Executive Summary
The Metro Chiropractic Center is a sole proprietorship that will begin operations in February, 1999. The business will be located in the Metro Center complex, the largest retail and office center in Foster City, California. The office will be 1000 square feet, and will front the 22 story Metro Center Tower and the two adjoining 300,000 square foot Visa International headquarters.
The Metro Chiropractic Center will provide chiropractic care to the residents and workers of Foster City. In addition, two ancillary services will be provided: vitamin counseling and sales, and weight management services. These two non-traditional chiropractic services will allow enhanced profitability as they are typically paid for directly by the consumer. In addition, they expose a new segment of the population to the benefits of wellness care that Doctors of Chiropractic are uniquely suited to provide.
Foster City has been chosen because it is an area under-served by Doctors of Chiropractic, with the most favorable Chiropractor to population ratio in communities ranging from Los Altos north to San Francisco. Additionally, the demographics of the population in Foster City are ideal for the target markets typically served by Doctors of Chiropractic. Although Foster city is a community of 30,000 residents, it retains a small town feel due to its small geographic boundaries of just four square miles. This makes the community an ideal place for a professional practice to get thoroughly entwined in community affairs. The addition of over 1.5 million office, research and development, and retail space since 1990 has brought a tremendous influx of workers into the city, all of whom are additional potential chiropractic patients.
There are currently five Chiropractors working out of four different practices in Foster City. Two of the offices are active, ongoing concerns, and the other two are essentially part-time practices. None of the existing practices actively markets to the community. A void will be created at the beginning of 1999 when the largest and most established practice, with two practicing doctors, is either sold or closed down. The Doctors in this office will be moving out of state. This presents a unique opportunity for a well marketed practice to be established and to gain significant market share by attracting those patients who will now need a new Doctor.
Doctor Paul Piccione, D.C. received his Doctor of Chiropractic degree in 1998. Prior to that, he had a very successful 14 year career in the marketing and sales of medical equipment to physicians and hospitals. He also assisted in the startup of a service business in Palo Alto, serving as the Operations Manager. Here he gained valuable experience in all phases of a startup business. At the time of his departure, the business had gross revenues of $500,000.
The goal of the Metro Chiropractic Center is to become the single dominant force in providing wellness care to the residents of Foster City. This will be accomplished by a strategic marketing plan aimed at specific target markets. The prior background of the principal of this business will help to ensure success.
This goal should be reached by the end of the fourth year of practice, when in addition to employing a full time clinical staff, a full time marketing person will be fully operational and effective. This is a strategy that extremely few Doctors of Chiropractic utilize.
The financial analysis presented in this business plan project a breakeven point after only four months of operation. By the seventh month, the revenues will cover operating expenses along with a living wage for the principal Doctor. Although the practice will operate at a net loss of approximately $23,000 for the entire first year, by the end of the second year it will turn a net profit of $75,000. After three years, the practice will generate a net profit of approximately $95,000.
These figures are based on conservative projections, starting with only 10 patient visits per week the first month, and increasing by only 5 patient visits per week in the ensuing three years. At the end of year 3,
110 patient visits per week will be achieved. This conservative figure is below the national average of 121 patients per week seen across all of the survey respondents. Gross and Net Income figures are in line with these national averages at the end of year three.
The capital required to establish the Metro Chiropractic Center is $45,000. This includes $15,000 for startup equipment and supplies, as well as $30,000 to cover the net operating losses for the first seven months. In addition, a $20,000 line of credit is needed to cover any unforeseen deviations from the projected income.