The Pacific Valley Sport Medicine Center, opening soon in the greater Southerlin metro area, will be home to Dr. John Meeks. With six years of experience as a chiropractic doctor at the Nichols Wellness Center, Dr. Meeks is now venturing out on his own. He will join the Center’s esteemed sport injury specialists, who sought his expertise. These specialists account for over 70% of Dr. Meeks’ referrals. At his new location in the Center, Dr. Meeks will focus solely on sport injury referrals.
The mission of Sports Chiropractic in the Southerlin community is to provide accessible, quality chiropractic care for athletes of all ages. We emphasize trust, respect, confidentiality, and compassion in our service system. Our chiropractic care is a collaborative effort with a physician’s overall health strategies and other medical services, always keeping the customer/client as our priority.
Our objectives are to continuously develop and strengthen our chiropractic services, strengthen our commitment to chiropractic, increase referrals from physicians within the center, and build referral into repeat clients.
Sports Chiropractic, started by Dr. John Meeks in the newly opened Pacific Valley Sport Medicine Center, offers quality chiropractic services to athletes of all ages and works closely with the center’s physicians.
Our estimated start-up expenses are $20,000, which will be financed by Dr. Meeks’ personal funds. An additional $25,000 will be required as start-up assets.
Start-up
Requirements
Start-up Expenses
Legal $0
Stationery etc. $300
Brochures $500
Consultants $0
Insurance $800
Rent $1,500
Research and Development $0
Expensed Equipment $4,000
Leased Equipment $13,000
Other $0
Total Start-up Expenses $20,100
Start-up Assets
Cash Required $24,900
Other Current Assets $0
Long-term Assets $0
Total Assets $24,900
Total Requirements $45,000
Start-up Funding
Start-up Expenses to Fund $20,100
Start-up Assets to Fund $24,900
Total Funding Required $45,000
Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $24,900
Additional Cash Raised $0
Cash Balance on Starting Date $24,900
Total Assets $24,900
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Capital
Planned Investment
Dr. Meeks $45,000
Investor 2 $0
Other $0
Additional Investment Requirement $0
Total Planned Investment $45,000
Loss at Start-up (Start-up Expenses) ($20,100)
Total Capital $24,900
Total Capital and Liabilities $24,900
Total Funding $45,000
Company Ownership
Sports Chiropractic is owned by Dr. John Meeks.
Services
Dr. Meeks’ philosophy is that optimal health and performance can be attained through the proper balance of exercise, nutrition, and care of the body’s framework (skeleton). Additionally, maintaining good health depends on a normally functioning nervous system. Misaligned skull and spinal vertebrae can irritate and interfere with nerve impulses. As a chiropractor, Dr. Meeks corrects these misalignments to restore balance and promote the body’s ability to heal itself.
Sports Chiropractic offers treatment for various conditions, including athletic injuries, low back and leg pain, neck and arm pain, headaches, and shoulder, knee, and foot pain.
Market Analysis Summary
The chiropractic field in Southerlin is crowded, with over 60 chiropractors practicing in the area. Dr. Meeks specializes in athletic injuries, particularly for runners. Southerlin has a large and dedicated running community, as well as high school athletes in need of treatment. Another potential client group is active baby-boomers who want to remain pain-free as they age.
Market Segmentation
Sports Chiropractic will focus on the following market segments: runners, high school age athletes, and active baby-boomers.
Market Analysis
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Runners 15% 5,000 5,750 6,613 7,605 8,746 15.00%
High School Age Athletes 15% 4,000 4,600 5,290 6,084 6,997 15.00%
Active Baby-Boomers 10% 20,000 22,000 24,200 26,620 29,282 10.00%
Total 11.63% 29,000 32,350 36,103 40,309 45,025 11.63%
Strategy and Implementation Summary
Sports Chiropractic is uniquely positioned to successfully treat sports injuries. The following subsections outline these advantages.
5.1 Competitive Edge
Dr. Meeks, an avid runner, is one of the most visible sports injury specialists in Southerlin. He supports numerous charity runs and has spoken to many athletic groups and organizations about preventing sports injuries.
Dr. Meeks has developed an extensive network of contacts with physicians specializing in sports injuries. Over half of his referrals come from these doctors. This is a strong competitive edge. Additionally, his strong reputation for exceptional service has resulted in a growing base of loyal clients who will follow him to his new practice.
The strongest competitive advantage for Sports Chiropractic is being the only chiropractic service in the Pacific Valley Sport Medicine Center. As stated earlier, this center will become the dominant service provider for sports injuries. Dr. Meeks will be the chiropractor to see for sport-related injuries.
