Organizational Culture and Employee Behavior 4

Central Michigan University

Master of Science in Administration (MSA) Program

Course Title: MSA 600 Administration Research and Report Methods

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Submitted by: [Student’s Name]

[Street Address]

[City, State and Zip Code]

Work Phone: [703-555-1234]

Home/Cell Phone: [804-555-1111]

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Course Location: MSA600 Online

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Research Project Title: RESEARCH METHODOLOGY EXAMPLE

Feasibility Study for Establishing a Family Practice Medical Clinic in Christiansburg, Virginia

CERTIFICATE OF AUTHORSHIP:

I certify that I am the author of this paper and that any assistance I receive in its preparation is fully acknowledged and disclosed in this paper. I have also cited any sources from which I used data, ideas, or works, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.

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Feasibility Study for Establishing a Family Practice Medical Clinic in Christiansburg, Virginia

MSA 600 Administrative Research and Report Methods

Submitted by:

Peter Minalga

Project Instructor:

Dr. Thomas Kessler

March 2008

Table of Contents

Page Number

List of Tables ii

List of Figures ii

Chapter 1 Problem Definition 1

Chapter 2 Literature Review 7

Chapter 3 Research Methodology 15

Chapter 4 Data Analysis [Future]

Chapter 5 Summary, Conclusions, and Recommendations [Future]

Terminology and Definitions Page 18

References Pages 19-22

Appendix A Permission to Conduct Study

Appendix B Transmittal Letter/Survey Instructions

Appendix C Survey/Interview Questions

Chapter 3

RESEARCH METHODOLOGY

Research Approach

The purpose of this research is to determine if it is economically feasible to establish a family practice medical clinic in Christiansburg, Virginia and to see if this medical clinic can achieve a net income of $175,000 per year beginning with the fifth year of operations.

Based on the review of the literature selected regarding establishment of a family practice medical clinic, the approach to be utilized for this research is a feasibility study, more specifically, an abridged business plan, which is “a written document charting a business’ mission, strategies, sales projections, and plan for growth. [Also, the business plan] is used to obtain financing and provide a road map for growth.”(Axman, 2007)

A majority of the data will be collected from existing secondary sources, specifically, the Internet. The focus of this information collection will be pro forma fiscal data, meaning that actual data and reasoned estimates will be used to establish a realistic projection of the businesses month to month sales, expenses, profits, and cash flow. The Internet provides access to a wealth of information retained by the Small Business Administration, the Virginia Small Business Administration, the American Medical Association (AMA), the American Academy of Family Practice, and the American College of Osteopathic Family Physicians (ACOFP). Other secondary sources that will be used included the Central Michigan University Off-Campus Library, the Christiansburg Library, the Montgomery County Chamber of Commerce, and the Christiansburg Chamber of Commerce.

Data Collected

Collected data will be principally viewed from a financial cost-benefit perspective. It will include a balance sheet and pro forma cash flow statement and will include various financial analyses including break even analysis and payback period estimation. The information will include comprehensive estimates of both capital and operating costs for a five year period with included explanations of revenue projections and capital and operating expenses.

Taxes associated with a specific type of organizational structure will also be collected. Potential liability implications of each structure will be obtained and considered from a financial standpoint to see what, if any, cost increases or decreases are prudent to enhance the long term viability of the business.

Available personal financial assets, different types of financial options and associated costs, and available federal, state, and local grant types and amounts will be collected to determine the initial amount of capital required for start-up. This will aid in determining the best way to mitigate over-financing at start-up and in determining how much capital will be necessary for unforeseen circumstances or emergencies.

Types and amounts of insurance required by all government agencies will be estimated, along with their associated cost. Additionally, other recommended types of insurance and their associated costs will be identified and collected. This allows for further analysis of ways to mitigate financial risk in the near and long term until the business is solvent and running smoothly.

The costs associated with leasing versus buying will be collected and compared as part of location determinants. Additionally, the demographics of the local and regional area will be reviewed to determine if there is sufficient population base to provide satisfactory patient flow to sustain the business in its projected location.

Other areas of collected data include cost of advisors (e.g. accountant, lawyer, realtor), required business licenses, computer hardware, software, and supplies, record keeping, advertising, marketing, office furniture and supplies, office medical furniture and supplies, office medical supplies, and employee pay and benefits. Additionally, a general fee schedule for services will be reviewed and considered.

Data Collection Procedures

Organizational Structure

In determining an appropriate organizational structure three primary sources will be used. Information will be obtained from the Small Business Administration online at www.sba.gov and the 2008 Virginia Small Business Resource online at www.sba.gov/localresources/district/va. For additional analysis, the 4th Edition of the Ultimate Small Business Advisor: All You Need To Know will be reviewed with the purpose of referencing for this research project. Specifically, tax and liability implications will be reviewed and compared to determine which structure best compliments the owner’s goals. All sources are publicly available and are readily available for research via the internet.

