Assignment Exercise 23-1: Business Plan Refer to the proposal to add a retail pharmacy mini-case study in Chapter 29.

Required Build a Business Plan for this proposal. Prepare the service description using your consumer knowledge of a retail pharmacy (if necessary). Of course this retail pharmacy will be located within the hospital, but its purpose is to dispense prescriptions to carry off-site and use at home. Thus it operates pretty much like the neighborhood retail pharmacy that you use yourself. Use the information provided in the retail pharmacy Mini-Case Study 1 in Chapter 29 to prepare the financial section of the Business Plan. Use your imagination to create the marketing segment and the organization segment.

Mini-Case Study:

Exhibit 291 Sample General Hospital 3-Year Retail Pharmacy Profitability Analysis

		Year 1	Year 2	Year 3
Rx Sales		2,587,613	2,692,152	2,828,375
Cost of Goods Sold		2,047,950	2,088,909	2,151,576
Gross Margin		539,663	603,243	676,799
GM %		20.9%	22.4%	23.9%
EXPENSES
Salaries and Wages		192,000	197,760	203,693
Benefits		38,400	39,552	40,739
Materials and Supplies		12,000	14,400	17,280
Contract Services and Fees		14,400	17,280	20,736
Depreciation and Amortization		15,333	15,333	15,333
Interest
Provision for Bad Debts		25,876	26,922	28,284
Misc. Exp.		3,600	4,320	5,184
Total Expense		301,609	315,567	331,248
Net Income		238,053	287,676	345,550
Operating Margin		9.2%	10.7%	12.2%
	Cash Flow
		Year 1	Year 2	Year 3
Sources
Net Income		238,053	287,676	345,550
Depreciation		15,333	15,333	15,333
Borrowing
Total Sources		253,386	303,010	360,884
Uses
Capital Purchasing		130,000
Working Capital		49,789
Total Uses		179,789
Cash at Beginning of Period			73,597	376,607
Net Cash Activities		73,597	303,010	360,884
Cash at Ending of Period		73,597	376,607	737,490
	Volume
		Year 1	Year 2	Year 3
Number of Prescriptions Sold		55,350	56,457	58,151