be utilized almost
exclusively for particular hospitals, areas, or doctors, e.g. cardio-vascular, etc.
Moreover, the impact on training and turn-over costs would be minimized
because they can be spread out over a period of time.

Target Market/Marketing Area

The registry will initially operate in the Houston metropolitan area and
parts of South Texas, providing services to dozens of area hospitals. Eventually,
and by the mobile nature of this business, it expects to place personnel in
contiguous and even out-of-state areas.
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Future of this market

The immediate future of this geographical market is encouraging. From a

temporal point of view, the registry should be operational by autumn to be able to
provide services during the peak winter months. More importantly, contracts with
most nurse registries would expire during summer and are up for renewal by fall.
It is important that our firm is operational by then to be able to compete.

With the establishment of several specialty hospitals in Houston and

South Texas (such as cardio-vascular and dialysis facilities), the prospects for the
registry would be tremendous. If the registry is established soon, it should have
enough lead time to pick and possibly assist in training the necessary special
area personnel in time for these facilities' operation.

II. TYPE OF BUSINESS STRUCTURE

The choice of legal structure under which the business operates will affect
your taxes and personal liability. The pros and cons of selecting a particular
structure is one major aspect that needs further discussion.

Sole Proprietorship - It is the simplest and cheapest form of business to

start. The major disadvantage is that you personally assume all liabilities of the
firm. The business income also becomes your personal income. However, it is
the least complicated among the alternatives. A good insurance policy will
protect you against many, if not all liabilities.

Partnership and Limited Partnership - General partnerships are similar to

sole proprietorships from the liability and taxation standpoints. Each partner has
unlimited liability. However, the limited partnership is an attractive variation in
that a person can invest money in an operation, have liability to the amount
invested, and have tax benefits of the partnership. The limited partner, however,
cannot participate in management. Partnerships are generally more flexible.
Besides, a good insurance will protect you against most, if not all liabilities.

Corporation - A corporation limits your personal liability and provides

continuity/ease of transferability of ownership. The disadvantages include the
cost of starting a corporation vis-a-vis sole prop or partnerships, not to mention
the more extensive government entanglement and paperwork. There are some
fringe benefits you enjoy as a stockholder and/or employee of a corporation that
would not be available to sole props and partners. For example, group life,
medical and dental insurance premiums are tax deductible for key employees.
Some implications of the Tax Reform Act of 1986 may cause you to consider
using an S-Corporation structure (taxed much like a partnership, but offering
corporate protection from personal liability; no double taxation - corporate tax is
eliminated). A skilled CPA or tax attorney can explain these matters further.
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III. FINANCIAL PLAN

Sales and Profits Objectives

The registry/agency going rate for general duty nurses is $30 per hour and
up to $35 per hour for special area nurses. The registry typically provides
housing ($300/month), utilities/transportation ($100/month), retention bonus and
continuing education benefits ($50/month) as some of the fringe benefits. As will
be shown below, even by paying the contract nurses as much as $35/hour just to
be more competitive, the returns are still significant.

The breakeven tables and analysis below assume a 365-day year both
from income and expense standpoint. In reality, preferences of the
owners/employees of the business will determine the number of days that the
firm will operate in a year. However, the trends and percentages would still
remain valid. As shown hereunder, it would take only 6 shifts per day (or 2
nurses per shift) in order for the firm to breakeven.

PROJECTED BREAKEVEN PROFIT & LOSS STATEMENT

REVENUES
(average: 48.00 hours/day; $876,000 100%
6 RN shifts/day)

VARIABLE COST (for 6 nurses)

Payroll for Nurses 613,200 70.00%
Living/transport/CLE Allowance 32,400 3.71%
Est. workers comp premiums 4,700 .51%
TOTAL VARIABLE COST $650,300 74.22%

FIXED COST (for whole operation)

