Regina Ellis or Schaening
<![if !vml]>
<![endif]><![if !vml]>
<![endif]>
<![endif]><![if !vml]> |
<![if !vml]>
<![endif]>
<![endif]>
Document Contact
Name: Regina Ellis
Company: GP's On
Phone: 0431 629 053
Email: rschaening@yahoo.com.au
Mail: 28 Mossbery Street, Blair Arthur, 2560, NSW
Disclaimer and Intellectual Property
This document is issued by GP's On, ABN: 849 8320 8167. (“GP's On”)
<![if !vml]>
<![endif]>It is intended only for those persons to whom it is delivered personally by or on behalf of GP's On. It must not be copied or distributed to other persons without the prior written consent of GP's On.
<![endif]>It is intended only for those persons to whom it is delivered personally by or on behalf of GP's On. It must not be copied or distributed to other persons without the prior written consent of GP's On.
While GP's On has taken due care to ensure that the information contained in this business plan is true and correct and is not misleading or deceptive, neither GP's On nor any of its officers, employees or agents make any representations or warranties, express or implied, as to the accuracy of the information contained herein. GP's On does not warrant that this business plan is complete or that it contains all material information related to GP's On.
GP's On has not carried out any due diligence investigations in connection with the preparation of this business plan or any associated offer. Any investor making an assessment of GP's On and the risks relevant to an investment in GP's On should make its own independent investigation.
Information in this business plan (“Confidential Information”) is confidential. The Confidential Information is provided to you solely for the purpose of evaluating the merits of GP's On. You must not use the Confidential Information for any other purpose. You must not copy or reproduce the Confidential Information or give it to another person without the prior written approval of GP's On.
Business Snapshot
<![if !supportLists]>· <![endif]>A sole trader focused on delivering tangible growth in the General Practice Medical Services in Australia market
<![if !supportLists]>· <![endif]>Estimated Annual Net Operating Cash Inflows of $1,696,608 by the end of year 5
<![if !supportLists]>· <![endif]>The business solves a key problem for customers in the Setting up medical centres Niche
<![if !supportLists]>· <![endif]><![if !vml]>
<![endif]>A series of services designed specifically to meet researched customer needs
<![endif]>A series of services designed specifically to meet researched customer needs
<![if !supportLists]>· <![endif]>A clear market entry and growth strategy
<![if !supportLists]>· <![endif]>Only turnkey General Practice setup provider in Australia
<![if !supportLists]>· <![endif]>Established contact with potential staff
<![if !supportLists]>· <![endif]>A team with a clear vision to establish a profitable business
<![if !supportLists]>· <![endif]>Our business model that enables us to scale rapidly whilst maintaining sustainable cash flow
<![if !supportLists]>· <![endif]>Our sustainable competitive advantage is derived from our independence in the market which allows us to work for any medical clinic without compromising our business
<![if !supportLists]>· <![endif]>Our experience in setting up 3 medical centres positions us strongly to capture the forecast operating cash flows
Contents
Document Contact.................................................................................................................................................................... 2
Disclaimer and Intellectual Property..................................................................................................................................... 2
Business Snapshot.................................................................................................................................................................... 3
Executive Summary.................................................................................................................................................................. 6
Overview............................................................................................................................................................................... 6
Founders and Team............................................................................................................................................................. 6
Business Objective.............................................................................................................................................................. 6
Our services......................................................................................................................................................................... 6
Competitors.......................................................................................................................................................................... 7
The Customer....................................................................................................................................................................... 7
The Market........................................................................................................................................................................... 7
Financial................................................................................................................................................................................ 7
The Business Opportunity....................................................................................................................................................... 8
The Value Statement........................................................................................................................................................... 8
The Window of Opportunity.............................................................................................................................................. 8
Stage of Development........................................................................................................................................................ 9
Marketing................................................................................................................................................................................ 10
Market Size and focus...................................................................................................................................................... 10
The Customer..................................................................................................................................................................... 12
Positioning.......................................................................................................................................................................... 13
services............................................................................................................................................................................... 13
Distribution......................................................................................................................................................................... 13
The Operational Business Model.................................................................................................................................... 14
Summary............................................................................................................................................................................. 17
Operations............................................................................................................................................................................... 18
Team – Executive Capability............................................................................................................................................ 18
Business Development Schedule................................................................................................................................... 19
SWOTM Analysis..................................................................................................................................................................... 22
Strengths............................................................................................................................................................................. 22
Weaknesses....................................................................................................................................................................... 22
Opportunities..................................................................................................................................................................... 22
Threats and Mitigation...................................................................................................................................................... 23
Governance and Ownership................................................................................................................................................ 24
Owners and Directors...................................................................................................................................................... 24
Assets.................................................................................................................................................................................. 25
Financials................................................................................................................................................................................. 26
Investment.......................................................................................................................................................................... 26
Cash Flow Projections....................................................................................................................................................... 27
Analysis of the Base Case Scenario................................................................................................................................ 28
Analysis of the Best Case Scenario................................................................................................................................. 33
Analysis of the Worst Case Scenario.............................................................................................................................. 35
Summary.................................................................................................................................................................................. 37
Overview
GP's On sets up and recruits staff for medical clinics.
