How to write a business plan for an orthopaedic and podology practice?
Putting together a business plan for an orthopaedic and podology practice can be daunting - especially if you're creating a business for the first time - but with this comprehensive guide, you'll have the necessary tools to do it confidently.
We will explore why writing one is so important in both starting up and growing an existing orthopaedic and podology practice, as well as what should go into making an effective plan - from its structure to content - and what tools can be used to streamline the process and avoid errors.
Without further ado, let us begin!
Why write a business plan for an orthopaedic and podology practice?
Being clear on the scope and goals of the document will make it easier to understand its structure and content. So before diving into the actual content of the plan, let's have a quick look at the main reasons why you would want to write an orthopaedic and podology practice business plan in the first place.
To have a clear roadmap to grow the business
It's rarely business as usual for small businesses. The economy follows cycles where years of growth are followed by recessions, and the business environment is always changing with new technologies, new regulations, new competitors, and new consumer behaviours appearing all the time...
In this context, running a business without a clear roadmap is like driving blindfolded: it's dangerous at best. That's why writing a business plan for an orthopaedic and podology practice is essential to create successful and sustainable businesses.
To write an effective business plan, you will need to take stock of where you are (if you are already in business) and where you want the business to go in the next three to five years.
Once you know where you want your orthopaedic and podology practice to be, you'll have to identify:
- what resources (human, equipment, and capital) are needed to get there,
- at what pace the business needs to progress to get there in time,
- and what risks you'll face along the way.
Going through this process regularly is beneficial, both for startups and existing companies, as it helps make informed decisions about how best to allocate resources to ensure the long-term success of the business.
To get visibility on future cash flows
If your small orthopaedic and podology practice runs out of cash: it's game over. That's why we often say "cash is king", and it's crucial to have a clear view of your orthopaedic and podology practice's future cash flows.
So, how can you achieve this? It's simple - you need to have an up-to-date financial forecast.
The good news is that your orthopaedic and podology practice business plan already includes a financial forecast (which we'll discuss further in this guide). Your task is to ensure it stays current.
To accomplish this, it's essential to regularly compare your actual financial performance with what was planned in your financial forecast. Based on your business's current trajectory, you can make adjustments to the forecast.
By diligently monitoring your orthopaedic and podology practice's financial health, you'll be able to spot potential financial issues, like unexpected cash shortfalls, early on and take corrective actions. Moreover, this practice will enable you to recognize and capitalize on growth opportunities, such as excess cash flow enabling you to expand to new locations.
To secure financing
Crafting a comprehensive business plan for your orthopaedic and podology practice, whether you're starting up or already established, is paramount when you're seeking financing from banks or investors.
Given how fragile small businesses are, financiers will want to ensure that you have a clear roadmap in place as well as command and control of your future cash flows before entertaining the idea of funding you.
For banks, the information in your business plan will be used to assess your borrowing capacity - which is defined as the maximum amount of debt your business can afford alongside your ability to repay the loan. This evaluation helps them decide whether to extend credit to your business and under what terms (interest rate, duration, repayment options, collateral, etc.).
Similarly, investors will thoroughly review your plan to determine if their investment can yield an attractive return. They'll be looking for evidence that your orthopaedic and podology practice has the potential for healthy growth, profitability, and consistent cash flow generation over time.
Now that you understand the importance of creating a business plan for your orthopaedic and podology practice, let's delve into the necessary information needed to craft an effective plan.
Information needed to create a business plan for an orthopaedic and podology practice
You need the right data in order to project sales, investments and costs accurately in the financial forecast of your orthopaedic and podology practice business plan.
Below, we'll cover three key pieces of information you should gather before drafting your business plan.
Carrying out market research for an orthopaedic and podology practice
Before you begin writing your business plan for an orthopaedic and podology practice, conducting market research is a critical step in ensuring precise and realistic financial projections.
Market research grants you valuable insights into your target customer base, competitors, pricing strategies, and other crucial factors that can impact the success of your business.
In the course of this research, you may stumble upon trends that could impact your orthopaedic and podology practice.
