Baker Chiropractic & Acupuncture

BUSINESS PLAN

Business Plan Prepared By

Steve Baker D.C., F.A.S.A.

Doctor of Chiropractic

11831 Admiralton Dr

Bridgeton, M0 63044

314-369-8000

Date Prepared

September, 2006

Business Plan

EXECUTIVE SUMMARY...... 5[N1]

MANAGEMENT AND ORGANIZATION...... 6[N2]

Management Team...... 6

Compensation and Ownership...... 6

Board of Directors/Advisory Council...... 6

Infrastructure...... 6

Contracts and Franchise Agreements...... 6

Insurance...... 7

Employee Stock Option Plan and Other Incentives...... 7

Organization Charts...... 7

PRODUCT/SERVICE...... 8

Purpose of the Product/Service...... 8

Unique Features...... 8

Stage of Development...... 9

Future Research and Development...... 9

Government Approvals...... 9

Product/Service Limitations...... 10

Product/Service Liability...... 10

Related Products/Services and Spin-Offs...... 10

Production...... 10

Facilities...... 11

Suppliers...... 11

Environmental Factors...... 11

MARKETING PLAN...... 12

Industry Profile...... 12

Current Size...... 12

Growth Potential...... 12

Geographic Locations...... 12

Industry Trends...... 13

Seasonality Factors...... 13

Profit Characteristics...... 13

Distribution Channels...... 13

Basis of Competition...... 13

Competition Profile...... 13

Customer Profile...... 14

Target Market Profile...... 14

Pricing Profile...... 14

Gross Margin on Products/Services...... 15

Market Penetration...... 15

Distribution Channels...... 13

Sales Representatives...... 15

Advertising and Promotion...... 15

Packaging and Labeling...... 15

Service and Warranties...... 15

Trade Shows...... 15

Future Markets...... 15

OPERATING AND CONTROL SYSTEMS...... 17

Administrative Policies, Procedures and Controls...... 17

Receiving Orders...... 17

Billing the Customers...... 17

Paying the Suppliers...... 17

Collecting the Accounts Receivable...... 17

Reporting to Management...... 17

Staff Development...... 17

Inventory Control...... 17

Handling Warranties and Returns...... 17

Monitoring the Company Budgets...... 17

Security Systems...... 17

Documents and Paper Flow...... 18

Planning Chart...... 18

Product/Service Development...... 18

Manufacturing...... 18

Financial Requirements...... 18

Marketing Flow Chart...... 18

Market Penetration...... 18

Management and Infrastructure...... 18

Risk Analysis...... 18

Salvaging Assets...... 18

GROWTH PLAN...... 19

New Offerings to Market...... 19

Capital Requirements...... 19

Personnel Requirements...... 19

Exit Strategy...... 19

FINANCIAL PLAN...... 20

Sales Projections...... 20

Income Projections...... 20

Cash Requirements...... 20

Sources of Financing...... 20

Attached Financial Projections...... 21

Cash Flow for Three Years

Income Statement for Three Years

Balance Sheet for Three Years

Ratio Analysis

SUPPORTING DOCUMENTS...... 22

EXECUTIVE SUMMARY

Venture History

Baker Chiropractic & Acupuncture will be formed in May of 2007. Dr. Steve Baker will also be graduating that same year in April. The practice will be opening in House Springs, Missouri and will be targeting the pediatric and geriatric population within the community. Dr. Baker will be the third chiropractor in this city. Dr. Baker projects a first year revenue of $85,900.

Dr. Baker plans to join the community and make a difference with in it. He plans on joining the local clubs that reside in the city along with being a trainer on a high school team. Dr. Baker has much to offer the community through education about safety, nutrition, and health. Dr. Baker will be holding weekly and monthly talks about subjects that affect everyone. These talks may even range outside the scope of chiropractic if the patients want to have such events.

Within five months of opening Baker Chiropractic & Acupuncture will be profitable. This will continue to increase with each month totaling a first year revenue of $85,900. With the market stating that only 11% of people use chiropractic care currently there is plenty of the market left.

Venture Description

Baker Chiropractic & Acupuncture is in the start-up phase. Chiropractic as a health care source is still in the early innovator phase, thus allowing much potential in the growth and increase in the alternative health care field. Along with chiropractic care, acupuncture care will be offered. Acupuncture is known to treat over 2,000 diseases (Clinical Acupuncture and Moxtibustion.) Additionally, Dr. Baker is certified in Activator and Total Body Modification techniques. Both of these techniques are known for being used on the pediatric and geriatric population as a safe and effective way for adjusting. Overall, this will allow for a broader reach within the community.

Venture Organization

Dr. Baker will be working under an S-Corp. This will allow for single taxation while protecting him self. Dr. Baker will be the main manager of the office. He will have a board of advisors that will help and instruct him on the best business choices and techniques for marketing as Dr. Baker develops the practice. The people that will be part of the board of advisors are mentioned later in the business plan and include a financial advisor, real estate investor, current chiropractors, and others. Dr. Baker has a current real estate business called Cypress Homes Inc. He has had the business for 4 years and is currently turning a profit with rental homes. He has been the president since the companies founding in 2001

Dr. Baker has worked for Sprint & Cingular as a sales representative. Dr. Baker received customer service awards along with additional bonuses as his quotas were normally over 100%. Dr. Baker is currently working as the Student Doctors Council President at Logan College of Chiropractic. This Council is in charge of student activity money along with making choices that affect the students at the college.

