Voice Recognition Software Business Plan
Voice Control, Inc. was created to provide a solution for orthopedic surgeons by addressing the input of patient data into a medical records database.
The solution utilizes a popular and accurate speech recognition component called "telephony." It allows orthopedic surgeons to input patient data during examinations, filling a major gap in existing products.
The value proposition for physicians is the ability to see more patients and reduce operating costs, resulting in higher revenue and operating margins.
The company differentiates itself from competitors by offering the first turnkey solution for electronic medical records using telephony.
Market research conducted at the American Academy of Orthopedics revealed that 86% of physicians would purchase electronic medical records with telephony input capabilities, compared to traditional input.
Additionally, research showed that less than 10% of the industry currently uses electronic medical records, but 89% of the market plans to adopt them within the next five years. Within this timeframe, 42% plan to purchase within 18 months, 36% within three years, and 11% within five years.
Currently, most physicians collect patient information on paper, including demographics, examinations, lab reports, and referral information. Electronic medical records enable the storage of all patient information in a database, potentially creating a paperless office.
With approximately 15,000 licensed orthopedists in the United States, there is a mature market with the need and ability to pay for electronic medical records services. Our goal is to capture at least 13% of this market within five years.
Implementing this plan will require initial financing, but substantial cash reserves are expected in the fifth year. This will enable the owners to start buying back the shares of the company needed for the startup. The owners aim to repurchase all outstanding shares within the current year.
Contents
1.1 Objectives
Our main objective is to exceed $22 million in sales revenue and $7 million in net profit in the fifth year.
PRIMARY OBJECTIVES:
- Penetrate 13% of the electronic medical records business in the orthopedic dictation market by year five.
- Prepare a business model that can be successfully launched in additional vertical medical markets by year five.
- Penetrate 7% of the orthopedic dictation market with speech recognition by year five.
1.2 Mission
Voice Control, Inc. will utilize advancing technology to provide a quick, content-secure method of input, review, and sharing of patient information.
Our customers are the lifeline to our mission. Every effort will be made to meet customer expectations. Our product and service quality will set the industry standard.
Voice Control, Inc. will provide an environment for employees that offers individual growth opportunities, creativity, fair compensation, family values, and the opportunity for civic participation.
1.3 Keys to Success
The keys to our success are:
- Acceptance of speech recognition software as an alternative process to current methods of dictation/transcription.
- Establishing market leadership by providing a "custom" solution to individual, end-users’ dictation/transcription needs.
- Developing a "voice-created" medical records package that will provide printed patient records while capturing information for the "paperless" record.
- Profitably managing the growth opportunities in this emerging market.
Company Summary
Under the name Vitec, we have been providing speech recognition software to orthopedics since 1998. Another division of Vitec has been providing bone screening products since 1983. As a result, we have become the industry leader in providing speech recognition solutions for dictation.
Voice Control, Inc. is a new company start-up, intending to acquire Vitec. We will have a dedicated beta site in Beavercreek, Ohio. The medical practice Springfield Surgery Center will perform beta site testing of our software. Dr. Begal currently uses speech recognition technology to capture patient exams in real-time and has provided consulting services to our speech recognition software efforts since 1998. There are seven physicians currently practicing at Springfield Surgery Center.
We have a partnership with WWBB, a proven leader in database software and speech recognition development. The union of this cutting-edge software development, combined with our in-depth knowledge of the medical market and speech recognition, will provide an optimum product and delivery system.
2.1 Company Ownership
Voice Control, Inc. is a privately held Ohio Corporation. James Brown, Jim Hendrix (Intuitive Medical Records, LLC), and Steve Wonder are the major shareholders. Dr. Michael J. Begal is a minor shareholder.
2.2 Start-up Summary
The primary start-up expenses include the acquisition of selected assets of Vitec and establishment of Voice Control, Inc. as a legal entity.
Assets acquired from Vitec will include copyrights, trademarks, license rights, accounting records, customer database, website, computers, office furniture, trade show exhibit, and inventory of dictation and orthopedic screening products. This expenditure is reflected in the following table under Start-up Assets Needed, Other Short-term Assets.
Initial investment will come from major shareholders, investors, and venture capital as depicted in the table below. Detailed information is available in the Financial Plan sections.
