A BUSINESS PLAN FOR ADVANCED 
’ PRACTICE NURSES 
by 
Teresa Jane Sadler 
A project submitted in partial fulfillment 
of the requirements for the degree 
of 
Master of Nursing 
MONTANA STATE UNIVERSITY-BOZEMAN 
Bozeman, Montana 
February 1996 
©COPYRIGHT 
by 
Teresa Jane Sadler 
1996 
All rights reserved 
11 
APPROVAL 
of a project submitted by 
Teresa Jane Sadler 
This project has been read by each member of the project comittee and has been 
found to be satisfactory regarding content, English usage, format, citations, bibliographic 
style, and consistency, and is ready for submission to the College of Graduate Studies. 
Approved for the College of Nursing 
Kathleen Chafey, Ph.D., R.N. 
(Signature) 
Approved for the College of Graduate Studies 
Robert Brown, Ph.D. 
(Signature) 
Ill 
STATEMENT OF PERMISSION TO USE 
In presenting this paper in partial fulfillment of the requirements for a master's 
degree at Montana State University-Bozeman, I agree that the Library shall make it 
available to borrowers under rules of the Library. 
If I have indicated my intention to copyright this paper by including a copyright 
notice page, copying is allowable only for scholarly purposes, consistent with "fair use" as 
prescribed in the U.S. Copyright Law. Requests for permission for extended quotation 
from or reproduction of this paper in whole or in parts may be granted only by the 
copyright holder. 
Date 
Signature^^f-A-^-g^ 
IV 
To Naomi and Levi, who show me the meaning of life. 
ACKNOWLEDGMENTS 
I am most appreciative of and indebted to my committee members for their 
assistance and guidance through the development of this project. I am also grateful to all 
my fellow classmates and friends for their encouragement and support, helping to make 
this project a reality. 
A special thanks goes to my husband, David, for believing in me. His 
encouragement, prodding, and incredible patience made my completion of this program 
possible. 
Finally, I wish to acknowledge my parents, Paul E. Sadler and Mary Carol Joy, and 
my brothers, for always showing me unconditional love, support, and encouragement 
throughout my life, convincing me that anything is possible. 
VI 
TABLE OF CONTENTS 
Page 
1. INTRODUCTION...           1 
Purpose      1 
Significance and Background..       1 
Business Failures        2 
Obstacles to Business Sucess          3 
Third Party Reimbursement     3 
Prescriptive Privileges.........................   4 
Physician Supervision................................................ 4 
Marketing          5 
Objectives.......   7 
2. LITERATURE REVIEW            9 
Business Plan.        12 
Cover Page          12 
Executive Summary.   13 
Table of Contents           14 
Business Information     15 
Company Description          15 
Survey of Industry........      15 
Market Research and Analysis    16 
Marketing Plan      17 
Management Team....      17 
Supporting Professional Assistance...    19 
Vll 
TABLE OF CONTENTS—Continued 
Page 
Operations Plan         19 
Research and Development Program  20 
Overall Schedule    20 
Critical Risks and Problems        20 
Financial Information.....          21 
Financial Plan         21 
Balance Sheet         21 
Cash-Flow Projection   21 
Break-Even Analysis..    22 
Income Statement     22 
Budget-Deviation Analysis   23 
Proposed Financing    23 
Legal Structure         23 
Appendices      24 
3. METHODOLOGY..........            25 
4. RESULTS AND RECOMMENDATIONS.     28 
Results      28 
Recommendations    30 
Partnership   31 
Rural Health Clinic         32 
Contracting Services    32 
Community Resources      33 
viii 
TABLE OF CONTENTS—Continued 
Page 
Summary...            33 
REFERENCES CITED.....................     35 
APPENDIX              38 
IX 
LIST OF FIGURES 
Figure Page 
1. Balance Sheet        66 
2. Cash Flow Projections        67 
3. Annual Break Even Analysis        71 
4. Break Even Graph..  72 
5. Income Statement-Annual by Month   73 
6. Quarterly Income Statement       75 
7. Annual Income Statement          76 
8. Personal Financial Statement      77 
X 
ABSTRACT 
Developing a private practice can be a challenging and rewarding experience, 
especially for the advanced practice nurse (APN). Benefits of private practice for the APN 
include autonomy, self actualization, achievement, control of the working environment, 
and the opportunity to express creativity. Although these benefits may serve to lure the 
APN into private practice, there are many challenges to be addressed prior to launching 
into a new business. To develop a successful business requires extensive planning and a 
thorough knowledge of business matters. Business skills must receive special attention to 
enhance the survival of the APN in private practice. 
By developing a business plan, the APN is provided with a means to analyze all of 
the steps involved in developing a successful business. For my professional project, I will 
develop a business plan for an APN directed practice in an underserved community. 
Support of the business plan by significant literature will address the APN in private 
practice in addition to the development of the business plan. The feasibility of APN 
directed practice in an underserved community will be addressed 
1 
CHAPTER 1 
INTRODUCTION 
Purpose 
Considerable thought and planning must be done by the entrepreneur before 
starting a business if one desires to have the greatest chance of being successful. Vogel 
and Doleysh (1994) indicated the difference between a successful business and one that 
fails, or at best develops slowly, is dependent on the amount of planning done before the 
opening of the business. A business plan provides the entrepreneur with a clear 
understanding of the nature of the business and an organized, practical format from which 
to make business decisions (Calmelat, 1993). The purpose of this professional project is to 
create a business plan for the future development of the author's expected private practice 
as an advanced practice nurse (APN) in Arizona. 
Significance and Background 
The desire of the entrepreneur to start a new business may be motivated by 
numerous factors. The most prevalent motivators include the opportunity to achieve 
improved financial status, the flexibility to be creative and exercise the full extent of one's 
abilities, dissatisfaction with restricting bureaucratic institutions and lack of control to 
change policies, and the opportunity to be one's own boss. In addition to these, nurses 
report other incentives motivating them to accept the challenges of entering private 
practice. These include a wish to provide improved health care, disenchantment with the 
medical model, the opportunity to gain knowledge about the business world, and the 
9 
desire to experience new challenges and choices (Colls, 1984; Durham & Hardin, 1983; 
Levin, 1993; Rolstad, 1987; Willis, 1993). However, nurses view autonomy as the most 
valued benefit of private practice (Willis, 1993). 
While there may be numerous motivating factors luring the entrepreneur to venture 
into the business world, the reality of starting a business requires an immense personal and 
economic commitment. For most first time entrepreneurs, the decision to start a business 
means leaving behind a steady and secure income to chart new territory. In order to 
remain in business, a profit must be made. To acquire a profitable business entails 
tremendous preparation and thoughtful planning. 
Business Failures 
The development of any type of business assumes the risk of financial failure. Dun 
& Bradstreet report the number of business failures in a series of weekly, monthly, and 
quarterly publications. In 1992, it was revealed that 667,000 new businesses were 
incorporated (Economics and Statistical Administration, 1994). Within the same year, 
97,069 businesses failed. In comparison to business corporations established, businesses 
failed at a rate of fifteen percent in the same year. Viewed in another way, 110 of every 
10,000 businesses failed. In 1993, the number of business failures declined slightly, with 
86,133 failures or 109 of every 10,000 businesses failing (Economic Analysis Department, 
1995). 
Reports of business failures in 1994 show a dramatic and optimistic decline in 
failures. Preliminary data reveals only 71,520 failures or fewer than 86 out of every 10,000 
businesses failed. Additionally, Dun & Bradstreet contend that most of the failure trends 
enumerated in 1994 are mainly a continuation of the trends originating in 1993 (Economic 
Analysis Department, 1995). It can be speculated that the increased emphasis placed on 
business plans in last decade has contributed to the sharp decline in business failures. 
3 
Despite favorable trends in the decreasing number of business failures, every effort must 
be made to enhance the odds of having a successful business. Anticipation of any obstacles 
are best dealt with from the beginning. 
Obstacles to Business Success 
Advanced practice nurses (APNs), including nurse practitioners, nurse midwives, 
nurse anesthetists, and clinical nurse specialists have unique obstacles that must be 
considered before entering private practice, all of which may impact the amount of 
revenue generated. Most of these obstacles are directly related to the legal scope of their 
professional practice. Before opening a private practice, APNs will need to critically 
examine the statutory regulations of the state in which they intend to practice. The costs 
associated with direct third party reimbursement, prescriptive authority, physician 
supervision, and marketing will provide the APN with the means to evaluate the economic 
consequences of opening a private practice. 
Third Party Reimbursement 
The financial future of the APN in private practice depends on direct third party 
reimbursement. Several independent APNs have identified direct reimbursement as one of 
the most significant barriers to the financial viability of their practice (Levin, 1993; 
Sullivan, 1992; Young, 1993). Reimbursement for services may be received directly from 
the client or from an insurance company. Currently under Medicaid statute, APNs are 
directly reimbursed in every state except for the District of Columbia and Ohio. In 37 of 
these states, APNs receive 80 to 100 percent of the Medicaid payment rate the physician 
receives for the same service (Pearson, 1995). Research regarding the most commonly 
used private insurers where the APN plans to practice will need to be determined along 
with ascertaining if these policies directly reimburse APNs. While some private insurers 
may directly reimburse the independent APN, the service may not be covered if it is not 
4 
legally defined within the scope of practice in that state. LaBar (1990) reassuringly states 
that provider numbers from private insurers can be obtained by most APNs in private 
practice. In order to generate revenue and maintain financial viability, a careful evaluation 
of reimbursement policies in the anticipated location of practice must be done. 
Prescriptive Privileges 
Prescriptive privileges also impact the APN's business. Restrictive prescriptive 
authority limits the scope of practice which in turn may limit the number of clients the 
APN in private practice is able to see. Without independent prescriptive authority, the 
APN requires the use of a collaborating physician's name or must refer clients who need 
prescriptions. As of January 1995, all but three states permitted some degree of 
prescriptive authority for APN’s. Eleven states allow APN's to obtain independent 
prescriptive authority for medications, including controlled substances (Pearson, 1995). 
Although prescriptive authority may not critically impact the degree of financial stability 
the APN may achieve in private practice, special consideration must be given if physician 
collaboration and support is required. 
Physician Supervision 
Another obstacle APNs in private practice may face relates to physician 
supervision. In states requiring physician supervision, finding a willing physician may 
prove to be a significant obstacle for the APN depending on the location of practice. In 
these states, supervised practice arrangements using written practice protocols will be 
necessary, requiring independent APNs to operate under standardized policies. Currently, 
twenty states allow APNs to practice without physician supervision (Pearson, 1995). With 
or without regulations requiring physician supervision, APNs need to foster solid working 
relationships with physicians and other health care providers as a source of referral and 
professional support. Developing collaborative relationships along with a positive 
5 
reputation among colleagues can assist in channeling new business towards the APN in 
private practice increasing the odds of attaining economic viability. 
Marketing 
One other component impacting the financial aspect of the APN in private practice 
is marketing. While not tied to statutory regulations, marketing deserves as much, if not 
more attention if success is desired. Marketing is an essential component to the 
establishment of a successful private practice (Durham & Hardin, 1983). 
Marketing appears to be the most difficult business aspect for nurses to manage. 
Results of a survey conducted by Durham and Hardin (1983) revealed that nurses are 
reluctant to market themselves and to be enterprising. Dayani and Holtmeier (1984) 
attribute this reluctance to the work environment to which nurses have become 
accustomed. Most nurses have practiced in a traditional hospital environment which is a 
highly structured and rigid bureaucracy. Nurses have been socialized to the role of 
employee where innovation is often not encouraged. They have not developed the role of 
entrepreneur which requires risk taking. In addition, Durham and Hardin (1983) point to 
the fact that neither the nursing profession as a whole nor nursing organizations separately 
have ever promoted nursing for the unique service that it is. 
One marketing obstacle APNs may encounter is the public’s misconception of the 
nursing role. This is related to the public's misunderstanding and ambiguity over the role of 
nurses in business. The public and other health care providers need to be educated about 
the scope and value of nursing services. Because the consumer may still be confused about 
the role of the APN, Shamansky, Schilling, and Holbrook (1985) recommend saturating 
the media with information regarding the primary health care services offered by APNs. In 
this way, nurses can identify and promote the nursing profession. Critical to success in a 
highly competitive health care market is the need for nursing to communicate to the public 
6 
about the expanding and unique services nurses are capable of providing to them (Gardner 
&Weinrauch, 1988). 
Although marketing as a concept is not generally well understood by the nurse 
entrepreneur (Gardner & Weinrauch, 1988), the nurse's understanding of the consumer is 
commanding due to intimate and extensive contact with hospital clients (Durham & 
Hardin, 1983). The public's perception that nurses are compassionate, caring, and trusting 
people gives the nurse entrepreneur a distinct advantage over their competitors. They may 
then capitalize on these unique perceptions to market their services. 
