MENTORING, EDUCATION, AND TRAINING CORNER
Prateek Sharma, Section Editor
How to Write an Effective Business Plan in Medicine
Amir Jazayeri1 and K. T. Park2
1
Division of Gastroenterology (Pediatrics), Columbia University Medical Center, New York, New York; 2Division of
Gastroenterology (Pediatrics), Stanford University School of Medicine, Palo Alto, California
I n today’s health
care
physician
economy,
leaders
are required to build
programs that fill
the unmet needs of
their patient popula-
tion in a cost-
effective manner.1
The practice of
gastroenterology has
numerous areas of
specialization that
provide innovative
and effective subspecialty care. These services include man-
aging complex GI conditions, such as inflammatory bowel
disease (IBD), chronic hepatitis, intestinal failure, dysmotility,
pancreatology, and advanced endoscopy. As we continue to
adopt cutting-edge strategies to treat these diseases, it is
essential for GI specialists and medical practices to be aligned
in forward-thinking approaches to care. New equipment,
services, or hiring personnel to support a growing program
require approval from hospital executives or institution’s
leadership.
However, it may be difficult when a physician is asked to
explain the value of an investment or a purchase to a hos-
pital administrator. Potential fragmentation of the physi-
cian’s vision and the hospital’s mission can occur if the
physician and administrator are not able to see eye to eye.
Establishing this alignment is similar to constructing a
house (Figure 1), where the foundation is the mission of the
institution or hospital, the roof is the project investment that
the physician leader is attempting to get funding for, and the
pillars are the areas of support that promote a unified
vision. An investment that demonstrates clear alignment of
these 2 viewpoints has the greatest opportunity to secure
funding.
This task is obviously easier said than done. Administra-
tors often lack the medical knowledge to properly assess the
value of an investment for a specialized clinical program. In
turn, physicians may be unaware of the large-scale mission
that the hospital is trying to achieve. Therefore, a business
plan is a standardized tool that can help to align the vision of
a gastroenterologist with the hospital’s mission to demon-
strate investment value to hospital administrators.2–4
A business plan serves 2 main goals: (1) it allows a
gastroenterologist to thoroughly analyze the various
processes that contribute to an investment, while also (2)
demonstrating value potential to an administrator in a
meaningful way. The aim of this paper is to provide an easy-
to-follow, standardized, and structured approach that
gastroenterologists can use to facilitate writing a business
plan. It consists of 5 parts: an executive summary, business
concept, market analysis, business strategy, and imple-
mentation plan.
Getting Invited at the Table: Executive
Summary
When undergoing an interview, your first impression
can make or break the next steps for future business part-
nership. A business plan in many ways is the initial inter-
view for your investment proposal. So, a strong executive
summary is essential to make a good first impression. An
executive summary provides a concise summation of the
key points of your business plan, allowing you to make that
great first impression as you move toward deeper part-
nership. In many ways, it is similar to a scientific abstract. It
is no more than 1 page in length and divided into para-
graphs based on subsections (in this case business concept,
market analysis, business strategy, and implementation
plan) where the key points are highlighted.
The key to a memorable executive summary lies in your
ability to summarize these key points effectively without
getting bogged down in the details. If the executive sum-
mary is unappealing or the big picture is lost, the reviewer
may not even bother reading the more detailed aspects of
the business plan. Ensuring that this first impression en-
gages the reviewer to study the investment proposal in
detail is paramount. In Figure 2, we provide a fishbone
diagram where the key elements of an executive summary
are highlighted. Ultimately, after reading your executive
summary, the administrator reviewing your proposal should
have a broad sense of what the program is and how it
benefits not only your department, but also the institution
as a whole. Once you have an invited seat at the table, you
can turn your attention on the project details to further their
interest and confidence in your proposal.
Most current article
© 2019 by the AGA Institute
0016-5085/$36.00
https://doi.org/10.1053/j.gastro.2019.03.003
Gastroenterology 2019;156:1243–1247
MENTORING, EDUCATION, AND TRAINING CORNER
Figure 1. Schematic of elements needed to support sub-
specialty areas in gastroenterology.
Providing the Rationale and Unmet
Needs: Business Concept
Now that you have piqued interest through a well-
written executive summary, it is time to get into more
substantive matters related to your business plan. In the
business concept, you provide your reader with background
information to fully understand the significance of the
clinical need and justify the potential solution you are pro-
posing in the business strategy. This is your opportunity to
highlight all the great things your specialized practice does
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to help your patients and why you are an asset to the
institution. It should include such details as the size of your
practice, the services/procedures you currently provide, the
characteristics of the patient population served, and so on.
However, most important, the business concept should
demonstrate why you are unable to adequately meet pa-
tients’ needs owing to the lack of equipment, services, or
personnel/staff. Table 1 provides a list of questions that
should be answered in the business concept to provide the
rationale for the investment. As a real-world example, we
showcase in Figure 3 how an IBD program needed to hire a
nurse coordinator to accelerate program development,
reach, and impact while supporting increased patient vol-
ume. In this scenario, it was important to discuss the cur-
rent size of the IBD practice, anticipated growth, payer mix,
and academic reputation. This background established the
necessary framework to transition into the unmet needs of
the patient population. Once introduced, the significance of
the unmet need can be further explained in the market
