Hello, everybody. It's great to be back in person, I hope, at the Society of Critical Care Medicine's Annual Congress. I want to thank the organizers of this pre-conference, which I think will be a really exciting session, so I'm really looking forward to it, for inviting me here to speak today. My name is Derek Wheeler. I'm honored and privileged to serve as the Executive Vice President and Chief Clinical Officer at the Ann and Robert H. Lurie Children's Hospital of Chicago. I also am the Crown Family Professor of Pediatrics at Northwestern University's Feinberg School of Medicine. Really great to be back in person, and it's been a couple of years since I've been able to come to the Congress, so I'm really looking forward to hearing the rest of the speakers and attending the Congress. So my session is entitled, How to Write a Business Plan for the Intensive Care Unit. Okay, so a couple housekeeping items. First of all, I have no relevant financial relationships to disclose. And the objectives of my talk today are twofold. So first, we're going to define the purpose of a business plan, and as part of that, we'll define what a business plan is. And second, we'll compare and contrast the elements of a business plan with a research grant proposal. I suspect that many of you have written a research grant proposal and have been successful doing so, and I will tell you that there are really a lot of similarities between writing a business plan and writing a research grant proposal. There's some differences as well, but we'll go ahead and compare and contrast the elements of both and use that to drill down and define in greater detail the specific elements of a business plan. So really, the first question is, why do you write a business plan? And I think that's a really important question and a very relevant one. And I would answer that you write a business plan in order to justify the hospital investing in your program. And so, you know, I think as many of you know, hospitals face major financial headwinds, and I think that that is shown on this slide. This is a slide from Kauffman and Hall, a consulting group, and shows the operating margin for a large number of hospitals across the United States. Now, your operating margin is really revenue minus expenses divided by your revenue. And you can see that pre-pandemic, hospital margins in at least the financially strong hospitals ran around three or four percent, and they've been really negative since about January of 2022. And that's not really a tenable situation for the long term. And we'll get to the reasons why in a second, but I would say that the major reason for writing a business plan is to make the hospital administration comfortable that they're spending their limited funds wisely and investing in your successful program. And so, that's probably the principal purpose for writing a strong business plan is so that you will actually be able to secure the funds and demonstrate that you're going to make a good return on the hospital's investment. So why are hospitals facing major financial headwinds? And I think this is, again, from Kauffman and Hall. This shows revenues and expenses. And you can see that hospital revenues are actually increasing, but unfortunately, hospital expenses are increasing at a greater rate. A lot of that is due to labor costs, as well as the purchased services and capital investments are costing more money. And so, hospitals are spending money more than they're bringing in. And so, that is really why hospitals have a negative operating margin. And, you know, that's really one of the reasons why hospital administrators are going to be really reluctant to spend any additional funds unless it can be done in such a way that they can demonstrate an effective return on their investment. So, again, this is not too dissimilar from research study proposals, right? So, this is a slide of the number of research grant proposals over time. And you can see here that the number of applications has increased significantly. And you have more research grant applicants competing for either the same number level of funds or even, in some cases, lower levels of funds. And just like funding agencies want to make sure that what they invest in is actually going to make a difference, they want to see a return on their investment. That really is one of the reasons why, you know, you write a research grant proposal, and the same is true for a business plan. So, the first and probably most important purposes of both is to demonstrate that what you're going to do is actually going to generate a return on investment for the hospital in the case of the business plan or the research proposal in the case of the funding agency. So, I like historical quotes. Not everybody does. But I think these two particular quotes from Benjamin Franklin and Winston Churchill are fairly relevant to the topic at hand. So, Benjamin Franklin said, by failing to plan, you are planning to fail. And Winston Churchill said, he who fails to plan is planning to fail. And I think that that really encapsulates the second principal purpose for a business plan or a research grant proposal is it helps you plan your project in such a way that it increases your chances of success. So, you know, I think that's probably the second principal purpose for your business plan is it allows you to lay out in great detail what you're going to do, how you're going to do it, and the key deliverables that you're going to show to your hospital. And that's shown here on this slide. It allows you to take your idea, generate a proposal, and then that turns into a project, which then turns into a return on investment. So, business plans and grant proposals are similar in that they allow you to define your goals and objectives. They provide a roadmap for how you will achieve them. And they establish a timeline with key deliverables. So, let's look at the specific elements of both business plans and grant proposals. And I said that they're very similar in a lot of ways. And so, you know, this, the research grant proposal elements are shown here on your left. And I think that's what, how the NIH prefers their research proposals. And then at least from a business plan perspective, there's a lot of different ways to write a business plan, but this was how I was taught. And if you go online and you look up a business plan or how to write a business plan, it's going to discuss these major foundational elements. Sometimes the order will change, just like they do with a research grant proposal, but the foundational elements are fairly specific and unique to the business plan. To the business plan and fairly consistent. So, they're going to like to see these elements for whatever business plan that you write. So, you know, the business plan starts with an executive summary. And I equate the executive summary with the specific aims page of a grant. I will, I was always taught, you know, when I was doing research that the most important part of your research grant proposal was the specific aims page because that was in frequently the first thing that the reviewer saw. And that's, that's the same exact thing is true for the executive summary of a business plan. It's probably the most important part of your business plan and your proposal. And it's, it really should catch the eye of the hospital administration. They may only read the executive summary and skip over the rest. So, so you need to make sure that what you put down in your executive summary makes, makes a big difference and shows adequately what you're trying to accomplish. So again, it's the most important part of the business plan has to tell a compelling story. Really should make the reader want to keep reading the business plan, just like the specific aims page for a research grant proposal. These business plans and grant proposals are really long. They're really detailed. And so when you're dealing with hospital administrators who have a limited amount of time to read through these, you need to tell a compelling story and really capture their attention with your executive summary. You want to summarize the key messages of the