Marketing can mean the difference between success and failure establishing a 
business. The time and financial commitment required to plan, perform, and evaluate a 
marketing strategy is enormous and extremely challenging for any business owner (Levin, 
1993). Schneider (1992) recommends spending weeks or months developing a marketing 
strategy. A marketing plan is then incorporated into the business plan requiring the 
entrepreneur to address specific marketing strategies. 
A business plan requires the APN to critically evaluate factors unique to the 
profession and general aspects which every business owner will eventually need to address 
in order to remain in business. Several APNs in private practice stress that a business plan 
is a critical component to a prosperous business (Glick, 1989; Levin, 1993; Rolstad, 1987; 
Schneider, 1992; Welton, 1989). A business plan includes strategies to respond to 
regulatory issues and marketing. 
The business plan is used as a blueprint to guide the business. Goals and objectives 
of the business are outlined and details of the business are addressed (Pinson & Jinnett, 
1990). The plan contains marketing strategies, budgeting expenses for start-up costs, a 
description of the company, support and management teams, an operations and financial 
plan, proposed timetables, and risks and problems the company may encounter (Schneider, 
1992; Vogel & Doleysh, 1994). Once the business is operational, the business plan may be 
7 
used as a guide for business decisions providing direction for growth and development of 
the business (Newman & Palumbo, 1994). 
A business plan provides the information necessary for lending institutions to 
secure loans or for attracting potential capital investors. It may also be utilized to provide 
an understanding about business philosophy to collaborating health care providers (Pinson 
& Jinnett, 1990). Most importantly, the business plan assists the entrepreneur in evaluating 
the feasibility of the business before committing to a major undertaking. Vast amounts of 
time and money may be saved if the business is viewed realistically. This is achieved 
through a business plan. 
Objectives 
A business plan is fast becoming a necessary document in the business world. Most 
financial institutions and venture capitalists require a business plan before they will 
consider investing in a business (Larson, 1990). The objective of this professional project 
is to develop a business plan. A thorough review of the literature in Chapter 2 will address 
the most recent trends of both women and advanced practice nurses in business. In 
addition, the process of developing a business plan will be described in detail. Chapter 
Three will contain a description of the methods utilized to obtain the information 
necessary to develop the business plan. 
An actual business plan of my anticipated private practice will be provided in the 
Appendix. This will include a sample market research analysis, financial and operations 
plan, a description and legal structure of the company, and a development plan. Results 
and recommendations will be offered in Chapter Four. 
Upon completion of this project, I will have a thorough knowledge of the 
anticipated business and be able to address business decisions before the actual opening of 
8 
my practice. In addition, the business plan will provide me with a portfolio that may be 
submitted to potential investors or for the purpose of obtaining a bank loan. 
9 
CHAPTER 2 
LITERATURE REVIEW 
In the United States, small businesses are being established at a rate of 250,000 per 
year with a current total of over 20 million small businesses (Keene, 1988). Small 
businesses contribute substantially to our economy by generating jobs. Nearly all new jobs 
created between 1988 and 1990 can be attributed to small business (U.S. Small Business 
Administration Office of Advocacy, 1994). The number of women establishing small 
businesses has shown a substantial increase over the last two decades.The growing 
number of women entrepreneurs are being recognized for their expanding contribution to 
the economy. 
The entrepreneurial role has become the new "American dream" for women, 
providing them with the opportunity to realize success on their own terms (Office of 
Women’s Business Organization, 1993). Wojahn (1986) reports that women are becoming 
entrepreneurs at a rate three times faster than men. Between 1977 and 1982, women- 
owned businesses increased by 6.9 percent per year, with three million women 
entrepreneurs in America. In the 1980's, the number of these businesses increased by 
nearly two fold (U.S. Bureau of the Census, 1993). By 1987, total receipts of women 
owned businesses reached over 476 billion dollars, with 30 percent of all businesses 
owned by women (U.S. Small Business Administration Office of Advocacy, 1994). 
Increased numbers of women entrepreneurs are predicted from the U.S. Bureau of the 
Census 1992 survey, though the survey results have not been published as yet (U.S. 
Bureau of the Census, 1993). President Bill Clinton acknowledged the growing number of 
women in small business recognizing them as one of America's greatest resources (Office 
of Women's Business Organization, 1993). 
10 
Women have made the greatest impact on business in the area of social and 
educational services. The U.S. Bureau of the Census (1993) reported the greatest 
concentration of women in business was in social service industries. Women owned 83 
percent of social service firms and claimed 56 percent of the gross receipts. Sixty-one 
percent of educational services were owned by women, collecting 35 percent of the gross 
receipts. 
Women-owned businesses tend to be small in size and profits. The size of a 
business can be determined through economic gains or by the number of employees on 
staff. Women owned 41 percent of the businesses making less than 5,000 dollars per year 
and only 14 percent of businesses owned by women grossed over one million. Similarly, 
women owned 34 percent of businesses with no hired employees and only 14 percent of 
businesses employing 100 or more persons (U.S. Bureau of the Census, 1993). 
In addition, the vast majority of women-owned businesses are operated as sole 
proprietorships. The 1987 statistics revealed 90 percent of these businesses were operating 
as sole proprietorships with only six percent operating under subchapter S corporations, a 
tax classification for certain corporations. The sole proprietor ownership of women 
decreased between 1982 and 1987 from 92 percent to 90 percent. Women owned 
subchapter S corporations nearly doubled from 1982 to 1987, increasing from 3.4 percent 
to six percent. The number of gross receipts doubled in these corporations, increasing 
from 30.4 percent of gross receipts in 1982 to 61 percent in 1987 (U.S. Bureau of the 
Census, 1993). 
The number of nurses developing independent practices mimics trends noted in 
women-owned businesses in regards to the increasing numbers. This may be attributed to 
the fact that nursing is a profession composed predominantly of females. As the total 
number of women in business expands, a reflection of this trend would be recognized in a 
female-dominated profession. Vogel and Doleysh (1994) point out that achievements 
11 
made toward improving women’s rights and roles in our culture are reflected in the career 
options open to nurses. This may explain the increasing numbers of nurses choosing to 
operate their own business. 
While several authors recognize the growing numbers of nurse entrepreneurs 
(Colls, 1984; Felton, Kelly, Renehan, & Alley, 1985; Gardner & Weinrauch, 1988; 
Rolstad, 1987), detailed statistical data is scarce. The number of self-employed nurses is 
less than one percent (Rolstad, 1987). Gardner and Weinrauch (1988) reported the 
number of nurses working independently in 1980 was approximately 11,000. Further 
breakdown of this figure revealed nearly 2,000 of the self-employed nurses practicing solo, 
600 of these nurses in partnership with other nurses, and 1,700 practicing in partnership 
with physicians or other professionals (Gardner & Weinrauch, 1988). Despite the fact that 
nurses may be establishing independent practices at an increasing rate, the number of self- 
employed nurses continues to be minimal. 
Information concerning the number of APNs in private practice remains rare. A 
review of the literature revealed only one source addressing the independent practice of 
APNs and specifically addressed nurse practitioners in private practice. Morain (1992) 
reports that less than 250 nurse practitioners have chosen to practice independently since 
1971. 
In summary, the number of women owned businesses are increasing at a rapid rate. 
This trend is also being illustrated in the nursing profession, though the total number of 
nurse entrepreneurs still remain small. Rolstad (1987) was accurate when she stated that 
nurse entrepreneurs have very few mentors in which to guide them. 
12 
The Business Plan 
Most business plans contain similar components but, based upon the plan's 
purpose, the format may vary. All business plans must be succinct and cogent while at the 
same time being comprehensive enough to cover the pertinent information. While there is 
no set length for business plans, the average length is 30 to 40 pages including the 
appendices (Pinson & Jinnett, 1993; Vogel & Doleysh, 1994). 
Vogel and Doleysh (1994) outline a business plan specifically for the nurse 
entrepreneur. Therefore, this paper will follow their framework in order to devise the most 
suitable business plan for the APN in private practice. Vogel and Doleysh (1994) divide 
the business plan into seventeen components. The first three components include a cover 
page, an executive summary, and a table of contents. The table of contents organizes the 
rest of the business plan into three major sections and are assembled in the following 
order: 
A. The Business Section 
Company Description 
Industry Survey 
Market Research and Analysis 
Marketing Plan 
Management Team 
Supporting Professional Assistance 
Operations Plan 
Research and Development 
Overall Schedule 
Critical Risks and Problems 
B. The Financial Section 
Financial Plan 
Proposed Company Financing 
Legal Structure 
C. Supporting Documents 
All business plans begin with a cover page. The cover page contains the business 
name, address, phone number, and if appropriate, the business logo. Also included are the 
13 
names and titles of the owners along with their addresses and phone numbers. Lastly, 
include the month and year in which the plan was prepared and the name of the person 
preparing the document (Pinson & Jinnett, 1993). 
Vogel and Doleysh (1994) address considerations to be taken when choosing a 
name for the business. A business can be named for the owners, business function, or 
location. Advantages of using the owner's name include giving the business a personal 
touch and giving the public the perception of being small, which may be a selling quality to 
some clientele. The image of being small may work to the disadvantage of the nurse. Some 
clients may equate small with inexperience of the nurse or the nurse's inability to establish 
a larger clientele. A disadvantage in using the owner's name deals with the potential of 
selling the business in the future since the nurse's name may be associated with a business 
over which he or she has no control. 
Other considerations when naming a business include conveying the business focus 
or orientation, the type of service offered, or the target market desired. Attention should 
be paid to the length of the name, the abbreviation, and even where the first letter of the 
business name is located in the alphabet since this will determine the position of listing in 
the Yellow Pages (Vogel & Doleysh, 1994). 
Executive Summary 
The second page of the business plan contains the executive summary, also 
referred to as the statement of purpose or the mission statement. The executive summary 
encompasses the name and type of business, the intended clients, present and future 
service or product, special characteristics and advantages concerning the service or 
product, and projections of sales and profits (Vogel & Doleysh, 1994). 
Depending on the purpose for writing the plan, the executive summary may be 
guided accordingly. For example, if the business is new, projections regarding start-up 
14 
expenses, the break-even point, and profits to be made based on the estimated number of 
consumers for one year should be presented. If the purpose is to receive funding, a 
concise use of the funds and plan for repayment should be addressed, including any type of 
collateral. In this case, any purchase orders, rate sheets, and supplier estimates would need 
to be included. A business plan used to entice outside investors would show the means to 
provide return on the investor's capital. Despite its location as the second page in the 
business plan, it is best to write the executive summary after completion of the other 
sections of the plan, since it highlights the most important aspects of the business 
(Newman & Palumbo, 1994; Pinson & Jinnett, 1993; Vogel & Doleysh, 1994). 
Table-of Contents 
The table of contents follows the executive summary and provides the reader with 
a quick and easy reference to the areas of interest (Newman & Palumbo, 1994). The 
reader is able to assess what is included in the plan through the use of a table of contents. 
Vogel and Doleysh (1994) recommend including citations for graphs, tables, or 
illustrations in the table of contents. This will encourage readers to explore the contents 
more thoroughly. 
The major sections to be listed in the table of contents, referenced by page number, 
are the business information, financial information, and appendices (Pinson & Jinnett, 
1993). Outlines and headings may vary somewhat from one business plan to another in 
these sections. As long as the pertinent details are contained in the business plan, this 
variation may reflect an enhanced and clearer picture of the company being described. 
15 
Business-Information 
Company_Descriptkm 
Vogel and Doleysh (1994) begin the business information section with a 
description of the business. This segment of the plan contains a detailed description of the 
business. It incorporates a history of how and why the business began or will begin. A 
description of the services offered and the clientele attracted should be included, along 
with the progress made to the present. Describe present assets and inventory including 
resale value. Future projections will describe not only how the business will grow in 10 
years, but also plans for research and development. Explain the company's uniqueness and 
how this will favor the client. If the business is just beginning, the experience, education, 
and qualifications of the owners and employees providing services should be outlined 
(Newman & Palumbo, 1994; Pinson & Jinnett, 1993; Vogel & Doleysh, 1994). 
Survey of the Industry 
Next follows a survey of the industry. This segment may be a review of the 
literature briefly describing the history and significant developments forming the industry 
of the business. Established and dominant practices, services and products available, 
markets, and trends of the industry should be examined. Internal and external trends are 
identified by Vogel and Doleysh (1994), with internal trends being defined as a service or 
product that the owner's innovated. An example would include alternative therapies being 
offered in a medical clinic. External trends are those phenomena that transpire outside the 
business. Examples of external trends would include changes that occur in the market due 
to customer demand, government regulations, or demographic changes. Competing 
practices in the local area that may have an impact on the business should be mentioned. 
All of this information will provide support regarding projections made for the business 
(Newman & Palumbo, 1994). 
