Hospital Business Plan and SWOT Analysis

Hospital Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Hospital Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Hospital business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

Your Business Planning Package will be immediately emailed to you after you make your purchase.

Product Specifications (please see images below):

  • Bank/Investor Ready!
  • Complete Industry Research
  • 3 Year Excel Financial Model
  • Business Plan (26 to 30 pages)
  • Loan Amortization and ROI Tools
  • Three SWOT Analysis Templates
  • Easy to Use Instructions
  • All Documents Delivered in Word, Excel, and PDF Format
  • Meets SBA Requirements

Hospitals are completely immune from negative changes in the economy given that people are going to continue to need to have emergency medical services, surgeries, and specialized diagnostic procedures performed on a regular basis. In fact, hospitals are generally some of the most profitable businesses in the world given that their service that can only be provided by qualified and licensed physicians, nurses, nurse practitioners, and related medical personnel. The barriers to entry for a new hospital are extremely high. In fact, it can be reasonably stated that starting a new hospital is one of the most difficult types of for-profit organizations to create given the drastically large sums of money needed to develop a state-of-the-art hospital facility. Typically, hospitals can have a startup cost ranging anywhere from $50 million to $250 million depending on the scope and scale of the facility.

The median startup cost for a new hospital that features surgical capabilities is approximately $100 million. The gross margins generated from hospital services typically range anywhere from 75% to 85% depending on whether or not physicians and surgeons are considered to be employees of the hospital rather than independently contracted personnel. Generally, the amount of time it takes to start a new hospital facility is also incredibly long. From planning to development – it can be expected will take approximately three years to five years to get the operations of a new hospital or related medical facility off the ground. The most difficult aspect of starting one of these businesses is that there is a significant amount of licensure that is required in order to operate as a surgical and hospital facility. One of the other aspects that makes this business difficult to start and why the barriers to entry are so extremely high is that the amount of time it takes to raise and secure the capital as well.

Provided that the founder and management team are prepared to make a 15% to 20% capital infusion into the business, a financial institution is almost always willing to put up the remaining capital needed in order to develop this type of business. This is primarily due to the fact that a substantial portion of any borrowed funds will be used for the acquisition and development of real estate, medical equipment, and general furniture, fixtures, and equipment. A hospital business plan is going to be required and it should feature a three year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page features industry-standard information specific for a hospital.

As it relates to industry research, hospitals generally in excess of $1 trillion per year within the United States and employ nearly 5 million people. Annual payrolls in each of the last five years has exceeded $490 billion. The growth of the industry’s revenues are expected to be significant given that many people from the baby boomer population are now reaching senior citizen age. As such, the complexities relating to their health care are going to increase significantly and thus there will be a substantial more demand for these types of services.

Prior to developing operations, a full demographic profile is going to be required as well. This includes a significant overview of the population, population density, population size, median household income, median family income, percentage of people that are enrolled in publicly funded health systems, percentage of people have private insurance, and percentage of people that are expected to require emergency medical services in any given year. This will assist the entrepreneur or group of entrepreneurs in determining the number of personnel that is going to be needed to any given time, the number of people who are uninsured are going to be required to have care, and other relevant metrics that go into the development of a hospital.

In many instances, the development of a hospital business plan is done in conjunction with a team of medical professionals as well as healthcare consultants. While this may contribute to a higher startup costs, hiring a healthcare consultant to develop the business plan may be favorable given that they have an extensive understanding of the revenues, profits, and operating expenses can be expected from the facility on a year-to-year basis. The return on investment for hiring the consultant can be significant provided they do a good job in estimating annualized revenues and expenses.

A hospital marketing plan is going to be needed as well and this is going to be an expansive document that discusses how the hospital will develop ongoing relationships with referring physicians, ambulance services, municipal agencies, state agencies, and regional medical clinics that will refer patients to the hospital for specialized procedures or medical emergencies. One of the ways that most hospitals conduct their marketing operations as to the use of billboards, print advertisements, radio advertisements, and television. Online marketing is also an important part of a hospital’s overall advertising plan given that many people will use their phones and related devices to find a hospital in the event of a medical emergency. As such, while the online presence of a hospital does not need to be major – it does need to exist so that people can easily find the hospital, understand the services rendered, insurance is accepted, and related information has to have a medical or surgical procedure completed at the facility.

Given the scope and scale of a hospital’s operations, usually a large-scale internal marketing division is developed in order to properly ensure that people can know the company’s brand name and where the facilities are located. However, maintaining an in-house marketing force is expensive in many hospitals – given their substantial access to capital – will frequently use a third-party marketing and advertising firm to handle this aspect of operations. While the upfront expenses for this type of operation is significant, it can drastically reduce the amount of payroll taxes that are normally associated with the operations of this type of business. Additionally, there are now many firms that specialize specifically in healthcare marketing and advertising, which can be of great benefit to a hospital that is looking to create brand name within a regional market.

A hospital SWOT analysis should be produced as well. As it relates to strengths, once established the barriers to entry for a new hospital facility are extremely high. In fact, in any major metropolitan area or rural regional area – there are usually only a handful of full-scale trauma level hospitals in operation. As such, these businesses are almost always able to have minimal competition as a progress to their business operations. Again, these businesses are also able to generate revenues in any economic climate given that people are going to continue to become sick and require immediate healthcare. Given that hospitals maintain reimbursement from private insurance, Medicare, and Medicaid – most people have access to the type of health care that they need.

For weaknesses, these businesses have extraordinarily high operating costs given that they must employ a veritable army of physicians, surgeons, nurses, nurse practitioners, physicians assistants, and nursing aides that will render services to patients that have been admitted to the hospital. As such, these highly skilled medical professionals to require a substantial salary. This is going to be one of the most major ongoing expenses for any type of hospital facility.

For opportunities, establish there’s generally very few opportunities that exist for hospital given that they are in a large-scale facility. However, many hospitals have taken to developing ongoing relationships with group practices within a specific regional market in order to have specialized procedures performed at their facilities. Additionally, many hospitals have sought to purchase large-scale group practices in order to have satellite locations so that additional billings can be rendered from outside of the centralized hospital facility.

Relating to threats, there are always a number of ongoing pieces of regulation and legislation that impact the way that hospitals operate especially in regards to Medicaid and Medicare reimbursement schedules. As such, the senior management team is going to need to keep a close eye on these pending pieces of legislation and regulation to ensure that pricing schedules and operational procedures can be appropriately modified when these changes to occur. The revenues of these companies are subject to political changes as well.

Hospitals are one of the most centralized and most important businesses within the United States. They can be highly lucrative provided that they are operated properly and they are always going to remain in demand. Changes in technology, especially relating to automation, should have only a minimal to negligible impact on the way they ways that these companies conduct business. This is one of the mainstay industries within the United States, and will continue to be so in the coming years.