Venture Market

Baker Chiropractic & Acupuncture will be focusing on the pediatric and geriatric people within the House Springs, MO area. This area has a chiropractor ratio of 4,612 to 1. There are only 2 other chiropractors in this rural city. Along with that, people travel 30+ miles to work from around the area. This will allow for additional traffic flow and people to be present to Dr. Baker’s practice. Dr. Baker will be working to create friendships and partnerships with the 9 medical doctors in the area. Currently there are no chiropractors focusing on the geriatric and pediatric population.

Venture Operations

Baker Chiropractic & Acupuncture will have $27,146 in start-up costs. The working capital will be $17,024. The total loan and money invested will be $44,178. This will be more than enough money to start and maintain the practice as it moves into the profit margin.

Venture Financing

Baker Chiropractic & Acupuncture will be taking a small business loan. This will be a total of $36,170 with an investment of $8,000 from Dr. Baker. The terms of this loan will be a 72 month loan with a 10% interest rate. The loan will be paid back monthly till the completion of the loan.

MANAGEMENT AND ORGANIZATION

Management Team

The Doctor of Chiropractic, Steve Baker D.C., will be in charge of performing history, consult, report of findings, x-rays, treatment plan, and adjusting. Steve Baker will also be the business manager who will be responsible for writing checks, mailing bills, scheduling marketing events, and deliver the lectures scheduled.

Dr. Baker has a bachelors of Science degree, doctorate of chiropractic (D.C.) from Logan College of Chiropractic, and fellowship of American society of acupuncture (FASA). He has been licensed by the National Board of Chiropractic Examiners. Dr. Baker is certified in Sacro Occipital Technique, Activator, Diversified, Acupuncture, and Total Body Modification.

Dr. Baker has worked as a lifeguard & lifeguard manager at the Bridgeton, MO Community center. He has worked as a sales representative and customer service representative fro Cingular Wireless and Sprint PCS. He also was part of the Student Doctors Council at Logan College. He was student activities director and president for a total of four trimesters.

The chiropractic assistant (CA) will be in charge of scheduling appointments, answering the phone, collecting and updating patients information, collecting payment from the patient, filing patients folders according to HIPPA, and check clinic email.

The CA should also have computer skills with knowledge of Microsoft Word, Quick Books, and Microsoft XP. The CA should also have prior experience in a clerical position.

Compensation and Ownership

Dr. Baker will be the sole owner of Baker Chiropractic and Acupuncture. He will receive an annual salary starting at $50,000. This is higher than the mode for the Midwest region according to the 9th Annual Salary and Expense Survey. The CA will receive an hourly wage of $9.00 per hour with 25 hours per week.

Board of Directors/Advisory Council

The Advisory council will consist of Marlene Trice, successful business owner and real estate investor; Dennis Baker D.C., chiropractor for 25+ years; Susan Baker D.C., chiropractor for 39+ years; Daniel Clinert, financial advisor; and Sam Ambrose, web designer.

Infrastructure

The following will be paid for their services:

Accountant – Cindy Delbrugge

Investor – Daniel Clinert

Attorney – William Richmond

NCMIC – for malpractice consultation

Contracts and Franchise Agreements

Dr. Baker will have a mortgage payment for the 1,000 square feet office building.

Insurance

Dr. Baker will have life insurance with no less than a $150,000 pay out.

State Farm insurance company will insure the building.

NCMIC will cover malpractice insurance.

Employee Stock Option Plan and Other Incentives

One incentive would be a bonus per hour worked when the office reaches its weekly goals. The bonus would range anywhere from $.25 to $5.00 per hour.

Organization Charts

PRODUCT/SERVICE

Purpose of the Product/Service

Baker Chiropractic & Acupuncture will offer chiropractic and acupuncture to its patients and community located in House Springs, Missouri. The purposes of these products are similar. They are both focused on bringing the body back to balance. Balance in this presentation means a couple of things. Acupuncture looks at balancing meridians, or energy pathways, that flow throughout the body. When each of the 12 main meridians is in balance the body has the opportunity to function at its greatest efficiency. This providing increased energy, immunity, and overall happiness. Chiropractic will address the musculoskeletal components of the body. Those components consist of, but are not limited to, back pain, shoulder pain, knee pain, whip lash, sciatica, headaches, and any other joint pain caused by dysfunctional movement not caused by a disease.

Additional side products will be offered besides the two main treatment types. Nutritional supplements will be available for those patients that need additional nutrition or need supplementation to provide to best treatment plan. Cervical pillows will be available along with orthopedic supports for patients if so indicated upon treatment. Additional products are not limited to these and may change if patients may benefit from additional products.

