1.0 Executive Summary
The purpose of this business plan is to raise $175,000 for the development of a home healthcare agency while showcasing the expected financials and operations over the next three years. The Home Healthcare Agency, Inc. (“the Company”) is a New York based corporation that will provide both non-medical and skilled care services to this market. The Founder, John Doe, anticipates that the business will launch revenue generating operations in the fourth quarter of 2021.
1.1 The Services
The first revenue center for the business will come from the ongoing non-medical care specific for elderly and developmentally disabled people that need care throughout the day. The business will have aides that can render overnight services when require. Through these operations, the Company’s staff (direct and independently contracted) will render services that will include general assistance, companionship, meal preparation, medication reminders, light housekeeping, grocery shopping, and assistance with dressing.
The Company’s second revenue center will come from skilled care services that will be rendered by registered nurses and licensed practical nurses. These individuals will assist with day to day living for clients while rendering specific services including the administration of medications, bathing, wound care, catheter care, and skilled hospice support. The business will directly employ and independently contract with nursing professionals to render these services.
The third section of the business plan will further describe the services offered by the Home Healthcare Agency.
1.2 Financing
Mr. Doe is seeking to raise $175,000 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 7 year loan with a 5% fixed interest rate. The financing will be used for the following:
- Development of the Company’s office location.
- Financing for the first six months of operation.
- Capital to purchase two company vehicles.
Mr. Doe will contribute $25,000 to the venture.
1.3 Mission Statement
The Home Healthcare Agency’s mission is to become the recognized leader in its targeted market for in home nursing and non-medical care services.
1.4 Management Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the healthcare industry. 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 with home healthcare needs within the target market. The business will also expand its connections with medical professionals throughout the greater New York metropolitan area in order to ensure referrals.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Home Healthcare Agency, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Home Healthcare Agency requires $175,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Mr. Doe is not seeking an investment from a third party at this time.
2.4 Management Equity
John Doe owns 100% of the Home Healthcare Agency, Inc.
2.5 Exit Strategy
If the business is very successful, Mr. Doe may seek to sell the business 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 the Home Healthcare Agency. Based on historical numbers, the business could fetch a sales premium of up to four times earnings.
3.0 Home Healthcare Services
As in the executive summary, Home Healthcare Agency will provide both non-medical and skilled in-home nursing services to the New York general public. For the Company’s non-medical services, the business will hired qualified caregivers that can compassionate tend to the needs of clients on a day to day basis. On a per hour basis, the Company intends to charge $20 per hour for these services. Approximately 25% of the Company’s caregivers will be independently contracted. These services will include:
- Communication Support
- Dressing Assistance
- General Companionship
- Grocery Shopping
- Meal Preparation
- Medication Reminders (but not administration)
- Transportation
The Company’s skilled services will generally produce an equal amount of revenue to the business’ non-medical services. Through these operations, the business will hire registered nurses and licensed practical nurses to render services to clients. Approximately 35% of staff for these operations will be independently contracted. The Company’s skilled nursing staff will follow all regimens prescribed by the client’s physician. These services will encompass administration of medicine, insulin injections, hospice support services (in conjunction with a palliative medicine practitioner), catheter care, wound care, and all other services that can be rendered in this scope of practice.
Management will implement a number of procedures during the hiring process in order to ensure that only the most qualified and compassionate care givers and nurses are hired by the business. The Company will conduct thorough background checks as well as drug tests on all hired staff (direct and independently contracted). The business will also verify all educational credentials and licensure.
At all times, the Company will maintain relationships with third party physicians that can be contacted in the event of an emergency. All clients will be required to provide the names of all physicians that treat them as well.
The Company’s billing will be managed by a third-party processing agent. This will allow the business to more quickly receive its fees especially as it relates to skilled nursing charges that are charged to private insurance companies or publicly funded healthcare systems.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the in home healthcare industry, the customer profile, and the competition that the business will face as it progresses through its business operations.
Currently, the economic climate is uncertain. The pandemic stemming from COVID-19 has created a substantial amount of turmoil within the capital markets. It is expected that a prolonged economic recovery will occur given that numerous businesses are being forced to remain closed for an indefinite period of time (while concurrently having their respective employees remain at home). However, central banks around the world have taken aggressive steps in order to ensure the free flow of capital into financial institutions. This is expected to greatly blunt the economic issues that will arise from this public health matter.
However, home healthcare agencies are immune from negative changes in the economy.
4.2 Industry Analysis
Within the United States, there are nearly 440,000 companies that provide in home care services (non-medical and skilled). The industry employs over 1.9 million people. Aggregate revenues are $97 billion.