Although keeping costs down play a big role, whether or not the owner desires to have partners and investors able to impact the day-to-day decision making and operations play a significant role and outweighed the cost-benefit of different structure types. Ultimately, the information gained in this research will be used as input for the income statement, the cash flow statement, and the balance sheet to determine the feasibility of establishing a family practice medical clinic.

Capital/Financing

Clearly one of the biggest decisions associated with business start-up costs is the amount of financing required to get the business moving in the right direction. To determine the correct amount of financing required, research will be conducted into how much capital the owner of the business possesses and is willing to contribute to financing the medical clinic. Additionally, available capital from friends and relatives will be investigated. The amount of capital to be financed from a lending institution will also be researched. Included in the research of the capital being financed will be an analysis of the fees and percentage rate associated with the loan as well as the repayment schedule of the loan.

The primary sources for determining the types and amounts of financing for a medical clinic are online with the Small Business Administration and the 2008 Virginia Small Business Resource. The 4th Edition of the Ultimate Small Business Advisor: All You Need To Know will also be used. All sources are publicly available and are readily available for research via the internet. The information gained from this research serves as input for the income statement, the cash flow statement, and the balance sheet to determine the financial feasibility of establishing a family practice medical clinic.

Insurance

Determining the types and amounts of insurance for a business is one of the critical tasks in keeping business start up costs down. To determine the correct types and amounts of insurance required for a medical clinic, research will be conducted on the types of insurance and amounts of coverage required as directed by the federal, state and local governments. Additionally, research will be conducted into which types of insurance are strongly recommended for a medical clinic, what amounts of coverage are recommended, and how much they cost. Research will be undertaken to review those types of insurance that are simply good to have and how much they cost. A cursory analysis of the risk associated with not taking on insurance and not taking on full coverage will be reviewed if the area to be insured is strongly recommended by a particular credible source.

The primary sources for determining the types and amounts of insurance for a medical clinic are online with the Small Business Administration, the 2008 Virginia Small Business Resource and the Montgomery County and Town of Christiansburg’s Chambers of Commerce. The 4th Edition of the Ultimate Small Business Advisor: All You Need To Know will also be used. All sources are publicly available and are readily available for research via the internet. Again, the information gained from this research will be used as input for the income statement, the cash flow statement, and the balance sheet to determine the financial feasibility of establishing a family practice medical clinic.

Location

Determining the location for establishing a business is, if not the most critical task in starting, one of the top three critical tasks. To determine the proper location for establishing a family practice medical clinic, the population base in Christiansburg and surrounding communities will be researched. Research will also be conducted to determine if Christiansburg and the surrounding communities are stable economic bases and to determine their economic potential.

Inclusive in this research, the demographic profile of Christiansburg and the surrounding communities will be reviewed and analyzed to determine if the population base can support the establishment of a medical clinic. Sequentially related to this topic is whether to lease or buy when the location for establishing a medical clinic is identified. Research into these methods will be conducted to determine the cost implications associated with each method and which method best compliments the owner’s goals of minimizing start-up costs.

The primary sources for determining the location for a medical clinic are online with the Census Bureau at www.census.gov, the Small Business Administration, and the 2008 Virginia Small Business Resource. The 4th Edition of the Ultimate Small Business Advisor: All You Need To Know will also be used. Other resources include the Montgomery County Chamber of Commerce on online at www.montgomerycc.org, Christiansburg Chamber of Commerce online at www.christiansburg.org, and the Christiansburg Library.

The information gained from the demographic research of Christiansburg and the surrounding communities is aimed at determining the potential patient flow into the family practice medical clinic. This determinant helps shape the income and cash flow statements and is a principal input for realizing whether or not the targeted net income can be attained at the five year mark of the business. The information gained from research into leasing vice buying will be used as input for the income statement, the cash flow statement, and the balance sheet to aid in determining the financial feasibility of establishing a family practice medical clinic. All sources are publicly available and are readily available for research via the internet.

Proposed Approach for Data Analysis and Synthesis

Ultimately, information gained from this data collection and analysis was used as input for the income statement, the cash flow statement, and the balance sheet to determine the financial feasibility of establishing a family practice medical clinic. These statements and spreadsheets will be structured and presented as a series of tables in formats that are traditionally used for presentation of financial information. The 5-year cash flow will show whether this medical clinic can achieve a net income of $250,000 per year beginning with the fifth year of operations (Axman, 2007).

Methodological Limitations

One of the weaknesses projected for this study includes the scope of the topic areas to be researched for cost data. Much of the cost information will be generated from existing resources and not compared thoroughly against other options. For example, advertising and marketing costs will be derived from existing industry standards vice comparing the different options available in the local, regional, and state communities.

Another weakness is the lack of face-to-face interaction with existing family practice business owners. Most of the information collected is from existing and from secondary sources and although the validity is likely high, additional information, specifically lessons learned and different courses of action these existing family practice business owners would take if they had it to do over again, could potentially be gleaned from first hand interviews.