In his presentation at the Essentially Women Focus on the Future
tradeshow in Glendale, Ariz, Doug Stallbaumer, co-founder of Argosy Group Inc.,
discussed how a properly composed business plan maintains a company’s
focus on its attainable goals and future endeavors. Business plans are crucial
documents that guide a company in the right direction, he said.
“The business plan is an inward-looking window into the business
that helps management understand the business’ costs relative to their
growth,” Stallbaumer told O&P Business News.
He discussed how he often uncovers financial discrepancies while working
with providers, to their great surprise.
“The providers will say, ‘I did not realize this was
occurring,’ or ‘I did not realize we were this far off,’”
Stallbaumer said. “It’s an introspection of how their business is
actually doing. Sometimes just going through the exercise is enough to right
some wrongs.”
However, a large majority of businesses, not only in health care but in
all marketplaces, operate with their feelings or hunches instead of facts,
according to Stallbaumer.
“I do not know if there is an easy way to compose a
business plan. It is certainly an exercise that takes effort,
which is probably why a lot of people forego it and see it as a nonessential
part of their business world,” Stallbaumer said.
He listed the characteristics of a basic business plan. They would
include:
- an executive summary describing the core focus of your business;
- a mission statement;
- the industry/market the company works in;
- a competitive analysis describing the company’s competition in
the marketplace; - marketing, operations and financial plans; management summary; and
- milestones and goals for the company in 3-, 5-, or 10-year
increments.
But if a large majority of companies operate without a business plan,
why are they necessary?
“Business plans represent a map to a company’s future,”
Stallbaumer said. “Companies need something to guide them when they
approach key decision points or a fork in the road. By creating this document,
the decision is already made or they have developed enough background
information to make a smart decision at that time.”
Stallbaumer noted that the health care industry is in a state of
transition and is a continually moving target. Understanding where your company
fits in the ever-changing health care system is crucial to the success or
failure of your company.
Businesses tend to shy away from composing business plans because they
are not a document that can be created and then simply shelved. According to
Stallbaumer, the business plan becomes a living document — something that
must be updated on a regular basis as your company or the marketplace around
your company changes.
“In health care, practitioners are focused on treating patients and
they do not have the resources or the time for detailed financial
planning,” Stallbaumer said. “It is not something that they are
focusing on. But the truth is, if they did focus on their business plans, they
may have more time for their patients instead of chasing the rabbit down the
hole.”
Your audience will dictate how intricate and formal the plan will be.
For internal company decisions, a business plan does not have to be perfectly
structured. According to Stallbaumer, basic formats and templates are available
online or at small business associations and commerce departments.
“If it’s going to be a document that is used outside the
organization, such as for support and funding from a bank, then the business
will want to place more emphasis on the necessary components of the business
plan,” Stallbaumer said. “If your management team can walk into your
local bank with a guided and focused business plan, the percentage for walking
out with a funding check will be extremely high.” — by Anthony
Calabro
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| Elizabeth Carlstrom |
A business plan can address concepts such as moral or ethical
positioning of the company, public image, target market, products and services,
geographical information and expectations of growth and profitability.
The business plan should have compliance measures incorporated into it
as well. Compliance is such a huge concern right now. Owners must take into
consideration Durable Medical Equipment, Prosthetics, Orthotics and Supplies
quality standards, facility accreditation standards, etc. The list goes on and
on. Compliance mandates are coming down strong and hard.
I have worked with a lot of orthotic and prosthetic (O&P)
businesses, and most of them are quite small. On many occasions, the owners
have the plan in their head, but they do not put it on paper. The business plan
has to be documented. It is a roadmap to your success, but it must also be
consistently updated in case there is a detour.
For the best business practices, create a plan and review that business
plan with key personnel on an annual basis and make improvements as necessary.
Only the strong are going to survive in this industry. Having a successful
business plan is a vital piece of information and documentation that can help
an O&P office not only survive but grow.
— Elizabeth Carlstrom
Owner, O&P
Business Solutions
