An operation budget for your startup business should estimate your initial costs, such as to register your business and obtain equipment. Your budget also should include expected expenses, like the cost of office space and utilities. Organize your budget on an annual and monthly basis. Although this might be your first business venture, try to accurately develop a budget so that you have a solid financial grasp.
First, figure out what kind of business entity you will organize your healthcare business as, (incorporated or unincorporated) and the appropriate registration procedure. In most states, information about business registration is provided through the state secretary of state. You usually must register your business (Jane Smith’s Home Healthcare Services), unless you operate only using your personal name (Jane Smith). Plus, as a healthcare business, you state might require a special license or certification, which can include conducting a background check on you. Next, contact insurance companies because your business should have at least liability or malpractice coverage. Insurance and registration fees can be identified in your budget as fixed annual costs but calculated monthly ($1,000 annually, but about $83.50 monthly).
Clarify the services your business will provide, such as medical, nonmedical, or both. Next, calculate costs of essential staff training, medical equipment, and office supplies, like pens, uniforms, and telephones. If your business will focus on medical services, then contact wholesale distributors and online retailers to evaluate their supply quality and costs. Nonmedical home healthcare usually includes helping clients with daily tasks, like bathing and cooking, for which you will not use business supplies. Also consider your staffing needs. Although you might personally work with clients, as your business grows, determine if you will need registered nurses, medical assistants, and administrative support. Using independent contractors rather than hiring employees will affect your budget differently. For example, you will not take out taxes for an independent contractor. Your marketing expenses may include brochures, newspaper ads and business cards. If you will develop a website, add maintenance costs.
After understanding your expenses, you should calculate your total expected costs. You should have a grasp of how much sales revenue you must generate in order to break even (revenue minus expenses = 0). If your expenses are extremely high, then reassess your decisions. For example, you could start by offering nonmedical services and later expand your business to include medical services. Alternatively, renegotiate your fixed costs, such as rent or insurance, by selecting a higher deductible. Use your expected costs when creating your pricing structure. Without an operation budget, you likely will undervalue your home healthcare business, which can cause your business to fail.