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Business plan for Diabetic Centre

Business plan for Diabetic Centre

About the owner

The business will be a sole proprietorship business, and Jama Mohamed Warsame will own it. The basic information of the business is given below-

Business name:Diabetic Centre
Owner(s) name:Jama Mohamed Warsame
Business address and postcode:Hargaisa, Somaliland
Business telephone:N/A
Business email address:hargaisasomaliland@gamil.com 
Home address and postcode Hargaisa Somaliland

 

Table 1: Basic information about the business

Skills and expertise of the owner

The owner is vastly experienced in the health care sector. He has the experience of working in the health care sector of the United Kingdom, and he has been working in the UK health care sector for more than 15 years as a Clinician. Apart from this, Mr Jama Mohamed Warsame was educated and trained in the United Kingdom. Thus, the owner possesses the necessary expertise, skills and relevant experience to run the Diabetic Centre properly.

 

Business Overview
Purpose

The business founder has initiated the industry to educate the patients about diabetics and their treatment and promote self-care management so that they can take care of themselves without frequently going to diabetic centres during the hard times of their health.

Mission

The business has been started with a few missions keeping in mind. It wants to serve its customer’s patient-centred affordable treatment facilities and give hopes to live a better, healthier and happier life. Most importantly, it aims at supporting and empowering its patients of diabetes type 2 patients to overcome their diseases by providing necessary diets and educating them with a proper lifestyle.

Management

The Diabetic centre will have the following command and personnel-

Owner

Jama Mohamed Warsame

Medical team

  • Two medical doctors
  • One Dietician 
  • One Nurse 
  • One pharmacist

Support staff

  • Two laboratory staff
  • One administration
  • One accountant /payroll

Table 2: Management of the business

 

SWOT analysis

Through SWOT analysis, the proposed business’s internal strengths and weaknesses and external opportunities and threats. The proposed Diabetic Centre’s SWOT analysis is discussed here. 

The strengths are the most significant components for the business to sustain and grow in such a country. The business owner has more than 15 years of work experience in the UK, and the management is planning to hire two medical doctors, 1 Dietician, 1 Nurse, 2 laboratories, and 1 pharmacist for its medical operation. And it also has collaboration with King’s College London for offering DNA analysis for its customers. Thus, the strengths of the business will be very effective for the organisation to sustain.

 

Diagram 1: SWOT for Diabetic Centre

However, the management of the company does not have any prior experience of working in Somalia. Therefore, it is their weakest point in operating in Somalia. Nevertheless, working in Somalia does also bring many opportunities. As it is an impoverished and undeveloped country, there are not many diabetic care centres in Somalia, but there are many diabetic patients, and the number is overgrowing. Therefore, these geographical and national factors bring many opportunities for the business. Despite such opportunities, there is a threat that government regulations and restrictions might be imposed on the company, which might thwart the progress.

 

STP analysis

STP analysis includes segmentation, targeting and positioning strategy analysis for the proposed business. The STP analysis for the Diabetic Centre is discussed below.

Segmentation & targeting

The proposed business’s overall market has been segmented in three ways: age, income level, and customer types. The segmentation and targeting and their justification are discussed below.

 

Diagram 2: Segmentation and targeting

The overall population has been segmented into three age categories. The categories are 0-17 years, 18-44 years, and 45-65 years. The promotional activities will primarily be done approaching the people aged more than 45 years as this group has the highest track record of being diabetes patients. However, the group ageing 18-44 will also be under consideration. Primarily, the diabetic centre will be targeting the people whose earnings level is £26,000 or more. Because diabetes treatment requires a certain amount of expenditure, the customers also need to have a minimum earning status to bear the costs. Lastly, not surprisingly, individuals and families are being targeted.

Positioning

As it is an entirely new diabetic centre cum business, the positioning strategy would be crucial for the organisation to target, reach, and have enough customers to profit and sustain. The company / diabetic centre must position itself with its top-quality treatment service, experienced and professional doctor, and its dedication to providing hope and effort to make people self-sufficient to lead a healthy and problem-free life.