16 
Market Research and Analysis 
Market research and analysis follows the survey of the industry. This segment is 
written before any other parts of the business plan to determine if there is a market for the 
business. This section contains information gathered to defend the conclusion that a 
market is present for the business. Data for a health care practice may be obtained from 
the local Chamber of Commerce, Department of Health, and marketing research firms. 
The public library can provide government documents and trade journals. Also, health care 
organizations, such as medical and hospital associations, nursing organizations, and 
nursing schools can provide important data (Pinson & Jinnett, 1993; Vogel & Doleysh, 
1994). 
The size of the market to be serviced initially by the business must be determined 
and trends identified. The customer analysis answers questions such as who will purchase 
the product/service, why they should choose this service over competitors and how they 
will be introduced to this service. From this information a growth potential may be 
projected for years one, three, five, and ten (Larson, 1990; Pinson & Jinnett, 1993; Vogel 
& Doleysh, 1994). 
The competition, both direct and indirect, needs to be evaluated in the marketing 
analysis. Pinson and Jinnett (1993) define direct competition as businesses that provide the 
same product/service to the same market, while indirect competition services a different 
target market but offers the same product/service. When analyzing the competitors, 
consider their size, share of the market, location, the type and price of the product/service 
offered, services not offered and their operating hours (Larson, 1990; Pinson & Jinnett, 
1993). In the health care field, it would be important to ascertain the types of insurance 
the competitors accept. Decide what advantage the competition has and what advantage 
the new or developing business has over the competition (Click, 1989). 
17 
It is necessary to identify, in depth, the market that the business intends to target, 
describing common characteristics of the market. This will encompass the demographics 
of the target market including where they live, work, and shop. As the information 
regarding potential clients increases, so do the odds of developing an effective marketing 
campaign (Pinson & Jinnett, 1993; Vogel & Doleysh, 1994). 
All of the research is compiled and organized in a manner so that the market may 
be analyzed. Once the clients are identified, estimates can be made regarding sales to each 
client and subsequent yearly sales. The competitor's market share and the potential market 
for the business are determined by these estimates. This information will help with an 
effective market campaign and entry into the market (Pinson & Jinnett, 1993; Vogel & 
Doleysh, 1994). 
Marketing Plan 
Once market research and analysis has been thoroughly described, the marketing 
plan is written. The marketing plan describes the strategies used to reach the target 
market. Marketing materials need to be based on the characteristics of the target 
population. Decisions about whether experience, service, price, or results are to be 
emphasized in the marketing plan must be made (Vogel & Doleysh, 1994). 
The marketing plan will describe the types of marketing strategies to be used and 
the rationale for choosing one strategy over another. It will incorporate ways in which the 
promotional activities will reach the target market, projected costs of the marketing, and 
time frames. Providing copies of the promotional materials, such as brochures and fliers, 
will enhance the credibility of the marketing plan (Pinson & Jinnett, 1993). 
Management Team 
The next section of the business plan is a description of the management team. 
Management encompasses such fields as financing, marketing, accounting, or sales, to 
18 
name a few. A description of each member's qualifications need to be provided. This 
would include the experience, skill, or education of each member of the team that will 
enhance the company's success. If a key position of the management team is not yet filled, 
a job description of the experience necessary should be included (Vogel & Doleysh, 
1994). 
All of the functions carried out by the management team may be accomplished by 
the owner in a sole proprietorship. If this is the case, a description of the owner's 
education and background identifying qualifications to perform each of the functions vital 
to business survival should be provided. If the owner does not possess the skills of 
management and does not plan on hiring a manager in these areas, then it will be necessary 
to describe how this skill will be developed. For example, the entrepreneur could describe 
plans to enroll in an accounting class or seek the advice of an accountant when necessary 
(Pinson & Jinnett, 1993). Entrepreneurs should understand that the risk of business failure 
increases when they undertake management positions for which they lack experience. 
Vogel and Doleysh (1994) point out that there is a reciprocal relationship between success 
and a management team, especially if the managers chosen possess the ability to enhance 
or compliment the qualities of the entrepreneur. 
In a business partnership or corporation, each of the member's skills and abilities 
are described, highlighting how the members compliment one another. In a corporation, a 
detailed description of the corporate structure and officers will need to be provided. An 
organizational chart is one way to illustrate the structure and position of each member. 
Resumes are another way to describe each member of the team, detailing each team 
members qualifications, experience, and background. Succinct versions of each members 
resume would be provided in this section and comprehensive resumes belong in the 
appendices section (Pinson & Jinnett, 1993; Vogel & Doleysh, 1994). 
19 
The management section should incorporate the means of compensation for each 
team member. Compensation would include not only salaries but also company insurance, 
retirement plans, paid time off, and continuing education benefits. Another important item 
to be included is whether compensation includes ownership in the business or if it is a 
profit sharing business (Pinson & Jinnett, 1993; Vogel & Doleysh, 1994). 
Supporting Professional Assistance 
Any consultants or other supporting professional assistance, contracted from 
outside the business need to be listed in this section. This would include any professionals 
required to extend the expertise of the entrepreneur’s management skills, such as lawyers, 
bankers, or insurance agencies. Experts such as these are essential to building any business 
and can enhance the business in a cost-effective manner (Vogel & Doleysh, 1994). 
Operations Plan 
A discussion of how and where the major business activity will operate is 
contained in the operations plan. Descriptions of personnel, equipment, and supplies 
needed for the business will be covered in this section. It identifies the process of 
production for either a service or product, describing who does what and the time and 
costs involved in each step (Vogel & Doleysh, 1994). 
• Decisions about purchasing capital equipment is a significant factor in planning a 
private practice since it has a dramatic effect on start up costs. Decisions will need to be 
made regarding the cost-effectiveness of buying, leasing, or renting equipment. Research 
will need to be done on all the cost options of equipment and compared with the 
frequency of use of the equipment to make a well informed decision (Newman & 
Palumbo, 1994; Vogel & Doleysh, 1994). 
20 
Research and Development Program 
Improvements planned for services/products or business process are covered in the 
research and development program. Any intentions to add services or create new products 
would also be specified here. Funds targeted to be spent on research and development 
would be stated. In the new business, projections of funds can be done as a percentage 
from financial data (Vogel & Doleysh, 1994). An example of improvements in a health 
care clinic would describe future plans to add radiation therapy as part of the services 
available. 
Overall Schedule ' 
The progress of the business will be depicted in the overall schedule by outlining 
major events on a time line. Dates such as when the business will start the advertisement 
campaign, open for business, provision of services, and receipt of the first payments will 
be noted. This will be done by preparing a month to month schedule for the first year 
describing what activities must be accomplished to reach each goal (Vogel & Doleysh, 
1994). Caution is given by Newman and Palumbo (1994) to the novice entrepreneur 
regarding stringent time schedules. They suggest that when beginning a new practice, 
allow plenty of time for each activity scheduled. 
Critical Risks and Problems 
Critical risks and problems acknowledges that internal and external threats do arise 
in any business. Threats to the business need to be identified and addressed in this section. 
Internal threats would include a long-term illness of the sole proprietor or the resignation 
of a manager. External threats include trends in the industry which may restrict the 
practice, increased competition, or possible shortcomings of anticipated clientele (Vogel & 
Doleysh, 1994). For the APN in a private practice, external threats also include restrictive 
laws regarding prescriptive authority, hospital privileges, and third party reimbursement. 
21 
Financial Information 
Financial Plan 
The financial plan begins the next major section of the business plan. It contains 
the financial predictions and projections for the business over the next three years. Vogel 
and Doleysh (1994) further divide the financial plan into five documents: (a) balance sheet, 
(b) cash-flow projection, (c) break-even analysis, (d) income (or profit-and-loss) 
statement, and (e) budget deviation analysis. Each one of these documents will be 
described. 
Balance Sheet 
The balance sheet describes the business' net worth at a given moment in time. The 
total assets and liabilities are calculated to determine the financial position of the business. 
Vogel and Doleysh (1994) recommend a balance sheet be prepared at the start-up of the 
business, in six months, and at one year. After the first year of the business, balance sheets 
are usually prepared at the close of annual accounting periods. Trends in the financial data 
may be observed from the balance sheets and predictions of the strength of the business 
may be demonstrated (Larson, 1990; Pinson & Jinnett, 1993; Vogel & Doleysh, 1994). 
Cash-FlowProjection 
The second document in the financial plan includes the cash-flow projection. Cash¬ 
flow describes the inflow and outflow of income for the business over a certain period of 
time. This reveals the amount of cash expected to be received and how much of this will 
be needed to pay bills, debts, or expenses. Cash-flow describes how well the business is 
being financially managed (Larson, 1990; Pinson & Jinnett, 1993; Vogel & Doleysh, 
1994). 
22 
A cash-flow projection is done for three years, with the first year broken into 
monthly projections. Years two and three may be divided into quarterly projections. It is 
important to revise all projections every three months to reflect actual performance 
(Larson, 1990; Pinson & Jinnett, 1993; Vogel & Doleysh, 1994). 
Break-Even Analysis 
The next document included in the financial plan is the break-even analysis. The 
break-even analysis reveals the point in time where the business expenses equal the 
revenues generated. Thus, neither a profit is made nor a loss incurred (Pinson & Jinnett, 
1993; Vogel & Doleysh, 1994). 
The break-even analysis is an estimate and may be plotted in graph form or 
calculated mathematically. The calculations can show different break-even points 
depending on the amount of sales predicted. The figures used to calculate the break-even 
point will come from the cash-flow document. For the business that is unsure about the 
number of sales to be made, several break-even points may be calculated using different 
sales levels (Larson, 1990; Pinson & Jinnett, 1993). 
Most businesses require months to years to achieve a profit. Therefore, the way in 
which the business plans to compensate or survive until the break-even point is reached 
must be described. State the time and the amount of revenue it will take the business to 
reach the break-even point (Larson, 1990; Vogel & Doleysh, 1994). 
Income Statement 
The fourth document included in the financial plan is the income statement, also 
referred to as the profit-and-loss statement. The income statement shows the profits of the 
business by subtracting expenses from revenue. The information necessary to devise the 
income statement is derived from the previous documents in the financial plan (Larson, 
1990; Vogel & Doleysh, 1994). 
23 
Income statements may be used to assess trends in the business over a period of 
time. In this way, strengths and weaknesses may be recognized and changes may be made 
accordingly. For example, the income statement may reveal a decrease in sales in a 
particular month with an increase in expenses due to advertising in that same month. The 
business may choose to decrease advertising expenses during that month in the following 
year to offset the loss of revenue. The income statement may also be used to portray a 
trend in profits. Profit trends reveal a source of capital to attract potential investors or to 
support company growth (Larson, 1990; Pinson & Jinnett, 1993). 
Budget Deviation Analysis 
The last document included in the financial plan is the budget deviation analysis. 
The budget deviation analysis is done monthly in order to quickly recognize any 
departures from the budget parameters. Calculations of monthly budget figures allows 
corrections to be made if an increase or decrease in profits occurs. The business can then 
capitalize on this information (Vogel & Doleysh, 1994). 
Proposed Financing 
This section of the business plan identifies the sources of financial support for the 
business. The entrepreneur details how much money is being borrowed, from whom the 
finances are being received, intended use of the money, collateral, and plans for 
repayment, even if the money is from personal sources (Larson, 1990; Vogel & Doleysh, 
1994). 
Legal Structure 
A business may choose from three forms of legal structure, all with advantages and 
disadvantages. These are proprietorship, partnership, or corporation. Consulting a lawyer 
24 
or an accountant will assist in choosing the most beneficial legal structure for the business 
(Vogel & Doleysh, 1994). 
The legal structure chosen and the impetus for selecting the structure is stated in 
this section. If the business takes on the form of sole proprietor, a copy of the business 
license should be included. Documents of a partnership or a corporation will be included 
in the appendices. In a partnership, agreements clearly stating the terms for dissolution of 
the business or departure of one of the partners must be included. A statement describing 
responsibilities and division of profits and losses between partners must be disclosed. 
Corporations would include a copy of the charter and articles along with the operations of 
the corporate structure (Pinson & Jinnett, 1993). 
Appendices 
This is the last section of the business plan and contains the supporting documents. 
Examples include the resumes of the owners and the management team; personal and 
business credit reports; personal financial statements of all the owners; lease agreements; 
letters of recommendation; contracts; and legal documents. Supporting documents may 
cover articles written by key personnel or pertinent written documents relevant to the 
business or industry (Pinson & Jinnett, 1993; Vogel & Doleysh, 1994). 
25 
CHAPTERS 
METHODOLOGY 
This chapter will discuss the methodology utilized to develop a business plan for 
private practice as a nurse practitioner in rural Arizona. In order to develop this business 
plan, extensive research was required. Initial research began with a thorough review of the 
literature regarding small business, nurses in private practice, entrepreneurship, marketing 
strategies, business and financial planning, reimbursement issues and statutory regulations 
of the APN, and Arizona state laws and taxes. 
