St.

Mark
Community Health Services

Operational Commencement Plan

2010-2012
 Contents

1. Executive Summary................................................................................................3
2. Introduction ............................................................................................................4
3. Corporate Strategy..................................................................................................4
4. Inception Action Plan .............................................................................................6
5. Financial Plan .........................................................................................................9
6. Conclusion & Way Forward.................................................................................11
1. Executive Summary

This Commencement Business Plan covers the initial establishment and early
implementation (delivery) of a St. Mark Health Facility. The business plan
summarises the preferred option arising from St. Mark’s feasibility study and sets out
an action plan and delivery programme.

The business plan provides key information for founders, partners and investors and
sets out a calendar of actions required to take St. Mark’s services from pre-inception
through the delivery of the proposed services.

As shown in the feasibility study report, St. Mark is probably the most innovative
health care services provider in Uganda. We have an iconic status evidenced by our
proposed introduction of mobile healthcare facilities to offer quality services to the
underserved peri-urban residents around Uganda’s capital, Wakiso district and other
sub-urban areas of the country.

This commencement plan is a modification of our earlier plan which had proposed
acquisition of a mobile clinic right from inception. Given the level of available
funding, we have found it prudent to scale down from our earlier plan without
affecting viability. In this scaled down approach, propose to start with a fixed medical
facility before we roll out the mobile healthcare services. Establishing a fixed medical
facility for St. Mark will provide a unique development, planning and promotional
mechanism.

The facility will provide the needed initial growth that will be enough to fund the
acquisition of a mobile clinic in the second year. It will also provide coverage in terms
of brand exposure, and promotional awareness while also serving as a central location
for corporate, administrative and other headquartered operations supporting the
smooth delivery of mobile health care services.

By the second year after commencement, we believe the facility would have broken
its initial operations even and provided a platform to launch St. Mark’s first mobile
clinic. Through a consistent brand extension effort, St. Mark will roll out its unique
service proposition in building mobile services in subsequent 12 months through
retained earnings. All operations following this development shall be governed by the
long-term growth strategy of St. Mark’s asset base.

An action plan detailing the early actions needed to promote the St. Mark medical
facility is given in Section 4. This includes a summary set of targets linked to critical
success factors and identifies potential signature projects.

The key financial issues for the establishment of the medical facility are set out in
Section 5 of this report. It is anticipated that the core funding costs for establishing the
facility in Inception Year (2010/11) will be US$45,000.

The final section of the commencement plan proposes a way forward strategy for the
St. Mark business until 2012.
2. Introduction

The concept of a network of mobile clinics based on St. Mark Medical was first
discussed in 2008. Since then various reports and studies have recognised the need for
a better approach to spatial delivery of medical services in the sub-urban areas of
Uganda (i.e. mobile clinics).

The current proposal stems from the 2009/2010 business plan, as a great deal had
been accomplished in reaching the initial round of funding, both in the conception and
planning of the operations.

More importantly a wide variety of stake holding efforts have been undertaken to
maximise the potential benefits both to local communities and to the shareholders of
the business. It has been this progress combined with a desire by all to launch services
and gain the momentum that led St. Mark Community Health Care Services to earn
outstanding recognition during the Global Social Venture February 2010 Competition
round in Milan Italy.

This Commencement Plan covers the first 2 years of the establishment and early
implementation (delivery) of a St. Mark Medical Services (i.e. 2010 to 2012). The
plan sets out an action plan and delivery programme from 2010 to 2012 i.e. the
Planning Period.

This plan is based upon the preferred option arising from the feasibility study. The
preferred starting option is to establish a fixed medical facility for St. Mark which is
governed by our corporate structure model. This is just part of our long term initiative
to establish a network of mobile clinics as our core business model.

