The third and final part of our serialisation of Dr Sunil Gupta's Effective GP Commissioning looks at how GPs can successfully put together business plans
Many GPs can be intimidated at the prospect of having to write a business plan, which is an essential skill for effective commissioning or for provision within the new commissioning environment. This article explains how to formulate a robust business plan and gives a brief outline of what a typical plan can look like.
It is essential to have a realistic, working business plan when you are starting up a business, bidding to run a service or planning the commissioning of a new service. A business plan is a written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts. It has many functions, from securing external funding to measuring success within your business.
There are many benefits to creating and managing a realistic business plan. Even if you just use it in-house, it can:
• help you spot potential pitfalls before they happen
• focus your development efforts
• structure the financial side of your business efficiently
• act as a measure of your success.1
A business plan can be used to secure external funding. This is significant as ‘potential investors, including banks, may invest in your idea, work with you or lend you money as a result of the strength of your plan'.1 The following people or institutions may request to see your business plan at some stage:
• potential partners in the business or service
• external investors – whether this is a friend, a venture capitalist firm or a business angel
• grant providers
• anyone interested in buying the business.
You should also bear in mind that a business plan is a living document that will need updating and changing as a service or business grows. Regardless of whether you intend to use your plan internally, or as a document for external people, it should still take an objective and honest look at your business. Failing to do this could mean that you and others have unrealistic expectations of what can be achieved and when.
What the plan should include
Your business plan should provide details of how you are going to develop your business or service, when you are going to do it, who is going to play a part and how you will manage the finances.
Clarity on these issues is particularly important if you're looking for finance or investment. The process of building your plan will also focus your mind on how your new business will need to operate to give it the best chance of success. Your plan should include:
• An executive summary – this is an overview of the business you want to start. It is vital; many lenders and investors make judgments about your business based on this section of the plan alone.
• A short description of the business opportunity – who you are, what you plan to sell or offer, why and to whom.
• Your marketing and sales strategy – why you think people will buy what you want to sell and how you plan to sell to them.
• Your management team and personnel – your credentials and the people you plan to recruit to work with you.
• Your operations – your premises, facilities, management information systems and IT.
• Financial forecasts – this section translates everything you have said in the previous sections into numbers.1
Dr Sunil Gupta is a GP in Benfleet, Essex, chair of the Professional Executive Committee of NHS South East Essex, and joint clinical director of Castle Point GP Consortium
Dr Gupta is author of Effective GP Commissioning, a practical guide designed to provide GPs with essential knowledge, skills and attitudes to succeed as commissioners. Chapters include Assessing local health needs, Budgets and Patient safety. It is published by Radcliffe Publishing and costs £21.99. ISBN 978-1-84619-520-4