Our goal is to establish a profitable business.
GP's On’s current services are targeted at the General Practice Medical Services in Australia.
To date, our achievements include the following; set up 3 new medical clinics in NSW with a total of 60 staff including 16 doctors, and; set up 3 new pharmacies to complement the medical centres. Both the medical centres and pharmacies are profitable which is a testament to the organised way they were set up.
Founders and Team
GP's On was founded in June 2013 by, Regina Ellis, Manager to address a specific, identified opportunity in the Setting up medical centres market.
Business Objective
We aim attract a constructor of medical clinics to acquire the business.
Our strategy for demonstrating near term business viability is to set up six new clinics.
Our services
GP's On’s secret ingredient is our independence in the market which allows us to work for any medical clinic without compromising our business.
This unique capability has been used to develop our portfolio of services. Following in depth market research and testing we have decided to off the following services:
<![if !supportLists]>· <![endif]>Organize accreditation for the practice which would add be an income from the government of 80% of all billings
<![if !supportLists]>· <![endif]>Register for billings with HICAP machines and Medicare
<![if !supportLists]>· <![endif]>Get the provider number for the practice
<![if !supportLists]>· <![endif]>Organize PKI numbers for the practice identification
<![if !supportLists]>· <![endif]>Buy the relevant equipment that is needed and required by law
<![if !supportLists]>· <![endif]>Recruit staff by leveraging database of doctors, administrators, and nurses
<![if !supportLists]>· <![endif]>Train staff
<![if !supportLists]>· <![endif]>Set up the billing system
<![if !supportLists]>· <![endif]>Source equipment
Competitors
Our competitors do not have experience in setting up 3 medical centres.
We consider our key competitors to be:
<![if !supportLists]>· <![endif]>Doctor setting up centers themselves
<![if !supportLists]>· <![endif]>Administration managers
We are aware of our competitor’s strengths and weaknesses and have developed a comprehensive strategy to capitalise on this knowledge.
The Customer
GP's On’s target customers are developers of new medical centres and owners of existing medical centres.
The key issue experienced by our targeted customer group is the need for an expert to smoothly set up a medical center in the shortest time possible.
The Market
We estimate that market for General Practice Medical Services in Australia in Australia to be $10 Billion P.A. and growing at a rate of 4% annually.
We believe that this segment is growing at 7% PA and currently represents a value of $14m P.A. (+info: http://www.doctoralia.com.au/sitemap/medical-centers/county/victoria-10499).
Financial
We are seeking an investment of AUD $50,000 in the next 12 months.
In year 1 we expect to generate average monthly cash receipts from sales of $75,000. This figure will rise to $181,440 by year 5 with net operating income of $141,384 per month.
We aim to achieve a return on investment of 556%, achieving a valuation of $12,666,660 in year 5.
A discounted cash flow analysis reveals a current valuation of the business of $2,278,343.
The Business Opportunity
The Value Statement
GP's On has been developed with a core focus on our customer. Before developing our services, we focused on identifying the key value drivers for the Setting up medical centres customer segment.
To succinctly state how we provide value to our customers, we have developed a value statement that takes into account our positioning and broader business strategy within the marketplace:
“To take the hassle out of setting up a medical center”
The Window of Opportunity.
<![if !vml]>
<![endif]>The time is right for GP's On to deliver on its value statement. The opportunity represented in this business plan is time limited. We are strongly positioned to take advantage of the window of opportunity as due to the structure of the market where. Doctors must be a director of a medical clinic, so the experience remains in the hands of people who are not in the market for setting up a business that would benefit other clinics.
<![endif]>The time is right for GP's On to deliver on its value statement. The opportunity represented in this business plan is time limited. We are strongly positioned to take advantage of the window of opportunity as due to the structure of the market where. Doctors must be a director of a medical clinic, so the experience remains in the hands of people who are not in the market for setting up a business that would benefit other clinics.