The community that this practice will be located is in a growing community that has a range of ages. The chiropractic technique being used is a light force technique called equalizer. Acupuncture is also a low force technique that can be used on a person of any age. There would just be a choice in how to stimulate the acupuncture points by using needles, laser, or micro current. The community will find that the prices and the focus of the practice will include them. The practice will be family orientated and include acute care, wellness care, and sports enhancement care. With these benefits another chiropractor will be well received in this growing community.

Unique Features

There will be a few unique features to start and some may be added as seen necessary. The first unique feature is the doctor’s personality. Dr. Baker is fun and service orientated in all of his efforts. Dr. Baker will be educating patients every time they are in the office. This to further their improvement while understanding why chiropractic is working for them. This will also give them the ability to share about chiropractic and how it may make a difference for their friends.

Dr. Baker will also be able to treat over 2,000 diseases through the use of acupuncture. (National Institute of Health) This gives him the ability to treat additional disease that many chiropractors cannot offer without an acupuncture certification.

If Dr. Baker becomes aware of a niche that would move his practice into greater uniqueness then the steps would be taken to provide this unique care by attending the proper seminars or classes needed.

A survey may also be taken to see what type of hours patients are looking for as the patients are scheduled. This will provide feed back for when Dr. Baker is most needed in the office.

Stage of Development

Chiropractic, or Twei Nah (Chinese manipulation), and acupuncture have been around for nearly 4,000 years. Chiropractic as we know it today was inspired by D.D. Palmer back in 1896. These products have been around for many years and have provided results and benefits throughout their time. There is always some deviation or enhancement that is added and then claimed as being the newest technique; however the fundamentals are the same.

Additionally alternative medicine is showing constant signs of growing. As seen in a study done from 1990-1997 out of the people surveyed 11% of the people went to chiropractors. Over the seven year period there was an increase of 10% of the people seeing alternative therapies for health problems. Overall, chiropractic and acupuncture are growing areas of health care that are not showing signs of slowing.(JAMA. 280:1569-75. November 11, 1998)

Baker Chiropractic & Acupuncture is already built and will be adding on an addition to the existing building to accommodate an additional doctor. This building has been in operation for nearly 20 years and is located next to a highway.

Future Research and Development

Currently Dr. Baker’s father teaches acupuncture and sells products for Meridia Technologies. Dr. Baker plans on helping and eventually being a part of the teaching of acupuncture and an additional sales rep for Meridia Technologies.

Dr. Baker has been involved with Arthritis research in surveying a patient’s point of view on how well their care was administered. Dr. Baker has also attended TBM classes, Graston Technique class, SOT seminars, and is certified in Activator Protocal.

For continuing education in Missouri they require 24 hours per year, physician level instruction, approved by Board. 4 hours in boundary training or emergency procedures, HIV or infectious disease, 4 hours x-ray, 4 hours differential or physical diagnosis, or both, and 12 hours general continuing education. Certification available for Meridian Therapy / Accupressure / Acupuncture (MTAA) and/or Insurance Consulting. Each certification requires 12 hours annually each to maintain certification and those hours are considered in compliance with the general continuing education requirement. ( Along with this Dr. Baker participates with Landmark Education to provide break through results for his clinic and patients.

Government Approvals

Chiropractors get professional training at schools accredited by the Council of Chiropractic Education (CCE). The Doctor of Chiropractic (D.C.) degree is administered at the end of the program with completion of all requirements. There are four national board exams administered by the National Board of Chiropractic Examiners. All four exams cover material presented in the graduate program and include basic sciences, physical examination, diagnosis, and treatment.

HIPPA compliancy will be in place and upheld.

Product/Service Limitations

The limitations of practice will be addressed by the state statute below:

The "practice of chiropractic" is defined as the science and art of examination, diagnosis, adjustment, manipulation and treatment of malpositioned articulations and structures of the body, both in inpatient and outpatient settings. The adjustment, manipulation, or treatment shall be directed toward restoring and maintaining the normal neuromuscular and musculoskeletal function and health. It shall not include the use of operative surgery, obstetrics, osteopathy, podiatry, nor the administration or prescribing of any drug or medicine nor the practice of medicine. The practice of chiropractic is declared not to be the practice of medicine and operative surgery or osteopathy within the meaning of chapter 334, RSMo, and not subject to the provisions of the chapter. Chiropractors may advise and instruct patients in all matters pertaining to hygiene, nutrition, and sanitary measures as taught in any chiropractic college recognized and approved by the board. The practice of chiropractic may include meridian therapy/acupressure/acupuncture with certification as required by the board. This will include 100 hours with a passing grade in the course along with a passing Acupuncture NBCE test. (http://www.moga.mo.gov/statutes/C300-399/3310000010.HTM)

The referral network will consist of family, friends, and associates. Along with that Dr. Baker is planning to join organizations such as Lions Club, Swimming Club, and additional organizations that benefit the community.

Product/Service Liability

NCMIC will be Dr. Baker’s insurance provider. Insurance will cost 100.00 dollars per month and will be what NCMIC recommends. This includes one million dollars per incident and three million dollars per year including neglect and person injury.

State Farm will handle all other insurances for the building and liabilities present for running a business.

Baker Chiropractic & Acupuncture