Enterpreneurship - Dental Clinic

ESLSCA – MIBA – GROUP 40F

Final Assignment: EDCDr. Ashraf Sheta

Student: Ali Abdel hafiz Alshiekh11/10/2014

Final Assignment: EDC

Table of Contents1 Business Idea...........................................................................................................................12 First Screening..........................................................................................................................5

2.1 Strength of Business Idea...........................................................................................52.2 Industry Related Issues...............................................................................................62.3 Target Market and Customer-Related Issues.............................................................72.4 Founders-Related Issues............................................................................................82.5 Financial Issues..........................................................................................................9

3 Executive Summary & Company Description……………………………………………………..103.1 Executive Summary……………………………………………………….……………….103.2 Company Summary…………………………………………………..……………………103.3 Mission Statement………………………………………………………..………………..103.4 Tagline………………………………………………………………………..……………..103.5 Products & Services………………………………………………………………………..103.6 Funding Sought………………………………………………………………..……………113.7 Legal Status & Ownership…………………………………………………………………11

4 Feasibility Analysis………………………………………………………………..…………………..124.1 Service Feasibility Analysis………………………………………………….…………….12

4.1.1 Service desirability………………………………………………….…………….124.1.2 Service demand…………………………………………………….…………….134.1.3 Library Research:……………………………………………………..………….134.1.4 Gumshoe Research:……………………………………………………………..13

4.2 Industry/Target Market Feasibility Analysis…………………………………..………….144.2.1 Industry Attractiveness…………………………………………….…………….14

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4.2.2 Target Market Attractiveness………………………………………..………….154.2.3 Market Timeliness……………………………………………………..…………17

4.3 Organizational Feasibility Analysis………………………………………………………..184.3.1 Management Prowess…………………………………………………….……..184.3.2 Resource Sufficiency…………………………………………………….………19

4.4 Financial Feasibility Analysis……………………………………………………..……….194.4.1 Total Startup Cash Needed……………………………………………………..194.4.2 Financial Performance of Similar Businesses………………………..……….20

4.5 Summary and Conclusion………………………………………………………………….205 Industry Analysis.......................................................................................................................21

5.1 Industry Definition........................................................................................................215.2 Industry Size, Growth Rate, And Sales Projections.....................................................215.3 Industry Characteristics...............................................................................................22

5.3.1 Industry Structure..........................................................................................225.3.2 Nature of Participants....................................................................................235.3.3 Key Success Factors.....................................................................................25

5.4 Industry Trends...........................................................................................................26

5.4.1 Political-Legal analysis..................................................................................265.4.2 Economic environment analysis....................................................................26

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5.4.3 Socio-cultural environment analysis..............................................................275.4.4 Technological environment analysis..............................................................27

6 Business Model…………………………………………………………………..…...….…..……….316.1 Customer Segments……………………………………………………….....………..……..316.2 Value Propositions…………………………………………………………..….........……….316.3 Channels…………………………………………………………………….…..........……….326.4 Customer Relations………………………………………………………….….……..……..326.5 Revenue Streams……………………………………………….…………….………...…….326.6 Key Resources………………………………………………………………..………..……..326.7 Key Activities………………………………………………………………….………..……..336.8 Key Partnerships…………………………………………………………….………..………336.9 Cost Structure……………………………………………………………….………..……….33

7 Market Analysis………………………………………………………………………………..………...347.1 Market Segmentation……………………………………………………….……..………….347.2 Target Market Selection…………………………………………………….……………..…347.3 Target Market Size……………………………………………………….………………..….347.4 Segmentation……………………………………………………………………………….…357.5 Market Trends……………………………………………………………….…………….…..357.6 Competitor Analysis………………………………………………………….………….…….35

7.6.1 Identification of direct, indirect, and future competitors………..……….……….357.6.2 Competitive Analysis Grid…………………………………………..…….………..36

8 Marketing Plan………………………………………………………………………….……….……….368.1 Marketing Objectives……………………………………………………………….…………368.2 Financial Objectives……………………………………………………………….…………..368.3 Positioning…………………………………………………………………..…….……………368.4 Marketing Mix………………………………………………………………….……………….368.5 Customer Profile……………………………………………………………………………….378.6 Internal Marketing………………………………………………………………….…………..378.7 External Marketing……………………………………………………………………………..38

9 Management Team and Company Structure……………………………………....…………………389.1 Introduction………………………………………………………………..…………..……….389.2 Management Team………………………………………………………..………..…………389.3 Skill Profile and Gaps in Management Team………………………….………..………….399.4 Ownership and Compensation……………………………………………...……………….39

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9.5 Board of Directors…………………………………………………………...………….……..399.6 Organizational Chart………………………………………………..…….……………..…….39

10. Financial Projections..................................................................................................................40

10.1 Source and Use of Funds Statement............................................................................4010.2 Pro Forma Income Statement.......................................................................................4010.3 Pro Forma Balance Sheet.............................................................................................4110.4 Pro Forma Cash Flow...................................................................................................4210.5 Break-Even Analysis.....................................................................................................4310.6 Ratio Analysis...............................................................................................................43

Appendix A…………………………………………………………………………………………………44Appendix B……………………………………………………………………………………..…….…….44Appendix C…………………………………………………………………………………………...…….46References…………………………………………………………………………………………….……49

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1 Business IdeaDental clinics business is facing a huge shift these years from general maintenance to modern treatments as follows:

1. Cosmetic Dentistry:

Where patients are not only going to visit clinics when they are in pain, but also they will visit the clinic to simply look better.

2. Pediatric Dentistry:

Where clinics are now focusing more and more on children specific treatmentmethodologies, to gain the trust of this sector and to increase revenues given that treating children can take double the number of visits that adults takes. “EDC” is targeting these new trends in business, besides general dentistry.

The pediatric dentistry penetration rate is almost zero in Egypt. So, it isa good opportunity for EDC to offer this service, especially in a market like “msr elgadida” and “elnozha elgadida” where customers have a low elasticity towards their children.

The handicapped can’t find the professional dentists who can deal with their special needs. Again, it is a good opportunity for EDC, because Dr. Mohamed is certified in “Master in Pediatric Dentistry”.

The cosmetic dentistry in Egypt is not tracking the latest technology like nano-technology and laser technology. So, again, it is a good opportunity for EDC to offer this service with the latest technologies available.

Regarding to knowledge, there is a lack in clinic management experience. All EDC doctors are certified in “Healthcare and Hospital Management Diploma”. These management skills would enhance the customer experience, and the overall financial performance.

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Three new areas are ready for penetration kids treatment, special needs treatment, and cosmetic dentistry. EDC is ready for these areas.

2 First Screening2.1Strength of Business Idea

Low

Potential (-1)

Moderate

Potential (0)

HighPotential (+1)

Justification

1. Extent to which the idea: a) Takes Advantage of an environmental Trend b) Solves a Problem c) Addresses an unfilled Gap in the market place

a) Trend( Cosmetic Dental Treatments):Market culture changing from visiting a dental clinic only whenthere is a big dental problem to visiting the clinic as well to look good.b) Solves a Problem(Time Saving Clinics):Patients are suffering from several hours waiting before examination.c) Gap in the market place (Special Kids Treatment):Kids patient segment is always afraid to go to the dentist.

