Operational and Financial Plan for City Dental Care Center

This report outlines an operational and financial plan for the implementation of a new dental care facility, City Dental Care Center, that aims to provide affordable dental care services to the general public. The report includes a proposal, risks, resources, reporting of outcome, financial considerations, and a contingency plan.

Health Science
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Contents
Executive summary.........................................................................................................................3
Outline.............................................................................................................................................4
Background......................................................................................................................................4
Proposal...........................................................................................................................................5
Risks................................................................................................................................................6
Resources.........................................................................................................................................7
Reporting of outcome......................................................................................................................8
Financial consideration....................................................................................................................8
References......................................................................................................................................12
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Executive summary
Main objective of this report is to prepare an operational and financial plan for implementation
of new facility that would be providing health care services to general public. Execution of such
a plan can be very difficult and hence it is important that proper planning process is done before
actual execution. More importance will be given on financial planning in this project as financial
viability of a project is very important to ascertain whether the project will be able to continue its
operation in future. Financial planning is also important to make sure that proper financial aids
can be arranged for starting the project. Here the financial service that is selected to be
implemented is dental care service. The proposed name of the dental care provider would be
“City Dental care center”. This will be partly funded by private investors, financial aid from
government and donation received from general public. This project report will include major
source of income and heads of expenses that will be incurred in providing services to general
public. Break even analysis will also be performed to evaluate the total revenue of heat care
center that should essentially be achieved by the dental care clinic.
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Outline
Main purpose of starting a new dental care service clinic it to provide these services at
reasonable costs. People do not go for regular dental checkups because dental care is generally
not covered by their insurance policy and the cost such checkups is very high. Providing these
services at lower prices will encourage more people to come and give equal important to dental
care as other health care processes. Care centers specific to provide dental care are very limited
in the city and it is expected that “City dental care center” will be an addition to local health
department. It is expected that local health department will provide financial and operational help
to this dental health care center as there are limited dental care centers in the area (Burke, 2013).
This dental care center will provide all basic dental care services to its patients in addition to
advanced services through on call doctors of reputed hospitals.
Background
Dental care is as much important as any other form of heath care. This is a very important aspect
of health care that is usually ignored by people as its cost is very high and there is a lack of
awareness among people. People do not understand that in long term this could result in serious
repercussions for them if oral health is not maintained by them (Kerzner & Kerzner, 2013).
There is a lack of dental care centers in the area in which the “City dental care center” is
proposed to be established. It is expected that it will provide at least the basic dental care services
to the people residing in this area. It is true that main purpose of this center would be to provide
quality services at reasonable prices by profit making is also one of the important objectives of
this clinic. Without proper profits, it would be very difficult for the clinic to survive top operate
in that area. The costs of equipment and hiring doctors would be very high and it is essential that
clinic at least reaches it break even sales so that it could continue providing dental care services
to public. That is the reason financial planning is of vital importance in this case as its survival is
based on availability of funds and profits.
Initial funding of the clinic will be done with the help of financial help from local health
department, donations and some private investors. But it is not essential that these investors will
provide finance to the clinic every time it is in need of finance. Hence clinic should have enough
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profits to finance their basic operation for foreseeable future through reinvesting its profits in
clinic (Sbaraini, Carter, Evans & Blinkhorn, 2012).
There have been various survey in the word that has focused on the deficiency of people in
respect of awareness of dental health care. In a survey conducted by American Dental
Association (ADA), researchers concluded that majority of the people are not aware of the basics
information in relation to dental care. It is also very important to get a regular dental checkup but
this research also revealed that only 44% of people take professional help on regular basis to deal
with this situation. There are various precautionary products available in market that could help
in chances of serious oral diseases like plaque, gingivitis, and tartar (Wall, Vujicic, & Nasseh,
2012). People do not give importance to these products and they have to incur huge amount on
their cure which could have been done with investing little time and attention towards preventive
products.
Proposal
Aim
The proposal here is to start a single clinic in the local area and over the period of time increase
dental care centers in areas whether there are no such preexisting clinic. This will help in
increasing the number of dental clinics in whole Australia and improve the quality of dental care
services. It is also an essential task to keep this clinic running along with providing dental care
services at reasonable prices (Meredith, Mantel Jr, and Shafer, 2013).