3. Corporate Strategy

i) Market Entry Strategy

As shown in the feasibility study report, St. Mark is probably the most innovative
health care services provider in Uganda. We have an iconic status evidenced by our
unique idea of introducing mobile healthcare facilities to offer quality services to the
underserved peri-urban residents around Uganda’s capital, Wakiso district and other
sub-urban areas of the country. However, given the initial available funding, we have
found it necessary to adjust our initial strategy to ensure that we enter the market in a
viable manner that will facilitate long term and balanced growth for the operations
and ultimately raise the value of St. Mark’s assets to unprecedented levels.
We propose to enter the market initially through establishing a fixed medical centre
that will also serve as our corporate headquarters. The centre will provide the needed
initial growth that will be enough to fund the acquisition of a mobile clinic in the
second year. It will also provide coverage in terms of brand exposure, and
promotional awareness while also serving as a central location for corporate,
administrative and other headquartered operations supporting the smooth delivery of
mobile health care services.

In addition, establishing fixed premises will be in line with the local regulatory
framework which requires one to have a fixed place of business. The mobile clinics
will be mere delivery channels coordinated from this central facility.

ii) Pricing Strategy

St. Mark is adopting an aggressive pricing strategy, which seeks to offer the most at
the least to our customers while remaining profitable. This will entail a combination
of target pricing and discriminatory pricing in which prices at our fixed facility will be
market rates so as to subsidise the mobile clinic services which will be targeting the
relatively poorer segments. The outcome will be a profitable entity that provides
quality healthcare services across the board.

iii) People Strategy

Health services are unique, because the production and consumption process is
simultaneous, and the quality of services is as good as the staff delivering. This means
that the management and staff will form a critical input in the effort to provide better
services than the competition. St. Mark plans to recruit quality staff and align them to
the organisational mission and culture. All staff require to commence operations will
be ready one month in advance. This means recruiting two months before the planned
opening, conducting induction training, coaching and team building activities for a
period of one month.

iv) Marketing and Communication Strategy

No single communication tool is effective alone in attracting; persuading customers to

buy, keep coming back for more services. Therefore, to position St. Mark in the minds
of customers as the preferred health services provider calls for a combination of
communication tools. We therefore, plan to adopt an integrated marketing
communication strategy.

− A service launch activity and advertising campaign will be rolled out to create
awareness, build a big brand feel and persuade potential customers to come
and seek our services.
 − A sales promotion strategy will be developed to further enhance sales, remind
customers about the invaluable partnership with St. Mark and build relations
for future business growth.
− To enhance memory and provide a tangible link between St. Mark and the
intangible services, physical gifts will be given out to customers. Such items
will include pens, T-shirts, caps, calendars, diaries and key holders.
− St. Mark will also support relevant corporate social responsibility activities
and partnerships – activities that are beneficial to the communities.

Information Management and Technology

In order to improve efficiency of billing and service delivery, we will use a secure,
networked, Electronic Medical Records (EMR) system. The health centre will use the
most advanced computer, server and software systems, as well as Internet
connections, in order to optimize the potential the EMR system software resulting in
faster verification, efficient patient information transfer, reduction in administrative
costs, computer breakdown or malfunction, as wells as allowing outside access for the
physician in order to access important patient information for hospital admissions and
in other important situation where information is needed about the patient in
optimizing the care of the patient. St. Mark medical centre is strongly considering
EMR, in order to secure the success and efficiency of the office.

Audit Arrangements

St. Mark will maintain proper financial reports and audited accounts, copies of which
will be made available to the shareholders not more than six (6) months after the end
of each Ugandan financial year. The Audit reports will be prepared by an independent
audit firm, whose costs will be paid for by the company. St.Mark will also submit to
the board of directors regular quarterly progress reports which will enable the board
provide adequate oversight.

4. Inception Action Plan

This section highlights some of the early actions needed to launch and promote the St.
Mark medical business within its first phase of development. A detailed annual action
plan for the Inception period (2010) including agreed priorities and costs will need to
be developed and approved during the pre-execution phase.

We have established some basic milestones to keep the business plan priorities in
place. Responsibility for implementation falls on the shoulders of the management
team. This Milestones table will be updated as the year progresses using the actual
tables. New milestones will be added as the first year of operations commences.