The industry is set for expansive growth over the next twenty years as more people from the baby boomer generation require a greater degree of care. The Company will be in an excellent position to capitalize on this growth of the industry moving forward.
One of the reasons that the industry is set for major growth is that many families prefer to have their loved ones remain in their home versus in an assisted living or nursing home facility (unless it is absolutely necessary). The number of companies entering the market is expected to increase as demand grows over the next ten years.
4.3 Customer Profile
All of the Company’s clients will be developmentally disabled and elderly people that require full time non-medical or skilled nursing services. Management has developed the following demographic profile that will be used in conjunction with marketing operations:
- Over the age of 65
- Has an annual household income of $50,000
- Will spend $2,000 to $4,000 per month on the Company’s services
- Lives within 15 miles of the Company’s location
4.4 Competition
Given the strong demand for home healthcare services, there are always a number of home care agencies (non-medical and skilled) that provide care to the general public. In this section of the business plan, you should focus on examining companies that operate in a similar capacity to that of your business. This includes estimating the number of clients that they have, annual revenues, and number of employees. This information can be sourced through publicly available records.
5.0 Marketing Plan
The Home Healthcare Agency will use a number of marketing strategies in order to ensure maximum visibility for its operations among the demographics discussed in the fifth section of the business plan. Below is an overview of the strategies to be used.
5.1 Marketing Objectives
• Maintain strong relationships with referring physicians, surgeons, medical centers, allied health professionals, and hospital systems throughout the target market.
• Develop an expansive online presence that includes the use of social media and search engine optimization.
• Distribute print advertisements among regional newspapers throughout the target market.
5.2 Marketing Strategies
Foremost, Management intends to develop ongoing referral relationships with medical professionals throughout the target market area. For the skilled care portion of the Company’s operations, it is absolutely imperative that these relationships are developed so that prescribed medical care (including hospice support care) can be provided to clients with the intent to receive reimbursement from private insurance companies and publicly funded healthcare systems. The Company will develop a number of brochures that will be distributed to physicians’ offices.
The Home Healthcare Agency will also maintain an expansive online presence that will include a proprietary website as well as profiles among major social media platforms. The Company’s website will be search engine optimized and mobile friendly. In order to generate traffic from the onset of operations, the business will use pay-per-click marketing. The business will also use targeted advertisements on Facebook in order to further drive interest among people searching for home healthcare agencies. The business will have a number of professionally produced videos created that will showcase the operations of the business. These videos will be posted to the Company’s social media pages, shown on the website, and posted to YouTube.
The business will also distribute full and half page print advertisements among circulars and newspapers. These advertisements will focus on the affordability and compassionate care offered by the Company’s staff.
Starting in the second year of operations, the business will have televised advertisements shown on a regional basis that will be aired on cable television. The Company will work with a qualified advertising and marketing firm that will create these videos. All produced commercials will also be shown on social media platforms.
5.3 Revenue Overview
6.0 Organizational Plan
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:
- The Home Healthcare Agency will have an annual revenue growth rate of 16% per year.
- The Owner will acquire $175,000 of debt funds to develop the business (carrying a 7 year term and a 5% interest rate).
- Management will contribute $25,000 towards the venture.
7.2 Sensitivity Analysis
The Company’s revenues are immune from negative changes in the economy. By operating in both a non-medical and skilled care capacity – the business will have a strong mix of revenue that will ensure profitability at all times. Home Healthcare Agency will generate its revenues from client payments as well as insurance reimbursement. Additionally, the business will maintain a low operating and overhead cost infrastructure in order to ensure a strong financial cushion for the business.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
Appendix A – Home Healthcare SWOT Analysis
Strengths
- Revenues are relatively immune from negative changes in the economy.
- Low operating and overhead costs will ensure that the business remains profitable at all times.
- A qualified Founder/CEO (John Doe) who will be able to guide the operations of the business to profitability.
- Providing both non-medical and skilled care services will provide substantial economic security for the Company.
Weaknesses
- Substantial regulatory and compliance issues that need to be addressed on a daily basis.
- Potential for legal liabilities as a result of injury or malpractice.
Opportunities
- Continued hiring of care givers and nurses that will boost the revenues of the business.
- Acquisition of similar companies in the target market.
- Develop centralized locations in other markets.
- Integration of new services into the Home Healthcare Agency’s ecosystem (with a focus on hospice services).
Threats
- Changes in regulation can impact the operations of the business (limited risk)
- A resurgence of COVID-19 (limited risk given that the business’ skilled nursing operations).