Fargo Medical Laboratories (FML) is a start-up company committed to providing convenient, friendly blood testing service to physicians in the Main Street Professional Building and surrounding area. FML has been founded as a single member L.L.C. registered in North Dakota by Dave Gigsted. The company aims to quickly gain market share in the Fargo medical community.


1. Secure 60% of physicians in the Main Street Professional Building as customers.

2. Develop 20% of revenue from physicians in the nearby vicinity.

3. Reach profitability within 12 months. This is especially important since FML will be using bank debt and would like to see a positive ROI fairly soon.


FML will serve two market segments. The first segment includes physicians in the Main Street Professional Building, where FML will lease space. There are 128 potential customers in this segment with a 3% growth rate. The second segment includes physicians in other nearby facilities. There are 115 potential customers in this segment with a 5% annual growth rate.


FML offers a comprehensive battery of blood tests for physicians’ patients. In-house tests include:

– CBC: A test of red blood cell count, white blood count, and platelet count. Each can be ordered individually if needed.

– Blood sugar test: Frequently requested for diabetics or possible diabetics.

– Electrolyte testing: For patients on diuretics with concerns of electrolyte loss.

– Creatine: Often used to check kidney functioning or determine heart or kidney problems.

Other types of blood analysis can be done with specimens sent to a central lab for testing.


FML has been founded and will be led by Dave Gigsted, who holds an undergraduate degree in small business management. After graduation, Dave obtained his laboratory technician certification and worked for a laboratory, eventually becoming the lab manager. He then moved to Fargo with his wife, where he worked in a lab for a year and recognized the need for a lab in the Main Street Professional Building. Dave developed a plan and secured financing for the venture.

1.1 Objectives:

– Gain 60% of the Professional Building’s blood testing work.

– Develop 20% of revenues from offices outside the Professional Building.

– Reach profitability within 12 months.

1.2 Mission:

FML’s mission is to serve local physicians with fast, accurate, private, reasonably priced blood testing services, aiming to exceed all customer expectations.

1.3 Keys to Success:

1. Lease space in the Main Street Professional Building.

2. Set up a strong contract with a local laboratory to outsource difficult tests, ensuring fast service and good rates.

3. Follow strict accounting controls to ensure profitability.

Laboratory Business Plan Example

Fargo Medical Laboratories, an L.L.C. registered in North Dakota, is owned by Dave Gigsted and will lease office space in the Main Street Professional Building, which houses 93 medical professionals, mainly primary care physicians or general practitioners. Currently, there is no laboratory in the building, and doctors have to send their patients elsewhere for blood analysis.

The owner, Dave Gigsted, has received bank debt financing and will repay a long-term loan.

For the start-up, Fargo Medical Laboratories will need the following equipment:

– Waiting room furniture

– Two computers with QuickBooks Pro, Microsoft Office, and insurance billing software, sharing a laser printer and broadband Internet connection.

– Five portable ice coolers.

– Four chairs for the blood drawing rooms.

– Latex gloves, syringes, needles.

– Autoanalyzer.

– Complete blood testing machine.

– Centrifuge.

– Refrigerator/freezer unit.

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Laboratory Business Plan Example

Start-up Funding

Start-up Expenses to Fund: $5,000

Start-up Assets to Fund: $165,000

Total Funding Required: $170,000


Non-cash Assets from Start-up: $73,000

Cash Requirements from Start-up: $92,000

Additional Cash Raised: $0

Cash Balance on Starting Date: $92,000

Total Assets: $165,000

Liabilities and Capital


Current Borrowing: $0

Long-term Liabilities: $170,000

Accounts Payable: $0

Other Current Liabilities: $0

Total Liabilities: $170,000


Planned Investment

Investor 1: $0

Investor 2: $0

Other: $0

Additional Investment Requirement: $0

Total Planned Investment: $0

Loss at Start-up (Start-up Expenses): ($5,000)

Total Capital: ($5,000)

Total Capital and Liabilities: $165,000

Total Funding: $170,000



Start-up Expenses

Legal: $1,000

Stationery etc.: $0

Brochures: $500

Consultants: $0

Insurance: $500

Rent: $1,000

Research and Development: $0

Expensed Equipment: $2,000

Other: $0

Total Start-up Expenses: $5,000

Start-up Assets

Cash Required: $92,000

Other Current Assets: $0

Long-term Assets: $73,000

Total Assets: $165,000

Total Requirements: $170,000


Fargo Medical Laboratories offers routine blood tests on-site and more complex blood tests outsourced to a central lab. FML will be located inside the Main Street Professional Building which is home to numerous physicians. Currently, the doctors have to send their patients to an off-site laboratory, a 15-minute drive from the doctor’s office.