Start-up Requirements:
– Legal: $5,000
– Accounting: $2,500
– Stationery etc.: $1,000
– Brochures: $2,000
– Consultants: $5,000
– Insurance: $600
– Rent: $3,266
– Purchase of VCI Assets: $50,000
– Expensed equipment: $2,000
– Decision Tree: $75,000
– Total Start-up Expenses: $146,366
Start-up Assets:
– Cash Required: $1,453,634
– Start-up Inventory: $0
– Other Current Assets: $30,000
– Long-term Assets: $0
– Total Assets: $1,483,634
Total Requirements: $1,630,000
Start-up Funding:
– Start-up Expenses to Fund: $146,366
– Start-up Assets to Fund: $1,483,634
– Total Funding Required: $1,630,000
Assets:
– Non-cash Assets from Start-up: $30,000
– Cash Requirements from Start-up: $1,453,634
– Additional Cash Raised: $0
– Cash Balance on Starting Date: $1,453,634
– Total Assets: $1,483,634
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
– James Brown: $10,000
– Jim Hendrix: $10,000
– Steve Wonder: $10,000
– Private Investors: $1,600,000
– Other: $0
– Additional Investment Requirement: $0
– Total Planned Investment: $1,630,000
– Loss at Start-up (Start-up Expenses): ($146,366)
– Total Capital: $1,483,634
– Total Capital and Liabilities: $1,483,634
– Total Funding: $1,630,000
Company Locations and Facilities:
We will initially be located at the Entrepreneurs Center, 714 E. Monument Ave, Springfield, Ohio. This location offers cost efficiencies and an entrepreneurial environment. The unit we will lease will be approximately 950 square feet and provides access to most major markets within 90 minutes of air travel.
Products and Services:
We sell products that create a paperless medical practice and improve operational efficiencies, including:
1. Electronic medical records
2. Dictation/transcription solutions using speech recognition software
3. Software for the management of scanned paper documents and digital files
4. Orthopedic products
Our strategy is to license the telephony module of our electronic medical record software to our competitors to protect price erosion and generate high-margin revenue.
Product and Service Description:
Electronic Medical Records:
Our electronic medical records software is based on telephony, a speech recognition technology. Physicians can enter patient information using speech recognition software, which populates the database in real-time. This software allows for in-depth physical examinations without the need for manual typing. The software also generates referral letters, eliminating the need for dictation. The pricing model includes a one-time purchase fee and an annual service agreement.
Speech Recognition:
We are a value added reseller of Dragon NaturallySpeaking software, offering dictation solutions for physicians. This technology decreases transcription costs and improves staff efficiency. The pricing varies based on customization needs.
Management of Scanned Documents and Digital Files:
We are a value added reseller of ScanSoft software, providing a paperless office solution. This technology eliminates the need for physical filing and increases staff productivity. The pricing for this product includes customization fees.
Orthopedic Screening Products:
We offer Teller Acuity Cards, Cardiff Acuity Card Test System, and logMAR Acuity Cards for screening visual acuity in infants, toddlers, and children. These products are priced based on their capabilities.
EMR Components:
Electronic medical records consist of front office, patient medical records, and back office. The front office captures patient demographics and scheduling information. Patient records include notes and are entered using speech recognition or mouse and drop-down toolbars. The back office handles billing, accounts receivable, accounts payable, and payroll.
Competitive Comparison:
Our electronic medical records software is the first to utilize telephony as the primary means of data input. Our competitors offer speech recognition as a supplement rather than the driving force behind their software. Our solution provides voice-activated input without the need for constant monitor viewing, giving us a competitive advantage. We differentiate our speech recognition offerings by providing personalized solutions and expertise to our customers. Our orthopedic products are market leaders and well-known in the industry.
Fulfillment:
We assemble our own products using local vendors for materials. Our speech recognition software is manufactured by Dragon Systems, Inc. We also source handheld recorders and headsets from a vendor in Florida. The printing process for our orthopedic products is done exclusively by Hammer Graphics in Piqua, Ohio.
Technology:
We utilize telephony and continuous speech recognition software for our speech recognition solutions. Telephony offers higher accuracy and does not require training by the user. Continuous speech recognition software searches through a larger vocabulary and requires user training. Our orthopedic product, Teller Acuity Cards, is a registered trademark exclusively owned by Vitec.
Future Products and Services:
Our goal is to vertically penetrate other medical markets with our electronic medical records software. We will leverage relationships built from our regional sales and expand into strategic markets. Our focus is on providing software solutions using technology.
Market Analysis Summary:
Our initial target market is orthopedists, as we have expertise in this industry and have received interest from orthopedics at trade shows. There are approximately 15,000 orthopedists in the United States, representing a potential $212 million market for electronic medical records. We will focus on subspecialty orthopedists who require extensive referral letters, aiming to save on transcription costs and leverage our visibility in this market.
Industry Trends:
We are aware of HIPAA regulations and will actively participate in establishing industry standards for patient confidentiality. We conducted a survey at a medical conference, which revealed high interest in electronic medical records software with speech input. The majority of the market plans to purchase within the next 36 months.
Market Trends:
Market trends include reduced physician reimbursement, an aging population increasing demand for medical care, legislation to eliminate handwritten records, and the need to reduce medical errors.
Strategy and Implementation Summary:
Our strategy involves combining dictation/transcription speech recognition and document scanning efforts with electronic medical records software. We will leverage relationships formed in the orthopedic market to expand into other medical markets. We will focus on building trust and recognition in phase one, then penetrate other vertical markets in phase two.
Milestones:
Our critical milestones through year-end 2003 are outlined in the table and chart below. Monthly analysis meetings will be held to review progress against the plan.