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While Sports Chiropractic has a strong referral base for clients, it will still be important to market Dr. Meeks’ services.
Dr. Meeks will continue to speak to local groups about preventing sports injuries to maintain his reputation as the sports injury expert.
In addition, Sports Chiropractic will sponsor an annual run in the city to support high school athletics.
5.3 Sales Forecast
The following table and chart highlight the sales forecast for three years.
Sales Forecast
| Sales Forecast | |||
| Year 1 | Year 2 | Year 3 | |
| $138,000 | $151,800 | $166,980 | |
Personnel Plan
The Sports Chiropractic staff consists of Dr. Meeks, one full-time receptionist/clerical staff member, and a half-time bookkeeper.
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| $48,000 | $58,000 | $68,000 | |
| $24,000 | $28,000 | $33,000 | |
| $13,500 | $15,000 | $17,000 | |
| 3 | 3 | 0 | |
| $85,500 | $101,000 | $118,000 | |
The following is the financial plan for Sports Chiropractic.
Break-even Analysis
The monthly sales break-even point is shown in the table and chart below.
| Break-even Analysis | |
| Monthly Revenue Break-even | $10,244 |
| Average Percent Variable Cost | 0% |
| Estimated Monthly Fixed Cost | $10,244 |
Projected Profit and Loss
The projected profit and loss for three years is as follows.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| $138,000 | $151,800 | $166,980 | |
| $0 | $0 | $0 | |
| $0 | $0 | $0 | |
| $0 | $0 | $0 | |
| $138,000 | $151,800 | $166,980 | |
| $85,500 | $101,000 | $118,000 | |
| $4,800 | $5,000 | $5,000 | |
| $0 | $0 | $150 | |
| $1,800 | $1,800 | $1,800 | |
| $18,000 | $18,000 | $1,800 | |
| $12,825 | $15,150 | $17,700 | |
| $0 | $0 | $0 | |
| $122,925 | $140,950 | $144,450 | |
| $15,075 | $10,850 | $22,530 | |
| $15,075 | $10,850 | $22,530 | |
| $0 | $0 | $0 | |
| $4,523 | $3,255 | $6,759 | |
| $10,553 | $7,595 | $15,771 | |
| 7.65% | 5.00% | 9.44% | |
Projected Cash Flow
The projected cash flow for three years is as follows.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| $138,000 | $151,800 | $166,980 | |
| $138,000 | $151,800 | $166,980 | |
| $0 | $0 | $0 | |
| $0 | $0 | $0 | |
| $0 | $0 | $0 | |
| $0 | $0 | $0 | |
| $0 | $0 | $0 | |
| $0 | $0 | $0 | |
| $138,000 | $151,800 | $166,980 | |
| $123,414 | $144,687 | $152,031 | |
| $123,414 | $144,687 | $152,031 | |
| $0 | $0 | $0 | |
| $0 | $0 | $0 | |
| $0 | $0 | $0 | |
| $0 | $0 | $0 | |
| $123,414 | $144,687 | $152,031 | |
| $14,586 | $7,113 | $14,949 | |
| $39,486 | $46,599 | $61,548 | |
Projected Balance Sheet
The projected balance sheet for three years is as follows.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| $39,486 | $46,599 | $61,548 | |
| $0 | $0 | $0 | |
| $39,486 | $46,599 | $61,548 | |
| $4,033 | $3,551 | $2,730 | |
| $0 | $0 | $0 | |
| $4,033 | $3,551 | $2,730 | |
| $35,453 | $43,048 | $58,819 | |
| $39,486 | $46,599 | $61,548 | |
| $35,453 | $43,048 | $58,819 | |
Business Ratios
The following table outlines some important ratios from the Offices of Physicians industry.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| 0.00% | 10.00% | 10.00% | 5.90% | |
| 0.00% | 0.00% | 0.00% | 50.50% | |
| 100.00% | 100.00% | 100.00% | 60.80% | |
| 0.00% | 0.00% | 0.00% | 39.20% | |
| 100.00% | 100.00% | 100.00% | 100.00% | |
| 10.21% | 7.62% | 4.43% | 39.80% | |
| 0.00% | 0.00% | 0.00% | 14.10% | |
| 10.21% | 7.62% | 4.43% | 53.90% | |
| 89.79% | 92.38% | 95.57% | 46.10% | |
| 100.00% | 100.00% | 100.00% | 100.00% | |
Appendix
Sales Forecast:
Sales:
Month 1: $7,000
Month 2: $8,000
Month 3: $9,000
Month 4: $10,000
Month 5: $11,000
Month 6: $12,000
Month 7: $12,000
Month 8: $13,000
Month 9: $14,000
Month 10: $14,000
Month 11: $14,000
Month 12: $14,000
Clients:
0%: $7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$12,000
$13,000
$14,000
$14,000
$14,000
$14,000
Other:
0%: $0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Total Sales:
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$12,000