The development of a business plan demands a thorough market research and 
analysis. The position of the competitors were investigated by spending over a week 
interviewing members of the health care community. This included conversations with at 
least one provider of each the three health care clinics in Round Valley, Arizona. The 
knowledge gained was used to determine expenses, suppliers, the strength and position of 
competitors, business management strategies, and barriers to entry in to the market. 
In order to ascertain the condition of the local economy and the demographics of 
the area to be served, several investigative techniques were utilized. Personal observations 
were made and informal interviews were done with potential customers to provide 
valuable information regarding the health care needs and market in the local area. Real 
estate brokers were interviewed to determine the local economic trends and availability of 
rental buildings. Numerous government sources were reviewed to establish demographic 
information. Information was also acquired by contacting members of the Alpine Chamber 
of Commerce and local business owners. 
26 
Numerous sources were researched contributing to the financial and business 
operations of the plan. Several attorneys and accountants were questioned to determine 
cost of services and their cumulative experience in the local area and with the health care 
industry. Information was retrieved to substantiate documents and contracts necessary for 
business operations. The most suitable legal structure was discussed with several advisors. 
Resource booklets were requested from the Small Business Administration (SBA). 
The booklets received from the SBAs management and planning series were as follows: 
(a) Business Plan for Small Service Firms, (b) Checklist for Going Into Business, (c) How 
to Write a Business Plan, (d) Handbook for Small Businesses, and (e) Marketing for Small 
Business: An Overview. These financial planning tools were utilized to develop financial 
statements. In addition, a personal contact was made with a member of the SBA for 
financial counseling and assistance with developing the financial statements. 
The Arizona Department of Revenue, accountants, and business managers were 
contacted to learn about business rules and regulations. Information was gathered to 
determine the necessary employee taxes and unemployment insurance to be withheld, and 
the average cost of workers' compensation insurance. Forms and instruction booklets 
regarding estimated income tax schedules were reviewed. The Arizona Corporation 
Commission was contacted for information regarding registration requirements. 
This business plan necessitated research in the area of the ABN's scope of practice 
in the state of Arizona. Therefore, the statutes and rules of the state board of nursing were 
examined. Regulations regarding third party reimbursement, prescriptive authority, and 
collaborative relationships were taken into consideration while developing the business 
plan. 
The business' economic survival is dependent on ability of the APN to be 
reimbursed for the services provided. The most prominent insurance carriers in the area 
were obtained through conversations with the local health care providers and business 
27 
managers. Information was retrieved regarding reimbursement regulations from Arizona 
Health Care Cost Containment System (AHCCCS), the state’s Medicaid program. The 
most recent literature was reviewed to determine the average length of time to expect 
reimbursement for services. 
All of this information was compiled and organized. This data was then evaluated 
and integrated into my business plan. This business plan is contained in the Appendix. 
28 
CHAPTER 4 
RESULTS AND RECOMMENDATIONS 
Results 
A business plan allows the entrepreneur to evaluate the feasibility of starting a 
business. In order to develop a business plan, extensive research into different aspects of 
the business operations must be done which then clarify the business concept. The 
entrepreneur must make decisions regarding the strategic planning of the business. 
Financial considerations must be made when projecting expenses and revenues (Abrams, 
1991). All of these processes force the entrepreneur to critically examine and develop 
realistic assumptions about the viability of the business. 
After developing a business plan for "Alpine Health Care", I have determined the 
business to be a relatively feasible proposition. Despite the fact that the business is 
achievable, the amount of financial capital necessary to establish the business seems 
prohibitive. The reasons for this conclusion are several. First, I conducted no formal 
market survey. Business success depends on an comprehensive knowledge of the 
consumer. Market research provides the entrepreneur with information regarding the size 
of the market and the desires of the consumer. The data revealed in a formal market 
survey assists in the market analysis (Abrams, 1991; Larson, 1990). This guides the 
entrepreneur toward the most successful marketing strategies and provides a more 
concrete evaluation of the market. Before making a final decision about whether or not to 
begin operations of Alpine Health Care, I would conduct a formal market survey. 
29 
Second, the amount of practical experience in my profession as a CFNP will be 
minimal by May of 1997. Several authors stress the importance of having well developed 
skills and a high degree of confidence in them before venturing into private practice 
(Levin, 1993; Newman & Palumbo, 1994; Schneider, 1992; Welton, 1989) Additionally, 
the amount of time necessary to develop a business is tremendous. Without a thorough 
knowledge and comfort level established in my profession, it would be difficult to focus 
my activities on other commitments such as operating a business. I estimate that at least 
three years of experience as a CFNP would be needed before I would be comfortable 
enough in my profession to launch into a private practice. 
Third, the amount of capital necessary for start-up expenses is relatively high 
compared with the conservative profits projected. I projected both conservative and 
optimistic cash flows. In actuality, the conservative projection is more reliable. Calmelat 
(1993) advises the NP in private practice to plan on having enough capital to prepare and 
operate the business for at least six months with no clients. She bases her advice on the 
fact that insurance companies. Medicare, and Medicaid may take up to six months to 
reimburse for services. Therefore, the business will only receive revenues coming from 
cash transactions for the first six months and these are estimated at only fifteen percent of 
the total revenue. In order to compensate for this, the amount of capital necessary to 
survive the first year of business would be projected at $65,000. This would require 
$45,000 of funding to be sought from a financial institution. Martin and Martin (1991), 
two APNs in private practice, describe financial lenders as reluctant to provide funding to 
nurse entrepreneurs. Despite evidence of a profitable and growing practice, these nurses 
were unable to receive financial assistance. The probability of a financial institution lending 
this amount of start-up capital to "Alpine Health Care" is slight. Consequently, it will most 
likely be necessary to solicit funds from private sources. 
30 
Upon completion of this business plan, another challenge became apparent to me. 
There are no pharmaceutical services in Alpine. The nearest pharmacy is located in Round 
Valley. If I found it necessary to prescribe medications, the client would have to drive to 
Round Valley, defeating the competitive position of Alpine Health Care. Therefore, before 
beginning operations of Alpine Health Care, I would need to devise strategies to make 
pharmaceutical supplies available in Alpine. One option would include arranging for a 
courier service to deliver pharmaceuticals daily. Another option would be to maintain a 
stock of commonly used medications to dispense according to state laws. The second 
option would require extensive research to determine whether restrictive regulations 
would prevent this from being economically achievable goal. 
Finally, I did not pursue all of the alternatives at length while developing this 
business plan. One of the advantages of developing a business plan is in its ability to make 
the entrepreneur critically examine all the options available. Before I would embark upon 
establishing a private practice, all of the following alternatives presented in the 
recommendations would be extensively explored. 
Recommendations 
For the APN located in a rural area, developing a successful private practice may 
be one of the most challenging endeavors embarked upon. Therefore, all available options 
ensuring the success of the business need to be considered. As the business plan evolves, 
the entrepreneur recognizes problems and must seek alternatives. Upon conclusion of my 
business plan, several alternatives were revealed though not pursued extensively for the 
purpose of this project. Some alternatives may either reduce the financial risk, cut 
operating expenses, or increase revenues. The following recommendations represent some 
alternatives that should be considered by the rural APN entering private practice. 
31 
Partnership 
One way to decrease financial risk is through a partnership where two or more 
people co-own the business. In a general partnership, all the owners have unlimited 
liability for all claims against the business and each partner is equally responsible for the 
actions of the other partner. Individuals are taxed after profits of the partnership are 
distributed (Larson, 1990; Vogel & Doleysh, 1994). 
Agreements between the partners may be arranged in any fashion. Contracts may 
be written or oral, though a contract drawn up by a lawyer is highly recommended. The 
specifics of the contract generally address each partner's management role and 
responsibility, financial contribution, and profit distribution. Larson (1990) points out the 
most important issue to address in the agreement concerns dissolution of the partnership. 
In a limited partnership there are general partners and limited or "silent" partners. 
The general partners are responsible for managing the business and are personally liable 
for any claims made against the business or any debts of the partnership. The limited 
partners only invest money into the business and do not participate in the management. 
The limited partners are liable only to the extent of their investment amount and share in 
some portion of the profits or assets of the business (Larson, 1990; Vogel & Doleysh, 
1994). 
Both a general and a limited partnership will lessen the amount of financial risk the 
nurse entrepreneur would have to assume. In some cases a certain amount of control and 
ownership may have to be sacrificed. In all cases profits would need to be distributed. The 
entrepreneur would need to weigh the risks and the benefits of a partnership to determine 
if this would be the most profitable option available. 
32 
Rural Health Clinic ' . 
Another alternative would entail developing a Rural Health Clinic in order to 
increase revenue. This option would be most beneficial to the nurse entrepreneur 
practicing in an highly indigent population where reimbursement rates are less than eighty 
percent of the physician's pay rate for the same service. According to Public Law 95.210 
(The Rural Health Clinic Act, 1978), NPs are reimbursed at 80 percent of the established 
Medicare rate and 100 percent of the Medicaid rate. The client is required to pay the 
remaining 20 percent of the Medicare rate. Established rates are based on the clinic's 
yearly operational expenses, though the rate may not exceed the predetermined maximum 
federal rate. The client visit rate may be increased if the clinic's annual operating expenses 
surpass the revenues (Martin & Martin, 1991). 
Certain qualifications must be met in order to operated a Rural Health Clinic. 
These qualifications include the area being designated as a health manpower shortage area 
(HMS A), being certified by the health department of the state, and the clinic must have on 
site consulting done by a supervising physician at least every two weeks (Martin & Martin, 
1991). Assuming the business meets all the qualifications, establishing a Rural Health 
Clinic may provide a profitable alternative to some private practices. 
Contracting Services 
Contracting with a nearby health care clinic may allow the APN to reduce 
expenses and thus constitute another alternative. Numerous financial arrangements could 
be made. The nurse entrepreneur may be able to contract out certain operational expenses 
at a reduced rate. Purchasing supplies in bulk is one way to reduce expenses. The nurse 
may be able to contract with another clinic in order to purchase supplies or equipment at a 
reduced rate. Instead of using the business' capital to set up billing programs, the 
entrepreneur may also be able to contract those services out with another clinic. One 
33 
arrangement could include the nurse entrepreneur agreeing to pay a percentage of business 
expenses based on a percentage of client visits. 
Another arrangement could be the development of an outreach clinic using the 
established clinic's name. Profit-sharing agreements would need to be made. Several 
business expenses could be shared and competition for clients could possibly be decreased. 
All of these alternatives may require the nurse entrepreneur to relinquish part ownership of 
the business. 
Community Resources 
The last alternative recommended requires seeking out community resources as a 
means to reduce operating expenses. Many times in communities where limited or no 
health care services exist, town officials will subsidize providers in order to benefit the 
community. This may include leasing community owned buildings at a reduced rate or 
donating medical equipment. If such an arrangement is possible, expenses of the business 
may be substantially reduced. 
Recommendations were made specifically to address APN's considering private 
practice in a rural area. Some of these recommendations may also apply to independent 
APN’s practicing in urban areas. Furthermore, not all options available to the APN in 
private practice were revealed. Each provider will have individual circumstances 
presenting unique opportunities. 
Summary 
Once all the alternatives have been explored and the business plan is complete, the 
entrepreneur must decide if the business idea is worth pursuing. Rolstad (1987) indicates 
that "successful entrepreneurs recognize fatal warning signs during the information- 
gathering stage and will postpone or abandon the idea of private practice if these warning 
signs appear without solutions" and warned that getting caught up in the excitement of the 
34 
idea can be very costly (p. 57). Whether or not the business idea is pursued or abandon, 
the entrepreneur can be assured that every aspect was addressed before making this crucial 
decision. 
I would strongly encourage anyone considering starting a business to develop a 
plan. I learned that there are numerous aspects of a business that must be addressed, most 
of which would have been overlooked if I had not written this plan. When I first began this 
project, I felt overwhelmed with the prospect of starting a private practice. I didn't feel I 
had the many different resources, such as time, energy, or finances, necessary to start a 
business. Once I started putting all of my thoughts and the information I gathered on 
paper, the dreams of owning a private practice became more and more possible. I was able 
to look at my options on paper and pursue different avenues. Writing this business plan 
forced me to be innovative. I know now that owning a private practice no longer has to be 
a dream. I am now confident I can make it a reality if I choose. 
35 
REFERENCES CITED 
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Pass, OR: Oasis Press. 
Calmelat, A. (1993). Tips for starting your own nurse practitioner practice. Nurse 
Practitioner, 18(4), 58-68. 
Colls, J. P. (1984). A business for profit can help the NP role. Nurse Practitioner, 
9(9), 58-60. 