Staff payroll & payroll/SSS taxes $116,500 13.30%
(2 RN manager/consultant @ $2,500/mo)
(2 schedulers/acctg/mktg @ $2,000/mo)
Health insurance 15,000 1.72%
Rent and Utilities 15,000 1.72%
Telephone 6,600 .75%
Answering Service & Pager 1,800 .20%
Office Supplies 1,800 .20%
Postage, copying, etc. 3,000 .34%
Food, Lodging & Travel - Recruitment 24,000 2.74%
Representation 15,000 1.72%
Insurance (liability & property) 12,000 1.37%
Advertising & promotion 15,000 1.72%
TOTAL FIXED COST $225,700 25.78%

PROFIT & LOSS -0-

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BREAKEVEN ANALYSIS

Assumptions:

Breakeven Point - Fixed Cost/ (1-Variable Cost as % of Sales)

Fixed Cost - $225,700 per year
Variable Cost - 74.22% of Sales
Nurse' Salary - $35 per hour (8 hour shift)
Charge to hospital - $50/hour or $400 per 8 hour shift

No. of Nurses Profit or

Working/ day Sales Fixed Cost Variable Cost (loss)

30 4,380,000 225,700 3,250,836 1,129,164

20 2,920,000 225,700 2,167,224 752,776
10 1,460,000 225,700 1,083,612 150,688
7 1,022,000 225,700 758,528 37,772
6 876,000 225,700 650,300 -0-
5 730,000 225,700 541,806 (37,506)

Star-up Requirements

Office location - A moderate size office of approximately 700-1,000 sq. ft.

in a professional building or shopping plaza would be sufficient, preferably one
that is accessible and/or open 7 days a week. The office is important during the
start-up period because about 20-30% of potential employees would be walk-in
applicants. The rest would normally be interviewed outside and/or out of town.
At least 4 persons should operate a registry that anticipates to place up to 30
shifts a day or around 9 nurses per shift. This initial personnel compliment are
broken down as follows: Two (2) full-time scheduler/staffers who would also act
as bookkeeper and marketing reps during spare time; and Two (2) nurse
managers/consultants who would double as hospital marketer and nurse
marketer at the same time. Moreover, they are expected to take work
assignments in the absence of qualified nurses during peak or emergency
situations.

The following summaries refer to the anticipated start-up costs, which

include pre-opening costs and projected working capital/cash flow requirements
for the first few months.

IV. PERSONNEL/ADMINISTRATIVE PLAN

Recruitment Objectives
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Most nurses who work full time in hospitals can spare 1-2 shifts a week of
overtime work for a registry. The immediate recruitment goal is to attract nurses
who work full time in hospitals and existing contract nurses presently working in
the area. The reason is obvious. They are already trained and are familiar with
the facilities. Moreover, recruitment costs would be minimized. There are also
several nurses in the area who are interested in working full-time for a registry.

Considering that special area nurses are our target, the nurse
managers/consultants' long association with people in the registry business
would be valuable. Thus, the first wave of recruitment would be targeted for
personal friends, acquaintances, and referrals from people in the registry
business. The second wave would be recruitment by selective advertising in
area trade media aimed at attracting nurses from the immediate and contiguous
geographical areas. The third wave would be institutional recruitment, through,
trade journals, job fairs, and similar activities. However, with the projected volume
that we presented in this plan and because of the amount of working capital we
initially require, it is anticipated that recruitment efforts would barely touch the
third wave.

Salary and incentive pay structure

As started elsewhere in this plan, offering special area nurses with a

$35/hour pay would be very attractive, given the current $33-35/hour contract
rate elsewhere. Also, the fringe benefits have already been presented in the
breakeven charts and analysis, which basically include, housing ($300/month),
utilities/transportation ($100/month), retention bonus and continuing education
($50/month), and workers' comp premiums (optional).