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2. Timeliness of Entry to Market

People are concerned about their appearance. Their personal appearance is of a high priority when it comes to spending money.

3. Adds Value forBuyer

Although all services related to dental business can be imitated, it would take time and effort fromcompetitors. Till then, Elite dental clinic will lead the market.

4. Extent to which Customer isSatisfied by Current Products

Yes, the service in most of the dental clinics are the same.

5. Degree to which the idea requires customerto change their basic practices or behaviors

It depends on demographics of the people in the marketplace. So, Elite dental clinics will start business in areas like “misr-algadida, maadi, and zamalek”

2.2Industry Related Issues

LowPotential (-1)

Moderate

Potential (0)

HighPotential (+1)

Justification

1. Number of competitors

Large number of competitors in thearea of regular treatment, it is not the “Elite dental clinics” area of interest. The number of competitors in the cosmetic area and kids treatment area are not relatively high.

2. Stage of industry life Although regular treatment is in

the phase of maturity, cosmetic

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cycle and kids treatment are in the growth phase.

3. Growth rate ofindustry

Regarding to IBIS, industry growthin the U.S is 2.7%, which means low growth rate.

4. Importance of industry’s productsand/or services to customers

It depends on the culture of the targeted segment. So, “EDC is targeting “Msr Elgadida” and “Elnozha Elgadida”.

5. Industry operating margins

2.3Target Market and Customer-Related Issues

LowPotential (-1)

Moderate

Potential (0)

HighPotential (+1)

Justification

1. Identificationof target market forthe proposed new

The geographic target market is “Masr-Elgadida” and “Elnozha Elgadida”.The demographics of the target

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venture market is the high-quality of lifepatients.

2. Ability to create “barriers to entry”for potential competitors

product differentiation is the core value of “Elite dental clinics”. Regarding to the experience and education level of the partners, it would be easy to achieve this core value.

3. Purchasing power of customers

The target market purchasing poweris high.

4. Ease of makingcustomers awareof the new product or service

It needs some effort from the marketing team to educate customers.

5. Growth potential of target market

The potential growth for kids treatment is relatively high, while it’s moderate for cosmetic and general dentistry.

2.4Founders-Related Issues

LowPotential (-1)

Moderate

Potenti

HighPotential (+1)

Justification

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al (0)

1. Founder’s or founders’ experience in theindustry

All partners are experienced in that business for more than 10 years.All partners are certified in “Healthcare and Hospital Management Diploma” and “Master inPediatric Dentistry”.

2. Founder’s or founders’ skills as they relate tothe proposed new venture’s productor service

All partners are experienced in that business for more than 10 years.All partners are certified in “Healthcare and Hospital Management Diploma” and “Master inPediatric Dentistry”.

3. Extent of the founder’s or founders’professional and social networks in therelevant industry

The doctors already have loyal patients from their previous experience. These customers are contacted, they have the desire for “EDC” services.

4. Extent to which the proposed new venturemeets the founder’s or founders’ personalgoals and aspirations

Having a private business offering an elite service, is the dream of all founders. So, team members have the passion to make it succeed.

5. Likelihood that a team can be put together to launch and grow the new venture

Team members have the same target, the passion to make it succeed.

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2.5Financial Issues

LowPotential (-1)

Moderate

Potential (0)

HighPotential (+1)

Justification

1. Initial capital investment

The business will be totally funded by the partners.

2. Number of revenue drivers (ways in which the company makesmoney)

Revenue = (Number of Customers) x (Frequency of Purchase) x (AverageTransaction Size) x (Price).The marketing team has an ambitious plan to increase patientloyalty to increase the frequencyof visits. The team will develop aplan to educate customers about available services and the added value for them.

3. Time to break even

Regarding to the experience of partners in the local market, the project will break-even in 3 months.

4. Financial performance of similar businesses

Although it depends on the targetsegment, service differentiation would succeed in elite areas.

5. Ability to fund initial product (or service) development and/or initial start-upexpenses from personal funds orvia

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bootstrapping

3 Executive Summary & Company Description3.1 Executive SummaryEDC is the dentistry practice that will offer general, pediatric, and cosmetic dentistry.

Through a combination of industry benchmarked customer service and flexibility, EDC will quickly gain market share. The general dentistry practice will be used to generate initial cash flow as EDC develops branding for his enhancement services.

Over time, the percentage of business will shift from general maintenance to pediatric and cosmetic dentistry. The cosmetic practice is desired because it services wealthier clients who are not dependent on insurance plans. The pediatric practice is desired too because it services both two uncovered client areas, kids, and special needs.

EDC will leverage the years spent by cofounders in private practice to model the new business. the past experience in conjunction with the forwardlooking, customer-centric business model will allow EDC to rapidly grow a large and loyal patient base. Sales will reach 1,000,000 EGP by the end of the first year.

3.2 Company SummaryThe EDC, to be located in “Elnozha Elgadida”, will offer general dentistry,kids treatment, and cosmetic dentistry. General dentistry consists

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primarily of cleaning and fillings, while cosmetic dentistry consists of teeth whitening, veneers, and gap removal.

3.3 Mission StatementThe EDC's mission is to provide the finest dental care. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.

3.4 Tagline"EDC" tagline is already a part of its brand name, and the marketing team will depend mainly on it to attract our customers, is "try our elite services, you deserve it".

3.5 Products & ServicesThe “EDC” provides both general dentistry consisting primarily of cleaning and fillings, kids treatment, as well as cosmetics improvements. Services delivered by "EDC" will be:

Pediatrics: The Pediatric Dentistry Clinic provides dental services for infants, children, and adolescents, including those with special needs, in a relaxing, caring environment specifically geared toward young patients.

Orthodontics: Orthodontic treatment helps teeth line up correctly, using braces or other devices.

Periodontics: Periodontics is the study, diagnosis, and treatment of diseases and injuries to the gums, connective tissues, and bone surrounding the teeth.

Dentures: Replacements for missing teeth that can be taken out and putback into the mouth.

Crown & Bridge Work: Both crowns and most bridges are fixed prostheticdevices. Unlike removable devices such as dentures, which you can takeout and clean daily, crowns and bridges are cemented onto existing teeth or implants, and can only be removed by a dentist.

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Teeth whitening: There are many different ways a tooth can be stained, common causes are age, antibiotics, excess fluoride, illness,and certain beverage consumption. Teeth whitening removes the discoloration and restores the original whiteness.

Dental Implant: Metal posts attached to the jaw to hold replacement teeth.

Composite Bonding: Chipped, broken, discolored or decayed teeth may berepaired or have their appearance corrected using a procedure called composite bonding.

Root Canal: A treatment to remove damaged or diseased tooth pulp.

Smile Makeover: Smile makeovers involve a comprehensive assessment of your smile esthetics in order to improve its overall appearance. Typically one or more cosmetic dentistry procedures, such as dental veneers, dental implants, gingival sculpting and teeth whitening, willbe required for several teeth in both the upper and lower arches in order to achieve the look you want.

Dental Laboratory: is an important part of dental services. This specialty deals with the design, fabrication and repair of dental appliances (crowns, complete dentures, removable partial dentures, crown and bridge) under the direction and supervision of the dentist.

Restoration: restoration refers to reproducing a tooth using metal and/or tooth-colored materials. This fabrication process is done by a dental technician.