Once Fargo Medical Laboratories is up and running, the doctors will be able to send their patients to FML’s offices within the building. For simple tests, Fargo Medical Laboratories will do the analysis in-house. For more complex blood work, the specimens will be sent to an outsourced central laboratory.

The advantages to the physicians and their patients include convenience (blood can be drawn within the same building), faster service (no driving or transportation time), and for the most commonly requested tests the analysis occurs in-house guaranteeing results within 24 hours.

Fargo Medical Laboratories will offer the following tests in-house:

– Red blood cell count: $15

– White blood cell count: $15

– CBC (a more complete test that counts platelets in addition to white and red blood cell counts): $30

– Blood sugar (suited for diabetics or people who are trying to determine if they have a blood sugar problem): $15

– Electrolytes (for people on diuretics): $20

– Creatine (tests for heart or kidney difficulties): $15

If more extensive blood work is needed, blood will be drawn in our offices and sent to a central laboratory. Fargo Medical Laboratories will use a courier service that transports the samples in an ice cooler. The specimens are tested within 24-36 hours of receipt at the central lab, and the results are returned to FML via encrypted email.

Market Analysis Summary

Fargo Medical Laboratories has identified two market segments. The first segment is the physicians that practice within the same professional building as FML. The second group is comprised of physicians that practice in the surrounding area.

4.1 Market Segmentation

Fargo Medical Laboratories will provide services geared to two distinct customer segments.

Main Street Professional Building physicians: This segment is made up of physicians that practice medicine in offices within the Main Street Professional Building. There is a wide range of specialties represented, but predominantly primary care and general practitioners. Most types of doctors need blood work done on their patients with some regularity. The Main Street physicians have always had to send their patients to another area of town to have blood drawn and analyzed. This is not convenient for their patients and is time-consuming, so physicians in the building would generally be quite happy if there were a blood laboratory within the building.

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Laboratory Business Plan Example

Market Analysis:

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR

Potential Customers

Growth 3% 128 132 136 140 144 2.99%

Nearby physicians 5% 115 121 127 133 140 5.04%

Total 3.97% 243 253 263 273 284 3.97%

4.2 Target Market Segment Strategy:

Physicians within the Main Street Professional Building are the primary target market due to their high demand for Fargo Medical Laboratories’ services. Almost all doctors have patients who require blood testing, and choosing a lab primarily depends on convenience for the patient. By being located in the same building as the physicians, Fargo Medical Laboratories offers the most convenient option. The second target market, nearby physicians, also values convenience for their patients, making Fargo Medical Laboratories a closer alternative to the current lab.

4.3 Service Business Analysis:

Blood laboratories offer similar services and compete based on convenience. Quick turnaround time is essential, typically within a couple of days. In most cities, labs are placed strategically to serve nearby clusters of physicians. The Main Street Professional Building in Fargo has been lacking a blood laboratory due to difficulty attracting qualified technical personnel. Fargo Medical Laboratories aims to fill this gap.

4.3.1 Competition and Buying Patterns:

Fargo has a total of seven blood drawing laboratories. Of these, two are exclusive to specific clients and do not serve other physicians. The remaining five, including Fargo Medical Laboratories, offer basic tests on-site. The closest competitor to Fargo Medical Laboratories is Mednet, located four miles away and currently used by 95% of physicians in the Main Street Professional Building. Convenience is the primary factor driving physician choice in selecting a blood testing service.

Strategy and Implementation Summary:

Fargo Medical Laboratories will leverage its competitive edge of being conveniently located within a large medical facility to gain market share. The company has developed a strategic marketing plan to create local awareness and emphasize the benefits it offers. A sales strategy is also in place to convert leads by highlighting the advantages for physicians’ patients. More details regarding the competitive edge, marketing, and sales strategies can be found in sections 5.1-5.3.

