BUSINESS PLAN

BUSINESS PLAN FOR THE

ESTABLISHMENT
--------------------------------LABORATO
RY.
 SECTION 1

1.0 EXECUTIVE SUMMARY

The following reports and recommendation relate to the

proposal --------------------------------Laboratory to establish

a medical diagnostic centre at Afikpo, Ebonyi state.

 The project would require a start-up capital of

N9952600 of which N6352100 is fixed and N3600500 is the

working capital.

 The vision of the laboratory is to be the most

outstanding, qualified and reliable laboratory in Afikpo and

within the state at large

 The laboratory will be located at Mgbom, Afikpo

because of good road network, free land availability and its

nearness to a hospital without a laboratory that will form

alliance with the laboratory.

 A huge market is available for the business to serve the

entire populace, both sick and healthy ones will serve as

clients or customers to the laboratory.

 The diagnostic laboratory will generate revenue

through tax payment for the government, and create job for

the teaming youth.

 The funding requirement of the project is N9952600 of

which N6332600 is to be obtained as loan from the bank

while N3620000 will be provided by the owner.

 The financial projections show that the project will be

financially stable and commercially viable by the time it

matures. A net profit of N2273740, N2849000, and N3,

569000 are expected for the 1st, and 2nd and 3rd years

respectively.

 Only three competitors have been identified, one strong

and the other two weak. But the laboratory shall have

competitive edge over them in terms of quick service

delivery aided by automation and accurate diagnosis with

reliable results.

 From the analytical points of view, the proposed project

is found to be technically feasible, financially viable and

economically desirable. Thus, it is recommended for

implementation.
 SECTION II

2.0 BACKGROUND

2.1 INTRODUCTION

The idea to establish a unique, solid Rock diagnostic

laboratory at Afikpo is the result of the supervision

recently conducted by medical laboratory scientists that

revealed that of the three medical laboratories instituted

in the area, only one is up to standard probably because it

is within a hospital while the others are owned and

managed by people who have no knowledge of the

profession and did not even study it as a course.

People even with their money, suffer and die of

sicknesses whose causes could be identified and the right

treatment given if the existing laboratories were

competent. I think this is an ample opportunity to

establish a qualified laboratory whose competence is well

known to the general public because of the quality of

service/ diagnosis it is capable of delivering.

2.2 VISION

 To be the most outstanding, qualified and reliable

medical laboratory in Afikpo of Ebonyi state and within the

state at large.

 To reduce mortality rate in Afikpo through accurate

investigation of the causes of the diseases that lead to

death.

 To restore the hope of the public/patients on

medical tests through the release of impeccable results.

2.3 MISSION

To carryout an accurate laboratory diagnosis and to release

the most reliable result through the use of well trained

personnel and modern automation.

2.4 OWNERSHIP/LEGAL STATUS

 The laboratory shall be a sole proprietorship business

owned and managed by Owuru Erica.

 He is a registered Nigerian medical laboratory

scientist with a license to operate or practice.

2.5 LOCATION OF THE BUSINESS

The laboratory shall be located at Mgbom in Afikpo North

Local Government Area of Ebonyi state. This choice of site is

prompted by the following factors.

 Availability of self acquired land to contain

expansion of the laboratory

 Its nearness to a well known hospital that has no

lab.

 Availability of good road network and lively nature

of the settlement

2.6 SERVICES

Solid Rock diagnostic laboratory shall provide the following

services:-

 All Hematological analysis (using blood

samples)

 Chemical pathologic analysis

 Microbiological analysis (using stool, blood,

sputum, urine, samples etc)

 Histologic processing of tissues

 Blood transfusion and immunological analysis.

2.7 PRODUCTION (OPERATION) PLAN

Required facilities

 Culture plates and media for culturing organisms.

 Microscopes and slides, for observing microscopic

organisms

 Auto analyzers, for quick analysis of samples.