analysis. Ultimately, the business concept starts the process
of conceptualizing the pillars that connect the foundation of
the hospital mission to the roof of the investment proposal
(Figure 1).
Demonstrating the Value Potential:
Market Analysis
Now that administration understands the significance of
the practice and the unmet clinical need, “How much in-
vestment is needed?” is the pressing question at hand. The
market analysis is the section that delineates the scope of
the unmet need. Fundamentally, a market analysis provides
Figure 2. Fishbone dia-
gram showing the 4 major
components of a business
plan.
 MENTORING, EDUCATION, AND TRAINING CORNER
Table 1.Question Checklist to Assist in Business Plan
Development
Business concept
What is the size of your practice?
What is the make-up of your practice?
What procedures/services do you provide?
What is the current payer mix?
What is the vision/goal of your practice?
What is the current problem being faced by your practice?
How is this current problem being addressed?
Market analysis
What is the population that this problem impacts?
What are the demographics of this population?
What is the payer mix of the population?
Is the size of the market growing or shrinking?
What are projected market size in the future?
How are the needs of the population currently being addressed?
What does the current competition consist of?
Business strategy
What is the anticipated budget?
What other additional costs need to be considered?
Will there be any marketing for this new project?
What volume will you need to achieve value?
How much additional revenue will this generate per patient?
How long will it take to become profitable?
How does this proposed solution meet the vision/goal of your
practice?
Implementation plan
What is the timeline for this plan?
How will you implement this plan?
Who will be in charge of implementation?
What will you do if anticipated volume/revenue not met?
What other pitfalls need to be considered and planned for?
How is current competition being addressed?
What will competitors do to compensate?
both a qualitative and a quantitative assessment of the
potential population affected by the proposal. It aims to
clarify the size of the population where the unmet need
exists and the potential impact that solving this unmet need
will produce. It pulls the broad data (population, payer
mix) discussed in the business concept and applies it to the
intended target population. From our previous example of
an IBD nurse, the market analysis answered how the
additional personnel for the program added potential
value. Specifically, we had to demonstrate how a nurse
coordinator would manage between-visit care, which
would allow physician specialists to more cost effectively
provide expert care for the growing IBD clinic population
(shown by service line trends within the past 5 years). A
well-written market analysis is able to addresses both
the financial and nonfinancial implications of the unmet
needs. For a physician, accessing and applying this
information can often be quite challenging. This creates an
opportunity to partner with a hospital administrative
dyad who is experienced in estimating these metrics.
Partnering with an administrative dyad will provide you
not only with an accurate estimation, but will also lead to
further collaboration between physician and nonphysician
stakeholders to generate support for your proposed proj-
ect or program.
Selling the Proposal: Business Strategy
Until this point, you have moved the reader from
intrigue to deeper interest, and now the timing is right to
make the sale’s pitch. The business strategy is where you
finally get to propose your solution to the unmet clinical
need. However, the business strategy is more than just
proposing a solution; it is a detailed presentation of the
costs and benefits of the project. It is important to be
thorough in your assessment because an accurate assess-
ment of the cost and benefit of your proposal can impact
future investment opportunities. It is also important to note
that, when purchasing a new product or offering a new
service, you must anticipate not only the direct costs (hiring
an IBD nurse), but also the indirect costs of an investment
such as staff training costs, any complimentary equipment,
and how long it will take to reach value goals (Table 1).
These are details that need to be discussed owing to the
significant impact they can have on the success of your
proposal. Again, collaborating with a hospital administrative
dyad here would be invaluable in ensuring a well-
formulated business strategy.
However, not all projects are able to demonstrate prof-
itability easily. These purchases demonstrate an objective
cost, but their benefit is more abstract. In our scenario
(Figure 3), the nurse spending time on patient education
and care coordination would be an appropriate example.
Any gastroenterologist can attest to the value of having
dedicated personnel to help patients and their families with
the co-management of their disease and navigate the
complexity of the health care system, allowing physicians to
see more patients and provide the medical expertise that
ancillary staff are unable to perform. Demonstrating how
education and care coordination adds value can be chal-
lenging. The business strategy section can be used to more
clearly describe this value by delineating the role of the
patient educator, establishing an objective measure of suc-
cess (how many patients seen, resources provided,
increased patient satisfaction, etc), and demonstrating the
degree of productivity that can be achieved by the physi-
cians. Based on the same example, Figure 3 attempts to
clearly demonstrate the value of hiring such an important
team member through the logical presentation of a key
driver diagram.
Executing the Vision: Implementation
Plan
After performing the business sale’s pitch, it is time to
conclude by communicating the steps to making the vision
a reality. As a gastroenterologist, you need to be able to
describe in a step-by-step manner how the project will be
implemented: from making the purchase, training the staff,
and gaining market share (patients). An implementation
plan presents a timeframe to completion. Communicating
the anticipated timeline demonstrates that the proposal is
more than just a concept but an organized plan to get the
job done. An effective implementation plan communicates
confidence, and ends the business plan on a high note
(Table 1).
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MENTORING, EDUCATION, AND TRAINING CORNER