The window of opportunity has emerged because nobody has identified this opportunity, currently I am the only business dedicated completely to setting up medical centres. The need has been around for decades, yet nobody has thought to build a business around it. The people who do have experience setting up clinics are usually owner operators and keep their new found knowledge to themselves.
Whilst others have made early attempts to exploit the opportunity, they have failed to achieve our expected success.
We expect that entering the initial window of opportunity will open up other additional business opportunities. New opportunities would also be created: once we have established our business of setting up clinics and recruiting staff we can go into operating clinics to re stock their equipment. Ultimately the medical centres could join together as a buying group where equipment and supplies can be purchased in bulk
Stage of Development
The GP's On business has been in development over the past 6 months. Whilst we have made some substantial progress, we would expect the next 12 months to be critical to our commercial success.
We are proud of our success in delivering two significant achievements on time and budget to date:
<![if !supportLists]>· <![endif]>Set up 3 new medical clinics in NSW with a total of 60 staff including 16 doctors.
<![if !supportLists]>· <![endif]>Set up 3 new pharmacies to complement the medical centres. Both the medical centres and pharmacies are profitable which is a testament to the organised way they were set up.
These activities were delivered within the anticipated time and budget. A project plan of the further development of GP's On will be provided later in this document. It will outline key milestones and is tightly integrated with the financials and financial scenario analysis.
The next key steps in our development schedule include:
Roll out - to build a business with regular contracts
Growth - to expand nationally
Buying group - to leveraged the relationships with clinics we have set up to create a buying group which allows for economies of scale
Marketing
Market Size and focus
Our analysis of the market has focused on a two tiered approach.
<![if !supportLists]>1. <![endif]>To understand the broad market in which the business will operate
<![if !supportLists]>2. <![endif]>To clearly identify our niche of focus
Using this approach to clearly understand the market in which our business will operate has enabled us to clearly focus our positioning, distribution, promotional strategy and pricing.
<![if !supportLists]>1. <![endif]>The market for General Practice Medical Services in Australia services
<![if !vml]>
<![endif]>The broader market has been identified as large and growing. It is currently occupied by several key industry players including:
<![endif]>The broader market has been identified as large and growing. It is currently occupied by several key industry players including:
<![if !supportLists]>· <![endif]>Doctor setting up centers themselves
<![if !supportLists]>· <![endif]>Administration managers
Our preliminary research shows that the broad market size is $10 Billion P.A.. The market size provided relates to Australia.
This research has been compiled from a variety of sources including http://www.ibisworld.com.au/industry/default.aspx?indid=611.
Given industry information we accessed, we estimate that the market will continue its growth at 4% for the next 3-5 years.
Further to our research, this industry is made up of companies and practitioners that primarily provide general practice services.
<![if !supportLists]>2. <![endif]>Our selected market Niche
<![if !vml]>
<![endif]>There are a number of niches that exist within the overall marketplace. Attempting to enter the market with a broad based product would not provide sufficient focus to achieve the desired market penetration.
<![endif]>There are a number of niches that exist within the overall marketplace. Attempting to enter the market with a broad based product would not provide sufficient focus to achieve the desired market penetration.
Following in depth analysis of the market, we believe that an opportunity exists to focus on developing the Setting up medical centres niche.
We estimate that to be $14m P.A. (+info: http://www.doctoralia.com.au/sitemap/medical-centers/county/victoria-10499).
The niche has emerged several factors:
<![if !supportLists]>1. <![endif]>Changes in the healthcare's system in that funding has been cut to hospitals which has increased waiting times.
<![if !supportLists]>2. <![endif]>People are aware that they are more likely to become infected by being in a hospital compared to going to a GP.
<![if !supportLists]>3. <![endif]>Medical clinics are closer than hospitals.
<![if !supportLists]>4. <![endif]>Although many people have the experience, they do not want to help the competition.
Our competitive advantage in this niche will be derived from Regina's combination of business and medical acumen, she is better positioned than anyone else to take advantage of this opportunity.
Our services have been selected specifically to appeal to this address the needs of this niche. Our entry into the niche will be to make contact with medical center construction companies, making them aware of our services. For the employment database we will work with Centerlink, employment agencies, colleges, and schools.
The Customer
<![if !vml]>
<![endif]>To better explain who our customer is and how they might use our services, we have developed a brief customer scenario:
<![endif]>To better explain who our customer is and how they might use our services, we have developed a brief customer scenario:
"Dr. Brown after 15 years of working as a GP wanted to open his own practice. The only problem is that he didn’t know where to start. He was daunted by the myriad of paperwork and did not know how to go about finding staff. A college of his told him about GPs On a company specializing in setting up medical centers. He got online and phoned Regina.