Benefit
Following are some of the benefits of this plan-
1. People in locality will be able to get access to heat clinic that is specifically designed to
provide dental care services as prices lower than other hospitals and clinics. This would also help
in spreading information in relation to preventive actions that could be taken by people and
awareness in relation to dental health care (Hatten, 2015).
2. This would also help in spreading dental care services in whole Australia which is limited in
certain remote areas of Australia. This would improve the level and diversity of health care
services provided in the country.
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3. It would provide employment opportunities to nurses, doctors and other staff members that
would be employed in the clinic.
4. This plan will for a base for various other clinic that will be opened after the successful
implementation of first clinic (Schaper, Volery, Weber & Gibson, 2014).
5. Other main purpose of this plan is to evaluate whether proposed dental clinic will be able to
continue its operations in foreseeable future. Tools like, financial projection, budgeting and
break even analysis would be used for such evaluation.
Risks
Following are some of the risk factors that can affect operations of the clinic before and after its
incorporation.
Risk
Issue
Description Severity Impact Mitigation Plan
Financial
risk
Availability of funds for
initiation of project is a financial
risk for the clinic. Without
adequate finances this clinic
cannot be incorporated
High High Efforts have been made to
mitigate this risk with the
help of preparing business
proposal that are submitted to
various private investors and
local health departments. As a
result of these efforts, clinic
has secured sufficient
investment for their initial
investment (Weygandt,
Kimmel & Kieso, 2015).
Patients This risk involve whether people
will come to the clinic for their
dental care or not as that much
importance is not given to dental
care.
Medium Medium
low
Awareness program will be
initiated after 2-3 days of the
clinic. At the same time it is
proposed to give free basic
dental checkups to local
people and give advice to
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Risk
Issue
Description Severity Impact Mitigation Plan
them regarding further
treatment if any disease or
problem is identified.
Not
covered
by
Insurances
It is common that people with
low income or medium income
does not have dental insurance.
This is the reason that people do
not go for regular dental
checkups which can be very
dangerous in long term.
Medium
high
Medium
high
The prices at which basic
dental checkup is provided is
very lower as compared to
other organizations so that
people can get adequate and
regular dental care services.
In addition to that clinic is
also in talks with insurance
companies to provide some
type of dental health care
policy at the clinic to
interested people.
Resources
Process of planning and execution of prepared plan in effective manner will require some
resources that are explained as follows-
Financial resources- At initial level, main financial resource that is required for proper
execution of plan is initial investment amount. This is very essential resource as planning process
is of no use if such amount is not secured. In this plan the initial investment amount has been
secured with some government and private investors (Hilton & Platt, 2013).
Financial expert- Financial planning is also very important part of this plan as it will determine
its future operational capabilities. Hence it is important that help of financial expert is taken to
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analyze the break-even point, expected cost and revenue sources for the clinic with certain level
of accuracy.
Human resources- human resource is very essential requirement for any project especially when
it proposes to provide services to general public. Human resources will be required for both the
phases i.e. before implementation of plan and after implementation of plan. At initial level
volunteers will be invited from management universities to initiate the process of planning
including financial planning (Maher, Stickney & Weil, 2013). Once the plan is prepared then
recruitment and selection process will be initiated for doctors and other staff members. For
recruitment and selection process, outside agency will be hired so that most effective and
efficient resources can be hired in clinic.
Reporting of outcome
A manager will be appointed for overseeing the function of planning and execution of the plan.
A weekly report will be prepared by this manager that will be distributed to all interested parties
such as investors, proposed employees, local health department and other team members that are
involved in development process. This will help in getting an overview of the planning and
execution process. In addition to that a personal meeting will be arranged between manager and
all above mentioned interested stakeholders on monthly basis.
Financial consideration
This is one of the most important function of this project plan as financial consideration is
always considered as one of the most important aspect of large scale project. Regular availability
of financial resources is important for continuous operation of any business. A clinic is not
different from any other business and it requires financial resources to continue its operations.
On the other hand important of financial resources increases in a medical service providing
business as services provided in this case are very essential (Harrison & Lock, 2017).