Veneers: These are porcelain shells that are bonded to the front of the teeth. They reshape the tooth and make the tooth whiter in color.

Gap removal: This procedure uses tooth-colored plastic that is bonded to places where there should be tooth material. The removal of gaps makes a significant improvement to a smile.

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3.6 Funding SoughtAs described in total startup costs, the initial cost for only one examining room will be 110,000 EGP.

3.7 Legal Status & Ownership"EDC" is a Limited Liability Corporation incorporated in "Elnozha Elgadida". it is currently owned by Ali Alshiekh, Dr. Mohamed Ahmed, and Dr. Hassan Mahmoud.

4 Feasibility Analysis4.1 Service Feasibility Analysis 4.1.1 Service desirability

Concept Statement Service

“EDC” exists to provide the most professional expert advice and treatment services for children, “EDC” set up a "baby teeth world" Children Dental Center, has extensive clinical experience by the experts and specialist Children's dental patients. Children's clinic, humorous cartoons, colorful cartoon toys, so your baby is no longer afraid of the dentist, easy and smooth completion of treatment. “EDC” provides comprehensive treatment planning and use restorative and cosmetic dentistry to achieve your optimal dental health.

Target MarketCustomers of both high income (10,000EGP or more) and high awareness will be targeted. “Elnozha Elgadida” will be the start target in the first 2 years. “Maadi, Mohandseen, and Sheikh Zayed” will be targeted later.

Why " EDC"The main criteria for “EDC” is and will always be “quality of service” and that includes not only the dental services provided but the service as a whole from the moment our patients become aware of our existence. Maintain strict sterilization and disinfection protocols.Best service possible using recent materials & technologies.

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Special Features - No Other Dental Clinic Does This“EDC” offers ambient waiting environment and the least possible waiting time because " Elite Dental Clinics" are “appointment only” practice. So say goodbye to waiting for hours to get in to the dentist. All you have to do is call the branch you want to go to and take the appointment that suits you.On the other hand, if you are in pain or have a dental emergency “EDC” will make time for you in our busy schedule because your comfort is our main concern.

Management Team“EDC” is led by its cofounders, Ali Alshiekh, Dr. Mohamed Ahmed, and Dr. Hassan Mahmoud. Dr Mohamed has 15 years experience in pediatric dentistry. Dr. Hassan has 10 years experience in cosmetic dentistry.

EDC initiated a survey (Appendix A) to measure the customer feedback to theconcept statement, the survey results were:

All feedbacks are positive about “EDC” new services. The sample group are interested in kids treatment service.

4.1.2 Service demandEDC initiated another survey (Appendix B) to measure the customer intensions to buy EDC dental services, the survey results were very promising for both cosmetic and pediatric dentistry (Appendix-C).

4.1.3 Library Research: The age structure in Egypt, 2013 is

0-14 years: 32.3% (Kids treatment segment size)15-24 years: 18% (both cosmetic and regular treatment segment size)25-54 years: 38.3% (both cosmetic and regular treatment segment size)55-64 years: 6.6% 65 years and over: 4.8%

The age structure is promising for both cosmetic and kids treatment. Number of dental clinics in “Msr Elgadida” is 383, while the number is

36 in “Elnozha Elgadida”. It is a good opportunity to provide dental services.

Population of “Msr Elgadida” is 193,000, while population of “ElnozhaElgadida” is 185,000. This means that both have almost the same demandpower.

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4.1.4 Gumshoe Research: The rent for apartments in “Elnozha Elgadida” and “Msr Elgadida” is

almost the same and between 2,000 to 3,200 EGP. Most of families live in “Elnozha Elgadida” are new families with

young children. “Msr Elgadida” is an old neighborhood with old families. This means

that kids concentration in “Elnozha Elgadida” is higher than “Msr Elgadida”.

Number of cars relative to buildings height is relatively high. This means high income population.

Average traffic is fair, around 5 customers/day (sample of one competitor). By asking customers, most of them are loyal to their doctors in “Msr Elgadida”.

Dental services are available with reasonable prices: Fillings from 400 to 600 EGP depending on the filling

position. Root Canals around 300 EGP. Basic Cleaning around 150EGP. Bleaching 2000EGP. Extraction 150EGP.

4.2 Industry/Target Market Feasibility Analysis 4.2.1 Industry Attractiveness

LowPotential

ModeratePotential

HighPotenti

alJustification

1. Number of competitors

Fair number of dental clinicsrelative to the population. the distribution is not

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unified, it is dependent on the area attractiveness.

2. Age or industry

Both kids treatment and cosmetic treatment are considered "young" industries. Regular treatmentis "medium" for sure

3. Growth rate ofindustry

The market is growing in the three dimension (number of customers, number of visits, and number of services orders). For example, number of dental clinics has increased by 11% in Dubai, 2011, growth rate of teeth implantation service in the U.S is 15 to 20%.

4. Average net income for firms in the industry

For both cosmetic and kids treatment, the net income is high. For regular treatment, the net income is relatively good.

5. Degree of industry concentration

The industry is totally fragmented.

6. Stage of industry life cycle

Both kids treatment and cosmetic treatment are considered "early" in life cycle. Regular treatment is "saturated" for sure

7. Importance of industry's service to customers

cosmetic treatment is a "WantTo Have". Both kids treatmentand regular treatment are "Must Have".

8. Extension to which business and environmentaltrends are in thefavor of the industry

People culture tends to cosmetic treatment in order to look better. Awareness hasincreased in the last decade,this would reflect on dealingwith kids professionally to avoid non co-operative behavior.

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9. Number of exciting new product and services emergingfrom the industry

Kids treatment professionallydepending on children Psychology is relatively new to the Egyptian market.

10. Long-term prospects

Nano Technology is now invading the dental treatmentto give the patients a betterservice.

4.2.2 Target Market Attractiveness

Low

Potential

Moderate

Potential

HighPotenti

alJustification

I. Number of competitors in targetmarket

Only 36 dental clinics are available in "ElnozhaElGadida". If we considered "Msr Elgadida"is a part of the market, 45 dental clinics deal with cosmetic treatment, and zero clinics deal professionally with kids treatment.

2. Growth rate of firms in the target market

Although "Elnozha Elgadida" is still a young neighborhood, the growth rate is good.

3. Average net incomefor firms in the target market

regarding to the gumshoe research, the service prices is relatively highallowing a high net income.

4. Methods for generating revenue inthe industry

The prices of raw materials are clear. There is no bargaining power for suppliers. The prices of the service is almost the same.

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5. Ability to create "barriers to entry" for potential competitors

There is no barriers to entry. It is not hard to imitate any competitor.

6. Degree to which customers feel satisfied by the current offerings in the target market

Customers are satisfied to a great extent by the regular treatment, but they are not satisfied from kids treatment, waiting time they spend in the dental clinics.

7. Potential to employee low cost guerilla and/or buzz marketing technique to promote the firm'sservice

"EDC" has an ambitious marketing plan that targets "Al-Ahly " club and all the internationalschools in the neighborhood.

8. Excitement surrounding new service offerings in the target market

It is totally a silent service, no marketing, little advertising. “EDC”will depend on a marketing team to attractmore customers.