A week later Regina flew down to Melbourne from Sydney and came to meet Dr. Brown in the outer South Eastern Suburbs of Melbourne. They sat down and began to talk. Pretty soon Dr. Brown was even more overwhelmed by the number of tasks required to put together a practice, though at the same time he was relived to know that there was someone like Regina who could help. Dr. Brown mentioned that he was not planning on having on site pathology but Regina highly recommended it. Every day people will have to be travelling to the hospital a couple of km away and it will make your clinic less desirable. Another benefit of pathology is that you get free sharps containers and collection service. Dr. Brown was not intending to buy an autoclave, but Regina recommended it because although many procedures can be done with disposable tools, many common procedures for example to do with the eye do not have appropriate disposable tools. An Autoclave not only allows for more variety of tools it also saves money in the long term because disposable tools are quite expensive. Dr. Brown agreed and was grateful for the advice.
Regina went away and prepared three proposals at different price points. The middle priced proposal was $80k with 50% due at the beginning of the contract and the remainder at completion. Dr. Brown was thrilled, he could focus on being a doctor and outsource the business development to an expert.
Regina was happy to get started the next month, she moved down to the outer South Eastern Suburbs and began the 8 week engagement only once the deposit had been cleared. She runs a string practice of only investing time with a client once they had paid the deposit to reduce the risk of runaway clients who get advice and never pay.
The Grand opening was on time and a complete success. Dr. Brown was extremely happy with the service. There was nothing for him to stress about, now he could get to work in his new practice. Whenever speaking to colleagues Dr. Brown was not shy to recommend GP’s On.
Positioning
Our position within the market place has been developed to ensure that we are positioned as an expert with the skills to get the job done right in the shortest time possible.
As a reflection, our pricing is higher than employing a full time staff to do the work. However we will be able to get the clinic up and running many months quicker.
services
Our product list has been developed to address the identified customer need of an expert to smoothly set up a medical center in the shortest time possible.
To meet this need our services include:
<![if !supportLists]>· <![endif]>Organizing accreditation for the practice which would add an income from the government of 80% of all billings
<![if !supportLists]>· <![endif]>Register for billings with HICAP machines and Medicare
<![if !supportLists]>· <![endif]>Get the provider number for the practice
<![if !supportLists]>· <![endif]>Organize PKI numbers for the practice identification
<![if !supportLists]>· <![endif]>Buy the relevant equipment that is needed and required by law
<![if !supportLists]>· <![endif]>Recruit staff by leveraging her database of doctors, administrators, and nurses
<![if !supportLists]>· <![endif]>Train staff
<![if !supportLists]>· <![endif]>Set up the billing system
<![if !supportLists]>· <![endif]>Source equipment
Distribution
To connect our services with customers, the following distribution strategy will be employed: “Payment terms will be 50% upon order and 50% upon delivery. For staff recruitment, a fee of 20% of annual salary is charged”
The Operational Business Model
<![if !vml]>
<![endif]>Throughout the development stage of this business, we assessed alternate business models for this opportunity using a structured 9 element approach. The below overview of the preferred business model for GP's On provides a quick snapshot of the key functions, relationships and revenue sources.
<![endif]>Throughout the development stage of this business, we assessed alternate business models for this opportunity using a structured 9 element approach. The below overview of the preferred business model for GP's On provides a quick snapshot of the key functions, relationships and revenue sources.
The business model provided below was selected following detailed analysis. It provides a quick snapshot of how GP's On will operate, generate revenue and deliver value to shareholders and customers.
The 9 elements considered include:
- The Value Proposition – What are we offering to our customers?
- Capabilities/Resources – What skills and capacity do we require to deliver on the value proposition?
- Partnerships – Who do we need to work with to create value and access our revenue streams?
- Activities – What will the business actually do?
- Relationships – What organisations can influence our buyers purchase decision (excludes partners)?
- Costs – What significant cost types are likely to be incurred as a services company?
- Channel to Market – Who will support us in our desire to connect setting up medical centres with developers of new medical centres and owners of existing medical centres
- Revenues – What will our customers pay for, how will we earn our revenue?
- Customers – Who are our customers, purchasers and consumers?
<![if !supportLists]>1. <![endif]>The Value Proposition
Our value proposition was developed from our customer’s perspective, to ensure that GP's On solves a key issue/opportunity for our customers.
“To take the hassle out of setting up a medical center”
This value proposition has been used to guide the development of the overall business model.
<![if !supportLists]>2. <![endif]>Capabilities & Resources
Specific skills and organisational capabilities are required to effectively deliver on our value proposition. These capabilities will be the focus of future recruitment activities.
