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Arcand Biomedical

Business plan

Hans Arcand

12 May 2013

Table of Contents

|Executive Summary |1 |

|Products and Services |1 |

|Long Term Aim of the Business |1 |

|Objectives |1 |

|SWOT Analysis |2 |

|Market Analysis |2 |

|Target Market |2 |

|Target Company Revenue |3 |

|Market Trends |3 |

|Competitive Advantage |3 |

|Benefits to Clients |3 |

|Marketing/Sales Strategy |4 |

|Marketing/Testing Strategy |4 |

|Sales Strategy |4 |

|Pricing |4 |

|Marketing and Communications Strategy |4 |

|Public Relations |5 |

|Financial Projections |5 |

|References | |

| |6 |

Executive Summary

Arcand Biomedical will be starting up a medical equipment repair business in northwest Florida. The goal of this business is to create long-term contracting and consulting services, providing reduced-cost preventative maintenance, calibration and repair services with quality support personnel. Arcand Biomedical is able to achieve the above-mentioned services by providing reduced-cost support with the same amount of technical skill and proficiency as the big-name companies. The key to gaining clientele is to provide excellent service coupled with timely repairs and quality customer service.

This is a dual-proprietorship in which each of the parties has an equal share of the business. John Arcand, my father, was a field service engineer for 36 years who specialized in laboratory analyzers is the original creator of Arcand Biomedical. I am Hans Arcand and I have 5 years’ experience in the USAF and have specialized in imaging and radiological devices. We have come together to form what is now, ArcBio.

Products and Services

Arcand Biomedical will provide contracting and consulting services to hospitals and clinics, as well as provide contracting opportunities to equipment manufacturers to reduce the amount of support personnel required to service major products. The contracting opportunities will be made available to hospitals throughout the southeast region of the United States to allow the hospitals to cut down on the costs associated with fully staffing a BioMed repair section of the hospital. All preventative maintenance, calibrations and repairs will be completed by Arcand Biomedical with a yearly service contract. Consulting services will also be offered to the same hospitals and clinics when any technical expertise is needed for any major purchases or additions to the respective facilities.

The second phase of ArcBio’s vision is to provide contracting and consulting services to major equipment manufacturers to prevent them from fully staffing BMET’s around the southeast region. Arcand Biomedical will support new and existing equipment made by Philips, Baxter, AHS, GE, MedRad, Stryker, B&C and Siemens allowing the companies to rely on yearly contracts instead of yearly salaries. This will reduce the amount of time and money spent on management and service personnel, allowing them to save money in servicing the equipment that they provide to the customer.

Long Term Aim of the Business

Arcand Biomedical has a vision of providing product support to all major medical equipment manufacturers as well as providing product service to hospitals and clinics throughout the country. This will be achieved by creating staffing services throughout the regions, to allow Arcand Biomedical to not only provide product services, but also provide manpower to hospitals who do not want yearly contracts. The objective is to get involved in every aspect of product service and support allowing us to thrive in an ever-changing, rapidly-developing business sector.

Objectives

Arcand Biomedical expects to begin with about 10-15 accounts in the southeast region of the US encompassing only 2 full-time staff members. At a base price of $8,000 per contract for a single piece of laboratory equipment, Arcand Biomedical expects to make $200,000 - $400,000 the very first year of operation. We will continue to grow by adding new team members and expanding our services to other equipment modalities to include: x-ray machines, CT’s, MRI’s and gamma cameras. With the new modalities in place, service contracts for these pieces of equipment will start at $10,000 and average about $50,000 per contract for all imaging modalities. We expect around 5 imaging accounts the second year of operation, which is roughly $500,000 in addition to the extended laboratory account contracts.

Arcand Biomedical will continue to offer contracts with new service modalities, thus allowing us to expand and add to our team. This is done by recruiting trained individuals in their respective modalities to support an on-going service operation.

SWOT Analysis

|Strengths |Weaknesses |

|Guaranteed Initial Customer Base |Small Workforce |

|40+years of Experienced Service Personnel |Limited Initial Modality Support |

|Opportunities |Threats |

|Capitalize on Over-Priced Service Contracts Controlled by |Big-Business with Readily Available Service Personnel 24/7 |

|Big-Business |High-Priced Schooling for Increased Modality Support |

|Ending Service Contract with Big-Businesses | |

>>

Market Analysis

The medical equipment repair sector is one of the fastest emerging segments of the market; it is projected to grow 31% from 2010 to 2020 (Med Equip Repairers, 2010). This will allow us to penetrate the industry and flow with the market projections as we gain new team members throughout the years. The medical equipment sales are another large sector, encompassing about $94 billion annually which directly contributes to the job growth in the service segment.

Target Market

Medical device manufacturers are one of the main components that we will be trying to render our services to. This medical device industry has been very profitable and has grown in spite of the recent recession. Specifically, the industry has grown almost 40% over the last 6 years (Zhong, 2012). With every new product that is created, there is support to be give; this is exactly where Arcand Biomedical will thrive.

The healthcare industry as a whole is expected to rise about 4.6% over the next 4 years, but uncertainty of the new healthcare reforms is looming overhead. If the reform is funded, the healthcare industry will grow exponentially because of the sheer amount of people that will be granted free healthcare. If the bill is not funded, healthcare will continue to be a growing industry and we can still expect to see future growth. Regardless of the new legislation, there is a lot of room for improvement in the service characteristics of companies and we will seek out the avenues to capitalize on the opportunities.