Market Size Dentist Per Capita

Population: 184,503(1) Dentists: 36 (2)

Dentist Per Capita: 5125 Dentist Per Capita (international benchmark): Dubai (1:1616),

United Kingdom (1:2028), Australia (1:2032), United States (1:1703)and New Zealand (1:2353) (3)

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Msr Elgadida

06000

Dentist Per Capita

Dentist Per Capita

RegionDentist Per Capita

Demand per Capita (Dental Visits)

the demand is the highest for the group age "EDC" is interestedin for the cosmetic and the kids treatment. this is expected because most of cosmetic and the kids treatment services need more than one visit.

Mixed Dental Services Per Dental Visit The ratio of mixed dental services per dental visit at DUBAI is 1.86 compared to Australian benchmark of 2.38. The dental services which are carried out most commonly per dental visit includes general oral check-ups,scaling, polishing, application of fluoride, temporary filling, composite, GI and Amalgam Restoration.

CompetitionThe competition is relatively low, only 36 dental clinics in “Elnozha Elgadida”. Some of the population depend on services in “Msr Elgadida”.

4.2.3 Market Timeliness

Low

Potential

Moderate

Potential

HighPotenti

alJustification

1. Buying mood of “msr elgadida”

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customers

and “El nozha elgadida” areas have a high purchasing power.

2. Momentum of themarket

The population ofthe target market is around 380 thousands. The desire for a differentiated service is relatively high.

3. Need for a new firm in the marketwith your offerings or geographic location

As soon as the kids treatment service booms, it will be easy for competitors to imitate.

4. Extent to whichbusiness and environmental trends are moving in favor of the target market.

Patients already suffers from waiting time in dental clinics, and from dealing professionally with their non co-operative kids. Itwould be a great opportunity for "EDC".

5. Recent or planned entrance of large firms in the market

The market is already fragmented. There is no room for large firms.

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4.3 Organizational Feasibility Analysis4.3.1 Management Prowess

LowPotenti

al

Moderate

Potential

HighPotenti

al

Justification

1 . Passion for the business idea

2. Relevant industryexperience

Both doctors have been working for more than 10 years.

3. Prior entrepreneurial experience

Both doctors have been working for more than 10 yearsin their own clinics.

4. Depth of professional and social networks

Regarding to doctors' long experience, they have a large customer base.

5. Creativity among management team members

Management team have ideas that would enhance patient's waiting time, ideas related to marketing in social clubs and schools.

6. Experience in cash flow management

Ali Alshiekh, thefirst partner, will handle all financial and marketing issues.

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7. College graduate

Two out of three partners have master degree in dental treatment. The third partner is an expert of management.

4.3.2 Resource SufficiencyResource Sufficiency Ratings

1 2 3 4 5Office space Lab space, manufacturing space, or space to launch a service business

Key management employees (now and in the future) Key Support personnel (now and in the future) Key equipment needed to operate the business (computers, machinery, delivery vehicles)

4.4 Financial Feasibility Analysis4.4.1 Total Startup Cash NeededThe cost of one examination room is shown in the following table:

Item CostAutoclave 21000X-ray Machine 13500

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Endodontic Apex Locator

6700

Capsule Mixer (Amalgamator)

1900

Dental Unit 18000Various Extraction Forceps (10)

350

mirror handle x 20 440syringes x 5 300mirror x 20 80Various Extraction elevators x 6

132

Tweezers x 20 300Probes x 20 300light cure device 5300excavators x 5 300Cabinets of Drawers 9800High Suction 11500Air compressor 4300Water Distiller for Autoclave

900

Reception desk 10000Total Initial Cost 105,10

2EDC needs three examination rooms, so, the cost will be 315,306 EGP.The cost of preparing the clinic is shown in the following table:

CostItem

5000Sterilization room furniture

50000Clinic Furniture10000Computer + Customer D.B150000Retrofit Building215000Total

So, the total cost of establishing the business is 530,000 EGP.

4.4.2 Financial Performance of Similar Businesses

Below Average Average Above

Average Justification

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Annual Sales - Year 1

"EDC" will depend in the first year on regular dental treatment till the marketing plan makes aneffect to educate customers about why kids treatment is important.

Annual Sales - Year 2

"EDC" marketing team has a promising plan tohopefully attract parents to the clinic

Net Income - Year 1

Net Income - Year 2

4.5 Summary and Conclusion

Not

Feasible

NotSure

Feasible

Product/Service Feasibility

Industry/Market Feasibility

Organizational Feasibility

Financial Feasibility Overall Assessment

The “EDC” project is feasible in all areas of interest and has a high potential.

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5 Industry Analysis5.1 Industry Definition“EDC” belongs to the “Offices and Clinics of Dentists” industry (NAICS code621210, SIC code 8021). This industry comprises establishments of health practitioners having the degree of D.M.D. (Doctor of Dental Medicine), D.D.S. (Doctor of Dental Surgery), or D.D.Sc. (Doctor of Dental Science) primarily engaged in the independent practice of general or specialized dentistry or dental surgery. These practitioners operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO medical centers. They can provide either comprehensive preventive, cosmetic, or emergency care, or specialize in a single field of dentistry.

5.2 Industry Size, Growth Rate, And Sales ProjectionsThe size of the industry is determined by two main factors, the demand (number of dental visits), and the supply (number of clinics). The following tables show the size of the industry for DUBAI, and the international benchmarking:Industry Size (Dubai)

2010 20112015(projection)

2020(projection)

Industry Sales(Number of Dental Visits)

665,115 738,893 977,651 1,385,353

Number of Establishments(Number of required Dentists)

N/A 920 1,217 1,727

Industry Size (International Benchmark)

20112015(projection)

2020(projection)

Industry Sales 807,780 1,282,47 2,301,34

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(Number of Dental Visits) 3 7


979 1,555 2,790

These numbers must be related to the population to give it a meaning. The dentist per capita is described in details in the market feasibility section.

Industry Growth Rate (Dubai)

20112015

(projection)

2020(project

ion)Industry Sales(Number of Dental Visits)

11% 32.30% 41.70%


N/A 32% 41.60%

Industry Growth Rate (International Benchmark)

2015

(projection)

2020(projecti

on)Industry Sales(Number of Dental Visits)

58.70% 79.40%

Number of Establishments(Number of required

59% 79.40%

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Dentists)The growth rate for both the demand and the supply is promising. Both growth rates are synchronized.

5.3 Industry Characteristics5.3.1 Industry StructureThe industry is totally fragmented, there is no giants in this business. there is no concentration at all.other structural characteristics include the following:

The aging of the population: The age structure in Egypt, 2013 is0-14 years: 32.3% (Kids treatment segment size)15-24 years: 18% (both cosmetic and regular treatment segment size)25-54 years: 38.3% (both cosmetic and regular treatment segment size)55-64 years: 6.6% 65 years and over: 4.8%

Egypt is considered a young country. It is consider a good market for services related to kids and youth. Dental services like kids treatment and cosmetic dentistry will boom.

Competition: The age structure is promising for both cosmetic and kids treatment.

Number of dental clinics in “Msr Elgadida” is 383, while the number is 36 in “Elnozha Elgadida”. It is a good opportunity to provide dental services.

Population of “Msr Elgadida” is 193,000, while population of “Elnozha Elgadida” is 185,000. This means that both have almost the same demand power.