Your market research could potentially reveal that your orthopaedic and podology practice may have an opportunity to focus more on preventive care and wellness services, as there may be an increasing demand for such services in your local market. Additionally, your research might indicate that there may be a growing interest in specialized services such as orthotic and prosthetic services, as more and more people become aware of the benefits of such treatments.
Such market trends play a pivotal role in revenue forecasting, as they provide essential data regarding potential customers' spending habits and preferences.
By integrating these findings into your financial projections, you can provide investors with more accurate information, enabling them to make well-informed decisions about investing in your orthopaedic and podology practice.
Developing the sales and marketing plan for an orthopaedic and podology practice
Budgeting sales and marketing expenses is essential before creating an orthopaedic and podology practice business plan.
A comprehensive sales and marketing plan should provide an accurate projection of what actions need to be implemented to acquire and retain customers, how many people are needed to carry out these initiatives, and how much needs to be spent on promotions, advertising, and other aspects.
This helps ensure that the right amount of resources is allocated to these activities in order to hit the sales and growth objectives forecasted in your business plan.
The staffing and equipment needs of an orthopaedic and podology practice
As you embark on starting or expanding your orthopaedic and podology practice, having a clear plan for recruitment and capital expenditures (investment in equipment and real estate) is essential for ensuring your business's success.
Both the recruitment and investment plans must align with the timing and level of growth projected in your forecast, and they require appropriate funding.
The staffing costs for an orthopaedic and podology practice could include salaries for a physician, medical assistants, and a receptionist. The equipment costs for an orthopaedic and podology practice could include x-ray machines, diagnostic imaging equipment, medical supplies, and computers.
To create a realistic financial forecast, you also need to consider other operating expenses associated with the day-to-day running of your business, such as insurance and bookkeeping.
With all the necessary information at hand, you are ready to begin crafting your business plan and developing your financial forecast.
What goes into your orthopaedic and podology practice's financial forecast?
The financial forecast of your orthopaedic and podology practice's business plan will enable you to assess the growth, profitability, funding requirements, and cash generation potential of your business in the coming years.
The four key outputs of a financial forecast for a orthopaedic and podology practice are:
- The profit and loss (P&L) statement,
- The projected balance sheet,
- The cash flow forecast,
- And the sources and uses table.
Let's look at each of these in a bit more detail.
The projected P&L statement
The projected P&L statement for an orthopaedic and podology practice shows how much revenue and profits your business is expected to generate in the future.
Ideally, your orthopaedic and podology practice's P&L statement should show:
- Healthy growth - above inflation level
- Improving or stable profit margins
- Positive net profit
Expectations will vary based on the stage of your business. A startup will be expected to grow faster than an established orthopaedic and podology practice. And similarly, an established company should showcase a higher level of profitability than a new venture.
The projected balance sheet of your orthopaedic and podology practice
The balance sheet for an orthopaedic and podology practice is a financial document that provides a snapshot of your business’s financial health at a given point in time.
It shows three main components: assets, liabilities and equity:
- Assets: are resources owned by the business, such as cash, equipment, and accounts receivable (money owed by clients).
- Liabilities: are debts owed to creditors and other entities, such as accounts payable (money owed to suppliers) and loans.
- Equity: includes the sums invested by the shareholders or business owners and the cumulative profits and losses of the business to date (called retained earnings). It is a proxy for the value of the owner's stake in the business.
Examining the balance sheet is important for lenders, investors, or other stakeholders who are interested in assessing your orthopaedic and podology practice's liquidity and solvency:
- Liquidity: assesses whether or not your business has sufficient cash and short-term assets to honour its liabilities due over the next 12 months. It is a short-term focus.
- Solvency: assesses whether or not your business has the capacity to repay its debt over the medium-term.
Looking at the balance sheet can also provide insights into your orthopaedic and podology practice's investment and financing policies.
In particular, stakeholders can compare the value of equity to the value of the outstanding financial debt to assess how the business is funded and what level of financial risk has been taken by the owners (financial debt is riskier because it has to be repaid, while equity doesn't need to be repaid).
