Devoted Elderly Healthcare Services (DEHS) is a planned business venture that will provide specialized homecare and treatment for the aged. DEHS’s mission is to help elderly people live happier and healthier lives by offering wholesome care and medical attention. It will device tailored medical care plans for patients that do not have one. In addition, it will help patients with existing health plans to follow them to the later, thereby ensuring perfect health outcomes for at-risk patients. This report describes the DEHS’s business plan for the first three years.
DEHS idea originated from a personal experience with my elderly parents. Elderly people often lack support from close family members even after developing chronic age-related health conditions. The family members often live away from home and often in urban areas where economic activities are concentrated. In the absence of close friends and family, the elderly live alone and feel abandoned. Consequently, DEHS will fill this gap by providing comprehensive homecare and healthcare services targeting these vulnerable citizens.
Market
DEHS’s targets Kuwait residents aged 55 years and above. Kuwait has a total population of 4.35 million residents (World Bank, 2021). About 7% of the total population is aged 55 years and over (Knoema, 2021). Therefore, the total target population is about 300,000 residents. The World Bank further estimates that the number of elderly residents has increased at an annual rate of 6% over the last five decades (World Bank, 2021). This increase in the proportion of elderly people is attributable to better access to healthcare, improving diet, and the adoption of healthy lifestyles. Therefore, DEHS will have a growing customer base over the next ten years.
DEHS will start its operations in the capital city of Kuwait. The city has an estimated population of 60,000 residents. Assuming that the elderly constitute 7% of the population, the target market size is 4,200 residents. Most of the elderly population lives in extended families or have an existing homecare and healthcare plan. However, DEHS estimates that 20% of the total elderly population lack a suitable healthcare and homecare plan and could be converted into loyal customers. Therefore, the initial market size for DEHS is 20% of the total 4,200 residents, or about 840 residents.
The market needs differ by the residents’ gender and health condition. Firstly, sick and disabled residents require specialized ambulances and medication to alleviate their pain and suffering. They also require constant attention to prevent the occurrence of other health risks such as falls, burns, and other accidents that can exacerbate existing health conditions. Secondly, the residents’ homecare needs depend on their gender. Patients might request services from either male or female counterparts depending on their preferences. Therefore, DEHS will offer customized health and homecare services based on the customer needs.
Proposed Service
DEHS will offer three main types of services. Firstly, it will take the elderly people to the doctor’s appointments. This service will driving patients to and from medical practitioner’s offices. The service will be offered as a one-off request or as part of a monthly or annual plan. The service will target patients that have pre-existing medical conditions such as diabetes and high blood pressure who need to visit the medical practitioners often.
The second service will be to develop a health plan for the elderly residents. A health plan is a comprehensive policy that caters for the patients’ medical needs. DEHS will help patients that already have a medical plan by reminding them of the due dates of premium payments, handling the transactions, determining the medical conditions that are covered by specific insurance policies, and advising the patients on the claim limits under the policy. It will also help patients that do not have a medical plan by developing a tailored medical plan that suits their health conditions.
DEHS will also offer consultancy services to the elderly population. The company will employ experienced medical practitioners and consultants who will diagnose medical conditions early to facilitate treatment. The consultants will be available for office visits for able-bodied residents, and home visits for patients with disabilities or who are terminally ill. The residents will pay the consultant based on the number of consultations made per month and the payments will be covered by insurance.
Residents will have the option to sign up for weekly visits. This service will be open to customers that have had a recent health problem and require constant monitoring. The patients will pay for these services based on the number of visits per month. The cost of any prescribed medication will not be included in the payment for weekly visits. Patients that have weekly plans can also subscribe to other services based on their changing health conditions and advancing age.
Business Model
Value Proposition
DEHS key value proposition is the delivery of superior and humane healthcare services to elderly residents living in Kuwait. In the current system, elderly people often find themselves alone without close family members or friends to manage their health conditions. While there are several homecare services on the market, none offer a close personal connection with these elderly and vulnerable people at an affordable price. As a result, a considerable section of the low-end market remains underserved as the current market favors only the high-end clients. DEHS seeks to revolutionize the industry by developing a low-priced alternative to the existing service providers.
Key Activities
DEHS will offer tailored healthcare services to residents aged 65 years and above. Unlike other competitors on the market, DEHS will offer a humane and personalized approach to every customer to address their physical, social, and emotional needs. Consequently, it will utilize comfortable vehicles to transport the elderly to the hospitals, offer good company to the patients, and charge pocket-friendly rates. The main objective of DEHS service is to develop close relationships with the elderly population that is currently lacking on this market.
Key Resources
The main resources include a friendly and homely organizational culture, qualified human resource, and comfortable transportation system to transport weak and vulnerable customers to various healthcare centers. Of these resources, the human resource will be the most important source of competitiveness due to their frequent contact with the customer and ability to influence the customer’s healthcare and social outcomes (Brigham & Ehrhardt, 2016). In addition, the development of a customer friendly culture will remove the barriers to effective communication between the medical practitioners at DEHS and the customers.