 Test tubes

 Centrifuge

 Spectrophotometer

 Incubator

 Microtome

 Automatic tissue processor

 Reagents

 Laboratory tables

 Refrigerator

Diagnostic Processes

 Culturing processes
 Centrifugation of fluid samples

 Staining

 Microscopy

 Biochemical reactions

 Incubation

 Colorimetry

 Photometry

Output Target

The output target --------------------------------Laboratory is

500 tests per day.

2.8 BUSINESS STRATEGY

 Employment of a good and well behaved receptionist

who will act friendly to patients/customers

 Regular and availability of services to patients at any

point in time.

 Quick analysis of samples and delivery of expected and

reliable results.

 Diagnosis and accurate prescription of drugs after

diagnosis.

2.9 KEY SUCCESS FACTORS

 People’s preference for a laboratory that diagnoses and

prescribes drugs instead of hospitals that are rather

expensive.

 Alliance with a private hospital without a laboratory,

that sends its patients to solid Rock Diagnostic laboratory.

 Production of reliable lab results at cheaper prices.

 Low quality standard of existing laboratories

 SECTION III

3.0 MARKET AND CLIENTS

3.1 TARGET CLIENTS:

The target clients include

(1) All kind of patients (sick people)

(2) Pregnant women and nursing mothers.

(3) Normal/ healthy individuals

 Patients need our services for diagnosis of their

ailments and consequently for their treatment.

 Women who suspect pregnancy need our laboratory for

its confirmation.

 Healthy individuals need our services for medical report

and examination of fitness especially in terms of

employment

 Healthy individuals also need the laboratory for

confirmation of marital compatibility.

3.2 KEY COMPETITORS

The expected competitors include:

(1) Mater Miscericordiae hospitals.

(2) Amachi medical laboratory

(3) Mgbom medical laboratory

 Only mater miscericordiae hospital is a strong

competitor because of the establishment of the laboratory

within its hospital.

 Both Amachi and Mgbom medical laboratories are weak

competitors because of their low quality standard and non-

reliable results.

3.3 COMPETITIVE EDGE

Solid Rock Diagnostic Laboratory shall have competitive

edge over its competitors in the following ways:

 Quick service delivery through automation and

affordability of our price.

 Creation of relaxation apartment for the comfort of

patients waiting for their results.

 Text message to patients/ other clients about the

readiness of their results in case they could not wait.

 Accurate diagnosis and reliable results.

3.4 SERVICES DELIVERY:

Services delivery shall follow the following sequence.

(1) Client calls at the reception with his sample or for

sample collection.

(2) Open a request form for the client and fill his

relevant data.

(3) Record and documentation of samples received from

client.

(4) Shifting of samples into the laboratory for analysis.

(5) Analysis of samples (Diagnosis proper)

(6) Take repeated analysis to ensure accurate results.

(7) Write the results in client’s request form.

(8) Enter the result in result register.

(9) Call the patient for dispatch of the results after

signing.

3.5 QUALITY ASSURANCE AND CONTROL

The following methods shall be employed to ensure high

quality and reliability of laboratory results:

(1) The use of commercial sera at different levels

(2) The use of pooled sera.

(3) The use aqueous solution.

(4) The use of duplicate analysis.

(5) The use of daily means of patients results.

(6) The use of cusum which is a computerized extension

of the daily mean method.

(7) Repeat from the day before.

3.6 DEMAND AND SUPPLY ANALYSIS

Since the diagnostic laboratories provide medical services, it

dose not produce any physical commodity supplied to the

market. Its supply depends on the demand and the number

of clients that call for service delivery. The following factors

affect the demand and supply of the laboratory services:

 Disease outbreak/ epidemics

 Inadequate nutrition

 Marriage and employment.

 Prevalence of disease.

3.7 TECHNOLOGY

Solid Roc k laboratories will employ the latest technology:

(1) Automatic analysis of samples (using auto analyzer).

(2) Aphaeresis machine for selective blood transfusion.

(3) On-line delivery of results to clients that are

connected.

 The use of automation requires special training

 Though the cost of acquiring auto analyzer is

expensive but it makes work faster and cost of test cheaper

since many samples are run at once.