Dayani, E. C. & Holtmeier, P. A. (1984). Formula for success: A company of 
nurse entrepreneurs. Nursing Economics, 2, 376-3 81. • 
Durham, J. D. & Hardin, S. B. (1983). Promoting private practice in a competitive 
market. Nursing Economics, 1. 24-28. 
Economic Analysis Department. (1995). Business failure record Wilton, CT: Dun 
& Bradstreet Corporation. 
Economics and Statistical Administration. (1994). Statistical abstract of the U.S. 
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Felton, G., Kelly, H. D., Renehan, K., & Alley, J. (1985). Nursing entrepreneurs: 
A success story. Nursing Outlook, 33(6), 276-280. 
Gardner, K. L., & Weinrauch, D. (1988). Marketing strategies for nurse 
entrepreneurs. Nurse Practitioner, 13(5)r 46-49. 
Glick, C. L. (1989). The occupational health nurse in independent practice. 
Nursing Praxis in New Zealand, 5(1), 27-31. 
Keene, L. (1988). Pioneers in independent practice. New Zealand Nursing Journal, 
81(4), 27-28. 
LaBar, C. (1990). The issue of third party reimbursement-Advice for nurse 
practitioners from a national expert. Nurse Practitioner, 15(3), 46-47. 
Larson, P. R. (1990). The Montana entrepreneur’s guide. Missoula, MT: 
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Levin, T. E. (1993). The solo nurse practitioner: A private practice model. Nurse 
Practitioner Forum, 4(3), 158-164. 
36 
Martin, S., & Martin, D. (1991). Nurses as primary care providers in rural america. 
In A. Bushy (Eds.), Rural nursing: Volume 2 (pp. 198-208). Newbury Park, CA: Sage 
Publications. 
Morain, C. (1992). What happens when an NP competes with doctors. Medical 
Economics, 69, 60-69. 
Newman, D. K., & Palumbo, M. V. (1994). Planning an independent nursing 
practice for continence services. Nurse Practitioner Forum. 5(3)r 190-193. 
Office of Women’s Business Organization. (1993). Mentor program: Women's 
network for entrepreneurial training Washington, DC: U.S. Small Business 
Administration. 
Pearson, L. J. (1995). Annual update of how each state stands on legislative issues 
affecting advanced nursing practice. Nurse Practitioner, 20(1), 13-50. 
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planning series (U.S. Small Business Administration) Fort Worth, TX: UNICOR Print 
Plant. 
Rolstad, B. S. (1987). Taking a ride on the reading railroad: Achieving autonomy 
through independent nursing practice. Journal of Enterostomal Therapy, 14(2). 57-61. 
Schneider, B. (1992). Establishing an independent practice. Journal of Pediatric 
Health Care, 6(1), 43-44. 
Shamansky, S. L., Schilling, L. S., & Holbrook, T. L. (1985). Determining the 
market for nurse practitioner services: The New Haven experience. Nursing Research, 
34(4), 242-247. 
Sullivan, E. M. (1992). Nurse practitioners and reimbursement. Nursing and 
H£allh_CaoU3,236-241. 
U.S. Bureau of the Census. (1993). We measure America: Women in business. 
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small business data. Washington, DC: U.S. Government Printing Office. 
Vogel, G. & Doleysh, N. (1994). Entrepreneuring: A nurse’s guide to starting a 
business. New York: National League for Nursing. 
37 
Welton, J. M. (1989). Going into business as a nurse. American Journal of 
Nursing, 89(12) 1639-1641. 
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38 
APPENDIX 
39 
ALPINE HEALTH CARE 
P. O. Box 1750 
Springerville, Arizona 85938 
(520) 333-4197 
BUSINESS PLAN 
Plan prepared February, 1996 
by Teresa Jane Sadler 
40 
EXECUTIVE SUMMARY 
Alpine Health Care will provide primary health care to the residents of Alpine, 
Arizona and surrounding communities. Currently, there are no health care services 
available in the community of Alpine. Residents must travel a round trip distance of 54 
miles to Round Valley in order to receive health care. Alpine Health Care will offer 
convenient access to health care services in this community. 
Mission Statement 
The mission of Alpine Health Care is to serve our clients by providing efficient, 
comprehensive, and cost effective primary health care emphasizing health promotion, 
disease prevention, and education. Alpine Health Care is dedicated to treating the whole 
person within the context of the family. This will be done by providing continuity of care 
and educating the client so they may make informed choices for an optimal outcome. 
Alpine Health Care promotes the importance of working in a complementary fashion with 
the community and other health care professionals while achieving professional and 
personal fulfillment. 
Services 
Alpine Health Care will provide primary health care services by a Certified Family 
Nurse Practitioner (CFNP). The CFNP will be able to care for clients of all ages with 
various illness and injuries. Services offered will entail primary contact care, complete 
history interviews, physical examinations, diagnostic testing and interpretation, planning 
and monitoring treatment, prescribing medications, therapeutic, and corrective measures, 
and providing long term management. 
41 
Alpine Health Care will target clients in Alpine and surrounding communities 
within a thirty mile radius without easy access to health care. Most clients will be over the 
age of 55, with a large portion of the summer clients being tourists. 
Competitive Position 
Local competitors with Alpine Health Care do not exist since virtually no health 
care services are available in Alpine. Most residents of Alpine and the surrounding areas 
receive their care in Round Valley, providing Alpine Health Care with a clear advantage 
over its competitors in Round Valley due to its close proximity to clients. 
Another way Alpine Health Care distinguishes itself from its competition is the fact 
that the provider has been from the local area longer than any of the competitors in Round 
Valley. The provider has over 25 years of personal and family ties to the local area. 
Management 
Teresa J. Sadler, the President and founder of the company, has vital experience 
with business management over the past 15 years. Mrs. Sadler was extensively involved in 
a family owned business and went on to operate a business of her own. Alpine Health Care 
will begin operations in May of 1997, giving Mrs. Sadler six years of experience as a 
registered nurse and one year of experience as a Certified Family Nurse Practitioner. 
Vice President, Patricia Orona enhances the management team with her significant 
background in business and the health care industry. Mrs. Orona offers previously gained 
experience as owner of a business with ten employees. She has been employed in 
management positions in the health care industry and is currently business manager for a 
newly formed health care clinic. The combination of both Mrs. Sadler’s and Mrs. Orona's 
business and health care knowledge provides Alpine Health Care with a premium 
management team. 
42 
Financial Projections 
Alpine Health Care projects conservative but steady growth. Projections are based 
on the most conservative revenue estimates. Sales revenues projected for the last eight 
months in 1997 are $57,600. The annual projected sales revenues for 1998 are $124,200 
and $129,600 in 1999. Alpine Health Care will reinvest income to ensure financial security 
and growth during the first five years of business instead of dispersing the profits. 
Start-up expenses are estimated at $12,63*5. The break-even point is $8,351 per 
month or $100,200 per year. This will be accomplished within one year. 
Funding Sought 
The funding being sought by the company is $10,000 with repayment projected at 
five years. These funds will be utilized as part of the start-up costs and to provide 
adequate cash flow income for the first year of business. The owner will invest $20,000 of 
her personal savings into the company and still be able to provide adequate collateral. 
Repayment of the owners investment will begin in five years, after repayment to the 
financial institute is completed. 
43 
TABLE OF CONTENTS 
Page 
Company Description  44 
Survey of the Industry.   46 
Market Research and Analysis  49 
Marketing Plan     55 
Management Team  57 
Support Team   59 
Operations Plan.  60 
Research and Development  62 
Overall Schedule  63 
Critical Risks and Problems  65 
Financial Plan  66 
Proposed Financing  78 
Legal Structure. 79 
44 
COMPANY DESCRIPTION 
Alpine Health Care will provide primary health care to residents in a rural area of 
Arizona and New Mexico currently without convenient access to care. The clinic will be 
located on the main street of Alpine, Arizona and serve residents within a thirty miles 
radius. The surrounding communities of Alpine include Nutrioso, Hannagan Meadows, 
and Blue, Arizona, along with Luna and Reserve in New Mexico. 
Background 
The unincorporated town of Alpine, Arizona is currently without any permanent 
health care services. Residents must travel a total distance of 54 miles in order to receive 
health care. Recognizing this opportunity, Teresa J. Sadler founded Alpine Health Care 
and plans to begin operations of a primary health care clinic in May of 1997. 
Scpdces 
Alpine Health Care will make available a full range of primary care services 
throughout the life span. This includes annual and sports physical examinations, well child 
visits, women’s health care, general prenatal and postpartum care, family planning services, 
and geriatric care. Additionally, management of chronic stable illness, common acute 
illness, minor infections, minor trauma and suturing, and simple splinting and casting will 
be provided. 
Care will include counseling, health education and promotion, disease prevention, 
and access to community based resources. The individuals own health care beliefs will be 
incorporated into the plan of care. All seriously ill or unstable clients with complex 
diagnostic and treatment problems will be referred. 
45 
Management 
Teresa J. Sadler will have her Master's of Nursing and be a Certified Family Nurse 
Practitioner when initial operations of Alpine Health Care begin. Sadler has a Bachelor's of 
Science in nursing and an Associate of Arts in Business. She has a broad knowledge of 
business consisting of extensive participation in a family owned business. She also 
organized and developed of a highly successful community food cooperative. 
Patricia Orona will be Vice President and business manager for Alpine Health 
Care. Orona has extensive experience in health care and business management. She brings 
with her knowledge of starting a business with ten employees and five years experience as 
quality and utilization management coordinator for a hospital and care center. She is 
currently employed as business manager of a recently formed health care clinic. 
Legal Structure and Ownership 
Teresa J. Sadler will assume sole proprietorship of Alpine Health Care. The 
company will incorporate under the laws of the state of Arizona. Ten thousand shares in 
the company will be issued. The President and founder of the company will own 7,000 
shares. The Vice President of the corporation will own 1,000 shares. The company will 
retain 2,000 shares to be distributed at a later date. 
The president of the company will contribute $20,000 from her personal saving as 
partial funding for start-up costs of the business. Another $10,000 will be sought from a 
financial institution several months before initial operations. 
46 
SURVEY OF THE INDUSTRY 
The health care industry has been in a state of flux in recent decades. The industry 
has gone from an era of virtually unlimited resources and wasteful spending to an era of 
cost-containment, finite resources, and decreased funding. Health care reform policies in 
recent years have called for quality, cost-effective, and accessible health care for all 
Americans. 
Current Trends 
As Congress works to provide increased quality health care with decreased 
budgets, non-physician providers, such as nurse practitioners (NPs), clinical nurse 
specialists, and physician assistants have been recognized as valuable contributors to the 
solution of the health care crisis. Nurse practitioners have proven their ability to be 
effective and efficient health care providers. Currently, the demand for non-physician 
providers far outweighs the supply. 
The increased utilization of non-physician providers and the hard work of nurses 
lobbying for an expanded scope of practice has contributed favorably to the progress of 
increasing autonomy of NPs. Every year state legislation shows forward movement 
furthering the NP's independence by either expanding the scope of practice or removing 
restrictions placed on reimbursement or prescriptive authority. Thus, current trends in the 
health care industry provide innovative NPs greater opportunity to establish private 
practices. 
Barriers to Entry 
Despite progress towards increasing autonomy and utilization of NPs, barriers still 
remain, limiting the NPs ability to establish a private practice. Each state's legislative status 
of the advanced practice nurse differs on issues regarding reimbursement, prescriptive 
47 
authority, and scope of practice. These legislative issues can significantly affect the NP's 
ability to establish a private practice. v 
The scope of practice for NPs in Arizona is defined in the Nurse Practice Act. 
Presently, NPs are required to have a collaborative relationship with a physician for 
referrals and consultation. In the state of Arizona, NPs do receive third-party 
reimbursement. Arizona Health Care Cost Containment System (AHCCCS) is the state’s 
form of Medicaid and contracts on a capitated basis with primary care providers. Nurse 
practitioners are able to directly contract with AHCCCS as primary care providers and are 
reimbursed at 60 percent of the appointed physician rate. Arizona allows NPs full 
prescriptive and dispensing authority. Drug Enforcement Agency (DEA) numbers are 
provided to the nurse practitioner allowing prescriptive authority of narcotics with limited 
supply restrictions enforced. The ability of the nurse practitioner to establish a private 
practice remain moderately difficult due to the low reimbursement rate of AHCCCS. 
Long-Term Opportunities 
As Congress remains in deadlock regarding health care reform policies, trends in 
the health care industry tend to be moving towards manage care organizations. Managed 
care organizations such as Health Maintenance Organizations (HMOs) and Physician 
Provider Organizations(PPOs) appear to be the country’s way of providing cost-effective 
health care. A relationship with local managed care groups may be a vital issue in the near 
future. Nurse practitioners in private practice will need to solicit managed care 
organizations in order to be recognized as the group's primary care provider. 
