Developing a Comprehensive Business Plan: Detailing Your Dream

Table of Contents

• The components of a business plan
• Stating your mission
• Stating business intentions
• Market research and more

Launching your own dermatology practice requires a solid foundation to both guide long-term, strategic decision-making. A comprehensive business plan serves as this foundation; guiding decisions on service offerings, organizational structure, personnel, daily operations, technology investments, and other key practice components. The development of such a plan supports dermatology entrepreneurs in achieving their dream — opening a practice that runs successfully and provides high quality care.

The components of a business plan

The goal of opening a practice requires shaping to materialize and mature. The strategic document detailing your business plan forms this much-needed structure, outlining practical and logistical intentions for the dermatology practice. These include your goals, objectives, means to achieve them. A business plan provides industry-specific direction that is integral to secure funding — a malleable roadmap that defines the practice’s mission, profile, offerings, marketing and staffing plans, financial forecasts, and anticipated organizational structure. 

The following components are typically included in a business plan:

• A business summary including service offerings, the ideal patient, provider/entrepreneur history, and potential location(s)
• Financial projections such as anticipated volumes, technology/software investments, and monthly expenses 
• Operational considerations including employment structure, collaborative partners, and anticipated staffing requirements
• Marketing tools that will be used to promote the practice, secure and retain patients, and sell services

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Stating your mission

For an aspiring owner to clearly define a practice’s objectives and plans, it is important to begin with the “whys” — your key motivations in providing dermatological care that is unique in the market. These fundamentals will form the basis of your mission statement, a declaration that defines the core purpose and principles of your practice. Establishing the mission statement during the formation of a business plan will help guide the practice’s actions to facilitate optimal care provision over time. As important decisions arise, a strong and trusted mission statement will help mitigate uncertainty and bring clarity to operations.

An EZDERM customer shared that decisions are easier when considered in the context of your mission statement, which houses your practice’s core values:

The most important aspect to convey in the business plan is what drove you to open a dermatology practice. While many aspects of your business plan may be altered, revised, or even discarded following real-world applications or attempts, the essence of the mission statement will remain unchanged. It is critical to assign words to the basis of your drive, noting how the practice will be different from other area providers. 

It is also important to identify in your business plan the skill set that you intend to most frequently use in practice. Consider how you want to spend the majority of your working hours. Contemplate your motivations and differentiators to establish a values-driven, clear, concise statement about who you want to be as a practice. While the mission statement of your dermatology practice may evolve slightly over time, your purposeful passion and clear intentions for success will be precisely stated.

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Stating business intentions

Once the business’s primary tenets and mission are established, the comprehensive business plan should delineate short and long-term goals of the practice as well as a projected financial forecast. The goals will be specific and personal to each business owner and dermatology practice.

An example of a goal in the short term — a span of 12 to 24 months after launch — is to stay open and solvent, a realistic aspiration for any new medical practice. This ties directly to the financial forecast, as well. “Just stay alive,” one practice owner advises; the business plan will highlight how you intend to do so. Since it can be difficult to project volumes and revenues, the simplest way to achieve business solvency over the short term is keeping the largest expenses like rent and payroll as low as possible, while choosing the right tools and platforms that will benefit you in the long-long. 

For example, if you intend to do a buildout or extensively renovate office space, include the financial projections and intentions for financing and revenues. Keep in mind, among the biggest mistakes new practice owners make is overspending on basic expenses as a result of overestimating how quickly revenue streams will materialize. If possible, consider choosing an affordable office space that is rented for a fixed cost or one that does not require a large investment to kick off the business. Include these intentions with projected dollars in the business plan to illustrate how you plan to avoid overspending and maintain solvency, highlighting how your financial projections integrate with your practice goals and mission.

Also consider how you will maximize staff efficiencies, like having an administrator or advanced practice physician wear many hats for an initial period. Further, seek to make smart technology investments in the area of software. While it is wise to consider frugality in your business plan, choosing the lowest-cost software option may lead to bigger expenses and missed opportunities down the road. Partnering with a reputable software vendor from the start can set you up for streamlined workflows and lasting successful operations.

One EZDERM customer began their business with the goal of covering all major monthly practice expenses with just one week’s worth of revenue:

As for inclusion of a long-term goal in the business plan, this will be unique to each dermatology practice owner. The long-term business goal is typically derived from the primary motivation for starting your practice. If the owner is a practicing dermatologist, he or she may seek autonomy that enables a certain level of medical care or fosters a specific type of workplace environment. He or she may be passionate about care provision based on very specific qualities unattainable elsewhere. The motivation may stem from lifestyle or monetary aspirations, which would be reflected in goals for visit volumes or revenues. It is important to consider how the practice will be different, and focus the long-term goal on the merging of key differentiators and personal ambitions.

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Market research and more

When opening a new dermatology practice, it’s important to understand the target market, local competition, and current industry trends in the context of creating a business plan that aligns with your primary motivations and passions.

A target market is the group of people you plan to serve and retain — primarily patients, but may also include caregivers or referring providers. Demographics are key, and include data on age, gender, income level, and location. Purchasing habits, hobbies, attitudes, and lifestyle decisions will also play a role in understanding a local market. Do research on the market and consider your ability to both meet the most prominent need (or needs) and any additional desires for services that may arise. Ensure the market need is aligned with the primary provider’s area of expertise and/or interest, and demonstrate that in the business plan.

One customer recommended meeting the immediate market demand, with intent to expand services as needs arise:

When including competitive analysis in the business plan, it’s important to strike a balance between your own growth efforts and your focus on other practices’ offerings. Research area dermatology practice services, pricing structures, patient demographics, marketing strategies, and unique offerings. Use review sites to understand areas of success and improvement among competitors.

In the business plan, prioritize your practice’s key differentiators among local options, and how you will use these factors to attract and retain patients within the market. Include these insights, highlighting a strategy not based on what others are doing, but how you will uniquely fulfill the wants and needs of patients.

When drafting the business plan,  be sure to address market-specific trends in dermatology. Provide insight into the current reimbursement climate. Generally speaking, Medicare reimbursement rates are failing to keep up with inflationary costs for dermatology services. With insufficient or unreliable insurance reimbursement, create a plan — including a projection as a percentage of services — for cash-pay procedures that are not covered by insurance. 

Many cosmetic dermatology advances are trending: laser therapies, peels, fillers, injections, microdermabrasion, microneedling, and others. Choose wisely, planning service offerings — preliminarily — that do not require an immediate expensive equipment investment. The business plan should reflect the provider’s interest in medical, surgical, or cosmetic dermatology procedures — ideally some combination of service offerings that will yield profits, meet patient demand, and support the provider’s mission.

When drafting the business plan, continue to keep in mind its primary function to secure financing. It is prudent to include ways you will seek to optimize operations, from software that empowers staff to virtual assistants that can help patients at lower costs. As you consider your target market, location options, service offerings, and other key business elements, you will identify potential pitfalls and strategize to avoid them. Your mission, values, and goals will support a plan for sustenance and future growth, demonstrating to prospective stakeholders your commitment to patient care and the potential of your proposed business plan.

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