SECTION IV

4.0 MARKETING PLAN.

Unlike other professions/businesses, the code of conduct of

medical laboratory sciences does not condone

advertisement. However, solid Rock Diagnostic laboratory

shall erect attractive and conspicuous sign posts on the road

leading to and within the site of the laboratory for public

awareness.

4.1 ALLIANCES

 The diagnostic centre will form alliance with Delight

hospital for regular sending of their patients to our

laboratory whenever needed.

 Also, the laboratory shall maintain a mutual

relationship with the hospital by referring patients with

positive test to them for treatment.

4.2 MARKET POSITIONING

Solid Rock Diagnostic laboratory will position itself as the

“ROCK OF AGES” in diagnosis in Afikpo and Ebonyi state at

large. The laboratory shall make a name, secure popularity

for itself and will want to be seen by its clients, competitors

and the general public as:-

 The most reliable medical laboratory in terms of

accuracy of results.

 A diagnostic laboratory whose aim is to serve God and

humanity through the reductions in prices and maintenance

of quality.

4.3 SWOT ANALYSIS

The SWOT analysis carries out on the project reveals the

following:

Strength

 The location of the laboratory will make it to have easy

access to its targeted clients

 The location is close to the market where reagents and

equipment are sold and thus reduces cost.

 Quick diagnosis and highly reliable results.

 Combination of both diagnosis and perfect prescription.

 A large site for easy expansion.

The laboratory will build on these strengths.

Weakness

 The initial problems of raising adequate capital for the

project anticipated

 Solid Rock Diagnostic laboratory plans to address this

financial problem through applying to bank for loans.

Opportunities

 High incidence of systemic disease whose causes have

not been discovered by the existing laboratories.

 Lack of trusted laboratories that can diagnose and

prescribe drugs after sensitivity test, despite the increase in

the demand for laboratory tests owning to diseases outbreak

in the area.

Threats
 There is still the challenge to convince people that a

laboratories as quack due to their ineptitude.

 The difficulty in securing loans from finance house.

 To arrest these threat, the laboratory will through

schools and churches, get people informed of the existence
of a reliable laboratory, that is, solid rock diagnostic
laboratory. This will serve as a better option since
awareness through media is ethically unacceptable.

SECTION V

5.0 ORGANIZATION AND MANAGEMENT

5.1 Organizational structure

The organization will consist of the chief medical laboratory

scientist (CMLS), Assistant medical laboratory scientists, a

nurse, accountant, a receptionist, and security men.

CMLS

Receptionist Cashier/typist
Scientists

Security Men

Solid Rock Diagnostic laboratory is a sole proprietorship. It

is wholly owned and managed by Miss. Owuru Erica, who is

the sole proprietor and the CMLS.

5.2 PERSONNEL PLAN

(1) diagnostic laboratory shall required the services of

the following personnel:

 Two medical laboratory scientists as assistants:

One specialist in medical microbiology and the other a

specialist in histopathology with immunology as his minor.

 A trained nurse who works as a phlebotomist,

withdrawing blood and other specimens from patients.

 The proprietor is already a trained and experienced

medical laboratory scientist specialized in chemical

pathology and hematology (minor)

A receptionist for sample receipt and result dispatch to the

clients.
(2) The personnel shall be employed after a written and an

oral interview have been conducted on them.

(3) Employee’s remuneration shall be monthly salary. The

management and laborer compliments are shown below.

S/N Positions No. of Annual salary per Total

staff staff (N)

1 Lab. 3 48000 1440000

Assistants
2 Typist/cashier 1 300000 300000
3 Nurse 1 360000 360000
4 Security 2 240000 480,000
Grand Total 2,580000

:. Grand total salary per year = 2,580000

5.3 VALUES AND NORMS OF THE LABORATORY

(a) To trace the root cause of any disease.

(b) To uphold the integrity of the laboratory

(c) To see her employees and clients as the

most valuable assets.

(d) To always be available to her clients

(patients).
(e) To operate within the federal, state and

local government laws as well as the laws of the Nigerian

medical laboratory scientists.

SECTION VI

6.0 LEGAL, REGULATORY SOCIAL AND

ENVIRONMENTAL ISSUES

6.1 Legal Issues:

Solid Rock Diagnostic laboratory, as a sole proprietorship

plans to register with the appropriate department at the

local government head quarters.