With advances in new technology, we can expect to see major growth in cloud-computing as well as computer-computer interactions. We can also expect to see major advances in every aspect of the imaging sector, to include the modalities in which we already have trained service personnel. With all of the technological advances, the need for product service and support will only continue to rise and we will step to the occasion.

Target Company Revenue

Arcand Biomedical will offer year-long service contracts to potential clients starting around $8,000 for one laboratory analyzer. This price would be adjusted based on how many analyzers the customer had and compounded by the hours they want service. Most medical facilities have a minimum of 2 analyzers and want 24/7 service to keep their labs up and running. Based on a projection of 10 starting accounts with 2-3 analyzers, company revenue the first year would surpass $200,000. This number would only grow with additional accounts, analyzers and response time that would likely occur.

Market Trends

In the healthcare sector, there is a large amount of legislation that is currently looming overhead. Arcand Biomedical is seeking to take advantage of the legislation, if it is funded, and reap the benefits of millions of additional healthcare beneficiaries. The increased amount of beneficiaries will lead to an increase in the amount of equipment, which eventually leads to an increase in service needs.

Competitive Advantage

The going rate for a biomedical equipment repair technician is around $350/hr which begins when the technician leaves their house. Arcand Biomedical would not charge hourly fees and could reduce the cost to the customer by almost 75%. By being on an annual contract, the only money that the customer would have to spend is on the repair parts, everything else would be covered by Arcand Biomedical. This would allow the customer to rely on a more predictable budget and not have the excess concerns of costly repairs.

Benefits to Clients

When signing a contract with Arcand Biomedical, almost all aspects of equipment management will be taken care of. This will allow customers to reduce the amount of money spent on in-house BMET personnel and reduce time devoted managing equipment issues. With a 24/7 contract, customers can also bank on reduced downtime of equipment because we guarantee next-day service.

Most technically advanced issues regarding any analyzers or imaging equipment are normally called out to the MFG to perform repairs; Arcand Biomedical will allow the customer to have a one-stop-shop. We will function as a consulting and contracting service by arranging all repairs and service to reduce management time and reduce excess costs.

Marketing/Sales Strategy

Marketing/Testing Strategy

We have 10 Quest accounts that have agreed to sign a year contract with ArcBio to perform service functions for their laboratory analyzers when their current service contract will expire next month. This will be our test-phase, allowing us to judge equipment downtime and personnel issues.

Based on the findings throughout the first year of service, we will be able to make adjustments regarding new contracts, additional support personnel, account management and company expansion possibilities.

Based upon the findings, we can expand into some of the other Quest accounts or we can start meeting with hospital and clinic staff around the area to try and gain new customers. Cost-savings in the healthcare industry play a large role in decision-making; I know that we can beat any competitor’s prices because we have the knowledge and experience to perform any functions that would be required.

Sales Strategy

To gain potential customers, I would personally make a sales visit to reinforce the personable nature of ArcBio and start the customer service experience right from the beginning. I believe that personal interaction with the customer is important because it gives the customer a sense of camaraderie; It allows the customer to put a face and a name together and I believe that it gives a better representation of company values.

Pricing

ArcBio will set the standard for exceptional quality and budgeting in mind. We strive to save our customers money by engaging in contracts instead of hourly costs. A steady cash flow will allow our customers to make a more predictable budget and not have outrageous repair costs.

With the industry standard set around $350/hr, just a few repairs could pay for a year’s worth of dedicated service by the highly trained technicians at ArcBio. With our reduced-cost service, we can also set a good deal on the repair parts necessary for any repairs. We have a partnership with a medical part consulting agency in which we get 20% off MFG parts. Every aspect of the company is set to reduce the prices paid by our customers.

Marketing and Communications Strategy

We will meet with our potential customers and let them know about the products we support and what they can expect in cost-savings. Direct marketing is the most advantageous advertising medium due to the nature of the business. We will also get the addresses of regional hospitals and clinics and send them an advertising letter, discussing what we can do for our customers. ArcBio has a Facebook page as well as a twitter account which can inform potential customers of new service modalities as well as service sales and discounts. Exhibitions and conferences are another very good advertising medium that will be very beneficial to our company. Exhibitions like the MD Expo or the AAMI conference would spur service sales because people are able to compare prices in a regional setting.

Public Relations

We are as dedicated to our community as we are to our customers. We will provide free service on all dental engines and hand pieces for any dentists who provide underprivileged children with free dental care. We will provide any clinic with free annual inspections if they post anti-smoking ads in every room of their facility. Lastly, we will sponsor a local food drive every year to feed the homeless at Christmas time. All of these things are just part of ArcBio’s good nature and philanthropist-based attitude toward supporting the local community.

Financial Projections

| |Year 1 |Year 2 |Year 3 |

|Contracts |250,000 |700,000 |780,000 |

|Transportation Fees |20,000 |80,000 |85,000 |

|Equipment & Incidentals |10,000 |100,000 |150,000 |

|Schooling |0 |100,000 |40,000 |

|Wages |80,000 |240,000 |300,000 |

|Revenue |250,000 |700,000 |780,000 |

|Net Profit |140,000 |280,000 |205,000 |

| | | | |

ArcBio would immediately earn a profit and would not have a break-even point because there is no overhead that the proprietors cannot cover. As a team, my father and I have accumulated tools and test equipment necessary to provide adequate service without having to purchase new equipment. ArcBio is an irrefutably good investment and will certainly have a profitable future in the service industry.

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References

U.S. Department of Labor, Bureau of Labor Statistics. (2010). Medical Equipment

Repairers. Occupational outlook handbook, 2009-10. Retrieved from



Zhong, H. (2012, June). Primer: The Medical Device Industry [Forumn]. American Action Forum. from

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