30


Costs and site selection: Costs of general dentistry will be almost the same in all clinics in the market. Costs of cosmetic dentistry and kids treatment are relatively high.“Elnozha Elgadida” population demographics will help “EDC” in marketing its high cost services.

Basis for competition: “EDC” is depending on service differentiation as the basis for competition not the cost. So, “EDC” is offering services like kids treatment and cosmetic dentistry using the latest technologies.

5.3.2 Nature of Participants Firms in the industry:

The industry is totally fragmented. No giants exist. The industry is comprised of large centers offering all dentistry services to small clinics offering just the general dentistry.

Segmentation: The segmentation according to the services offered by dental

clinics in the area of “Msr Elgadida” and “Elnozha Elgadida” are shown in the below figure.

The figure shows there is a lack of cosmetic dental clinics in the area, especially with the opportunity of population demographics that prefers to look better.

31


The segmentation according to the clientele age is shown in the below table:

Age Group Percentage Segment

0-14 years 32.30% Kids treatment segment size

15-24 years 18%both cosmetic and regular treatment

25-54 years 38.30%both cosmetic and regular treatment

55-64 years 6.60% 65 years and over 4.80% The structure is promising to the services offered by “EDC”.

Average prices: The following table shows the prices of basic services offered by dental clinics in the market of “Msr Elgadida” and “Elnozha Elgadida”.These prices are reasonable for the general dentistry services and very profitable for cosmetic dentistry.

Service Price

Fillings from 400 to 600 EGP depending on the filling position.

Root Canals around 300 EGPBasic Cleaning around 150EGP

Bleaching 2000EGPExtraction 150EGP

5.3.3 Key Success Factors

LowPotenti

al

Moderate

Potential

HighPotenti

alJustification

32


Location and Income

Location: selecting "Elnozha Elgadida" as the project location has expanded the market to include "Msr Elgadida" too.Income:the income for both "Msr Elgadida" and "Elnozha Elgadida"

Right Mix of Classes and Activities

"EDC" offers diversified activities, kids treatment,cosmetic dentistry, and regular treatment. This diversification covers all classes and needs.

Member Motivation

Attracting New Customer:new services like kids treatment would attract a large segment of customers.Sustainability:"EDC" follows the latest technology, pain free treatment, least waiting time. These core values would keep customer loyalty level.

Informed and Proactive Staff

Proactive Staff:"EDC" has two emergency daily periods in case a patient suffers pain.Informed Staff:Both doctors are qualified and experienced to deal with patients.

Tightly Focused Target Market

"EDC" offers its elite service for customers with high income and high awareness.

33


Prices prices are almost the same as competitors.

5.4 Industry Trends5.4.1 Political-Legal analysis Description Impact on

"EDC" Justification

Stable political situation

Sisi's military backgroundis certainly a source of strength, as the army remains the most trusted institution inthe country, with around 90% of Egyptians expressing their support for it.

Impact: High

Occurrence: High

The stability of the political system affectsbusiness growth in general because it eliminates uncertainty.

Tax Law

the change in the tax regime (from 20% to 25% bracket)which affected the deferred tax figures

Impact: High

Occurrence: High

Increase in taxes would decrease the profit margin of "EDC"

Terroristic activities

Terrorism in activities representedin attacking military and police sites.

Impact: Low

Occurrence: Low

Although terroristic activities are decreasing with time, they affect

34


5.4.2 Economic environment analysis Description Impact on "EDC" Justification

Theconsumerprice

inflation(CPI)

It is expected that consumer price inflation (CPI) in Egyptto continue in its downward trend over the coming months.

Impact: Medium

Occurrence: Medium

the downward trend of the CPI gives a room for luxurious servicessuch as cosmetic dentistry.

The Expansionary policy

The government is following an expansionary policy inorder to increase the money supply and stimulate the economy to grow.

Impact: High

Occurrence: High

economy stimulation would affect the business growth positively

The gulf support

Exposure to the liquidity story in theGulf is likely to insulate Egypt againstexternal shocks to

Impact: Medium

Occurrence: High

As the liquidity increases, the consumption increases.This would affect "EDC" positively.

35


some degree and keep growth positive,assuming a relatively quick recovery for theregion from the current turmoil.

5.4.3 Socio-cultural environment analysis Description Impact on "EDC" Justification

Poverty

In 2011, Egypt's HDI value was 0.644, which gave the country a rankof 113 out of 187 countries. The report stated that 4.7 million people in the country were living in poverty while another 7.2%of the population.

Impact: Low

Occurrence: Low

although poverty would affect services like cosmetic dentistry, it would not affect general dentistry, besides "EDC" is targeting customers with high income.

Look better culture

people become moreinterested in getting a better look through cloths, haircuts, and even medical intervention.

Impact: High

Occurrence: High

the more the people areinterested in getting abetter look, the more revenues will be gainedby cosmetic dentistry. It would affect "EDC" positively.

Health awareness increase

the culture of healthy food, periodic check-ups, and the importance of sports.

Impact: High

Occurrence: High

the more the people areinterested in getting abetter look, the more revenues will be gainedby general dentistry. It would affect "EDC" positively.

5.4.4 Technological environment analysis Description Impact on

"EDC" Justification

36


The era ofnanotechnolo

gy

nanotechnology is the direct manipulation of materials at the nano scale. This term defines a technology that enables almost complete control of the structure of matter at nano scaledimensions. Nanotechnology will give us the ability to arrange atoms as we desire and subsequently to achieve effective, complete control of the structure of matter.

Impact: High

Occurrence: High

Potential applications of nanotechnology coverimplanting, bone replacement materials, and tissue engineering. These covered applications will be more effective and painless. This would open new areas of services.

Invisalign Invisalign are clear, practically invisible braces that can gently straighten your teeth. They provide an effectiveand comfortable way to straighten your smile without the inconvenience ofwearing heavy, metalbraces. Invisalign braces are easy to take out for cleaning and don’t require a restriction on what type of foods to eat. They get the job done in less time with less

Impact: High

Occurrence: High

many people were afraid of using braces because of bad look. Invisible braces have removed all the barriers to use braces by solving all these problems. It is expected that the numberof customers using braces will increase.

37


hassle.

LaserDentistry

Lasers are used to improve efficiency and eliminate discomfort in a number dental procedures, including filling cavities, reducing tooth sensitivity, getting rid of tumors, and whitening. Laserdentistry is fast, painless, and can effectively eliminate any form of bacteria during the procedure to avoid any further complications or problems.

Impact: High

Occurrence: High

reducing time of treatment, and pain willattract more patients to"EDC" services.

DentalImplants

Dental implants are screw-replacements for the root portionof missing teeth. Implants are used to restore healthy smiles when patients have missing teeth. Implants are effective because they can replace missing teeth, while still giving the patient the feel and look ofa natural tooth.

Impact: High

Occurrence: High

increasing the number ofservices offered by "EDC" would increase theprofit factors.

ZoomWhitening

Zoom Whitening is a new, state of the art whitening treatment that

Impact: High

Occurrence:

whitening is the most famous cosmetic dentistry procedure. Anyenhancement in this

38


gives our patients fast and easy results. In just oneappointment, Zoom! Whitening can make a significant changein a person’s smile and can make their teeth up to eight shades whiter.