We see our business critical capabilities as:
<![if !supportLists]>· <![endif]>Up to date knowledge of medical regulations on both state and federal level
<![if !supportLists]>· <![endif]>Leverage relationships with clients to get more business
<![if !supportLists]>· <![endif]>Project management skills
<![if !supportLists]>· <![endif]>Ability to attract high quality staff
<![if !supportLists]>· <![endif]>Capability to set up IT systems
We have worked hard to assemble as many as possible of these capabilities into the organisation to date and the focus of our development path will be to acquire outstanding resources to fill any capability gaps.
<![if !supportLists]>3. <![endif]>Partnerships
We understand that GP's On does not operate in isolation, we require active engagement with existing industry participants. Our selection of potential partners for the development of GP's On is critical to influence our customers to engage with our services. We have carefully selected partners that will reflect and support our market positioning.
Our early partner development activities will be focused on Construction companies such as Icon. Further partnerships will be developed over time including Centerlink; and Medical equipment suppliers such as Team Med.
These partner relationships will assist in building diverse revenue streams and ensuring our services are supported in the market.
<![if !supportLists]>4. <![endif]>Activities
<![if !supportLists]>· <![endif]>Several primary activities will outline what the team at GP's On is actually focused on achieving. The Meeting with potential clients will be the primary activity undertaken.
Supporting activities include:
<![if !supportLists]>· <![endif]>Filling out and submitting applications
<![if !supportLists]>· <![endif]>Shopping for equipment and supplies
<![if !supportLists]>· <![endif]>Interviewing potential employees
<![if !supportLists]>· <![endif]>Managing sub contractors
By executing effectively on these activities we can ensure effective progress towards setting up six new clinics over the coming 12 months.
<![if !supportLists]>5. <![endif]>Relationships
There are a number of organisations that can influence our customer’s decision to purchase. We will develop relationships with the following organisations:
<![if !supportLists]>· <![endif]>Medicare
<![if !supportLists]>· <![endif]>Job networks
<![if !supportLists]>· <![endif]>TAFE's (Medical receptionist course)
We believe that ongoing, sustainable relationships with these organisations can be developed over the next 12-18 months.
<![if !supportLists]>6. <![endif]>Costs
Ensuring that costs remain below operating revenue is a core priority. We understand our key cost centres and the interplay of these costs with revenue.
Our major cost items include:
<![if !supportLists]>· <![endif]>Wages
<![if !supportLists]>· <![endif]>Travel
<![if !supportLists]>· <![endif]>Accommodation
<![if !supportLists]>· <![endif]>Transport
Detailed costings for each of these items and the associated cash flow implications are provided in the financial forecasts. (See our cash flow statement in the financial section for details)
<![if !supportLists]>7. <![endif]>Channel To Market
Reaching our customers is a key priority for GP's On. We understand the alternative market channels for General Practice Medical Services in Australia services, and the margins associated with engaging these channels.
We have elected to use the following channels to reach the developers of new medical centres and owners of existing medical centres:
<![if !supportLists]>· <![endif]>Direct to customers
<![if !supportLists]>· <![endif]>Doctors magazine advertisements
<![if !supportLists]>· <![endif]>YouTube ad
<![if !supportLists]>· <![endif]>Internet search for website
This multi-layered approach will ensure a diverse and secure income stream.
<![if !supportLists]>8. <![endif]>Revenues
To further leverage our market entry approach and strategy, we have identified several possible revenue streams. This breadth of revenue has been designed to maximize our return on marketing efforts to reach our customers.
Expected revenue streams to be developed include:
<![if !supportLists]>· <![endif]>Fee for setting up new medical center
<![if !supportLists]>· <![endif]>Fee for screening employees
<![if !supportLists]>· <![endif]>Fee for setting up pharmacy
<![if !supportLists]>· <![endif]>Fee for setting up pathology
<![if !supportLists]>· <![endif]>Centrelink incentives (Aboriginal, long term unemployed)
These revenue streams have been designed to maximize the “Lifetime Customer Value” of our target market to GP's On.
<![if !supportLists]>9. <![endif]>Customers
Combining market research with our understanding of the target market, we have identified several key customer groups.
Reaching the following customers will be critical to the success of GP's On:
<![if !supportLists]>· <![endif]>GPs setting up a new practice
<![if !supportLists]>· <![endif]>GPs currently operating a practice
<![if !supportLists]>· <![endif]>Pharmacists
<![if !supportLists]>· <![endif]>Pathology owner
These customers have been selected to represent only those whose needs are most closely addressed by our services and can be reached effectively using the identified channels to market.