Executive Compensation/Draw

Depending on the business structure agreed upon later on, it is expected

that the CEO of the business would be entitled to monthly compensation or
managing partner's draw. It is proposed that the minimum salary for the CEO
would be fixed as soon as the business has reached break-even point. As is the
case with registries who have nurses managers/consultants, in the event that the
staffing is short, he/she would be obligated to cover for the absent and/or
unavailable person. In such cases, the nurse/manager is entitled to a
preferential rate which is normally $5-10 more than the offered rate.

As started elsewhere, the corporate structure is preferred for the reasons

stated therein. However, a limited partnership would also be acceptable,
considering that the business considers taking liability insurance. If a corporation
is going to be formed, and if silent participation in the business is preferred by
investor, it could be recorded as a loan to the corporation. For instance, RMC
could act as the sole shareholder for all issued stocks, then the corporation
would borrow from the investor for the agreed amount, the latter taking a note
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from the corporation. As a collateral for the note, RMC would also assign some
of the shares equal to the agreed percentage of ownership and/or profits that the
investor wants from the corporation. Similar arrangements could be made for the
general or limited partnership type of business structure. However, if the investor
opts to become an ostensible player, then there would be no need for such
elaborate paperwork.

Although certainly subject to further discussion, it is proposed that the

investor would put up at least $220,000 while RMC would invest at least $16,000
or a total available liquid capital of $236,000.

Considering that RMC had exerted substantial labor in the past in

researching, testing, and practicing the intricacies of the business, as well as
evaluating the feasibility of the business in the target geographic area, it is
expected that his share in the net profits would be substantially more than what
the percentage of his capital contribution would bear to the total liquid capital, i.e.
his share of the net profits should include not only his capital contribution, but
also labor previously exerted as well as efforts to be done during the pre-
opening and operational phase of the business. A share of at least 50% of net
profits is proposed. Depending on the volume of the business (please refer to
the breakeven charts and analysis), a substantial return of investment is
anticipated even under the most conservative conditions.

V. COMPETITION

The major competition of this business are the current registry agencies
that provide nurses to hospitals in the area. The most glaring advantage that
RMC can provide to this new venture is the extensive contacts with nurses who
have utilized the services of the law offices in the past as well as the ability to
recruit and train nurses from abroad (Philippines, United Kingdom, Singapore,
Canada). A registry that has its own full-time nurses would have tremendous
advantage over the competition not only in terms of availability of warm bodies,
but also the ability to engage in long-term contracts or assignments.

Competitors' strength worthy of emulation would be the ability of some to

guarantee contract nurses with fixed number of days for a certain period, and the
ability to advance salaries regardless of when the hospitals settle their accounts.

VI. SUMMARY OF START UP COSTS

Pre-opening Costs

Leasehold

1st month's rent 1,250

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Security deposit 1,250

Equipment, Furniture, & Fixture

Incorporation fee, kit, licenses $ 500

Phone systems lease & hook-up 600
Answering service/pager 150
Computer & printer (2) 2,200
Software (accounting, billing, database,) 1,000
Electric typewriter (2) 250
Computer tables, desks, chairs 3,500
Filing cabinets 400
Office supplies 500
Office forms and supplies 1,000
Marketing brochures/mailers 3,000
Pre-opening promotion/marketing 4,000
Coffee maker, water cooler, small ref 400
Total pre-opening costs $20,000

VII. WORKING CAPITAL

The working capital of $236,000.00 is expected to be sufficient for an

operation based on a placement of at most 10 nurses per day during the first two
months and gradually increasing thereafter. It is assumed that hospitals pay their
accounts within 30 days of billing and no more than 60 days past due.
Therefore, the illustrations only calculate the period during the pre-opening phase
and the first two months of actual operation because it is expected that on the
third month, the hospitals would have paid their accounts for month one. These
payments would then be rolled over for the third month's use and so on.

Working capital summary

Pre-opening 1st month 2nd month

$20,000
Variable cost (10x$400/shiftx30x.7422) 89,064 89,064
Fixed cost ($225,700/12) 18,808 18,808
CEO compensation/draw _______ ______ _______
$20,000 107,872 107,872

Total initial working capital $235,744