$13,000
$14,000
$14,000
$14,000
$14,000
Direct Cost of Sales:
Month 1: $0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Clients:
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Other:
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Subtotal Direct Cost of Sales:
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Personnel Plan:
Dr. Meeks:
0%: $4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
Receptionist/Clerical:
0%: $2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
Bookkeeper:
0%: $0
$0
$0
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
Other:
0%: $0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Total People:
3
3
3
3
3
3
3
3
3
3
3
3
Total Payroll:
$6,000
$6,000
$6,000
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
General Assumptions:
1
2
3
4
5
6
7
8
9
10
11
12
Current Interest Rate:
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
Long-term Interest Rate:
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
Tax Rate:
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
Other:
0
0
0
0
0
0
0
0
0
0
0
0
Pro Forma Profit and Loss:
Sales:
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$12,000
$13,000
$14,000
$14,000
$14,000
$14,000
Direct Cost of Sales:
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Other Production Expenses:
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Total Cost of Sales:
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Gross Margin:
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$12,000
$13,000
$14,000
$14,000
$14,000
$14,000
Gross Margin %:
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Expenses:
Payroll:
$6,000
$6,000
$6,000
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
$7,500
Sales and Marketing and Other Expenses:
$400
$400
$400
$400
$400
$400
$400
$400
$400
$400
$400
$400
Pro Forma Cash Flow
| Pro Forma Cash Flow | |||||||||||||
| Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
| Cash Received | |||||||||||||
| Cash from Operations | |||||||||||||
| Cash Sales | $7,000 | $8,000 | $9,000 | $10,000 | $11,000 | $12,000 | $12,000 | $13,000 | $14,000 | $14,000 | $14,000 | $14,000 | |
| Subtotal Cash from Operations | $7,000 | $8,000 | $9,000 | $10,000 | $11,000 | $12,000 | $12,000 | $13,000 | $14,000 | $14,000 | $14,000 | $14,000 | |
| Additional Cash Received | |||||||||||||
| Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Subtotal Cash Received | $7,000 | $8,000 | $9,000 | $10,000 | $11,000 | $12,000 | $12,000 | $13,000 | $14,000 | $14,000 | $14,000 | $14,000 | |
| Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
| Expenditures from Operations | |||||||||||||
| Cash Spending | $6,000 | $6,000 | $6,000 | $7,500 | $7,500 | $7,500 | $7,500 | $7,500 | $7,500 | $7,500 | $7,500 | $7,500 | |
| Bill Payments | $79 | $2,375 | $2,675 | $2,965 | $2,983 | $3,283 | $3,573 | $3,583 | $3,883 | $4,173 | $4,173 | $4,173 | |
| Subtotal Spent on Operations | $6,079 | $8,375 | $8,675 | $10,465 | $10,483 | $10,783 | $11,073 | $11,083 | $11,383 | $11,673 | $11,673 | $11,673 | |
| Additional Cash Spent | |||||||||||||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Subtotal Cash Spent | $6,079 | $8,375 | $8,675 | $10,465 | $10,483 | $10,783 | $11,073 | $11,083 | $11,383 | $11,673 | $11,673 | $11,673 | |
| Net Cash Flow | $921 | ($375) | $325 | ($465) | $518 | $1,218 | $928 | $1,918 | $2,618 | $2,328 | $2,328 | $2,328 | |
| Cash Balance | $25,821 | $25,446 | $25,771 | $25,306 | $25,823 | $27,041 | $27,968 | $29,886 | $32,503 | $34,831 | $37,158 | $39,486 | |
Pro Forma Balance Sheet
| Pro Forma Balance Sheet | |||||||||||||
| Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
| Assets | Starting Balances | ||||||||||||
| Current Assets | |||||||||||||
| Cash | $24,900 | $25,821 | $25,446 | $25,771 | $25,306 | $25,823 | $27,041 | $27,968 | $29,886 | $32,503 | $34,831 | $37,158 | $39,486 |
| Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ||||||
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