Two types of business plans exist: the standard business plan with contains 8 sections and many pages of information; and the lean startup plan which is abbreviated and contains about one page of information
Having a written business plan is key for organizing your thoughts, visions and future growth goals.
A written business plan may be the gateway to needed funding for your practice
Take time to write your business plan. Keep it detailed and engaging and follow the descriptions of each section as stated earlier in this chapter. Utilize example business plans if needed.
When it comes to building a great business, a business plan is a vital piece of the puzzle. A business plan explicitly explains how a business seeks to go after its mission and how it will utilize its operations to become profitable. Components of your business plan will help you think through problems and arrive at solutions. Alongside this, a well written and convincing business plan will help you obtain funding, bring in additional partners (if applicable) and even get investors.
The Small Business Association (SBA), a governmental organization created to help small businesses thrive and obtain funding, defines two types of business plans:
- (1) Traditional business plans
- (2) Lean startup business plans.
The lean startup plan focuses only on summarizing key elements of a traditional plan and typically encompasses only one page. This one page of content includes: Key Partnerships, Key Activities, Key resources, a Value Proposition (a compelling statement on your practice’s unique value), Customer relationships/segments, Channels (of communication with customers), and finally, Revenue Streams (how you will make money).
While lean startup plans are useful for getting the gears grinding in terms of planning your business, the traditional business plan is ultimately the bread and butter for getting funding and outlining success. Thus, the rest of this article will be dedicated to the traditional business plan.
Traditional business plans take the format of a 9-part document:
- Executive summary
- Company description
- Market Analysis
- Organization and Management
- Service/Product Line
- Marketing and Sales
- Funding Request
- Financial Projections
Let’s go through each step of the business plan in detail.
(1) Executive Summary
The executive summary is essentially the abstract of your business plan, if we are to draw a parallel to an academic paper. The summary succinctly tells your reader the what and why:
- What your company is (in your case...optometry practice)
- Why it will be successful (sorry, you’re on your own for this one)
Important aspects to include in your executive summary are your mission statement and business philosophy. Alongside this, you will want to outline the services and materials you provide and give some data on your team that will help provide these services and sell these products. Remember to include yourself in the “team!”
Since this is a summary, make sure you utilize the economy of words tactic and get your message out in as few words as possible. This will pique a readers interest and prevent a premature stop to reading due to poor diction.
(2) Company Description
Now it is time to be detailed. Your company description should outline what consumer problems your practice seeks to solve. Give complete answers. Instead of “give eye exams” or “provide glasses,” try more specific and direct answers such as: “fit and dispense non-traditional contact lenses for patients with eye disorders” or “provide early detection of prevalent cardiovascular disease through advanced retinal imaging.”
Next, list out specific consumers and organizations that your practice will be targeting and serving. Then follow this up with why you and your practice will succeed at this. List your competitive advantages over other established practices/businesses in your area. Do not be shy, your company description should be bold and audacious. Let your reader know that you plan to fill big shoes.
(3) Market Analysis
Part of creating a successful business is understanding your target market and the overall outlook on the industry you seek to enter. This means looking at your competitors. Look at what makes them great and what creates return consumers. What are trends that lead to success? What are trends that your competitors have that make them better than you?
Now flip the script. Take what works for your competitors and explain how you can improve on this and create an even better experience to attract and keep customers/patients. Expand upon any innovations or new approaches to business that can be implemented to strategically take market share that has been caught in your competitors’ stranglehold.
(4) Organization and Management
Now that you have explained your passion and your battlefield strategy for achieving your mission, it is time to talk logistics. Explain how your practice will run and who will be running it. Get into the nitty gritty of how your practice will be set up. This includes the legal structure of your business entity and incorporation.
Charts and maps that illustrate management and chains of command are a good touch in this section. If you already have staff members and other doctors in line to be employed by you, include their resumes.
(5) Service or Product Line
This is the fun part. Describe what you do! Outline all the services you will provide and how these services will not only benefit your patients, but produce lifelong loyalty and growth of your practice. Make sure to describe all your services and products in detail. The further in detail you can dive, the more confidence you are that your services/products will provide success down the line.
(6) Marketing and Sales
In this section, details about how you will market your practice to grow your patient base will take center stage. Outline cohesive strategies for getting your practice name out and attracting patients in your doors. Remember that marketing is a dynamic practice. Marketing strategies evolve with time, and both patient age and demographics play into what marketing strategies and mediums are most effective.
Now that you have described how to obtain a patient, you now need to describe how you will make a sale and collect a payment from the patient. This includes presenting products and services, how the patient agrees to these products and services, methods of payment (credit card, cash, check, vision insurance, etc.) and transactional details. It is very important that you outline the sale procedure in detail in this section, since there will be considerable attention paid to it when you outline sales projections in the last section of your Business Plan.
(7) Funding Request
While personal use and goal setting are great, one of the big uses for a business plan is to obtain funding. Essentially, the business plan is a proposal where you are trying to sell your future business as a thriving organization that will be a solid investment for a financier.
In this section, you will outline your funding requirements. Outline how much funding you will need and what you will specifically use it for. Next, specify whether you want your funding in debt or equity (Debt means you are trying to obtain a loan, where you receive money up front and pay it back over a set period of time with interest. Equity, which would rarely occur for an optometry practice, means using part of a company itself as payment rather than cash.). Finally, list out the terms you would like and the amount of time your request will cover.
Finally, give a detailed description on how the funds will be used. Specify if the funds will be used for equipment, inventory, build outs, improvements, etc. Also, remember to specify the allocations associated with each aspect of funding.
(8) Financial Projections
Alright, pull out your crystal ball and Tarot cards! Just kidding. Well, kind of. The last section of your business plan is all about predicting the future and showcasing how a combination of your vision, drive, technical skills and evolving business prowess will foster growth of a practice with increasing financial returns.
The Financial Projections section should provide a financial outlook of your company for the next five years. Forecasted income statements, balance sheets and cash flow statements should be included in this section. For the first one or two years, forecasting should be even more specific, with monthly predictions used. Utilize visual aids such as graphs, charts and models to get your point across.
"Remember: you are trying to convince your reader that you are a worthwhile investment. Be convincing and realistic in your projections. Being overly optimistic and out of reason are just as damaging as being pessimistic."
The Business Plan is a vital component in outlining future success and is an important tool for obtaining financing needed to get a business going. The illustrative, detailed and purposeful nature of a business plan means that it will be a time consuming endeavor. However, this endeavor will enable you to better gauge your expectations and the work needed to reach these expectations. Want to look at a few sample business plans of real, successful private practices?
Check out: Private Practice SpotLight: Starting Cold