 

Marketing mix analysis

Marketing mix analysis includes the analysis of the 4Ps of a business or organisation. The 4Ps have Products, Price, Place and Promotion.  The marketing mix analysis for the proposed business is discussed here.

Products

The business is expected to offer mainly two services. The first and foremost service is to provide treatment and consultancy to type 2 diabetes patients. And secondly, the centre will provide special health check-up facilities for its clients. Thirdly, the business is expected to offer DNA test facilities for different purposes in collaboration with King’s College London.

Price

Since the organisation is about to start its business, it is expected to use a Market Penetration pricing strategy to enter and reach as many clients as possible. The pricing for the three products are as follows-

Particulars 

(2019/20) (£)

(2020/21) (£)

(2021/22) (£)

Diabetes patient visit

15.0

18.0

20.0

Health check-ups 

50.0

55.0

60.0

DNA tests 

135.0

140.0

145.0

Table 3: Pricing of different products

Place

The business is expected to operate in Somalia.

Promotion

The promotion strategy will be crucial for the diabetic centre as it will be operating for the first time in the Somalia region. Therefore, the organisation must have a proper promotional strategy to reach its desired target audience. The new business will be using newspapers, banners and posters as an offline medium to promote its business. And it will use email marketing, website, and social media marketing for online promotion.

 

Value chain of the business

The value chain of the business would comprise primary activities and support activities. The primary activities include inbound logistics, operations, promotion and service of the firm.

 

Diagram 3: Value chain of the proposed business

Inbound logistics include the names of the other organisations with whom the Diabetic Centre will be partnering to have medicine, laboratory equipment and DNA test support. Operations include the regular activities that the staff will provide its primary services to its clients. The marketing and services have already been discussed earlier in this report.

The infrastructure of the business will include its building, apartment, laboratories, furniture and fixtures. The technological resources include websites, laboratory systems, security systems etc. Procurement activities include procuring medicine, laboratories equipment and DNA test facilities.

 

Legal issues

The diabetic centre will be operating in Somalia, but it has many connections and activities in the UK. Therefore, the diabetic centre will have to abide by the rules and regulations of both countries. The diabetic centre will be regulated under the statutes and laws of the ministry of health. Besides, it will also have to abide by the regulations of local laws and authorities of Somalia. It will have to take a licence from the relevant authorities and register for importing its necessary materials from the suppliers.

 

Financials

Financials include the preparation of Pro-forma financial statements for the proposed business. In this case, the Pro forma Income statement for the next three year, Assets, and total capital required for the first will be prepared with justification. The total assets of the business for the first will be as follows-

Item required  

Price (£)

Yearly amount

Furniture and Fittings 

3,000

3,000

Premises/Warehouse 

12,000

12,000

Equipment 

35,000

35,000

Transport & Vehicles – Car, Van, Truck 

7,000

7,000

Hardware & Software 

3,000

3,000

Security Systems and Surveillance Cameras 

300

3,600

Websites and Social Media Development 

2,000

2,000

Displays 

500

500

Others (Please mention) 

200

2,400

Total

68,500

Table 3: Assets size of the Diabetic Centre

In preparing the business’s Pro-forma income statement, it is necessary to assume the sales price per unit, the total number of sales units, and material costs per unit. As the diabetic centre will be serving two primary services, the pro forma statement has been prepared based on those two products. The selling price for the diabetes patient visit has been set up to 15 pounds per visit. And this price will increase over the upcoming years. It will be 18pound and 20pound for the next two years. The material costs for diabetes patients include only the medicine provided to them from the diabetic centre, and this has been set at 5pound per patient for the first year. It will be 5.5pound and 6pound for the following two years, respectively. The health check-up’s selling price has been set at 50pounds, 55pounds and 60 pounds for the first three years, respectively.  The DNA test’s selling price has been set at 135 pounds for the first year, and it will be 140pounds and 145pounds for the next two years, respectively.

