If I had a nickel for every person who groans when mention of a business plan surfaces in a conversation, we could eliminate the federal deficit! Okay, maybe that is optimistic but still, what is the groaning about? Business planning and business plans are fundamental in moving a service or practice forward. Business plans are often associated with organizations intending to make a profit and seeking funding, but their value is wide-spread in the non-profit world and especially important with hospitals and service-line development.
Too often, the business plan gets moved to the “back burner” because of time constraints and never receives its fair share of reflection and planning. And even worse, the service may get implemented without a solid planning process and that is where the trouble begins.
Rationale for Developing a Business Plan for your Hospital Service Line
A good business plan is never really done. It is constantly being revamped. The goal is not getting it done but rather having a repository of information in an acceptable format that compels testing and implementation. The plan is the guide and by creating a plan, you will discover what is necessary for success. You will alter the plan for different audiences once you have the basic template but consider having two basic formats: one for internal use and one for external conversations.
The actual posture of writing your business plan will push you to serious contemplation and that is where the benefits are derived. You are creating a roadmap for your service line and considering the key elements stretches your thinking. Knowing what resources are required (space to personnel), what your payer mix might be and forecasting utilization will help you estimate how long it will take before the service contributes to the operating margin.
Once you are done (with the first version!), you will have your objectives articulated and the process outlined that will help you reach those objectives. You will be taking the guesswork out of the mix and applying solid, useful planning that will enable you to carefully guide your service toward success and then check back in when assumptions or the environment changes. The plan will serve as your playbook and kept up-to-date, it provides you with a key management tool serves as fodder for crafting management reports.
Business Plan Elements
- Business plan elements typically include the following:
- Executive Summary
- The Organization
- The Management Team/Personnel
- The Service
- Operation Plan
- Market Overview (include competition)
- Market Plan
- Implementation Plan