Table1: Scheduled Inception Activities

Task Start Finish

Identify Premises July 1, 2010 July 21, 2010
Re-model, and furnish facility July 21, 2010 August 3, 2010
Design and place first adverts August 3, 2010 August 9, 2010
Install and Test EMR system August 3, 2010 August 4, 2010
Staffing, recruitment & employee training July 21, 2010 August 20, 2010
Finish Printed Materials August 3, 2010 August 9, 2010
Monthly Financial Review by management September 30, 2010 Continuous
Monthly Operational Review by management September 30, 2010 Continuous
Promotional events August 2, 2010 August 6, 2010
Begin first appointments September 1, 2010 September 2, 2010

It is proposed that the Inception period should start in April 2010 as by this date the
memorandum and investor financing decisions will have been completed and the new
governance structure will be in place. This will allow the St. Mark’s objectives and
outputs to be matched to the financiers/investor objectives.

An April 2010 start date would also allow time for a working team to take the project
from the feasibility stage to inception and to secure further buy-in and core funding as
appropriate. During this phase it is important that funding be provided to support the
working group, to maintain momentum and maintain contact with stakeholders.

Figure 1: Indicative Scheme for the Inception Stages of a St. Mark Medical
Facility

2009 2010 2011 2012

Pre- Inception Year 1 Year 2

inception (6months)

Review

The Action and Business Plan relates to the following main stages:
2009-2010: Pre-Inception Period (feasibility study and refinement)
2010-2010: Inception period (6 months)
2010-2011: Delivery Year 1
2011-2012: Delivery Year 2
2012 Review

Table 2: Inception Action plan

Objective / Core
Critical Success Factor Action Required Signature Project
Issue

Differentiate between branding the St.

Mark medical business and branding or
Understand Branding Experience the St. Mark-
Image, Identity and promoting the mobile health services.
and use it to maximum Innovative Quality
Profile Understand the target audiences. Build
effect. Healthcare
consensus amongst partners around brand
values.

St. Mark Medical is a place that is readily

Image, Identity and Connecting Quality and
Haven-making recognized and accepted as a destination
Profile Customer care
for affordable quality healthcare.

No business gets all the required partners

on board from the outset. First and
foremost, get support and ownership from
those partners that are most important or
influential i.e. without whom the Medical
facility may not progress

Work hard to engage partners in all sectors

Community Widespread ‘ownership’
– but especially the public sector - by
Empowerment / from key public, private Connecting Communities –
understanding what’s in it for them, and
Governance and voluntary sector People Perceptions
targeting their involvement accordingly.
partners.
Consider the development of a
Community Panel (based on the historical
wide perception citizens model) to act as a
sounding board for project and programme
development.

Build on local pride and ownership of St.

Mark Medical services special by
prioritizing activities in these areas and
dealing with long standing community Experience the Quality
needs. Healthcare – Connecting
Community Capturing local hearts
Quality and Customer care
Empowerment and minds
Ensure community engagement touches all and Connecting
St. Mark activities by empowering Communities
community involvement in all aspects
from local projects to strategic planning
and prioritization.

Ensure everything associated with, or

branded as part of the Regional Park is of
New Visitor Centre
the highest possible quality.
Image, Identity and Regional Park Quality
Quality, quality, quality
Profile Scheme Regional Park
Actively encourage design competitions.
Innovative Design Mark
Establish design benchmarks. Develop
pan-park quality assurance schemes.
5. Financial Plan
It is estimated that start-up expenses will be $44,000. This amount of money will be used to
purchase office equipment, medical supplies, furniture, stationary, and other start-up expenses.
The table below gives a high-level breakdown of how we plan to spend the budget.