High procedure would attract more customers

6 Business Model6.1 Customer Segments

General

DentistrySegment

PediatricDentistry Segment

Cosmetic DentistrySegment

Market Type Mass Market Segmented Segmented

Needs

1. service with no pain.2. reasonable price.

Professional relationship with non co-operative kids.

the customers in this segment are interested in the latest technologies

Distinct Offers

Membership offers for schools of mentally handicapped children, and sports clubs.

Profitability Medium High High

39


Relationship

1. reminder for periodic check-ups by e-mail or phone.2. Announcement of the new services and technologies.

6.2 Value PropositionsThe bundle of services that create value for “EDC” customers:

Waiting time: “EDC” saves its patient time through a strict reservation strategy, patient calls for an appointment, the doctor investigate his case through the phone to decide the time needed in the examination.

Announcements: “EDC” developed a marketing plan that suggests sending an educational announcement to customers of the new technologies and services, it suggests to send a reminder of periodic check-ups to patients.

Patient history: “EDC” has a complete database of the customer historyincluding previous visits dates, x-rays, and medications. This database helps “EDC” doctors to keep tracking

Reservation flexibility: “EDC” offers flexibility in reservation. Patients may reserve through internet or phone.

Emergency examination: “EDC” saves two half hours a day for patient emergencies.

Below

Average Average AboveAverage Justification

Newness

"EDC" offers pediatric dentistry to help examiningkids and mentally handicapped persons in a professional way.

Performance through using the latest

technologies and the 40


talented doctors, "EDC" will be perceived as a quality leader.

Price

"EDC" will not be perceivedas a cost leadership. "EDC"will introduce a high quality service with a reasonable price.

Accessibility

Although "EDC" follows a strict appointment reservation strategy, emergencies will be examined.

6.3 Channels Awareness channels: Marketing team would raise customer awareness

about "EDC" services through direct contact with potential customers in schools and sports clubs.

Service delivery channels: the delivery of “EDC” services will be through its clinics only.

6.4 Customer RelationsThe relationship between patients and “EDC” will be of a personal assistance type, there will be a human interaction between “EDC” doctors and patients to take an appointment and to determine the time needed for examination and the number of visits.

6.5 Revenue Streams“EDC” depends on transaction revenues generated from the use of dentistry services.

6.6 Key Resources Doctors: doctors are the most valuable asset for “EDC”. experience is

the key issue in dealing with kids and mentally handicapped patients. Dentistry tools: “EDC” depends on the latest technologies to attract the

elite customers. Web site: “EDC” depends on the web site for two purposes, reservation,

and feedback surveys. So, the website is a valuable asset to keep the relation with the customers.

41


6.7 Key Activities Marketing: marketing team has a promising plans to attract the following segments:

Kids. Mentally handicapped patients. Cosmetic dentistry segment. General dentistry segment.

Examination activities Customer-Relation activities:The customer-relation activities are divided into two main activities:

Appointment reservation Feedback surveys.

6.8 Key Partnerships Supplier partnership: “EDC” has a relationship with its main supplier, “the united group for trading”. Strategic alliance partnership:“EDC” has already a strategic alliance with a scanning center “Photon Scanning Center” for cephalometric analysis, and 3D scanning. Joint venture partnership:“EDC” is not planning for a joint venture right now.

6.9 Cost StructureCost structure of “EDC” business is dependent on the following variables: Cost-Driven / Value-Driven:“EDC” is a value-driven business. “EDC” offers an elite service to its customers using the latest technology. So, it is not a cost-driven business. Fixed Costs:The items of fixed costs are:

The doctors salaries: Dr. Mohamed, and Dr. Hassan salaries arerespectively 12,000, and 10,000 EGP.

COO salary: 10,000 EGP. The nurse salary is around 1500 EGP. The rent is around 3500 EGP. Other expenses are around 500 EGP.

The total fixed cost is 37,00 EGP per month, 444,000 EGP per year.

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Variable Costs:The main component of the variable costs is the material used in dentistry treatment. the materials used in the dentistry clinics is around 6% of the revenue. Economies of scale:The partner doctors already have a loyal customers, who were contacted to check if they are interested in “EDC” and the feedback was positive. This would enhance the economies of scale for the starting period.

Economies of scope:“EDC” offers pediatric dentistry, cosmetic dentistry, and general dentistry. All these services share the same activities, resources, and channels.

7 Market Analysis7.1 Market Segmentation regarding to the international benchmark for the demand, the age group 5 to 14 years has the highest number of visits, the age group of 15 to 24 years old has the second high demand, 1.5 visits.the reasons for high number of visits for these two groups are simply that they are interested in their look, and pediatric dentistry needs more visits than the general dentistry. the larger the number of visits,the higher the revenue.

7.2 Target Market SelectionEDC will target the two age groups 5-14, and 15-24 by the two main servicesoffered, cosmetic dentistry, and pediatric dentistry. this is because the high income generated from both services.

43


7.3 Target Market SizeEDC plans to open a single location in "ElNozha Elgadida". the following steps were taken to determine the size of the target market:

1. Trade Area both "Msr Elgadida" and "Elnozha Elgadida" are considered the trade area. EDC has a strong evidence to consider both belong to the same trade area. "Elnozha Elgadida" has only 36 dentists for 185,000 population. this is notenough at all. the Gumshoe research ensured this result, some of the population are still loyal to their dentists in "Msr Elgadida". so, the whole population of the trade area is 185,000 + 193,000, which is around 378,000.

2. The number of people belonging to the age groups 5-14, and 15-24Regarding to the population structure of Egypt, and based on the assumptionthat all geographic areas in Egypt has the same population structure, age group from 0-14 is 32% of the population, and age group of 15-24 is 18% of the population. So, the size of the target segment is around 50% of the population, which is around 189,000.

3. The percentage of people visit their dentist on a regular basisalthough EDC has no statistics for this percentage, but regarding to the Gumshoe research and the survey, the potential is high. EDC marketing team has contacted customers of both doctors, Dr. Mohamed, and Dr. Hassan to estimate potential customers, around 500 loyal customers have the intentionto be EDC customers. EDC is expecting around 1500 new customers for pediatric and cosmetic dentistry in the first year. this would make the total potential customers 2000 customers.

4. The size (in EGP) spent by this segment on dental servicesalthough EDC has no statistics for this percentage, but regarding to the Gumshoe research and the survey, the potential is high. EDC will assume from the long experience of the two doctors, Dr. Mohamed, and Dr. Hassan, that the average customer revenue per year is around 500 EGP. this would make the total revenue per year is around 1,000,000 EGP.

7.4 Segmentationthe segments in the market are shown in the following table:

CommentsProfitabi

litySegmentSize

AgeGroup

although specialhigh(32%)120,000-14Pediatr44


needs are served,EDC has no

statistics coversthe market size.

0 ic Dentistry

Although cosmeticdentistry covers

other segments, itwon't be includeddue to lack ofstatistics.

high(18%)68,00015-24

Cosmetic Dentistry

Although generaldentistry has a

low profit margin,the large segmentsize will enhance

the revenuestream.

medium378,000all agegroups

GeneralDentistry

some important attributes of the segments are not mentioned in the table such as the income and the awareness level, because EDC assumption is that most of the population of "msr elgadida" and "elnozha elgadida" have a highincome and a high awareness level.