The cash flow forecast
As we've seen earlier in this guide, monitoring future cash flows is the key to success and the only way of ensuring that your orthopaedic and podology practice has enough cash to operate.
As you can expect showing future cash flows is the main role of the cash flow forecast in your orthopaedic and podology practice business plan.
It is best practice to organise the cash flow statement by nature in order to show the cash impact of the following areas:
- Cash flow generated from operations: the operating cash flow shows how much cash is generated or consumed by the business's commercial activities
- Cash flow from investing activities: the investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.) either to maintain the business's equipment or to expand its capabilities
- Cash flow from financing activities: the financing cash flow shows how much cash is raised or distributed to financiers
Looking at the cash flow forecast helps you to make sure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.
Your orthopaedic and podology practice business plan will normally include both yearly and monthly cash flow forecasts so that the readers can view the impact of seasonality on your business cash position and generation.
The initial financing plan
The sources and uses table or initial financing plan is a key component of your business plan when starting an orthopaedic and podology practice.
It shows where the capital needed to set up the business will come from (sources) and how it will be spent (uses).
This table helps size the investment required to set up the orthopaedic and podology practice, and understand how risks will be distributed between the business owners, and the financiers.
The sources and uses table also highlights what the starting cash position will be. This is key for startups as the business needs to have sufficient funding to sustain operations until the break-even point is reached.
Now that you have a clear understanding of what will go into the financial forecast of your orthopaedic and podology practice business plan, let's have a look at the written part of the plan.
The written part of an orthopaedic and podology practice business plan
The written part of an orthopaedic and podology practice business plan plays a key role: it lays out the plan of action you intend to execute to seize the commercial opportunity you've identified on the market and provides the context needed for the reader to decide if they believe your plan to be achievable and your financial forecast to be realistic.
The written part of an orthopaedic and podology practice business plan is composed of 7 main sections:
- The executive summary
- The presentation of the company
- The products and services
- The market analysis
- The strategy
- The operations
- The financial plan
Let's go through the content of each section in more detail!
1. The executive summary
The executive summary, the first section of your orthopaedic and podology practice's business plan, serves as an inviting snapshot of your entire plan, leaving readers eager to know more about your business.
To compose an effective executive summary, start with a concise introduction of your business, covering its name, concept, location, history, and unique aspects. Share insights about the services or products you intend to offer and your target customer base.
Subsequently, provide an overview of your orthopaedic and podology practice's addressable market, highlighting current trends and potential growth opportunities.
Then, present a summary of critical financial figures, such as projected revenues, profits, and cash flows.
You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.
Lastly, address any funding needs in the "ask" section of your executive summary.
2. The presentation of the company
In your orthopaedic and podology practice business plan, the second section should focus on the structure and ownership, location, and management team of your company.
In the structure and ownership part, you'll provide an overview of the business's legal structure, details about the owners, and their respective investments and ownership shares. This clarity is crucial, especially if you're seeking financing, as it helps the reader understand which legal entity will receive the funds and who controls the business.
Moving on to the location part, you'll offer an overview of the company's premises and their surroundings. Explain why this particular location is of interest, highlighting factors like catchment area, accessibility, and nearby amenities.
When describing the location of your orthopaedic and podology practice, you may emphasize the potential for high foot traffic and visibility. You could highlight its close proximity to other medical offices and hospitals in the area, as well as any public transportation links that may be available. You might also point out any local amenities that could be appealing to potential patients, such as nearby shops and restaurants. The area may also have a reputation for being a safe and desirable place to live, which could be beneficial for long-term growth of the practice.
Finally, you should introduce your management team. Describe each member's role, background, and experience.
Don't forget to emphasize any past successes achieved by the management team and how long they've been working together. Demonstrating their track record and teamwork will help potential lenders or investors gain confidence in their leadership and ability to execute the business plan.
3. The products and services section
The products and services section of your orthopaedic and podology practice business plan should include a detailed description of what your company sells to its customers.
