Business Plan Financial Projections As Term Paper

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Thus, the price will be:

(220*P)-(220*25.57) - $2,250 = 220P -- 7875.4 = $35.7, so the price for the one-hour session will be $360. Given that the expected demand is 240, the income statement will be as follows:

Income Statement

Year 1

Revenue

449280

less variable costs

319113.6

Gross Margin

130166.4

less Fixed Costs

108000

Income Before taxes

22166.4

Taxes

Net Income

14408.16

The CMS website's search function is non-functional, so there does not appear to be any place to find out the reimbursement rate for this type of service. This is ok, because reimbursement rates will differ depending on the payer -- private insurers may have different rates anyway. The biggest issue is actually going to be with cash flow. All types of payers can be notoriously slow with their payments. It can take 60 or even 90 days sometimes to collect on billings, which will have an effect on how much working capital the business needs to start.

To deal with the cash flow issue, the business is going to need to raise a significant amount of capital in order to be able to go what could be months in delays for revenue.

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Part of this can be addressed by stretching payables, but for the most part ensuring sufficient capital from the outset is going to be a critical success factor for the business. Thus, the financing plan is also important.

In addition to cash flow, one of the biggest concerns is that the project might not qualify for reimbursement being that this service is often available through the private sector on a non-medical basis. The service must be framed as preventative medicine, something that has been encouraged in the Affordable Care Act (ACA) in order to qualify. Further research will be required in order to ensure that this will be the case, as reimbursement is going to be essential to building the business, even though we are not seeking a significant market share. Overall, it is believed that this financial plan reflects a realistic….....

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