Table 3: Budgeted Start-up Expenditure

Expenditure US $
Capital Expenditure
Premises Re-modeling & fittings 4,000
Computer Hardware and Software 3,000
Medical Equipment 20,000
Sub-total 27,000

Other Start-up expenses

Publicity and Marketing & Promotion 2,000
Branding, Signage & Corporate Identity 1,000
Staff Recruitment 2,000
Medical Supplies 4,000
Starting Salaries 6,000
Rent 2,000
Sub-total 17,000

TOTAL 44,000

Assumptions

St. Mark will adopt best practices of health services provision to direct our services. The table
below shows assumptions associated with demographics, best practices, inflation and tax that we
have base on to make our projections.

Table 4: Key Assumptions

Operating Assumptions Year 1 Year 2 Year 3 Year 4 Year 5
Average fee per patient (US $) 5 5.5 6.05 6.66 7.32
Inflation rate 10% 10% 10% 10% 10%
Tax rate 30% 30% 30% 30% 30%
Population growth rate 2.80% 2.80% 2.80% 2.80% 2.80%
Summary of Financials

Basing on the above assumption, below is a summary of St. Mark’s projected income statement,
balance sheet, cash flow statement as well as the key financial ratios.

Table 5: Financial Summary

Year 1 Year 2 Year 3 Year 4 Year 5

Summary Financials ($)
Revenue 67,500 156,025 268,931 384,571 591,118
Gross Profit 40,000 80,675 160,397 224,106 371,754
EBIT 2,300 28,955 90,808 149,018 275,971
EBITDA 5,200 37,755 100,208 163,818 291,171
Net Profit 1,610 20,269 63,566 104,312 193,180
Net Cash from Operating
Activities 1,413 26,549 69,170 115,065 201,150
Capital Expenditures 27,000 55,000 4,000 53,000 3,000
Cash 14,413 -14,038 51,132 113,197 311,347
Total Equity 41,610 61,879 125,444 229,757 422,936
Growth
Revenue Growth Rate -
CAGR: 131.1% 72.4% 43.0% 53.7%
Net Earnings Growth Rate -
CAGR: 1158.9% 213.6% 64.1% 85.2%
Ratios
Current Ratio 249.3% 61.4% 265.8% 342.5% 513.6%
Profitability
Gross Profit % 59.3% 51.7% 59.6% 58.3% 62.9%
Operating Expenses % 48.4% 33.1% 25.9% 19.5% 16.2%
Net Earnings % 2.4% 13.0% 23.6% 27.1% 32.7%

Returns
Return on Assets 3.0% 24.2% 39.2% 37.0% 38.4%
Return on Equity 3.9% 32.8% 50.7% 45.4% 45.7%
The forecast income statement shows that St. Mark will start making profits even in the first
year.

The balance sheet shows a steady growth in total assets primarily funded by profits that are
ploughed back.

St. Mark’s revenues grow by 131% in the second year as result of acquiring the first mobile
clinic. However, because of this acquisition, we have a negative cash flow in the second year.

It is important to note that the profitability ratios are very good. The Operating Expenses ratio
declines consistently as St. Mark’s operations grow as we reap from economies of scale.
Consequently, the net earnings ratio grows from a mere 2.4% in the first year, to an impressive
32.7% in the fifth year.

Return on Assets and Return on Equity grow tremendously from 3.0% and 3.9% to 38.4% and
45.7% respectively over the five year period.

6. Conclusion & Way Forward

Our original idea was for St. Mark to start fully fledged mobile clinic services in the areas
surrounding Kampala City. However, due to financing constraints, we found it necessary to scale
down from our initial plan. The new idea is to start St. Mark Medical Centre with US$45,000
and grow organically and be able to finance our first mobile clinic in the second year.

This scaled down business commencement plan has clearly articulated that we can ably start
operations with initial capital of US$45,000 invested in a fixed medical centre as a launch pad
for our mobile clinic services. Through retaining profits, St. Mark has very high growth potential
coming from a profit of US$ 1,600 in the first year to US$ 200,000 by year five with equity
growing to US$ 420,000.

It is therefore our considered view that we start operations following the draft work plan
included herein, as we continue to look for another co-investor to scale up St. Mark’s operations.
It is evident that with US$ 45,000 the business is very viable and offers immense returns on
equity.