5.1 Competitive Edge:

Convenience is Fargo Medical Laboratories’ competitive edge in the blood analysis industry. Basic levels of care and performance, such as accepting popular insurance plans, providing fast and accurate analysis, are standard. Therefore, convenience becomes crucial in distinguishing one lab from another. Establishing a positive patient experience through friendly staff, successful specimen collection, minimal discomfort, and positive impressions will also contribute to customer satisfaction.

5.2 Marketing Strategy:

Fargo Medical Laboratories will employ three means of communication to promote its services: direct mail, targeting local physicians through a flyer; media advertising, utilizing local television and radio; and participating in health fairs and events to engage the community directly.

5.3 Sales Strategy:

The sales strategy of Fargo Medical Laboratories aims to emphasize three key services to convert leads into clients: accepting most insurance plans, providing fast test results, and maintaining high customer satisfaction levels.

5.3.1 Sales Forecast:

Fargo Medical Laboratories has developed a conservative sales forecast for the next three years to meet monthly sales goals. This approach ensures financial stability and avoids potential risks associated with inaccurate assumptions and overly optimistic forecasts.

Laboratory Business Plan Example

Laboratory Business Plan Example

Sales Forecast

Year 1 Year 2 Year 3
Professional building physicians $81,778 $210,545 $232,545
Nearby physicians $16,356 $42,109 $46,509
Total Sales $98,134 $252,654 $279,054
Direct Cost of Sales Year 1 Year 2 Year 3
Professional building physicians $28,622 $73,691 $81,391
Nearby physicians $5,724 $14,738 $16,278
Subtotal Direct Cost of Sales $34,347 $88,429 $97,669
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5.4 Milestones

Fargo Medical Laboratories has identified milestones for the organization. Achieving these milestones is instrumental for success. By enumerating the milestones, the organization gains clear goals for focused energy.

Laboratory Business Plan Example


Milestone Start Date End Date Budget Manager Department

Completion of business plan 1/1/2003 2/1/2003 $0 Dave Business development

Secure lease 1/1/2003 2/15/2003 $0 Dave Operations

Conversion of 50% of in-house drs into customers 2/15/2003 10/15/2003 $0 Dave Sales

Profitability 10/15/2003 12/15/2003 $0 Dave Everyone

Revenue of $100,000 12/15/2003 2/1/2004 $0 Dave Sales

Totals $0

Management Summary

Dave Gigsted is the founder and manager of Fargo Medical Laboratories. Dave received his undergraduate degree in Small Business Management from the University of Illinois. While in college, Dave worked at a bicycle shop, initially as a mechanic, moving up to assistant manager by the time he graduated. This provided him with hands-on business experience to combine with his business degree.

Upon graduation, Dave began his job search, including opportunities in the medical profession. His mother and aunt are both registered nurses who shared with Dave that, at that time in Illinois, lab technicians were in short supply. So Dave enrolled in an eight-month program through the community college for a degree in Laboratory Technology. After completing this degree, Dave went to work at a laboratory. Within two years, he had been promoted to Lab Manager. Dave found this work challenging, enjoyed the medical aspect and worked hard in the business end.

After five years, Dave and his wife moved to Fargo for a job opportunity for his wife. He immediately began working at a laboratory and worked there for a year. During this time Dave began looking into different business opportunities, recognizing that he had now developed sufficient business skills to operate his own business. Dave found there was a high concentration of physicians in a professional building with no nearby lab. In talking with people, he learned the physicians were looking for a lab to relocate but had been unable to find any. Armed with this information, Dave began to draft a business plan confident that with a solid strategy and comprehensive plan he would be able to find financing and begin his new venture.

6.1 Personnel Plan

– Dave will handle business development, sales, marketing, accounting, courier, customer service, and lab tech work.

– Two phlebotomists on staff at any one time to draw blood.

– One Lab technician will be responsible for onsite blood tests. This will be a part-time position. Dave will fill in as needed.

Personnel Plan:

Year 1 Year 2 Year 3

Dave $22,000 $28,000 $32,000

Phlebotomist $16,500 $18,000 $18,000

Phlebotomist $15,000 $18,000 $18,000

Lab technician $22,000 $24,000 $24,000

Total People 4 4 4

Total Payroll $75,500 $88,000 $92,000

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