In its simplest expression, a business plan is a document detailing the 7 Ws:
A business plan represents the summation and quantification of critical components, assumptions, and projections used to support the organization's goals and objectives. A well-functioning business plan is an essential component of an organization's operations. Initially, a business plan is a tool that helps to evaluate and summarize a business opportunity. Assuming the opportunity is pursued, the plan allows post-implementation monitoring and reporting. The development and implementation of a business plan follows the old adage, “plan the work and work the plan.”
What It Is and What It Is Not
There are several approaches to and uses for a business plan. For example, a business plan may be used to evaluate potential investment opportunities, ie, a “prospectus” for an external audience. These business plans typically describe the opportunity to a currently noninvested audience. The intended consumer of this type of business plan may or may not be familiar with the type of venture described and may or may not take an active and ongoing role in the management of the venture proposed.
While the investment-oriented business plan described previously may conjure up images of Wall Street, venture capitalists, and IPOs, a business plan focused on the emergency department (ED) will likely be a bit more utilitarian in nature. This type of plan serves as a guide to ED financial operations, as well as, future growth and profitability.
An ED business plan typically represents how the organization will pursue and manage the business of the ED. The business plan is typically a written document developed by the practice manager(s), ED leaders, with appropriate input by competent, professional business managers including accounting and legal professionals.
Because of the hectic and sometimes unpredictable pace of the ED, the concept of planning might sound like wishful thinking. To the contrary, a well thought-out business plan is essential to the successful management of the ED. Dr Graeme Edwards, Australian winner of the 2011 Health Provider Achievement Award, stated,
“It is not the plan that is important, it is the planning.”
A good business plan can be characterized as a set of directions for the business to follow; this implies that the organization's leaders actually know where they want it to go, and why they want it to go there. Peter Drucker said,
“Management by objectives works if you first think through your objectives. Ninety percent of the time you haven't.”
The Drucker statement highlights the need for planning that supports the creation of a business plan. When creating a business plan, it is important to initially ...