Summary
We believe that the unique design of this business model, demonstrated by our unique ability to combine and leverage each of these elements will ensure that GP's On is a success.
Operations
Team – Executive Capability
The team has many of the requisite skills to establish a profitable business Any additional capabilities required will be acquired through contracting and recruitment of new team members.
The team is led by Regina Ellis, Manager who has 15 years of experience as a nurse. Her qualifications include Bachelor of Nursing, Masters of Business and Bachelor of Community Development. She is responsible for all aspects of the business including winning new contracts, recruiting staff, and obtaining the legal licenses necessary to set up a medical practice.
Nancy and Dianna’s role will be as the Virtual Assistant based in Sydney. Her primary responsibility will be answer phone calls, and emails.
Mark, Stephan, and Elijah are Investigators who will travel to a site to take photos, and report back.
TBD, Administrator, will work on the documentation and all of the tasks required to set up a new clinic. She will work under the guidance of Regina.
Business Development Schedule
<![if !vml]>
<![endif]>In building a path forward for GP's On, we have identified three significant development milestones. We will monitor the achievement of both time and cost parameters in the achievement of these milestones closely. Any investment into the business can be provided in tranches, pegged to these.
<![endif]>In building a path forward for GP's On, we have identified three significant development milestones. We will monitor the achievement of both time and cost parameters in the achievement of these milestones closely. Any investment into the business can be provided in tranches, pegged to these.
A detailed project plan outlining how and who will be responsible for the delivery of these tasks is provided in a formal project plan on the following pages.
Milestone 1: Roll out
We believe this stage is critical in order to build a business with regular contracts
Core tasks to be undertaken in this stage include:
a) Build website
b) Set up virtual office
c) Network with construction companies
d) Set up agreement with construction company
d) Set up agreement with construction company
e) Advertise in "The Doctor Magazine"
We have already commenced delivery of this stage of activity and believe that we are well placed to meet the timeframes outlined in the project plan, and the costs provided in the financial section.
Milestone 2: Growth
Our objective in the delivery of this stage is to expand nationally.
Key actions to deliver this milestone will include:
a) Sign first contract
b) Execute first contract
c) Execute 5th contract
d) Execute 12th contract
e) Employ full time administrator
Successful delivery of this milestone will be judged by the efficiency of the growing and setting up medical centres.
Milestone 3: Buying group
This final stage has been designed to leverage the relationships with clinics we have set up to create a buying group which allows for economies of scale.
To achieve this objective, we will action the following:
a) Establish contact with current clients
b) First bulk purchase client
c) 5th bulk purchase client
SWOTM Analysis
<![if !vml]>
<![endif]>Our SWOTM (Strength, Weaknesses, Opportunities Threats and Mitigation Strategies) analysis has been informed by our knowledge of competitors and the marketplace in which we operate. Following extensive facilitated discussions, the following strengths, weaknesses and opportunities have been developed. Where possible any weaknesses have been identified as opportunities for further focus during the development of the business.
<![endif]>Our SWOTM (Strength, Weaknesses, Opportunities Threats and Mitigation Strategies) analysis has been informed by our knowledge of competitors and the marketplace in which we operate. Following extensive facilitated discussions, the following strengths, weaknesses and opportunities have been developed. Where possible any weaknesses have been identified as opportunities for further focus during the development of the business.
Strengths
<![if !supportLists]>· <![endif]>Only turnkey General Practice setup provider in Australia
<![if !supportLists]>· <![endif]>Established contact with potential staff
<![if !supportLists]>· <![endif]>Ability to complete project is a short time
<![if !supportLists]>· <![endif]>Proven track record of successfully establishing 3 medical centres in NSW
<![if !supportLists]>· <![endif]>Business model that enables leveraging of experience. Operators usually set up their own clinics and thus the experience gained in setting up the clinic is stuck in the head of the clinic manager never to be used again.
<![if !supportLists]>· <![endif]>Work with all kinds of medical providers and in all states of Australia
These strengths have been consolidated to achieve our core objective “establish a profitable business”.
Weaknesses
<![if !supportLists]>· <![endif]>Lack of contacts in the construction industry in each state
<![if !supportLists]>· <![endif]>Travel expenses not recouped if sales trips are not fruitful
<![if !supportLists]>· <![endif]>No ability to see that a sales lead can actually pay for the services. This may lead to wasted time and money on dead leads
<![if !supportLists]>· <![endif]>Little experience in states outside of NSW
Opportunities
<![if !supportLists]>· <![endif]>Contact construction companies to build referral relationships
<![if !supportLists]>· <![endif]>Qualify clients before travelling and get them to sign an agreement that they are serious about engaging professional services
<![if !supportLists]>· <![endif]>Due to receiving 50% of payment upfront, a delay would not be seriously detrimental to our business
<![if !supportLists]>· <![endif]>To research and become expert in the legal requirements around GP clinics in each state
Threats and Mitigation
The key potential threats have been identified, and mitigation strategies developed to minimise their impact on the business.