Pro forma Income Statement 

For Diabetic Centre

For the first 3 years of operation

Particulars 

Year 1 (2019/20) 

Year 2 (2020/21) 

Year 3 (2021/22) 

Diabetes Patients visit (Estimated Units) 

                    3,500.0 

              4,000.0 

                  4,700.0 

Selling price per unit 

                          15.0 

                    18.0 

                        20.0 

Materials cost per unit (only medicine costs) 

                            5.0 

                      5.5 

                          6.0 

Total Revenue from Diabetes patients 

                  52,500.0 

            72,000.0 

                94,000.0 

Total Cost of service provided Patient visit 

                  17,500.0 

            22,000.0 

                28,200.0 

Gross profit from diabetes patients visit 

                    35,000 

                50,000 

                  65,800 

Health Check-up (Estimated Units) 

                    1,500.0 

              2,000.0 

                  3,000.0 

Selling price per unit 

                          50.0 

                    55.0 

                        60.0 

Materials cost per unit (Laboratory maintenance) 

                          42.0 

                    42.0 

                        47.0 

Total Revenue from health check-up 

                    75,000 

            110,000 

                180,000 

Cost of service provided health check-up 

                    63,000 

                84,000 

                141,000 

Gross profit from health checkups 

                    12,000 

                26,000 

                  39,000 

DNA tests (Estimated Units) 

                          55.0 

                    60.0 

                        65.0 

Selling price per unit 

                      135.0 

                  140.0 

                    145.0 

Materials cost per unit 

                      120.0 

                  122.0 

                    125.0 

Total Revenue from DNA tests 

                      7,425 

                  8,400 

                    9,425 

Cost of service provided DNA test 

                      6,600 

                  7,320 

                    8,125 

Gross profit from DNA test 

                          825 

                  1,080 

                    1,300 

Total Gross profit 

                    47,825 

                77,080 

                106,100 

Selling expenses 

   

Salaries & Social Insurance & Commissions 

                      8,000 

                10,000 

                  12,000 

Motor Car Expenses 

                      7,000 

                        –   

                            –   

Advertising 

                      1,000 

                  1,000 

                            –   

Total Selling expense 

                    16,000 

                11,000 

                  12,000 

Operating and administrative expenses 

  

Legal Fees 

                      1,200 

                  1,200 

                    1,200 

Subscriptions and Donations 

                          600 

                    600 

                        600 

Rent Expenses 

                    12,000 

                12,000 

                  12,000 

Electricity and Water 

                      3,600 

                  3,600 

                    3,600 

Printings & Stationeries 

                      1,200 

                  1,200 

                    1,200 

Telephone 

                      2,400 

                  2,400 

                    2,400 

Repairs and Renewals 

                      3,600 

                  3,600 

                    3,600 

Cleaning Expenses 

                      1,200 

                  1,200 

                    1,200 

Overseas Travelling 

                      2,000 

                  3,000 

                    4,000 

Computer Expenses 

                      1,200 

                  1,200 

                    1,200 

Security Services 

                      3,600 

                  3,600 

                    3,600 

Total 

                    32,600 

                33,600 

                  34,600 

Total Selling and administrative expense 

                    48,600 

                44,600 

                  46,600 

Net Profit 

                        (775)

                32,480 

                  59,500 

 

Table 4: Pro-forma income statement

 

The number of patient visits for the first year for diabetes check-up and medicine purposes has been estimated at 3500, assuming around 10 patients every day on average for the first year. As the year passes, the number of patients visiting the diabetic centre will increase. It will be 4000 in the second year and 4700 in the third year considering the promotional aspects and reputation of a well-managed diabetic centre. 

The first year will not be profitable for the business, considering substantial capital costs and fewer sales. Hence, it is expected to experience a net loss of (775) pounds in the first year in the first year. However, from the second year, it will start earning profit. The diabetic centre is expected to make a net profit of 32,480 pounds and 59,500 pounds in the following 2 years.

The total start-up capital that the business will be required for the first year would include total assets and total working capital, along with other expenses that it will have to bear for the first year.  Thus, total start-up capital requirement = total assets + material costs + selling expenses + administrative expenses.

Particulars

Amount in pound

Total assets 

                68,500 

Total Cost of service provided Patient visit 

                17,500 

Cost of service provided health check-up 

                63,000 

Cost of service provided the DNA test 

                  6,600 

Total Selling and administrative expense 

                48,600 

Total Startup  capital requirement

            204,200 

Table 5: Start-up capital requirement

 



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