Key Partners
The main partners include medical practitioners, health insurance companies, elderly care homes, and relatives of the patients. The medical practitioners refer to the contracted medical professionals that attend to the customers. While DEHS will employ a number of medical consultants, it will sign partnerships with other medical consultants that are unavailable for employment. Secondly, DEHS will collaborate with health insurance providers to develop affordable healthcare policies for the age group. The plans will enhance access and affordability of healthcare especially among the low-income residents. Lastly, the elderly care homes and relatives will provide the medical history of newly enlisted customers.
Competition
DEHS will face intense competition from existing providers of elderly care in Kuwait. These include BairCare Home Health, Al Essa, Royale, and Ayadi Al Rahma elderly care companies. These competitors target their local neighborhoods and offer general elderly care services to the local residents. Table 1 shows a summary of competitors and key selling points.
Table 1. Competitor Summary
The competitors charge high cost per customer to offset the high operating costs needed to maintain their businesses. Therefore, DEHS will develop a low-priced alternative elderly care service that targets a large customer base to reduce unit cost.
Sales and Marketing
DEHS will use aggressive marketing to expand its market and customer base. DEHS will place adverts in local dailies, radio, and television stations to reach a wide audience of the local population. In addition, announcements will be made in mosques and other social gatherings to explain the unique value proposition offered by the new firm. After the initial year, DEHS will maintain a sales and marketing budget equivalent to 3% of the annual sales to ensure strong growth in revenue and market share.
DEHS will use a fair pricing model to attract a large client base. The pricing will be based on the services ordered. Table 2 shows a summary of the average monthly fee charged for each package.
Table 2. Monthly charges
DEHS will strive to portray a humane and customer-focused care as opposed to commercially oriented services. Our charges will guarantee the highest quality of care delivered with personalized attention to detail. This will ensure that patients do not feel alienated or depressed.
Operations
DEHS will have three departments in the first year of service. These include sales and marketing, internal operations, and administration. The internal operations department will be responsible for sourcing medical supplies, maintaining the supplies in good condition, supervising delivery of service to customers, and handling customer complaints (Blackwell, 2017; Ekanem, 2017). The department will also handle the day-to-day maintenance operations such as repairs, replacements, and the purchase of assets. The staff working at the internal operations department will report directly to the head of administration.
DEHS will employ three permanent staff and an additional four contract laborers. The permanent staff will be in charge of running the day to day operations of the business in each department. DEHS will employ the contracted staff on permanent terms once the demand for the services grow, which is expected after the first three years of operation. The contracted staff will be paid only when their services are rendered based on the number of hours worked.
Management
The management will comprise of the founder who will also serve as the chief executive officer. He will be in charge of the three departments at DEHS. The business will operate as a small family owned business in the first five years. However, it will be incorporated as a partnership or a limited liability company after the fifth year depending on the potential for growth and the need for additional capital (Brigham & Houston, 2016). If the business grows exponentially, the management will consider converting into a limited liability company to facilitate raising of additional capital for growth.
Financial Projections
DEHS expects to grow at an annual rate of 20% based on the strong potential in the underserved market. The management expect to gain at least 20 clients in the first month of operation following the intense marketing and publicity (Kieso et al., 2016). The number of clients will increase to at least 100 by the end of the year. Each client is expected to provide at an average of KD 450 per month. Therefore, the total revenue in the first year is expected to be at least KD 544,000. The startup funding will be derived from the Kuwait National Fund. This fund grants Kuwaiti citizens startup financing for up to KD400, 000. Consequently, the company will raise KD100, 000 from borrowings, and apply for KD400,000 from the national fund. The startup financing will be sufficient to finance the proposed business.
The strong growth in revenue will continue for the next four years. This growth will be supported by strong growth in demand for the quality service offered by DEHS and the lack of formidable competitors with a comparable business model. However, growth will decline to 5% per year after the sixth year in line with the national economic growth. The operating expenses will also increase at the same rate as total revenue, with most of the cost arising from salaries to medical staff. The management expects to break even by the end of the third year. The detailed projections are available in the appendix.
References
Blackwell, E. (2017). How to prepare a business plan: Your guide to creating an excellent strategy, forecasting your finances and producing a persuasive plan. Kogan Page.
Brigham, E., & Ehrhardt, M. (2016). Financial management: Theory & practice. Cengage Learning.
Brigham, E., & Houston, J. (2016). Fundamentals of financial management. Cengage Learning.
Ekanem, I. (2017). Writing a business plan: A practical guide. Taylor & Francis.
Kieso, D., Weygandt, J., & Warfield, T. (2016). Intermediate accounting. John Wiley & Sons.
Knoema. (2021).Kuwait – Total population aged 50 and over years.
World Bank. (2021).Kuwait population statistics.
Appendix A. Pro forma Income Statement
Values in Kuwait Dinar
Appendix B. Balance Sheet
Values in Kuwait Dinar