[Attached table/chart is omitted due to formatting restrictions]
Milestones:
– Milestone: SOW, level 1
– Start Date: 3/15/2002
– End Date: 4/15/2002
– Budget: $0
– Manager: Jim
– Department: R&D
– Milestone: Demonstration product
– Start Date: 4/1/2002
– End Date: 5/30/2002
– Budget: $0
– Manager: Jim
– Department: KLSS
– Milestone: AAO show demo
– Start Date: 5/30/2002
– End Date: 10/1/2002
– Budget: $0
– Manager: Jim
– Department: KLSS
– Milestone: Beta site testing
– Start Date: 10/1/2002
– End Date: 4/1/2003
– Budget: $100,000
– Manager: Jim
– Department: KLSS
– Milestone: Version 1.0 product
– Start Date: 4/1/2003
– End Date: 10/1/2003
– Budget: $100,000
– Manager: Jim
– Department: KLSS
– Milestone: Recruit and hire VRS sales rep
– Start Date: 10/1/2002
– End Date: 11/1/2002
– Budget: $2,000
– Manager: Steve
– Department: VRS
– Milestone: Recruit and hire EMR sales rep
– Start Date: 10/1/2002
– End Date: 11/1/2002
– Budget: $2,000
– Manager: James
– Department: EMR
– Milestone: Recruit and hire database coordinator
– Start Date: 9/1/2002
– End Date: 9/30/2002
– Budget: $0
– Manager: Steve
– Department: Cust Srvc
– Milestone: Recruit and hire EMR installation associate
– Start Date: 1/1/2003
– End Date: 2/1/2003
– Budget: $1,000
– Manager: James
– Department: Cust Srvc
– Totals: $205,000
5.3 Strategy Review
Upon entering 2005, we will review our dictation solutions strategy. Speech recognition will become a standard option on new computers, reducing profitability from selling off-the-shelf software. Sustaining momentum will be challenging.
By 2005, we should have a satisfied customer base. We expect the service provided by this group to shift from custom dictation solutions to speech integration solutions. If this group no longer aligns with our core electronic medical records business, we may need to spin off or sell it.
In 2005, we will assess the strategy of our orthopedic screening business. If it no longer aligns with our long-term objectives, we may divest from this business unit.
5.4 Sales Forecast
The table and charts below show our sales forecast for the first five years. First-year monthly forecasts are in the appendix.
| Sales Forecast | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Sales | |||||
| EMR | $0 | $1,951,400 | $3,366,100 | $11,586,600 | $19,294,600 |
| VRS | $126,000 | $262,638 | $536,242 | $1,069,048 | $1,643,331 |
| Ophthalmic Products | $121,000 | $112,000 | $103,000 | $95,000 | $87,000 |
| Installation & Training Income | $0 | $90,000 | $195,000 | $675,000 | $1,050,000 |
| Total Sales | $247,000 | $2,416,038 | $4,200,342 | $13,425,648 | $22,074,931 |
| Direct Cost of Sales | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| EMR | $0 | $29,856 | $51,675 | $178,875 | $278,250 |
| VRS | $39,000 | $79,570 | $160,694 | $308,258 | $456,233 |
| Ophthalmic Products | $51,000 | $47,000 | $43,000 | $40,000 | $37,000 |
| Installation & Training Income | $0 | $0 | $0 | $0 | $0 |
| Subtotal Direct Cost of Sales | $90,000 | $156,426 | $255,369 | $527,133 | $771,483 |
Management Summary
Our company will initially employ three principals who will fill the key management roles as the company moves forward: president, vice president of electronic medical records, and vice president of voice recognition and imaging systems. WWBB, our technology partner, will develop the software and provide support for our speech recognition, databased products, and technology needs.
In the near term, we will hire a database coordinator and two sales representatives. A human resource consultant will assist with hiring and routine human resource duties, allowing our management team to focus on sales and product development. Our management philosophy emphasizes customer relationships, which encourages creativity, customer satisfaction, and business goal achievement.
6.1 Management Team
Jim Hendrix, the president, has thirty years of entrepreneurial, management, and sales experience. He is recognized as an industry expert in speech recognition for the orthopedic industry. Jim has successfully turned around companies and has served as an adjunct professor at Cuyahoga Community College.
James Brown has over twenty-five years of business management, marketing, and sales experience. He is highly recognized in the graphic arts industry for technology implementation and holds a BS degree in Graphic Arts Technology and Management. James is active in local charities and serves as the vice president of an organization that raises funds for Children’s Mercy Hospital.
WWBB, Inc. is our technology partner and specializes in command and control, flightline logistics, and research. Their mission is to develop innovative logistics solutions using emerging technologies.
Steve Wonder, one of the owners of WWBB, has extensive experience in simulation technology. He has successfully applied voice recognition technology to improve data collection and analysis in various industries. WWBB offers three products that utilize voice recognition technology.
Below is a matrix of functional responsibilities within the organization.
VCI
WWBB
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