48 
Local Trends 
The community of Alpine lacks any type of health care provider. The community 
of Round Valley and the hospital board and administration have continually struggled to 
recruit and retain health care providers. Historically, Round Valley has had a health care 
personnel shortage. This provides Alpine Health Care with an excellent opportunity to 
develop a primary health care clinic to serve Alpine and its surrounding communities. 
49 
MARKET RESEARCH AND ANALYSIS 
Alpine Health Care will provide health care services in the unincorporated town of 
Alpine, Arizona. It will target clients not only in Alpine, but include surrounding 
communities within a thirty mile radius without easy access to health care. The 
surrounding communities of Alpine include Nutrioso, Hannagan Meadows, and Blue, 
Arizona, along with Luna and Reserve in New Mexico. 
Alpine is part of the greater Apache County which has shown a steady increase in 
population over the last fifty years. Apache County has a total population of 61,591 
according to the 1990 census. This is a growth rate of 18.2 percent from the previous 
decade. While Alpine contributes to only a small percentage of Apache County’s 
population, it too demonstrates a growth in numbers. The 1990 census shows Alpine with 
a winter population of 600, up from 525 in 1980, a 14.3 percent increase. 
Alpine exhibits a drastic rise in residents in the summer months. Alpine Chamber of 
Commerce reports a population of2,500 during this time period. This may be attributed to 
its geographic location. Alpine is centrally located on the eastern edge of Arizona, six 
miles from the New Mexico border. At an elevation of 8,050 feet, Alpine is surrounded by 
the Apache-Sitgreaves National Forest in the White Mountains. The White Mountains in 
Apache County attracts 50,000 tourists per year with its abundant outdoor recreation, 
producing a market in service related business. As a result, tourism claims up to 40 
percent of Apache County's employment. 
Alpine with its surrounding communities establishes its economic base not only in 
tourism, but also in the timber and ranching industry. The U. S. Forest Service is the 
largest major employer in the area. 
The economic base in Alpine has shown slow but stable growth. Businesses are 
locally owned. Alpine has two restaurants that have existed for over 20 years. Since the 
50 
town is unincorporated, there are no community buildings. The only county owned 
building is the elementary school. The county library rents its building from a private 
owner. 
The nearest health care facilities are at a distance of 27 miles in the adjoining 
towns of Springerville and Eagar, Arizona, also referred to as Round Valley. Round 
Valley is serviced by a 44 bed tax-based hospital. There are three health care clinics with a 
total of ten health care providers practicing in this area. Ambulance services are stationed 
in Springerville and supply Alpine with emergency coverage, with a response time of 
approximately 40 minutes. The nearest medical air service can be utilized in Springerville, 
with their response time at approximately 30 minutes. 
Target Customers 
The clients that Alpine Health Care will target are persons requiring primary health 
care who are currently driving to Round Valley or farther to receive care. Presently there 
is no permanent health care in Alpine. The closest provider for Alpine residents is 27 miles 
away in Springerville. Blue residents must drive approximately 50 miles one way to 
receive health care. The only form of health care provided to Alpine residents consists of a 
monthly visiting ophthalmologist and the Apache County health department which visits 
the elementary school on an as needed basis only to provide immunizations. 
Due to Alpine’s small population, there are no official documents regarding age 
breakdown of the community. Alpine’s Chamber of Commerce reports the majority of the 
population are retired citizens, estimating that 85 percent are age 55 or older. This fact 
represents a larger target market for health care than if the population consisted of a 
greater number of middle aged persons. A large tourist market provides the need for acute 
care illness and injury health care services. Alpine Health Care's target customers will 
consist mainly of Medicare clients and tourists in the Alpine and surrounding areas. 
51 
Market Readiness 
No formal survey was done regarding need or acceptance of a health care clinic. 
Informal surveys conducted with professional and lay persons of the community voiced a 
need for health care in the area. It was clear that acceptance would come slowly and that a 
trusting and reliable relationship would need to be developed before a significant clientele 
could be established. 
The nearest local competitors are located in Round Valley, at a distance of 27 
miles from Alpine. Most residents of Alpine and the surrounding areas receive their care in 
Round Valley unless they require a specialist. In this case, they would need to travel to an 
urban area, such as Phoenix, Tucson, or Albuquerque, all located at fairly equal distances 
from Alpine. Currently there are three groups providing health care in this area. Health 
Horizons, Incorporated is a group formed within the last nine months, though the 
providers of this group have been practicing in the area for over three years. The group 
consists of an Internal Medicine Physician, a Certified Family Nurse Practitioner/Certified 
Nurse Midwife and another Certified Nurse Midwife. Round Valley Medical Clinic is a 
solo practice consisting of a Family Practice Physician, who has practiced in the area for 
over five years. The last group. White Mountain Family Practice consists of one Internal 
Medicine Physician, one general surgeon, and a Family Practice Physician, all of whom 
have been practicing in the area for over five years. Other health care services in Round 
Valley include two recently established home health care companies, the county health 
department, one pharmacy, a physical therapist, two chiropractors, and three physician 
assistants providing emergent care only in the hospital. 
Health Horizons, Incorporated charges $43 for client visits. They are able to 
perform basic laboratory procedures and tests so the average client visit is estimated to be 
52 
$50. The average monthly income gross from accounts receivable for this group of three 
providers was over $32,000. The nurse practitioner sees between 20 to 30 clients per day. 
Round Valley Medical Clinic fees range between $20 to $65 per visit, not 
including basic laboratory charges for tests performed in the clinic. The physician sees 
between 32 to 34 clients per day and is open four days per week. The gross monthly 
income from client fees is between $16,000 to $20,000. In January, this physician publicly 
announced his plan to close his practice in March, 1996. 
The average client visit charge at White Mountain Family Practice ranges between 
$45 to $70 dollars. The providers see an average of 20 to 25 clients per day, four days a 
week. Information regarding gross monthly client fees was not available. 
Market Share 
None of the provider groups were able to determine what percentage of their 
clients were from Alpine and the surrounding areas. An estimate of the number of clients 
receiving health care in Round Valley from the Alpine area was determined by using 
figures from the 1990 census. The population of the Round Valley area in 1990 was 5,827 
with the population of Alpine and the surrounding area estimated to be 1,000. By dividing 
the Alpine area population by the Round Valley population, the percentage of clients from 
the Alpine area can be determined. From these figures it can be estimated that 17 percent 
of the providers clientele are from the Alpine area. Based on the lower end of each 
provider seeing 20 clients per day, four days per week, a figure of 80 clients per week can 
be determined. This number is then multiplied by seven providers making the average 
numbers of clients seen in the Round Valley area at 560 per week. Seventeen percent of 
560 equals 95 clients per week seeking health care in the Round Valley area that are from 
the Alpine area. 
53 
Advantages Over Competition 
Advantages Alpine Health Care will have over the competition will be its close 
proximity to clients. Residents of Alpine and the surrounding area can save the 54 mile 
round trip to receive health care. Only the community of Nutrioso would not benefit as 
much from having a health care clinic in Alpine. Nutrioso is located between Alpine and 
Round Valley, though Alpine is closer to Nutrioso than Round Valley is to Nutrioso by 
seven miles (see Appendix for map). 
\ 
Another advantage Alpine Health Care will have over its competition is the fact 
that the provider has been from the local area longer than any of the competitors. People 
tend to receive their health care more readily from someone "inside" the community rather 
than from a provider "outside" of the community. 
Strengths of Competitors 
The strengths of the competitors lie in their established practice. All of the 
providers have been practicing in the area for at least three years with one having 
practiced for more than ten years. A certain amount of client loyalty can be assumed. 
Another strength may be in the fixed practice of residents commuting to the larger 
community to do more than receive health care. It can be presumed that residents are also 
performing such tasks as banking and shopping while they are in Round Valley. Some 
residents also work in the Round Valley area. 
An additional strength only relates to the competitors which are physicians. The 
scope of practice of the physician exceeds that of a nurse practitioner. Some clients may 
prefer to visit the physician holding different credentials who has the ability to provide a 
broader or more specialized scope of care. 
V 54 
Competitive Positions 
The competitors of Alpine Health Care will not be particularly threatened by a new 
primary care provider entering the health care market. The community of Round Valley 
and the hospital board and administration have continually struggled to recruit and retain 
health care providers. Historically, Round Valley has had a health care personnel shortage. 
Most of the local health care providers contacted did not appear threatened and were very 
forthcoming with information regarding operations of their business and the market. The 
location of Alpine Health Care at a distance of 27 miles away presents even less of a 
threat. Additionally, there is opportunity for the competition to receive referrals from 
Alpine Health Care. 
55 
MARKETING PLAN 
Alpine Health Care sets itself apart from its competitors by offering convenient, 
accessible health care. The competitors are located at a total distance of 54 miles away. 
Alpine Health Care will be able to provide customers with equal or superior primary health 
care without the time and cost of a long distance journey. 
The owner of Alpine Health Care has been a local area resident for over twenty 
five years with established family ties. The education the owner has received allows her to 
practice as a generalist, able to care for persons across the life span. Health care 
consumers want to develop ongoing relationships with their health care provider. 
Therefore, Alpine Health Care will incorporate convenience and continuity into its 
marketing efforts. 
The sales team will consist of the owner and all employees of Alpine Health Care. 
The receptionist will be trained in phone etiquette and all company personnel will attend 
monthly customer relations meetings. 
One month prior to the first day of business the marketing campaign will begin. 
This will include bi-weekly six by six inch advertisements in the local newspaper, the 
Apache County White Mountain Independent. At the same time bulk direct mail will be 
sent out to all box holders in Alpine monthly, for three months. This direct mailing will be 
a colored advertisement printed on quality paper introducing the owner, describing the 
services offered, the location and phone number, and operating hours and days of the 
business. Customers will be encouraged to establish a relationship with the provider by 
offering complete physical examinations for half price during the first month of business. 
In this way, customers will be inspired to schedule an appointment before the actual 
opening of the business. During the first month of operations, newspaper and direct mail 
advertisements will announce free basic screening checks. 
56 
The Alpine Chamber of Commerce sponsors few community activities. Most 
Alpine residents attend the community activities in Round Valley. Future marketing plans 
include setting up a booth to advertise during events such as Eagar Daze in August and 
Valley Redondo Days over Labor Day weekend, both of which are located in Round 
Valley. A booth will also be sponsored in October at the Apache County Fair located in 
St. Johns. In recent years, the local hospital has hosted a health fair. Alpine Health Care 
will plan to sponsor a booth whenever this event occurs and all local county events. 
Another marketing strategy will consist of community health education seminars. 
In the seminars, the NP will give lectures on current health issues. Seminars will be 
conducted one evening a month and will be announce one week prior to the lecture in the 
local newspaper along with flyers distributed throughout the community. 
Other marketing strategies include establishing membership with the Alpine 
Chamber of Commerce, placing a small ad in the Yellow Pages, erecting a four by eight 
foot double sided sign outside the business, and hanging posters at local businesses. In 
order to receive free publicity, the owner will participate in an interview with the local 
paper to announce the opening of the business and inform local residents about the 
business. 
The receptionist will be responsible for collecting information from clients in order 
to evaluate current marketing strategies. All clients checking in for appointments will be 
questioned regarding how they heard about the business. This information will be 
compiled monthly in order to assess which marketing strategy is most effective. A short 
questionnaire form will also be given to each client to determine reasons why they chose 
Alpine Health Care over its competitors and how Alpine Health Care can improve on its 
services. Future marketing plans will be determine from this information and adjusted 
accordingly. The business will also compile a client list for future mailings. Advertising is 
budgeted at $3,400 for the first year, $3,000 the second year, and $2,000 the third year. 
57 
MANAGEMENT TEAM 
Teresa J. SadleiySole Proprietor Owner, Certified Family Nurse Practitioner. In 
May, 1996, Teresa J. Sadler will graduate from Montana State University-Bozeman with 
her Master's of Nursing. She will take the ANA family nurse practitioner certification 
examination in October of 1996. Sadler graduated with her Bachelor's of Science in 
nursing in May of 1991 and worked all areas of the 44 bed hospital in Springerville, 
Arizona. In September 1993, Sadler went on to extend her nursing skills by working in the 
intensive care unit at Maryvale Samaritan Medical Center in Glendale and later at 
Navapache Medical Center in Show Low, Arizona. While attending graduate school at 
Montana State University, Sadler continued to work as a nurse at the local hospital. 
Prior to attending nursing school, Sadler managed all of the business operations of 
a family owned business and went on to pursue her Associate of Arts in Business in 1988. 
From 1982 to 1988 she also organized and developed a community food cooperative. 
Sales increased 500 percent in two years. She was responsible for sales, banking, ordering, 
and organizing monthly food orders in excess of2,000 dollars. 
Sadler will own 70 percent of the stock in Alpine Health Care and serve as the 
Chairman and Treasurer of the Board of Directors. She will receive a reduced salary in the 
first three years of the business in order to assist in the financial establishment of the 
business. 