7.5 Market TrendsThe trend for dentistry is movement toward pain free procedures, cosmetic dentistry using the latest technologies available like implanting, and nano-technology.

7.6 Competitor Analysis7.6.1 Identification of direct, indirect, and future competitors

Direct competitors:only 11% of competitors offer cosmetic dentistry services. no other competitor offers pediatric dentistry services.

45


Indirect Competitors:there is no indirect competitors in such a business.

Future Competitors:the market penetration rate for cosmetic dentistry is relatively low, whilethe market penetration rate for pediatric dentistry is almost zero. these low penetration rates would attract more and more competitors in the two areas of interest.

7.6.2 Competitive Analysis GridDr. Mohamed SolimanIDCEDC

EvenEvenEvenGeographic Location

EvenEvenEvenStaffEvenEvenAdvantageServices Offered

EvenAdvantag

eAdvantageTechnologyEvenEvenEvenPrice

EvenAdvantag

eDisadvantag

eSocial Interaction

EvenAdvantag

eDisadvantag

eBreadth of Clientele

EDC will compete mainly the IDC. EDC has an advantage over IDC in both technology used and the services offered, while IDC has an advantage due tobeing in this market for more than 5 years, these advantages relate to the breadth of clientele and social interaction.

46


8 Marketing Plan8.1 Marketing Objectives

Increase customer referrals by 7% per quarter. Decrease customer acquisition costs by 8% per year. Increase brand awareness, evidenced by an increase in unsolicited

requests for services.

8.2 Financial Objectives A double digit growth rate for the first three years. A 4% decrease in labor costs per year. Profitability by the end of year two.

8.3 PositioningEDC will position itself as a quality leader, latest technology seeker, skilled provider of general, cosmetic, and pediatric dentistry. patients will appreciate the strong level of customer satisfaction.

47


8.4 Marketing MixEDC is comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service.

Pricing: The target market is not all that price sensitive. Regardless, prices will be competitive to similar services.

Distribution: All services will be provided at The clinic. Advertising and Promotion: A campaign consisting of ads, seminars, and

networking will be used to generate visibility and build the brand. Customer Service: EDC recognizes the need to have exemplary service to

build a strong, sustainable business.1. Email your patients weekly dental tips2. Use keywords in a blog post to show up for certain terms to reach

interested patients.

3. Make a video introducing your staff to help prospects become more comfortable with your practice

4. Use Facebook or Twitter to post fun dental facts to patients - to share with their friends.

8.5 Customer Profile Middle to high income College educated White collar Married with children All ages Two-income families

8.6 Internal MarketingIn order to ensure sustainability, and keep the current customers, EDC willdo the following:

A periodic satisfaction survey. Patient feedback after each visit.

48


Send a periodic reminder of checkups. Send a periodic e-mail of the new technologies. A discount membership card for families. Be on time and if you cannot, personally apologize to the patient for

any inconveniences this has caused him or her Greet patients by name (both dentist and staff) Install a music system Have multiple telephone lines Call patients at home after significant treatment to ensure patient is

doing well Install a "good-bye" mirror so patients can check their appearance

before leaving the office Offer coffee or other beverages Keep reading material current Provide referral cards which offers both the referring current patient

and the new patient a discount of certain services Have toys for children to play with Give patients magnets, toothbrushes, etc. with dental practice name

and logo

8.7 External MarketingIn order to attract new patients, EDC is going to do the following:

Arrange seminars in schools, special needs communities, and clubs. Arrange with kids clothing, and toys stores to offer one free visit

to EDC clinics. Develop a social network through the internet (web site, blog,

twitter, and facebook). Yellow page listing. Run newspaper advertisements. Hold an open house event to show off new office, meet new staff. Offer to write a monthly column on dental health issues or a

Question/Answer column. A discount membership card for the first fifty patients.

49


9 Management Team and Company Structure9.1 IntroductionEDC management philosophy focuses on quality, integrity, and providing the highest satisfaction level for both employees and patients.

9.2 Management TeamDr. Mohamed Ahmed, Cofounder and CEO, age 45Responsible for strategy formulation and the overall success of EDC. Dr. Mohamed worked in many dental clinics for 5 years, then he started his own clinic for twelve years. Dr Mohamed has 15 years experience in pediatric dentistry.

Dr. Hassan Mahmoud, Cofounder and Technical Manager, age 40Responsible for all issues related to doctors and .Dr. Hassan has 10 years experience in cosmetic dentistry

Ali Alshiekh, Cofounder and COO, age 37Responsible for the day-to-day operation of the clinic, the maintenance of clinic equipments, the acquisition of new equipments, manage web site, customer feedbacks, and satisfaction surveys. Ali has more than 7 years experience in market analysis for NTRA, and more than 7 years in IT field.

9.3 Skill Profile and Gaps in Management Team

ExecutiveLeadership

Accounting

Operations

Marketing HR IS

Dr. Mohamed Dr. Hassan Ali Alshiekh Gap

One gap exists in the management team, accounting. This gap will be handledby a part time employee.

50


9.4 Ownership and Compensation

Name Position BaseCompensation

% Ownershipin Company

PersonalInvestment in

Company

Dr. Mohamed Cofounder and CEO 12,000 33.30% 200,000 EGP

Dr. HassanCofounder and Technical Manager

10,000 33.30% 200,000 EGP

Ali Alshiekh

Cofounder and COO 10,000 33.30% 200,000 EGP

9.5 Board of DirectorsThe board of directors consist of the cofounders only, Dr. Mohamed, Dr. Hassan, and Ali Alshiekh.There is no outside members. Ali Alshiekh will play the role of customer advisor, because his duties relate to customer relationship through collecting patient feedback, satisfaction survey, and customer retention programs. Dr. Hassan will play the role of technical advisor, because his duties relate to doctors and the development of the clinic. Dr. Mohamed will play the role of the general advisor because of his long experience inthe field.

9.6 Organizational Chart

51


10. Financial Projections10.1 Source and Use of Funds Statement

Use Of FundsCost Item

Examination room * 3 315,000Sterilization room furniture 5,000Retrofit Building 150,000Office and computer equipment 10,000Furniture 50,000Initial Inventory 5,000Cash (working capital and reserve to cover losses) 65,000

Total Required Funds 600,000Source of FundsSource Amount

Management team Investment 600,000the clinic will be funded totally by partners, each partner will pay 200,000 EGP to have one third share of the business.EDC dental practice will usually hold the following items in stock:

sedatives, antibiotics and other medicines and pharmaceutical items

52


consumables such as disposable instruments and rubber gloves stocks of over-the-counter dental products, such as toothbrushes,

floss, brushes, mouthwashes and toothpaste.

