The Business Case

Renowned physician, Dr. May Kwell, is considering purchasing the medical practice of the only other physician in the city with her specialty, who has announced his retirement. She has formed a new entity, Dr. May Kwell, MD, LLC, opened a bank account, and deposited $100,000 as seed money for the venture. Dr. Kwell will be able keep the patients of the practice, and to use the same medical office space; however, she will need to purchase new office computers and network, develop a web presence, and purchase some updated laboratory and diagnostic equipment. She is attempting to secure a loan of $400,000 at estimated 6% annual interest to purchase the practice and equipment.

The current office staff consists of Office/Financial manager at a salary of $84,000 per year, administrative support at $48,000 annually, and a nurse at $60,000 per year. However, the current financial manager has left the organization to take a position in a different city. Dr. Kwell has decided not to take a salary until there is enough cash to do so. You have been hired as the new Business manager and will be responsible generating the necessary reports for aiding Dr. Kwell in securing a loan for the practice, along with managing and reporting all the financial activities of the practice.

The practices financial records have been kept by on personal computer running a rudimentary accounting system, which records accounting transactions, manages account balances, and creates files which can be uploaded into Excel for developing reports. Before leaving, the Office/Financial manager created a summary of all transactions by debit/credit accounts for each quarter for the last 4 years. The summary also includes the end-of-year closing adjustments, recognizing the profit and retained earnings for each of the years. The data is stored in an Excel format file, in a worksheet tab called Imported.

The Exercise

As part of the loan application process, the bank has asked Dr. Kwell to submit a business plan for the medical practice. She will address most of the strategic issues; however, you are assigned the tasks of describing the operations of the business along with associated technical requirements and providing financial forecasts.

1. Lets focus first on the operations:
   1. What would be the major operational areas in the clinic (for example, supply chain)?
   2. Identify at least two major processes within each operational area.
   3. Format your response (in a Word or PowerPoint document), assuming Dr. Kwell and/or bank loan processing staff is/are the intended audience.