The laboratory will be a legal entity having the right to sue

and be sued, being operated on the license offered to the

proprietor by the council of Nigerian medical laboratory

scientist.

6.2 Regulatory Issues:

The diagnostic laboratory will comply with all the ethical

rules governing the use of laboratory, the code of conducts

or ethics of the profession and with all the environmental

regulations.

6.3 Social Issues:

The actualization of this project will bring about social and

health benefits in the following ways:

1. It will create employment.

2. The Diagnostic laboratory will annually organize a

seminar for the youth, adults as well as pregnant women.

The seminar shall address any kind of disease prevalent for

that particular year.

6.4 Environment Issues:

Solid Rock diagnostic Laboratory whose concern is to identify

the cause of diseases will also is sensitive enough to know

how its activities affect the environment. It will avoid

environmental pollution and spread of disease by adopting

the following means:

(i) By disinfecting left-over samples of urine, stool

blood etc and then burying them.

(ii) By burning disposable materials such as syringe,

containers, gloves, etc in incinerator

(iii) Sterilizing any contaminated non-disposable

material before using them again.

 SECTION VII

7.0 FINANCIAL PLAN.

7.1 Summary of project cost:

The total cost of the project is N9952600 up of N6352100 in

fixed capital and N3,600500 in working capital.

Fixed Capital Investment

The fixed capital investment required for the project is

detailed as follows.

S/N Detail Quantity Unit price Total Amt

1 Standard plots of land 3 500,000 1,500,000(acquired)
2 One –storey building 1 2,000.000 2,000.000 (acquired)
3 Binocular microscope 2 35,000 70,000
4 Spectrophotometer 1 70,000 70,000
5 Centrifuge 1 25,000 25,000
6 Photoelectric 1 70,000 70,000

colorimeter
7 Refrigerator 2 50,000 100,000
8 Auto analyzer 1 800,000 800,000
9 Automatic processor 1 950,000 950,000
10 Microtome 1 150,000 150,000
11 Embedding machine 1 150,000 150,000
12 Cartons of slides 2 1000 2000
13 Incubator 1 150,000 150,000
14 Carton of test tubes 2 750 1500
15 Laboratory Tables 10 2000 20000
16 Water tank 1 7000 7000
17 Haematocrit reader 1 1600 1600
18 General plant 1 300,000 300,000
19 set of computer system 1 120,000 120,000
20 Grand Total 6352100

OTHER OPERATING EXPENSES

Type of expense Year o(N) Year 1(N) Year 2(N) Year 3(N)
Vehicle maintenance 100000 100000 105000 110000
Annual seminar 50000 50000 60000 80000
Miscellaneous 50000 50000 52500 55000
Total 200,000 200,000 690000 245000

WORKMING CAPITAL PROJECTION

The table below shows the details of the forecast working

capital for the project.

S/ Working capital Year o Year 1 Year 2 Year 3

N item
1 Haematologyical 3000 3000 3500 4500

stains
2 Histological stains 5000 5000 5800 6500
3 Other operating 200000 200,000 690,000 245000

expense
4 Reagents 10,000 10,000 10500 11,000
5 Salaries 258000 258000 300700 3,10000

0 0 0 0
6 Gas/Petrol 800000 800000 900000 1000,00

0
7 Culture media 1500 1500 2000 2500
8 Culture plate 1000 1000 1500 2000
9 Working capital 360050 360050 410030 4421500

0 0 0
10 Increase/Decreas - - 499800 821000

e in working

capital

START-UP CAPITAL

Start-up capital required=Total fixed capital + working

capital

S/N Capital items Amount (N)

1 Equipment and other (fixed) 6352100
2 Working capital requirement 3600500
Total 9,952600

7.2 PROPOSED FINANCIAL STRUCTURE /FUNDING

PLAN:

To fund the proposed project the proprietor plans raise an

equity capital of N3,620000 while N8332600 will be

borrowed from the bank.

Table for financing plan.