For example, your orthopaedic and podology practice might offer services such as orthopaedic surgery, physical therapy, and podiatric care to its customers. Orthopaedic surgery may be necessary to address musculoskeletal injuries, while physical therapy can help to restore mobility and strength to joints and muscles that have been affected by injury or illness. Podiatric care can help to diagnose and treat various foot and ankle conditions, such as bunions, plantar fasciitis, and hammertoe. Products such as orthotic shoe inserts, braces, and other supportive devices can also be offered to customers to help improve their quality of life.
The reader will want to understand what makes your orthopaedic and podology practice unique from other businesses in this competitive market.
When drafting this section, you should be precise about the categories of products or services you sell, the clients you are targeting and the channels that you are targeting them through.
4. The market analysis
When outlining your market analysis in the orthopaedic and podology practice business plan, it's essential to include comprehensive details about customers' demographics and segmentation, target market, competition, barriers to entry, and relevant regulations.
The primary aim of this section is to give the reader an understanding of the market size and appeal while demonstrating your expertise in the industry.
To begin, delve into the demographics and segmentation subsection, providing an overview of the addressable market for your orthopaedic and podology practice, key marketplace trends, and introducing various customer segments and their preferences in terms of purchasing habits and budgets.
Next, shift your focus to the target market subsection, where you can zoom in on the specific customer segments your orthopaedic and podology practice targets. Explain how your products and services are tailored to meet the unique needs of these customers.
For example, your target market might include elderly individuals suffering from chronic joint and muscle pain. This segment often seeks help from orthopaedic and podology practices for relief from their symptoms. These individuals typically have high healthcare expenses due to their condition and are likely to continue using the services of an orthopaedic and podology practice to manage their pain.
In the competition subsection, introduce your main competitors and explain what sets your orthopaedic and podology practice apart from them.
Finally, round off your market analysis by providing an overview of the main regulations that apply to your orthopaedic and podology practice.
5. The strategy section
When writing the strategy section of a business plan for your orthopaedic and podology practice, it is essential to include information about your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.
The competitive edge subsection should explain what sets your company apart from its competitors. This part is especially key if you are writing the business plan of a startup, as you have to make a name for yourself in the marketplace against established players.
The pricing strategy subsection should demonstrate how you intend to remain profitable while still offering competitive prices to your customers.
The sales & marketing plan should outline how you intend to reach out and acquire new customers, as well as retain existing ones with loyalty programs or special offers.
The milestones subsection should outline what your company has achieved to date, and its main objectives for the years to come - along with dates so that everyone involved has clear expectations of when progress can be expected.
The risks and mitigants subsection should list the main risks that jeopardize the execution of your plan and explain what measures you have taken to minimize these. This is essential in order for investors or lenders to feel secure in investing in your venture.
Your orthopaedic and podology practice may face a variety of risks. For example, there is the risk of medical malpractice lawsuits due to unexpected outcomes or complications from treatments. Another risk may be a data breach, which could lead to confidential patient information being exposed and a financial or reputational loss for the practice. It is important to be aware of these potential risks and take steps to protect your practice.
6. The operations section
The operations of your orthopaedic and podology practice must be presented in detail in your business plan.
The first thing you should cover in this section is your staffing team, the main roles, and the overall recruitment plan to support the growth expected in your business plan. You should also outline the qualifications and experience necessary to fulfil each role, and how you intend to recruit (using job boards, referrals, or headhunters).
You should then state the operating hours of your orthopaedic and podology practice - so that the reader can check the adequacy of your staffing levels - and any plans for varying opening times during peak season. Additionally, the plan should include details on how you will handle customer queries outside of normal operating hours.
The next part of this section should focus on the key assets and IP required to operate your business. If you depend on any licenses or trademarks, physical structures (equipment or property) or lease agreements, these should all go in there.
You may have key assets such as patient records and medical images, as well as valuable IP such as confidential patient information. Patient records and medical images could be critical to providing a good service to patients, while confidential patient information might be a source of competitive edge in a crowded market.
Finally, you should include a list of suppliers that you plan to work with and a breakdown of their services and main commercial terms (price, payment terms, contract duration, etc.). Investors are always keen to know if there is a particular reason why you have chosen to work with a specific supplier (higher-quality products or past relationships for example).