Threats
|
Mitigation Strategies
|
<![if !supportLists]>· <![endif]>Delayed delivery times of equipment due to supplier issues
|
<![if !supportLists]>· <![endif]>We will only work with the suppliers who have a reputation for punctuality
|
<![if !supportLists]>· <![endif]>Delayed delivery of equipment due to Doctors bad management or late payment
|
<![if !supportLists]>· <![endif]>Make clear contracts that stipulates payment terms as final payment due at delivery unless delayed at fault of Doctor.
|
<![if !supportLists]>· <![endif]>A competitor establishes themselves who has a similar background to Regina
|
<![if !supportLists]>· <![endif]>With our database of potential employees we are better positioned to offer a complete service including staffing and training
|
<![if !supportLists]>· <![endif]>Decline in the demand for General Practitioner clinics
|
<![if !supportLists]>· <![endif]>As a nimble organisation we could move into other related areas such as setting up dental practices
|
Governance and Ownership
Owners and Directors
The current ownership structure of GP's On is as follows:
Regina Ellis, Manager owns 100% of the business. She has 15 years of experience as a nurse. Her qualifications include Bachelor of Nursing, Masters of Business and Bachelor of Community Development. She is responsible for all aspects of the business including winning new contracts, recruiting staff, and obtaining the legal licenses necessary to set up a medical practice.
The owner is driving the plan set up six new clinics in the short term, and in the long term, attract a constructor of medical clinics to acquire the business.
Assets
The following is a catalogue of the 4 key business assets that will be used to deliver on our strategic objectives.
Asset
|
Ownership Structure
|
Why it is critical to GP's On
|
Degrees in Business, Nursing and Community Development
|
Owned
|
The Masters Degree in Business enables GP's On to understand the needs of investors, and be able to put together a good strategy for the clinic. The Bachelor Degree Nursing Degree helps us to understand the community healthcare needs and set up the appropriate billing systems, including integration withe Medicare. The community Development Degree is useful in helping us choose the best and most economical services to provide.
|
Network of nurses and doctors
|
Owned
|
The network of nurses and doctors is useful in recruiting staff for new centres
|
Contract
|
Owned
|
The contract is an agreement that binds GP's On with the client, it includes terms and conditions, and duration of work
|
Membership of Association of Extraordinary Women
|
Owned
|
Through regular meetings this network is used to get in touch with investors and people who can help with advice.
|
Financials
Investment
The business is seeking an initial investment of AUD $50,000 in order to meet planned milestones over the next 12 months. Failure to receive the funds will result in a delayed launch schedule. Beyond the initial tranche, we will fund our own growth.
The investments have been assumed in our cash flow model. This model demonstrates the level of free cash flow expected generated, and produces NPV (Net Present Value) and times earnings (cash) valuations.
Cash Flow Projections
Our revenue projections outline the financial implications of our business model and strategy outlined in this document.
Three alternative scenarios are presented.
<![if !supportLists]>1. <![endif]>The base case scenario represents what we believe to be the most likely scenario.
<![if !supportLists]>2. <![endif]>The best case scenario represents above expected results (the variables determining this result are outlined in the Cashflow model assumption table below).
<![if !supportLists]>3. <![endif]>The worst case scenario has been developed to “Stress Test” the business and determine the financial impact of a less than favorable operating environment.
Model assumptions, analysis and graphical dashboards are provided for each scenario below.
Analysis of the Base Case Scenario
The base case scenario represents most closely the expected financial implications of executing on this business plan. A lack of effective cash flow management can cause significant issues in ensuring stability. We have endeavored to cover all foreseeable costs and revenue, taking into account credit terms where applicable.
The most accurate form of financial forecasting is to use both market (Top Down) and Capability to deliver (Bottom Up) assumptions in preparing the forecasts.
Net Cash Balance
Our base case forecast, representing a minimum annual cash balance of $747,420 in Year 1 ensures that all foreseeable variables are taken into account. Costs associated with executing our development plan have been accounted for in these figures.
After the end of 5 years we will have $5,880,228 in funds available. This balance is added to the valuation multiple to determine the business value at the end of 5 years (See Valuation of Base Case Scenario)
Cash Receipts from Sales
The cash receipts from sales represent the cash we have received from customers for operating activity (Cash Revenue).
