Writing a Business Plan: Learning Objectives

Transcription

1 Writing a Business Plan: Learning Objectives 1. Describe the process of planning and the differences between strategic and business planning. Planning is the process of setting goals, developing strategies, and outlining efforts to accomplish a set goal. Strategic planning focuses on OVERALL goals, while business planning focuses on SPECIFIC programs. 2. Define SWOT analysis and how it relates to the market and competitors within the business plan. The SWOT analysis identifies the strengths, weaknesses, opportunities and threats to the proposed business or service. Buyers You want to identify who the actual and/or potential buyers are of the planned product or service. Market share you want to identify the actual and/or potential market share (i.e. how many customers/patients will be captured in the first year? Second year? In 5 years?) Competitors Identify current and future competition. 3. Define the 4 types of promotional programs most frequently utilized and give examples of each. Identify your Position: design a promotional program that gives the proposed business or service a distinct place in the mind of the target audience. o Clear, concise and to the point is the best approach. o Communicate the benefits of the product/service. The 4 Types of Promotional Programs include: 1. Advertising: paid medium for communication 2. Personal Selling: one- to- one detailing of product/service 3. Sales Promotion: use special items to increase awareness 4. Public Relations: activities to promote well- being of the product or service. 4. Define the 3 most common pro forma financial statements included in a business plan. Profit and Loss (Income Statement): provides information regarding projected income (revenue), expenses and profit, if any.

2 Balance Sheet: provides information regarding projected assets, liabilities and net worth. Cash Flow Statement: projects and tracks cash flow into and out of the proposed business or service. 5. Describe the 4 most common types of cost estimates associated with a proposed business or service and the importance of their inclusion in the business plan. Cost Estimates: project the costs associated with providing the product/service. o Start- up Costs: incurred before a business/service can begin Renovations, equipment costs, furniture, fixtures o On- going Costs: incurred during the life of the business Salaries, supplies, rent, utilities o Direct Costs: attributed directly to the product/service produced Most small businesses incur direct costs o Indirect Costs: shared by a larger organization regardless of whether a product/service is provided Utilities allocated to each hospital department

3 Break Even Analysis: Learning Objectives 1. Define and calculate the break- even point. Break- even point: the point in terms of sales or time wherein no profit or loss is realized by the enterprise. o It is a financial analysis comparison form year to year. 2. List and describe 2 uses of the break- even point. Determine how much in additional sales is necessary to cover a new expenditure or program. Determine how much in additional sales is necessary to reach a Net Profit Target. Sales COGS = GPM VE FE = Net Profit 3. Define and give examples of fixed and variable expenses. Variable Expenses: expenses that vary from month to month o Computer support, Rx packaging, employee wages, credit card fees, delivery fees Fixed Expenses: long- term expenses o Manager/owner s wages, rent, utilities, advertising, security, other expenses 4. Define the Marginal Income Ratio (MIR) mathematically and verbally. Marginal Income: the difference between sales and the variable expenses of the product or service. It is the amount of money available to cover fixed costs and generate profits. Sales COGS = GPM MIR = %GPM %VE **find %GPM of total sales **%GPM and %VE are out of total sales 5. Given the appropriate data, calculate the marginal income ratio. See above 6. Determine the sales necessary to achieve a target net profit. See equation in #2.

4 7. Given a specific expenditure, determine the additional sales necessary to cover the expenditure and achieve the same net profit.