Sources of fund Amount (N)

Equity contribution 3,62000
Bank loan 6332600
 Total 9952600

Loan Repayment and interest payment schedule

It is expected that the load would attract an interest of 10%

per annum. The payment is to be completed in 3years as

shown below:

Yea Loan Repayments Interests Loan balance

r
1 6,332600 Nil 250000 6332600
2 6332600 3232600 620000 310000
3 3090000 3100000 8104000 Nil

Depreciation

The annual depreciation is calculated using the straight-line

method.

Dep.= (IV-SV)
LS

Schedule of Annual Depreciation

S/N Capital items LS IV SV Depreciations

1 Binocular microscope 20 70000 50,000 1000
2 Spectrophotometer 20 70,000 50,000 1000
3 Centrifuge 10 25,000 22000 300
4 Photoelectric 20 70,000 50,000 1000

colorimeter
5 Refrigerator 10 100,000 80,000 2000
6 Auto analyzer 10 800,000 600,000 20000
7 Automatic tissue 10 950,000 70000 25000

processor
8 Microtome 10 150,000 130,000 2000
9 Embedding ma chine 10 150,000 120000 3000
10 Cartons of slide 2 2000 Nil 1000
11 Incubator 20 15000 Nil 750
12 Cartons of test-tubes 2 1500 Nil 750
13 Laboratory tables 20 20000 Nil 1000
14 Water tank 10 7000 Nil 700
15 Haematocrit reader 10 1600 Nil 160
16 Generating plant 20 300,000 100,000 1000
17 Computer system. 10 120,000 800,000 4000
Total 73660

7.3 Projected Profit And Loss Account

Particulars Year1 Year2 Year3

Expected 12,300,000 13,200,000 14,000,000

income
Expenses 6352100 6352100 6352100

fixed capital
Working 3600500 4100300 4421500

capital
Total 9952600 9952600 9952600

expenses
Profit before 2347400 3247400 4047400

tax
Loss 10% tax Nil 324740 404740
Profit after 2347400 2922660 3642660

tax
Depreciation 73660 73660 73660
Net profit 2,273,740 2,84,9000 3,569,000

7.4 CASH FLOW PROJECTION

Cash in: Year o Year Year Year3(N)

(N) 1(N) 2(N)

Equity 3,620000 - - -
Bank loan 6332,600 - - -
Net profits - 2273740 2849000 3569000
Depreciation - 73660 73660 73660
Total cash in 9952600 2347400 2922660 3642660
Cash out fixed 6352100 - - -

capital
Working capital 3600500 - - -
Increase/Decreas - - 499800 82100

e in cash
Loan repayment 3232600 3,100000
Total cash out 9952600 - 3732400 3921000

SECTION VIII
8.0 RISK ANALYSIS AND EXIT STARTEGY

8.1 Risk Analysis:

This project has been subjected to risk analysis and some

inherent risks identified with appropriate mitigants preferred

to avoid the folding of the business.

Identified Risks Mitigants

(1) Power outage. Provision of stand by generator
(2) competitors low price Accurate diagnosis with a

reliable result at an affordable

price.
(3)irregular water supply Construction of water reservoir

for rain water storage.

(4) initial low demand Seminar, since advertisement

in media is ethically forbidden

8.2 Exit strategy

No exit is planned; instead the owner changes the sites of

the laboratory followed by diversifications.

SECTION IX

9.0 OTHER CONSIDERATIONS

9.1 Economic Justification

 The laboratory shall provide Jobs

 It shall yield tax for the government

 Improvement of health care standard in Ebonyi state

 Reduces excessive dependence on western countries

for disease diagnosis and treatment

9.2 commercial viability:

The commercial viability of the projects is very obvious. This

has been shown through the projected profits and cash flow

positions. The viability of the project can also be deduced

from the increase in mortality rate of the inhabitants of the

area without a reliable diagnostic centre. This becomes an

ample opportunity.

9.3 Conclusion:

From the analytical point of view, the proposed project is

found to be technically feasible, financially viable, and

economically desirable. The project offers good investment

benefits and is thus recommended for funding and

implementation.