ZERO based Budget
Main objective of preparation of a budget is to analyze the expected profitability of a particular
financial project that is under consideration. It is very important to prepare budgets for a new
venture as it helps in determining financial viability of a project and additional resources that are
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required for successful execution of proposed plan. ZERO budget is a type of budget in which all
expenses and income are analyze for each accounting period separately and past year budgets are
not considered as a base. Zero based budget would be perfect in this situation as clinic will
initiate its operation for the first time. Budget has been prepared for the first year of operation
and fixed & variable expenses are disclosed separately for ease in break-even analysis.
Particulars Amount Amount
Total revenue
Dental Fees 351000
Equipment Charges 210600
Medicines Sold 234000
Total 795600
Variable expenses
Mouth Wash 28080
Syringe 112320
Medicines 280800
Operation Gloves 112320
Total 533520
Contribution 262080
Fixed expenses
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Salary
-Dentist 32000
-Cleaner 16800
-Held Desk Staff 8000
-On costs 8520
Utilities
-Electricity 36400
-Water 10400
-Disposal 5200
-Building Rent 20800
Advertisement 5200
Insurance 2600
Legal and Professional
Services
1040
Depreciation 24000
Total 170960
Profit 91120
Break even analysis
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Break even analysis is a management tool that is used by management to determine the level of
sales whether company will incur no loss and no profit from its business operations. This is an
important tool for the clinic in consideration as objective of the clinic is to provide dental health
care services to the people in local area. This will help management to decide a certain level of
target that will they have to achieve that that they do not have to shut down their operations
(Weske, 2012).
The comparison of the two break even analysis had shown that the profit for the normal cost was
$91,120.00. However, after optimizing cost by 10%, the overall profit rose to $159,168.00.
Hence, the profit almost changed to 170%. The optimization of the cost was done by decreasing
the cost of each of the expense of the project utilities and infrastructure by 10%. The analysis
also helped in forming the decreasing cost of the dental care cost by a significant amount. The
comparison of the expenses was based by considering the normal formula for the break even
analysis. The sum of the direct expenses has been taken and summed for the calculation of the
total expenses. The sum of the direct incomes has been taken and summed for the calculation of
the total incomes. The difference between the total expenses and total incomes would show the
break even value for the company.
Contingence plan
There is always a contingency plan that is prepare in the planning phase along with the original
plan. This plan is prepared for the situation where desired initial investment could not be
acquired by the management of the proposed project (Mariotti, S., & Glackin, 2014). Although
in case of “City Dental care center” proper plan have been made for acquisition of finances but
still a contingence plan is prepared if funds available are less than 10% of the budget that is
actually desired. In this case all the expenses will be cut down by 10%.
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References
Burke, R. (2013). Project management: planning and control techniques. New Jersey, USA.
Harrison, F., & Lock, D. (2017). Advanced project management: a structured approach.
Routledge.
Hatten, T. S. (2015). Small business management: Entrepreneurship and beyond. Nelson
Education.
Hilton, R. W., & Platt, D. E. (2013). Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Kerzner, H., & Kerzner, H. R. (2017). Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons.
Maher, M. W., Stickney, C. P., & Weil, R. L. (2012). Managerial accounting: An introduction
to concepts, methods and uses. Cengage Learning.
Mariotti, S., & Glackin, C. (2014). Entrepreneurship and small business management. Pearson
Higher Ed.
Meredith, J.R., Mantel Jr, S.J. and Shafer, S.M., 2013. Project management in practice. Wiley
Global Education.
Sbaraini, A., Carter, S. M., Evans, R. W., & Blinkhorn, A. (2012). Experiences of dental care:
what do patients value?. BMC health services research, 12(1), 177.
Schaper, M. T., Volery, T., Weber, P. C., & Gibson, B. (2014). Entrepreneurship and small
business.
Wall, T. P., Vujicic, M., & Nasseh, K. (2012). Recent trends in the utilization of dental care in
the United States. Journal of dental education, 76(8), 1020-1027.
Weske, M. (2012). Business process management architectures. In Business Process
Management (pp. 333-371). Springer, Berlin, Heidelberg.
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Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2015). Financial & managerial accounting.
John Wiley & Sons.
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