10.2 Pro Forma Income StatementRegarding to the business statistics ( www.bizstat.com ) for the year 2011,the benchmark for the dentistry office is shown in the following table:Sales 100.00%Cost of Sales 5.93%Gross Profit 94.07%Officers Comp. 18.56%Salary-Wages 22.63%Rent 6.47%Taxes 3.93%Advertising 1.28%Benefits-Pension 2.85%Repairs 1.03%Bad debts 0.00%Other SG&A Exp. 23.50%Amort. & Dep. 0.00%Interest Earned 0.00%Interest Expense 0.94%Other Income 3.00%Net Profit 13.53%

EDC forecasted income statement is shown in the following table:

Notes

Net Sales1,000,000

COGS 60,000 Equal to benchmarkGross Profit 940,000 Expenses

1. Salaries and Wages 396,000 Equal to benchmark2. Marketing 15,000 Equal to benchmark3. Rent 42,000 Less than the benchmark4. Telephone, Internet, and

Web Site 2,000not calculated in the benchmark

5. Supplies 5,000not calculated in the benchmark

53


6. Depreciation and Amortization 30,000

not calculated in the benchmark

7. Taxes 112,000 Total Expenses 602,000

Net Income338,00

0 Higher than the benchmark

10.3 Pro Forma Balance SheetRegarding to the business statistics ( www.bizstat.com ) for the year 2011,the benchmark for the dentistry office is shown in the following table:

Cash 27.53%Receivables 1.76%Inventory 0.41%Other Current Assets 2.51%Total Current Assets 32.21%Fixed Assets 48.05%Other Non-Current Assets 19.74%Total Assets 100.00%Accounts Payable 1.62%Loans/Notes Payable 5.77%Other Current Liabilities 24.16%Total Current Liabilities 31.56%Other Long-Term Liabilities 43.78%Total Liabilities 75.34%Net Worth 24.66%Total Liabilities Net Worth 100.00%

EDC forecasted balance sheet is shown in the following table:ASSETS Notes

54


Current Assets

1. Cash and Cash equivalent

433,000

much more higher than benchmark, because Net Income added as RE without any divdence.

2. A/R 0 3. Inventory 5,000 equals the benchmark.

Total Current Assets507,0

00the cash will be reserved for the EDC second branch

Fixed Assets

1. Equipments320,0

00

2. Furniture50,00

0

3. computers10,00

0

4. Fixtures150,0

00

3. Less Depreciation

-30,00

0 depreciation is around 10%

Total Fixed Assets500,0

00

equals the benchmark. fixedassets almost equals current assets

Total Assets938,0

00

LIABILITIES AND EQUITY

Shareholders’ Equity

liabilities are zero, because EDC depends only oncofounders capital. EDC will pay in advance for supplies.

1. Capital600,0

00

2. Retained Earnings338,0

00 no dividenceTotal liabilities and equity

938,000

55


10.4 Payback Period Analysis

Payback Period = Amount to be Invested/Estimated Annual Net Cash Flow = 600 / 338 = 1.8The payback period is two years.

10.5 Break-Even AnalysisIn order to calculate the break-even point, the situation has to be studied:Given:Customer spends around 500 EGP / year (Gumshoe research ).Fixed cost = 444,000 EGPRequired:Number of customers to break-even Solution:Variable cost = 6% * revenue = 0.06 * 500 = 30 EGPNumber of customers to break-even = fixed cost / (revenue – variable cost) = 444,000 / (470) = 944 customers

10.6 Ratio Analysis

Regarding to the business statistics ( www.bizstat.com ) for the year 2011,the benchmark for the dentistry office is shown in the following table:

Return on Sales 13.53%Return on Investment 61.82%

ROS = net income / net sales = 338 / 1000 = 33.8%

56


The benchmark is 13.53%. EDC return on sales is higher than the benchmark.

return on investment (%) = (Net profit / Investment) × 100 ROA = net income / average total assets = 338 / 600 = 56.3%The benchmark is 61%. EDC is lower than the benchmark by 4%, because EDC calculated the tax as 25%, while the benchmark is 4% only.

Appendix AConcept Statement Feedback Survey1. What do you like most about our services?

2. What do you suggest to make our services better?

3. All things considered, How Likely "EDC" is going to succeed inyour opinion?

All things considered, How Likely "EDC" is going to succeed in your opinion? Certain

High chanceNot sureLow chanceNever

57


4. Do you have any other comments, questions, or concerns?

Appendix BSurvey Questions

1. Which age group do you belong to?Below 2021 to 3031 to 4041 to 60Above 60

2. How would you rate the health of your teeth/gums?Excellent

58


Very GoodGoodFairBad

3. Have you ever gone for a cosmetic dental treatment?YesNo

4. Does your dentist have a special children's room with humorous cartoons,colorful cartoon toys, so your baby is no longer afraid?

YesNo

5. Does your child allow your dentist to work on him?YesNo

6. Are you satisfied with the time you have to wait to see your dentist? YesNo

7. All things considered, over the next 12 months how likely are you to replace your dentist?

CertainHigh chance

59


Not sureLow chanceNever

8. How much importance do you give to various factors before trying "Elite Dental Clinics" services?

Veryimportant

Somewhatimportant

Notsure

Notimportant

Skill of the dentist/hygienistCost of servicesUse of latest technology and equipmentsProviding elite cosmetic dental treatmentEffectiveness in pain managementProviding dental services for non co-operative kids

60


Appendix C1. the sample is not a representative sample because most of the group

members belong to a single age group. the good side is, most of the group members have children, which is good to analyze the need for kids treatment.

2. Most of the group members have a good to excellent teeth/gums health, which means they have health awareness. this awareness would make it easier for the marketing team to educate customers the new technologies and trends.

3. Around 30% of the sample have visited a cosmetic dentist. the question doesn't measure the desire of the other 70% to use this service, but question 8 does.

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4. There is almost no supply for professional kids treatment. This gives "EDC" the opportunity to penetrate the market.

5. Around 40% of the sampling group suffers the non co-operative kids. this ensure the existence of a problem that "EDC" could solve to its clients.

62


6. Around 50% of the customers suffers from the waiting problem."EDC" will offer a solution for this problem.

7. Around 75% of the group could be targeted by "EDC", 30% of them with high chance, 45% with a fair probability.

8. Regarding to the answer of this question, cosmetic dental services comes as the first interest for the sampling group. both "dealing withthe non co-operative kids" and "using the latest technologies" come asthe second interest.

63


References1. http://www.bizminer.com/search/Offices-of-Dentists-NAICS-621210/ 2. http://www.businessmonitor.com/ 3. http://www.yellowpages.com.eg/ar/category/%D8%B7%D8%A8-

%D8%A7%D8%B3%D9%86%D8%A7%D9%86-%D8%B9%D9%8A%D8%A7%D8%AF%D8%A7%D8%AA/3203/p18

4. http://www.cairo.gov.eg/areas/Lists/List1/DispForm.aspx?ID=4 5. http://www.bizstats.com/corporation-industry-financials/health-care-

social-assistance-62/offices-of-health-practitioners-and-outpatient-care-centers-621/offices-of-dentists-621210/show?asset_class_id=3

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http://www.bizstats.com/corporation-industry-financials/health-care-social-assistance-62/offices-of-health-practitioners-and-outpatient-care-centers-621/offices-of-dentists-621210/show?asset_class_id=3



http://www.cairo.gov.eg/areas/Lists/List1/DispForm.aspx?ID=4

http://www.yellowpages.com.eg/ar/category/%D8%B7%D8%A8-%D8%A7%D8%B3%D9%86%D8%A7%D9%86-%D8%B9%D9%8A%D8%A7%D8%AF%D8%A7%D8%AA/3203/p18



http://www.businessmonitor.com/

http://www.bizminer.com/search/Offices-of-Dentists-NAICS-621210/

Documents

Enterpreneurship - Dental Clinic