We expect our Cash receipts from sales to grow from an average per month figure of $75,000 in year 1 to $181,440 per month by Year 5. Given the market size, our entry niche and our business strategy, we believe that this is both possible and achievable.
Net Cash Flows from Operations
The net cash flow from operations figure excludes all financing costs, capital raised and drawings. The operational cash flow of the business turns positive during Year 1 , delivering an operating annual surplus of $700,920 in that year. The minimum net annual cash flow from operations is experienced in the first year and is an average of $58,410 per month. An improved net cash flow position is experienced in year 5, increasing to an average of $141,384 per month.
Business Valuation
The valuation represented by the above graph is determined by using a times earnings multiplier. Based on valuations of other companies in the General Practice Medical Services in Australia market, we believe that an earnings multiplier of 4 is reasonable.
To determine the year 5 value of GP's On, we multiplied year 5 net operating cash flow ( $1,696,608 ) X 4 (the earnings multiplier) = 6,786,432
To this we added the cash at bank ( $5,880,228 ) to this calculation. The result is a valuation at end of year 5 of $12,666,660.
As an alternative valuation approach we have also run a Net Present Value (NPV) calculation on our 5 year net operating cash flow. After reviewing reasonable discount factors used for other seed venture investments, we settled on a “Discount Factor” of 35%. Using this approach the Net Present Value of the business under the base case scenario is $2,278,343 as at January 2014.
Hence, given the assumptions used in the cash flow model, and the discount rate used, the current value of the business is $2,278,343 and is expected to increase to $12,666,660 over the next 5 years, resulting in a ROI (Return on Investment) of 556% and an average annual return of 111%.
Analysis of the Best Case Scenario
The best case scenario represents an optimistic outlook. The graphs and figures presented below assume a 100% % increase in sales over the base case scenario and a corresponding increase in costs by 20%.
All other variables used are held constant with those reflected in the base case scenario.
 |
Under the best case scenario, the cash balance ends Year 1 at $1,607,604 which is higher than the base case scenario by $860,184. By year 5 the cash balance would increase substantially to $13,177,918, $11,481,310 more than under the base case scenario.
|
 |
Receipts from sales have increased directly in-line with our assumption of 100%.
This drives sales growth from $150,000 per Month in year 1 to $362,880 in year 5.
|
 |
Our net cash flow position improves markedly over the base case scenario, as the gap between cash expenses and cash receipts from sales widens.
This leaves us with a substantially better operating position at the end of year 5 of
$314,813 per month in net operating cashflow, a 45% improvement on the base case. |
 |
The optimistic scenario produces a times earnings valuation of $28,288,932 at year 5. If it were possible to execute on this scenario we would be able to create an additional $15,622,272 in year 5 value.
Using the NPV approach to value the future 5 years cash flow, this produces a current valuation of $5,137,521.
Successful delivery on the optimistic scenario will produce a total return of 551%, or an average annual return of 110%. These percentage figures are calculated as return on initial valuation, and hence may be higher or lower than under the base case scenario.
|
Analysis of the Worst Case Scenario
The worst case scenario represents a pessimistic outlook. It is designed to represent an unlikely scenario that represents the worst financial outcome anticipated. The graphs and figures presented below assume a 50% decrease in sales over the base case scenario and a corresponding decrease in costs by 5%.
All other variables used are held constant with those reflected in the base case scenario.
 |
Under this worst case scenario, the cash balance ends Year 1 at $307,374 which is lower than the base case scenario by $440,046. By year 5 the cash balance would decrease substantially to $2,139,886, $3,740,342 less than that represented by the base case scenario.
|
 |
Receipts from sales have decreased directly in-line with our assumption of a 50% reduction in sales.
This limits sales growth from $37,500 per Month in year 1 to $90,720 in year 5.
|
 |
Our net cash flow position deteriorates significantly when compared to the base case scenario.
This leaves us with a substantially lower operating position at the end of year 5 of $52,667 per month in net operating cashflow, a 37% lower figure than the base case.
|
 |
This pessimistic scenario produces a times earnings valuation of $4,667,892 at year 5. This figure represents a reduction in overall business value of $7,998,768 in year 5 when compared to the base case scenario.
|
Summary
The financial analysis provided demonstrates that the successful execution of our strategy will deliver above average financial returns. Furthermore, given unfavorable circumstances, GP's On still manage to deliver a minimum net cash flow in year 5 of $632,002.
We would expect our valuation at the end of year 5 to be between $4,667,892 and $28,288,932. Given the business model and strategy outlined throughout this document, we would expect the most likely valuation to be $12,666,660.
No comments:
Post a Comment