5 Employment Law: Learning Objectives 1. Describe Title VII, ADEA, ADA, Pregnancy Discrimination and who is protected and their exceptions. Title VII of Civil Rights Act of 1964: Prohibits discrimination in hiring, firing, compensation, and terms, conditions or privileges of employment on the basis of race, color, religion, sex or national origin. o Applies to any business, public or private, with 15+ employees o Exceptions: Bona fide occupational qualifications, seniority systems, preferential treatment systems Age Discrimination in Employment Act of 1967 (ADEA): It is unlawful for an employer to fail or refuse to hire, to discharge, or otherwise discriminate because of age against individuals 40 years of age or older with respect to compensation, terms, conditions, or privileges of employment. It is unlawful to forcibly retire an employee because of age 40+. It is unlawful to give preference because of age to one person over another within the protected age group. o Applies to any business, public or private, with 20+ employees o Exceptions: Bona fide occupational qualifications (BFOQ), unequal impact on the protected age group, and seniority systems Americans with Disabilities Act of 1990 (ADA): Prohibits discrimination against a qualified individual with a disability in any areas of employment, including: hiring, promotion, discharge, and other terms and conditions of employment. Restricts use of pre- employment medical exams and inquiries and requires employers to reasonably accommodate individuals who are mentally or physically impaired, have a record of impairment, or are perceived to be impaired. Prohibits discrimination in public services (especially transportation), public accommodations, and telecommunication services. o Smokers & current drug abusers are not protected under the ADA. However, alcoholics are protected, if they can perform essential functions. Other exclusions include homosexuals, people with sexual disorders, and compulsive gamblers. o Applies to any business, public or private, with 15+ employees Pregnancy Discrimination Act of 1978 (PDA): Women affected by pregnancy must be treated the same as other applicants and employees on the basis of their ability or inability to work. Employers could no longer require women to take leaves of absence or resign because of pregnancy. Health insurance provided must cover expenses for pregnancy- related conditions on the same basis as

6 expenses for other conditions. There must be specific guidelines for pregnancy leave. o Applies to any business, public or private, with 15+ employees 2. Explain the basis for an employee s right to privacy and defense for invasion of privacy. 4 th Amendment to the U.S. Constitution: guarantees privacy and prohibits unreasonable searches and seizures by the government. Written to protect the individual. Also protects employees of the Government (i.e. public sector). Privacy Protection Act of 1974: established the Privacy Protection Study Commission, which made recommendations (but no laws) for private employers in 3 areas: record review, employee access, and outside requests. Legislation Protecting Individual Privacy: o Criminal Defamation: Defined in GA State Constitution. Ruining a person s good name. Communicating false information without a privilege to do so. Employer s defense: Information revealed on a need to know basis. o Invasion of Privacy: Defined in GA State Constitution. A private place is a place where one can expect to be safe from intrusion. In a private place, it is unlawful to eavesdrop, observe, intercept a private conversation, activities out of the public view, private messages. o Invasion of Privacy (employer s defense): Workplace is property of employer Employee can expect privacy only in: Personal belongings Locked items 3. Explain the Privacy Protection Act of 1974 regarding record review. Record Review: o Review regularly o Discard inaccurate information o Examine disclosure process

7 4. Explain what procedures to follow regarding references and criminal records. Background Investigations: o Accuracy is critical o Catch 22 of references Potential employer wants information Former employer fears defamation suit Use waivers o Applicant s criminal record Ask about job related convictions, not arrests Any question should be job related o Rule of thumb: Limit access to a need to know basis 5. Explain when polygraph tests, search of the company, and property by law. Polygraph Tests: o Employee Polygraph Protection Act of 1988 Prohibits private employers from using polygraphs o Businesses exempted from EPPA Firms with on- going investigations of theft Security firms Firms that handle controlled substances Searches: o Desks/lockers/storage areas are company property. o Employees have a reasonable expectation of privacy if the area/item is locked and the employer did not gain prior consent. o Advice for employers: Establish a right to search policy and obtain written consent. 6. List the recommendations for managing HIV in the workplace, testing, confidentiality and the ADA. AIDS Testing: o Difficult to justify for employment purposes HIV+ protected under ADA Not spread through routine work o HC workers are protected by following guidelines issued by the CDC and mandated by OSHA. o Maintain confidentiality

8 7. List the recommendations for substance abuse, drug testing, retesting and confidentiality. Recommendations for Employers: o Test only applicants whose jobs are safety specific. o Obtain valid consent, provide examinee with results. o Maintain confidentiality, retest + results. o Random testing of current employees is difficult to justify. o Justified: current employee, under reasonable suspicion, for a work- related incident. Reality: o Current employee tests + for drugs. o Employee joins rehabilitation program. o Employee claims no longer using. o Employee attempts protection under ADA. Substance Abusers in the Workplace: o Danger to the public, employer liable for wrongs/negligence o General Guidelines: Develop a policy Document lessened performance Deal in private Explore rehabilitation as an option Employees under the influence should not drive o Pharmacists who are substance abusers