Patricia Orona, Business Manager. Currently Patricia Orona is business manager 
for a recently formed health care clinic in Springerville. Orona assisted in developing and 
implementing policy and procedure manuals, quality assurance programs, and establishing 
insurance payor contracts. Her responsibilities in this position are overseeing the financial 
and clerical aspects of the business including payroll, billing and collections, purchasing, 
and insurance. 
58 
Prior relevant experience consists of five years as quality and utilization 
management coordinator for the Springerville hospital and care center. Orona ensured 
reimbursement for insurance claims and compliance to all state and federal regulations 
imposed. In 1985, Orona founded her own small business, supervising up to ten 
employees and conducting all the business activities herself. Orona's employment history in 
health related business management provides her with suitable experience for the 
establishment of a newly founded health care clinic. 
Orona will own 10 percent of the stock in Alpine Health Care. In return for the 
equity she will receive a reduced salary of $19,000 the first year, $20,000 the second year, 
and $21,000 the third year. She will receive two weeks paid vacation at the end of the first 
year and an education budget of $100 per year. Free health care will be provided for 
employees and their families. Bonuses will be paid based on the business' annual profits. 
Bonuses may be received as cash or as stock in the business. 
Licensed Practical Nurse. The individual to be selected will have prior experience 
in a clinical setting. Responsibilities will include preparing the client to be seen by the 
provider, performing dressing changes, injections, simple laboratory tests within the legal 
scope of practice, electrocardiogram testing, and assisting the provider in other tasks and 
follow-up care. The nurse will possess outstanding public relations skills. 
The nurse will be offered $17,500 the first year and an education budget of $100 
per year. Free health care will be provided for employees and their family. Raises will be 
based on both performance of the individual and the business. Bonuses will be paid based 
on the businesses annual profits. Bonuses may be received as cash or as stock in the 
business. 
59 
SUPPORT TEAM 
Accountant: James H. Saunders, CPA 
74 North Main 
Eagar, Arizona 85925 
(520)333-2250 
James Saunders will serve as the accountant for Alpine Health Care. Saunders will 
serve to initially set up the books and computer software programs for the business and 
then prepare annual income taxes. Saunders has previously handled the accounts of several 
health care clinics in the Round Valley area and currently handles the accounts of several 
local businesses. Saunders has practiced in the area since 1987. 
Attorney: Brown and Brown Law Offices 
Douglas E. Brown 
48 South Main 
Eagar, Arizona 85925 
(520)333-4717 ’ 
Douglas Brown will serve Alpine Health Care as a consulting attorney after 
initially reviewing contracts, leases, and corporate documents. Brown and Brown Law 
Offices has represented Round Valley hospital and other local physicians in the past. 
Brown and Brown Law Offices has been established since 1983. 
60 
OPERATIONS PLAN 
The owner, Teresa Sadler, initially will be involved in all day-to-day operations of 
the company. All major decisions of the company will be made by her. Sadler will be the 
only professional health care provider and will be responsible for seeing each client. No 
appointments will be scheduled for less than 15 minutes with each client unless approved 
by Sadler. Some appointments may be scheduled for an hour depending on the type of 
examination necessary. Prices may vary according to length of time with the client and 
complicating circumstances. The average client charge will be $45 but may range from 
$20 to $65. 
Simple laboratory tests and procedures will be performed by the appropriate clinic 
staff. These include blood glucose monitoring, dipstick urinalysis, blood draws, 
electrocardiograms, peek flow and pulse oximetry, wet mounts, PAP smears, simple 
suturing, splinting and casting. 
The LPN will be responsible for triaging and bringing the client to the examination 
room. Vital signs and weight will be taken on all clients. Further responsibilities of the 
LPN will include wound cleaning, dressing changes, injections, preforming or assisting 
with the previously mentioned laboratory tests and procedures, and assisting the provider 
with any other reasonable duties. The LPN will assist with scheduling, referrals, and all 
interactions that will ensure a smooth, pleasant, and efficient flow of clients. 
The business manager, Patricia Orona, will initially perform all aspects of office 
management. While the business is in its beginning operations her responsibilities will 
consist of receptionist, scheduling, medical records, billing and insurance, purchasing, and 
payroll. Orona will also be responsible for setting up computer programs and establishing 
insurance contracts. As the number of clients grow and as business transactions increase, 
subsequent employees will be hired as needed to resume some of Orona’s duties. Orona 
61 
will be responsible for training the new employees in these positions and will continue to 
manage the office staff. 
Billing and insurance, payroll, taxes, and monthly statements will all be performed 
by the office staff This will be possible through the purchase of computer software for 
less than $500. The owner presently owns a computer that can handle all of the business 
transactions necessary to start and run the business for the first few years. Finances are 
allotted for future hardware needs and updated software programs. 
The location of the clinic will be on the main street of Alpine. The building is 
currently being remodeled by a local real estate company. The building will house the real 
estate office with plans to rent out half of the building. It has been estimated that there will 
be enough room to contain a small clinic. The owners are willing to allow minor 
remodeling to be done to the building and lease the space for $500 per month. Remodeling 
costs are estimated at $3,000. A lease contract as yet has not been signed. The location is 
ideal for a start-up business. Future plans include purchasing a lot and building or an 
already existing building and remodeling it into a clinic. 
Other plans include purchasing as much used equipment as possible. There are 
several suppliers in the area that sell used medical equipment. Medical equipment to be 
purchased is as follows: Examination tables, otoscope, opthalmascope, 
sphygmomanometer, stethoscopes, weight and height scale, microscope, autoclave, 
electrocardiogram machine, glucose monitor, peek flow meter, nebulizer, pulse oximeter, 
and speculums. Office equipment to be purchased or rented are as follows: Computer 
printer, copy machine, telephone, FAX and answering machine, desks, chairs, and waiting 
room furniture. Future plans will consider the purchase of a used X-ray machine. 
62 
RESEARCH AND DEVELOPMENT 
Growth by Alpine Health Care will be achieved at a steady and stable pace. Alpine 
Health Care plans to comer the health care market of Alpine and surrounding areas within 
five years. By 1999, Alpine Health Care expects to have 85 percent of Alpine's health care 
market share and 50 percent of the surrounding areas. This will be accomplished by 
expanding the marketing campaign to reach the smaller surrounding communities. 
Cornering the health care market share will be done by providing clients with a valued 
service satisfaction. An evaluation of client satisfaction will be done at the time of service 
and an outside source will conduct an annual quality assurance survey. In addition, surveys 
will be conducted to examine the needs of the client to determine services desired that are 
not currently being offered. Improvements in the business will be made accordingly. 
Continued monitoring will be done regarding community and county services and 
resources available. Public relations will be developed by contributing services and time to 
the community to the extent which is possible. 
Expansion of Alpine Health Care includes plans to purchase a building and an X- 
ray machine once a clientele has been established and adequate profits are realized. This is 
expected to happen after five years. Initially, three percent of the business profits will go 
into research and development along with one day a month of the provider's time. Later, 
when the business purchases a building, less of the provider's time and a larger percentage 
of the business profits will be contributed to research and development. 
63 
OVERALL SCHEDULE 
Alpine Health Care plans to open its doors for business May 1, 1997. At this time 
the owner will have had one year experience in her clinical field as a Certified Family 
Nurse Practitioner. Additionally, the owner will have had time to establish a clientele in 
the local area through working in one of the Round Valley health care clinics. 
Two months prior to opening Alpine Health Care, work will be done on billing 
insurance forms to establish contracts with the most common insurances used in the area. 
Additionally, a contract will be established regarding a collaborating physician agreement 
with the assistance of Alpine Health Care's attorney. 
One month before opening, priority will be given to the promotion and marketing 
of Alpine Health Care. Advertising in the local paper will announce the grand opening of 
Alpine Health Care and discounts will be offered on complete physical examinations 
scheduled in the first month of business. The rationale for this includes establishing rapport 
with new clients and encouraging them to seek care from the new provider should illness 
or injury occur. This will give the provider an opportunity to inform potential clients of the 
services she can offer. It will also give the provider a chance to offer her services to 
chronically ill individuals. This allows the provider to inform them about her abilities to 
manage their care on an ongoing basis. An answering service will be set up one month 
prior to opening so appointments may be scheduled. 
Lease agreements will also be written and signed one month prior to opening and 
liability insurance will be purchased. Remodeling of the building will begin and equipment 
and supplies will be purchased. The LPN will be recruited and hired along with securing a 
back-up nurse and office staff. 
64 
During this time period computer programs regarding payroll and billing will be set 
up. Work regarding setting up the initial books and recording keeping system will be done 
with Alpine Health Care's accountant. 
The owner plans to reduce her present work schedule to part-time at the clinic at 
which she has been employed. The business manager will be hired on a part-time basis to 
assist with start-up tasks. 
Alpine Health Care will be open to clients on May 1, 1997. This time of the year 
was selected due to the influx of summer visitors. The month of May will be devoted to 
establishing relationships with year-round residents. The summer can then be devoted to 
the tourist market. 
Every month after opening, a health education lecture will be advertised and 
presented by the provider at the clinic. Monthly income statements will be performed 
along with quality assurance reports based on client surveys. 
In June, Alpine has a parade and rodeo. Plans for an open house with refreshments 
will be scheduled. Free educational materials and magnets advertising Alpine Health Care 
will be given out. Simple screening tests will be performed. 
In August, during Eagar Daze, and over Labor Day during Valley Redondo Days 
in Springerville, and in September during the Apache County Fair in St. Johns, Alpine 
Health Care will sponsor a booth, again providing educational and promotional materials 
and offering free simple screening tests. 
During October, research will be done to determine the best way to recruit clients 
from the surrounding communities. Marketing strategies will then be developed after 
determining the best way to recruit this market. 
65 
CRITICAL RISKS AND PROBLEMS 
The most substantial critical risk Alpine Health Care faces is establishing enough 
clientele to reach the break-even point. The population of Alpine and the surrounding 
communities is on the low end of having an adequate market to support a health care 
provider. The possibility of running out of ample funding before the market is captured 
exists. 
In order to prepare for this possibility a larger portion of expenses will be spent in 
marketing during the first few years of the business' existence. Start up costs are budgeted 
to include this added expense. For the first three years, the owners salary is budgeted at 
half of the average salary a nurse practitioner is able to earn in the area. In addition, the 
projections regarding the number of clients to be served is well below the estimated 
percentage of Alpine clients seeking health care in Springerville. By following monthly 
financial statements, if it appears inevitable that the break-even point cannot be reached, 
six months prior to this time, efforts regarding a merger with a health care clinic in Round 
Valley will be made. 