7. The presentation of the financial plan
The financial plan section is where we will include the financial forecast we talked about earlier in this guide.
Now that you have a clear idea of the content of an orthopaedic and podology practice business plan, let's look at some of the tools you can use to create yours.
What tool should I use to write my orthopaedic and podology practice's business plan?
In this section, we will be reviewing the two main solutions for creating an orthopaedic and podology practice business plan:
- Using specialized online business plan software,
- Outsourcing the plan to the business plan writer.
Using an online business plan software for your orthopaedic and podology practice's business plan
The modern and most efficient way to write an orthopaedic and podology practice business plan is to use business plan software.
There are several advantages to using specialized software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can easily track your actual financial performance against your financial forecast
- You can create scenarios to stress test your forecast's main assumptions
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here.
Hiring a business plan writer to write your orthopaedic and podology practice's business plan
Outsourcing your orthopaedic and podology practice business plan to a business plan writer can also be a viable option.
Business plan writers are skilled in creating error-free business plans and accurate financial forecasts. Moreover, hiring a consultant can save you valuable time, allowing you to focus on day-to-day business operations.
However, it's essential to be aware that hiring business plan writers will be expensive, as you're not only paying for their time but also the software they use and their profit margin.
Based on experience, you should budget at least £1.5k ($2.0k) excluding tax for a comprehensive business plan, and more if you require changes after initial discussions with lenders or investors.
Also, exercise caution when seeking investment. Investors prefer their funds to be directed towards business growth rather than spent on consulting fees. Therefore, the amount you spend on business plan writing services and other consulting services should be insignificant compared to the amount raised.
Keep in mind that one drawback is that you usually don't own the business plan itself; you only receive the output, while the actual document is saved in the consultant's business planning software. This can make it challenging to update the document without retaining the consultant's services.
For these reasons, carefully consider outsourcing your orthopaedic and podology practice business plan to a business plan writer, weighing the advantages and disadvantages of seeking outside assistance.
Why not create your orthopaedic and podology practice's business plan using Word or Excel?
I must advise against using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write your orthopaedic and podology practice business plan. Let me explain why.
Firstly, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is highly technical and requires a strong grasp of accounting principles and financial modelling skills. It is, therefore, unlikely that anyone will fully trust your numbers unless you have both a degree in finance and accounting and significant financial modelling experience, like us at The Business Plan Shop.
Secondly, relying on spreadsheets is inefficient. While it may have been the only option in the past, technology has advanced significantly, and software can now perform these tasks much faster and with greater accuracy. With the rise of AI, software can even help us detect mistakes in forecasts and analyze the numbers for better decision-making.
And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.
Moreover, software makes it easier to compare actuals versus forecasts and maintain up-to-date forecasts to keep visibility on future cash flows, as we discussed earlier in this guide. This task is cumbersome when using spreadsheets.
Now, let's talk about the written part of your orthopaedic and podology practice business plan. While it may be less error-prone, using software can bring tremendous gains in productivity. Word processors, for example, lack instructions and examples for each part of your business plan. They also won't automatically update your numbers when changes occur in your forecast, and they don't handle formatting for you.
Overall, while Word or Excel may seem viable for some entrepreneurs to create a business plan, it's by far becoming an antiquated way of doing things.
- Using business plan software is a modern and cost-effective way of writing and maintaining business plans.
- A business plan is not a one-shot exercise as maintaining it current is the only way to keep visibility on your future cash flows.
- A business plan has 2 main parts: a financial forecast outlining the funding requirements of your orthopaedic and podology practice and the expected growth, profits and cash flows for the next 3 to 5 years; and a written part which gives the reader the information needed to decide if they believe the forecast is achievable.
We hope that this in-depth guide met your expectations and that you now have a clear understanding of how to write your orthopaedic and podology practice business plan. Do not hesitate to contact our friendly team if you have questions additional questions we haven't addressed here.
Also on The Business Plan Shop
- How to write a business plan to secure a bank loan?
- Key steps to write a business plan?
- Top mistakes to avoid in your business plan
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