Site appearance: The lease for the office space will be signed and Resilience will be in possession of the property by December. All office furniture and electronics will be purchased and installed by December 20. The communal areas will be set up with televisions and a coffee maker and microwave will be installed in the break area. The employees are responsible for decorating their office areas independently with final approval from the office manager by December 31. By December 5 Suddenlink will be contacted and our service package including cable and internet will be active.
Our service agreements will also be in place with our bookkeeping, client management, and telemedicine software. These will be active and the office manager will be working on streamlining the activities and entering the data necessary for operation.
Computers, including server and other items (firewall, network drive), need to be loaded with software and functional by December 15. Contracts with All Covered Technology will be signed and their professionals will ensure that all of the technology is up and running.
The Bizhub copy/fax/scan station will also be serviced through All Covered and Komax. It will be installed and operational by December 15 as well. The phone system will be installed by the same company by the same date. Going through one company for most of the technology that will be utilized will benefit Resilience due to the company’s familiarity with the system as a whole. All Covered will have contact information for all providers and be the liaison between parties when there are issues with any technological equipment or software.
Inventories: There is no identifiable inventory per se. Inventory for Resilience will be in the form of office supplies and testing materials. Prior to December 26, the office manager will ensure that all the miscellany required of a business is purchased including paper products, folders, paper clips, staplers, writing implements, and other necessities. The psychometrist will be responsible for stocking the testing supplies by December 26. This will include the test manuals, administration products, protocols, and scoring usages. Payroll set-up: Quickbooks will be utilized for payroll. The office manager will ensure that all W-4s and I-9s are on file for the employees by December 15 and that the software is set-up and operational by December 20. Payroll will be distributed biweekly with the first checks issued the second week of January.
Credit card reception: Lease agreement will be signed with FirstData for the credit card machine and service by December 5. Installation will be scheduled by December 20. Website: The office manager has experience in website design and ad copy. Wix will be utilized to build the company website. It will be up and live by December 15. Social Media: The office manager will create a Facebook site, a Twitter account, and a LinkedIn presence for Resilience by December 15.
Traditional Media: An introduction series will be created to run in the local newspaper and will be placed in local business magazines. Three ads total that will be produced by the office manager. These will be completed and submitted by December 1. They will run through December, January and February. Staff Training: Minimal staff training will be needed. Resilience is hiring professionals in the mental health field that are already trained in their profession. Continuing education in the future will be necessary, but to start out only a brief overview of the office requirements and expectations will be necessary. In the week before clients are scheduled to arrive for appointments (December 26-31), there will be time allotted for training on the office software and the procedures required to adhere to HIPAA and APA regulations.
Uniforms: Uniforms are not required at Resilience. There will be a business casual dress code requirement that will be detailed in the office handbook. Signage: Signs and window decals will be ordered through FastSigns locally with an installation deadline of December 20. Bank account: The office manager will open three checking accounts and a credit line for Resilience through Huntington Banks. The three accounts will be for a general checking account, payroll (estimated taxes and payroll expenses), and retainers (if any come in for contract or legal evaluations). This will all be set up by December 15.
Utilities: The lease for the property includes all utilities including water, sewage and refuse disposal. The property management company receives the bill for electricity for the unit through Appalachian Power and then forwards the bill to Resilience. This will already be set up upon arrival at the office space. As mentioned previously, Suddenlink Communications (internet and cable provider) will be up and running by December 1. Operating and marketing costs: As stated in the breakeven analysis, the total amount allotted for operating costs totals $64,780 annually. Marketing costs will be close to $5,000 after the purchase of head shots and other professional photography, website set up and advertising space in newspapers and periodicals. To cover the month of set up and then the first month of operation, an estimated $10,797 for operations and $5,000 for marketing. So through January an estimated $15,797 is required.
Resilience should have at least $75,000 in cash to start the business. That is taking into account some room for unexpected expenses within the start-up month. Based upon the estimates that were quoted in the breakeven portion of the analysis, $33,300 is the amount required to purchase all durables with the depreciation stretching out over the first five years. The first month of payroll and taxes will be around $22,580 and operating costs for one month are $5,398. Add the estimated $5,000 in marketing required and that puts the total around $66,278 in expenditures. $183,592.50 in cash will be needed in the first six months to augment the infancy of Resilience. This amount was calculated by taking the total estimated annual fixed costs and dividing it in half
The owner put in $50,000 of their own money and borrowed $25,000 from a family member that is interested in the growth of Resilience as a company. That allows $75,000 to start the business. Resilience is leasing their office space and it does not require machinery or vehicles to operate. The company is a service based industry and does not hold inventory to sell to the public. The durables that are purchased and considered assets would be primarily furniture, electronics, technology, and testing supplies. These were supplied in the breakeven analysis as an appendix and will be affixed to this report (Appendix C) to ensure it is clearly stated what the cost and depreciation that will be attributed.
Within the liabilities is the $25,000 loan that will require incremental payments and accounts payable for all of the recently purchased items that will require primarily cash payments within the next few months. Projected Income and Expense Statement (See Appendix D) Projected First Year Income. Ideally with four employees billing full time the company will bring in gross receipts estimated at $800,480. Cost of goods sold equals the number of units sold times unit cost to produce. Previously it was calculated that the cost of a billable unit for Resilience would be $50.03. The breakeven determination was 7,339.3 hours annually. COGS would equal $367,185. Gross profit would be gross receipts minus COGS or $800,480 – $367,185 = $433,295.
The officer is in charge of all liquidation decisions. The office manager will assist in all transactions but the officer is the final say when it comes to either selling the company or closing the doors. Since it is a mental health services office with minimal assets beyond the durables within the office space and no real inventory to deal with liquidation should not be complicated. The greatest risk is the proper disposal and/or dispersement of HIPAA protected data and files. This will be handled with APA standards in mind.
Given that Resilience is a mental health service provider there should be great care in the eventuality that the office must shut down due to financial reasons or due to a more positive exit such as being bought out by a larger entity. Continuity of care is essential in this planning. Most companies can generally notify the public with no further concern as to where the clientele goes for services or products in the future; however, mental health providers are ethically bound to personally notify and attempt to assign clients to another care giver that they feel will continue to treat the individual effectively.