66 
FINANCIAL PLAN 
Balance Sheet 
ASSETS 
Current Assets 
Cash 
Accounts Receivable 
Inventory 
Prepaid Expenses 
Total Current Assets 
Fixed Assets 
Land 
Building 
Equipment 
Furniture 
Lease Hold Improvement 
Less Accum. Depreciation 
Total Fixed Assets 
TOTAL ASSETS 
LIABILITIES 
STARTUP 
21,000 
21,000 
0 
500 
500 
22,000 
0 
0 
4.000 
0 
3.000 
0 
8,000 
Current Debt 0 
Accounts Payable 0 
Notes Payable 0 
Taxes Payable 0 
Total Current Debt 
Longterm Debt 10,000 
Notes Payable 0 
Mortgage 0 
Loan 10,000 
Total Longterm Debt 
TOTAL DEBT 10,000 
10,000 
Net Worth 
Shareholders' Equity - 20,000 
Retained Earnings 0 
Total Net Worth 20,000 
TOTAL LIABILITIES AND NET WORTH 
30.000 
30,000 
67 
CASH-FLOW PROJECTION 
OPTIMISTIC 
1997 
Pre-startup May June July 
Cash on hand 20,000 17,345 11,726 8,607 
Cash sales 0 2,000 2,000 3,000 
Collections 0 0 2,500 2,500 
Loans 10,000 0 0 0 
Total Cash Available 30,000 19,345 16,226 14,107 
CASH DISBURSEMENTS 
Cost of Goods 500 500 500 500 
Gross Wages 792 3,041 3,041 3,041 
Payroll Taxes 150 470 470 470 
Office Supplies 300 200 200 200 
Maintenance 0 80 80 80 
Advertising 600 350 350 350 
Professional Services 250 25 25 25 
Rent 500 500 500 500 
Telephone 70 70 70 70 
Utilities 140 95 95 95 
Insurance 500 0 0 0 
Postage 20 20 20 20 
Banking & Transcription 0 240 240 240 
Loan Payments 0 212 212 212 
Income Tax Payments 0 0 0 0 
Equipment Rental 0 50 50 50 
Equipment Purchase 5,000 0 0 0 
Remodeling 3,000 0 0 0 
Reserve 0 100 100 100 
Owner’s Draw 833 1,666 1,666 1,666 
TOTAL CASH PAID OUT 12,655 7,619 7,619 7,619 
CASH POSITION 17,345 11,726 8,607 6,488 
68 
CASH-FLOW PROJECTION 
OPTIMISTIC 
Aug 
Cash on hand 6,488 
Cash sales 3,000 
Collections 3,300 
Loans 0 
Total Cash Available 12,788 
CASH DISBURSEMENTS 
Cost of Goods 500 
Gross Wages 3,041 
Payroll Taxes 470 
Office Supplies 200 
Maintenance 80 
Advertising 250 
Professional Services 25 
Rent 500 
Telephone 70 
Utilities 95 
Insurance 0 
Postage 20 
Banking & Transcription 240 
Loan Payments 212 
Income Tax Payments 0 
Equipment Rental 50 
Equipment Purchase 0 
Remodeling 0 
Reserve 100 
Owner's Draw 1,666 
TOTAL CASH PAID OUT 7,519 
CASH POSITION 5,269 
1997 
Sept Oct Nov Dec 
5,269 5,250 6,231 7,712 
4,500 4,500 4,500 4,500 
3,300 4,500 4,500 4,500 
0 0 0 0 
13,069 14,250 15,231 16,712 
500 500 500 500 
3,041 3,041 3,041 3,041 
470 470 470 470 
200 200 200 200 
80 80 80 80 
250 250 250 250 
25 25 25 25 
500 500 500 500 
70 70 70 70 
95 95 95 95 
0 500 0 0 
20 20 20 20 
240 240 240 240 
212 212 212 212 
300 0 0 0 
50 50 50 50 
0 0 0 0 
0 0 0 0 
100 100 100 100 
1,666 1,666 1,666 1,666 
7,819 8,019 7,519 7,519 
5,250 6,231 7,712 9,193 
69 
CASH-FLOW PROJECTION 
CONSERVATIVE 
1997 
Pre-startup May June July 
Cash on hand 20,000 52,345 45,026 38,082 
Cash sales 0 300 675 825 
Collections 0 0 0 0 
Loans 45,000 0 0 0 
Total Cash Available 65,000 52,645 45,701 38,907 
CASH DISBURSEMENTS 
Cost of Goods 500 500 500 500 
Gross Wages 792 3,041 3,041 3,041 
Payroll Taxes 150 470 470 470 
Office Supplies 300 200 200 200 
Maintenance 0 80 80 80 
Advertising 600 350 350 350 
Professional Services 250 25 25 25 
Rent 500 500 500 500 
Telephone 70 70 70 70 
Utilities 140 95 95 95 
Insurance 500 0 0 0 
Postage 20 20 20 20 
Banking & Transcription 0 240 240 240 
Loan Payments 0 212 212 212 
Income Tax Payments 0 0 0 0 
Equipment Rental 0 50 50 50 
Equipment Purchase 5,000 0 0 0 
Remodeling 3,000 0 0 0 
Reserve 0 100 100 100 
Owner's Draw 833 1,666 1,666 1,666 
TOTAL CASH PAID OUT 12,655 7,619 7,619 7,619 
CASH POSITION 52,345 45,026 38,082 31,288 
70 
CASH-FLOW PROJECTION 
CONSERVATIVE 
1997 
Aug Sept Oct Nov Dec 
Cash on hand 31,288 24,714 18,065 11,396 6,927 
Cash sales 945 1,170 1,350 1,350 1,350 
Collections 0 0 0 1,700 3,825 
Loans 0 0 0 0 0 
Total Cash Available 32,233 25,884 19,415 14,446 12,102 
CASH DISBURSEMENTS 
Cost of Goods 500 500 500 500 500 
Gross Wages 3,041 3,041 3,041 3,041 3,041 
Payroll Taxes 470 470 470 470 470 
Office Supplies 200 200 200 200 200 
Maintenance 80 80 80 80 80 
Advertising 250 250 250 250 250 
Professional Services 25 25 25 25 25 
Rent 500 500 500 500 500 
Telephone 70 70 70 70 70 
Utilities 95 95 95 95 95 
Insurance 0 0 500 0 0 
Postage 20 20 20 20 20 
Banking & Transcription 240 240 240 240 240 
Loan Payments 212 212 212 212 212 
Income Tax Payments 0 300 0 0 0 
Equipment Rental 50 50 50 50 50 
Equipment Purchase 0 0 0 0 0 
Remodeling 0 0 0 0 0 
Reserve 100 100 100 100 100 
Owner's Draw 1,666 1,666 1,666 1,666 1,666 
TOTAL CASH PAID OUT 7,519 7,819 8,019 7,519 7,519 
CASH POSITION 24,714 18,065 11,396 6,927 4,583 
71 
ANNUAL BREAKEVEN ANALYSIS 
COSTS FIXED AMOUNT 
Raw materials 
Advertising 2,000 
Salaries & wages 59,000 
Professional Services 300 
Rent 6,000 
Insurance 2,000 
Depreciation 720 
Office Supplies 2,400 
Interest 2,544 
Telephone & Utilities 1,980 
Postage 240 
Payroll Taxes 5,900 
Maintenance 960 
Equipment Rental 600 
Banking & Transcription 2,880 
Other Expenses 1,200 
TOTALS 88,724 
BREAKEVEN POINT = 99,689 
VARIABLE % 
0.11 
0.11 
72 
Breakeven Graph 
(in Thousands) 
73 
Income Statement: Annual by Month 
For Year 1997 May June July Aug 
INCOME 
Gross Sales 4,500 4,500 6,300 6,300 
Less returns & 
allowances 0 0 0 0 
Net Sales 4,500 4,500 6,300 6,300 
Cost of Goods 500 500 500 500 
GROSS PROFIT 4,000 4,000 5,800 5,800 
OPERATING EXPENSES 
Marketing 350 350 350 250 
General & Administrative 
Expenses 
Salaries & wages 4,707 4,707 4,707 4,707 
Professional Services 25 25 25 25 
Rent 500 500 500 500 
Insurance 83 83 83 83 
Depreciation 60 60 60 60 
Office Supplies 200 200 200 200 
Interest 212 212 212 212 
Telephone & Utilities 165 165 165 165 
Postage 20 20 20 20 
Payroll Taxes 470 470 470 470 
Maintenance 80 80 80 80 
Equipment Rental 50 50 50 50 
Banking & Transcription 240 240 240 240 
Other Expenses 100 100 100 100 
Total G&A Expenses 6,912 6,912 6,912 6,912 
TOTAL OPERATING 
EXPENSES 7,262 7,262 7,262 7,162 
Net Income before taxes (3,262) (2,762) (1,462) (1,362) 
Taxes on income 0 0 0 0 
NET INCOME AFTER 
TAXES (NET PROFIT) (3,262) (2,762) (1,462) (1,362) 
74 
Income Statement: Annual by Month 
For Year 1997 Sept Oct Nov Dec 
INCOME 
Gross Sales 9,000 9,000 9,000 9,000 
Less returns & 
allowances 0 0 0 0 
Net Sales 9,000 9,000 9,000 9,000 
Cost of Goods 500 500 500 500 
GROSS PROFIT 8,500 8,500 8,500 8,500 
OPERATING EXPENSES 
Marketing 250 250 250 250 
General & Administrative 
Expenses 
Salaries & wages 4,707 4,707 4,707 4,707 
Professional Services 25 25 25 25 
Rent 500 500 500 500 
Insurance 83 83 83 83 
Depreciation 60 60 60 60 
Office Supplies 200 200 200 200 
Interest 212 212 212 212 
Telephone & Utilities 165 165 165 165 
Postage 20 20 20 20 
Payroll Taxes 470 470 470 470 
Maintenance 80 80 80 80 
Equipment Rental 50 50 50 50 
Banking & Transcription 240 240 240 240 
Other Expenses 100 100 100 100 
Total G&A Expenses 6,912 6,912 6,912 6,912 
TOTAL OPERATING 
EXPENSES 7,162 7,162 7,162 7,162 
Net Income before taxes 1,338 1,338 1,338 1,338 
Taxes on income 200 200 200 200 
NET INCOME AFTER 
TAXES (NET PROFIT) 1,138 1,138 1,138 1,138 
75 
Quarterly Income Statement 
For Year 1998 1st Quarter 2nd Quarter 3rd Quarter 4thQuarter 
INCOME 
Gross Sales 27,000 32,400 35,100 29,700 
Less returns & 
allowances 0 0 0 0 
Net Sales 27,000 32,400 35,100 29,700 
Cost of Goods 2,970 3,564 3,861 3,267 
GROSS PROFIT 24,030 28,836 31,239 26,433 
OPERATING EXPENSES 
Marketing 750 750 750 750 
General & Administrative 
Expenses 
Salaries & wages 14,750 14,750 14,750 14,750 
Professional Services 75 75 75 75 
Rent 1,500 1,500 1,500 1,500 
Insurance 249 249 249 249 
Depreciation 180 180 180 180 
Office Supplies 600 600 600 600 
Interest 636 636 636 636 
Telephone & Utilities 495 495 495 495 
Postage 60 60 60 60 
Payroll Taxes 1,475 1,475 1,475 1,475 
Maintenance 240 240 240 240 
Equipment Rental 150 150 150 150 
Banking & Transcription 720 720 720 720 
Other Expenses 300 300 300 300 
Total G&A Expenses 21,430 21,430 21,430 21,430 
TOTAL OPERATING 
EXPENSES 22,180 22,180 22,180 22,180 
Net Income before taxes 1,850 6,656 9,059 4,253 
Taxes on income 278 998 1,359 638 
NET INCOME AFTER 
TAXES (NET PROFIT) 1,572 5,658 7,700 3,615 
76 
Annual Income Statement 
For Year 1999 2000 2001 
INCOME 
Gross Sales 129,600 135,000 140,400 
Less returns & 
allowances 0 0 0 
Net Sales 129,600 135,000 140,400 
Cost of Goods 14,190 14,850 15,444 
GROSS PROFIT 115,410 120,150 124,956 
OPERATING EXPENSES 
Marketing 2,000 2,000 2,000 
General & Administrative 
Expenses 
Salaries & wages 74,000 78,000 80,000 
Professional Services 300 300 300 
Rent 6,000 6,000 6,000 
Insurance 2,000 2,000 2,000 
Depreciation 720 720 720 
Office Supplies 2,400 2,400 2,400 
Interest 2,544 2,544 2,544 
Telephone & Utilities 1,980 1,980 1,980 
Postage 240 240 . 240 
Payroll Taxes 7,400 7,800 8,000 
Maintenance 960 960 960 
Equipment Rental 600 600 600 
Banking & Transcription 2,880 2,880 2,880 
Other Expenses 1,200 1,200 1,200 
Total G&A Expenses 103,224 107,624 109,824 
TOTAL OPERATING 
EXPENSES 105,224 109,624 111,824 
Net Income before taxes 10,186 10,526 13,132 
Taxes on income 1,527 1,578 1,969 
NET INCOME AFTER 
TAXES (NET PROFIT) 8,659 8,948 11,163 
77 
Personal Financial Statement 
Febuary, 1996 
ASSETS „ LIABILITIES 
Cash on hand 13,000 Accounts payable 0 
Savings account 20,000 Notes payable 8,520 
Stocks or bonds 13,000 Contracts payable 0 
Accounts/notes 
recievable 
0 Taxes 0 
Real estate 60,000 Real estate loans 52,000 
Life insurance 0 Other liabilities 0 
Automobiles 16,000 
TOTAL ASSETS 122,000 TOTAL LIABILITIES 60,250 
NET WORTH 61,750 
78 
PROPOSED FINANCING 
Alpine Health Care will seek funding from a financial institute for the amount of 
$10,000. These funds will be utilized as part of the start-up costs and to provide adequate 
cash flow income for the first year of business. Repayment is projected for five years with 
a nine percent interest rate. 
Teresa Sadler will invest $20,000 of her personal savings into the company. Mrs. 
Sadler and her husband have personal assests totalling over $122,000 with liabilities 
totalling $60,250, enabling adequate collateral to be available. A personal financial 
statement is provided in the financial plan. 
79 
LEGAL STRUCTURE 
Teresa J. Sadler will assume sole proprietorship of Alpine Health Care. The 
company will incorporate under the laws of the state of Arizona. Mrs. Sadler will be the 
Chairman of the Board and Treasurer. The Vice Chairman will be Mrs. Sadler's husband, 
David Prunkard. The business manager, Patricia Orona, will serve as the Secretary. 
Ten thousand shares in the company will be issued. The owner and president of the 
company will own 7,000 shares. The vice president of the corporation, Patricia Orona, will 
be offered 1,000 non-voting shares in the corporation in return for a reduced salary. The 
company will retain 2,000 shares to be distributed at a later date.