Figure 3. Key driver diagram showing goal-driven drivers and proposed plans. Note: For the purposes of illustration, an
example that is relevant for an inflammatory bowel disease (IBD) program is used. A SWOT analysis describes the strengths,
weaknesses, opportunities, and threats of a business or project. (For more information: https://en.wikipedia.org/wiki/SWOT_
analysis.)

Conclusion of gastroenterologists. Creating a partnership between

Obtaining the support a gastroenterologist needs to
build successful programs is essential to provide the highest
quality patient care. It not only allows the program to
recruit the best staff and perform innovative and effective
procedures and services to meet patients’ needs, but also
elevates the institutional reputation and accelerates careers
physician leaders and hospital administrators is necessary
to achieve these shared goals (Table 2). A business plan
helps to build the pillars that align the foundation of
the hospital mission with the overarching roof of the in-
vestment proposal. By understanding the organizational
structure, opportunities for growth, and incentives that

Table 2.Useful Resources for Business Plan Development

Title Author/Source Notes

The Medical Entrepreneur: Pearls, Pitfalls and Practical Steven M. Hacker Published
Business Advice for Doctors December 16, 2010
The Business Side of Medicine: What Medical Schools Tom Harbin Published
Don’t Teach You Dec 18, 2012
How to Write a Great Business Plan (Harvard Business William A. Sahlman Published
Review Classics) December 18, 2012
How to Write a Business Plan https://www.entrepreneur.com/article/247575 Accessed
6/28/18
How to build a strategic business plan for your practice http://www.medicaleconomics.com/practice- Accessed
management/how-build-strategic-business-plan- 6/28/18
your-practice
5 things physicians need to know about a business https://www.kevinmd.com/blog/2014/06/5-things- Accessed
plan physicians-need-know-business-plan.html 6/28/18
Primary Care Strategic Plan Template https://www.advisory.com/research/market- Accessed
innovation-center/tools/2013/primary-care- 6/28/18 (Downloadable
strategic-plan-template template)
The Five Dysfunctions of a Team: A Leadership Fable Patrick Lencioni Published 2002

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 MENTORING, EDUCATION, AND TRAINING CORNER
drive decision making at the institutional level, today’s
leaders in gastroenterology can leverage a well-constructed
business plan as an invaluable tool to secure funding for
their clinical practice.
References
1. Papanicolas I, Woskie LR, Jha AK. Health care spending
in the United States and other high-income countries.
JAMA 2018;319:1024–1039.
2. Sahlman WA. How to write a great business plan.
Harvard Business Review July–August 1997.
3. Cohn KH, Schwartz RW. Business plan writing for phy-
sicians. Am J Surg 2002;184:114–120.
4. McKay DA, Peters DA. You want me to write a
business plan? Capital budgeting fundamentals for the
plastic surgeon. Can J Plastic Surg 2013;21:107–108.
Reprint requests
Address requests for reprints to: K.T. Park, MD, MS, 750 Welch Road, Suite
116, Palo Alto, California 94304. e-mail: ktpark@stanford.edu.
Conflicts of interest
The authors disclose no relevant conflicts.
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