plan. You generally try to do that in about one to two, maybe three pages at the max. You want to clearly define the problem, your proposed solution and the opportunity that this represents. And as I mentioned, frequently, not always, but frequently the executive summary is the only part of the business plan that gets read. So you need to make it important. And it's, it's, you need to spend a lot of time on this. Just like, again, how I was taught to write a research grant proposal. You always write the specific aims page last with the business plan. You write the executive summary last. It's the last thing that you do. And so, you know, if you think about it and people talk about the elevator pitch where you have a limited amount of time to pitch a proposal to a funding agency, to a donor, to your boss. And so the reason it's called an elevator pitch is you should be able to talk about this in the time that it takes to write up an elevator. So you have a very limited length of time and that that's really a really great analogy for your executive summary. You have to say that there is a big problem that affects people in a negative way. I'm working on this new thing, which has the power to help solve the problem. That's essentially what you want to put down in your executive summary. And I think the analogy of an elevator pitch is a really good one for writing your executive summary of your business plan. So the next portion of your business plan is a description of the business itself. You can think about this as the relevant section and the facilities and other resources section for your grant proposal. It's maybe a little loose of an analogy, but I think they're fairly similar in that way. Really, you want to provide important background information on the opportunity, the proposed solution, and why the organization should make this investment right now at this moment in time. It really provides detail on the product or service. I would say that pictures are always helpful. Pictures, diagrams, cartoons, videos, if you can provide those, again, it helps tell your story. It helps tell the compelling story and it helps grab the attention of the hospital administrator. And I've shown some pictures of here of some different business plans that I've written and how we've used pictures. They say that a picture capture is worth a thousand words, and it really makes a big difference to use pictures and diagrams whenever possible when you write the description of the business section of your business plan. The next sections are the market, the competition, marketing, sales, and operations. And I think of this as very similar to the equipment page of your grant, the research strategy, the significance, innovation, and an approach of your research grant proposal. And so, again, here I go with quotes, but Yogi Berra said that you've got to be careful if you don't know where you're going because you might not get there. I think that's absolutely true for your business plan. In this section, the market and competition sections, you need to define the market. Who is it? Who are you trying to direct your business plan towards? How big is that market? Is there an opportunity here to go outside of your hospital to a bigger market to the public? And then you also want to kind of talk about how powerful is the competition? So, you know, if you're putting together a business plan for a new clinical program, are there other hospital systems in your location, in your region that have that program already and how are they going to be able to help you? And how well is it doing? Those are the kinds of things that you need to talk about in this market and competition section of your business plan. Again, the market is defined typically as the potential customers who have purchasing power and unmet needs. And you need to talk about that. What is the audience that this particular business plan or your proposal is going to serve? And those can be internal customers at your hospital. They can be external customers, patients. There's a lot of different ways that you can define your market and segment your market depending on the nature of your proposal. Typically in this section, you talk about some, you know, what business managers typically see. Michael Porter's five forces model, which is a way of talking about the level of competition in the market. It's really a way of describing the market in a way that hospital administrators and business minded folks really can understand. Probably an easier way to do that is with a SWOT analysis where you talk about your strengths, weaknesses, opportunities, and threats. All of these things kind of go into that market and competition section of your business plan. You know, I mentioned also marketing and sales and operations. You know, people talk about the marketing mix, the four P's, place, promotion, product, and price. Some people have extended that and added three additional P's. But this is where I think it's helpful as you write your business plan, particularly if you've not been through business courses. If, you know, you can ask for help. You can ask for help. And I would highly recommend getting somebody who's more financially savvy, more business savvy to help write in particular these sections of the business plan. And, you know, you think about sales. It's like, okay, we're writing this business plan for a clinical program. You have to be able to articulate in your business plan how you're going to tell people about this new clinical program as an example. You know, so maybe not necessarily, you know, talking about your sales plan, but you're talking about how you're getting the word out about this new great clinical program or idea that you have or product that you are developing in your intensive care unit. You have to have a way of getting that out to people, either the internal customers or the external customers, in such a way that your business plan is going to be successful. What about the operations piece? You know, I think this really talks about what's required to make this project a success. What equipment do you need? Who are the personnel that are going to be involved? As you develop your proposal, as you move forward with your project, what are your plans for improvement? You know, are there any barriers that you feel like you may encounter? How are you going to overcome those barriers? All of that is really important elements of writing the operations section of your business plan. Then the next section is the management and key personnel, very similar to what you have in your grant. This is where you're going to say you have to be able to sell the fact to the hospital administration that the individuals that are leading this project are actually qualified to do so. So, they want to make sure that they're making the investment with people who can actually carry out and be successful with this particular proposal. And so, that's very similar, again, to the research grant proposal. And then I think probably the most difficult part for a lot of physicians and clinicians to write is the finance section, which is very similar to the budget. There are some key differences, though. You know, I think the finance section has your list of assumptions that drive your financial modeling. You want to talk about revenues and expenses. Of course, it's very similar to how you would put together your budget for a research proposal. But what I think is important is to develop something called a breakeven analysis. This is where you're going to make some key assumptions. And again, it's going to be very helpful to have somebody who's financially savvy to help you write this. But a breakeven analysis will tell the hospital administration, okay, if I invest this much money in this project, when am I going to start to see that return on investment? How long is it going to take before I start to see a positive margin associated with this particular project? And then you're also going to require pro forma. So that's kind of planned, projected financial statements for the next three to five years, depending upon your timeline. As I mentioned, here's the breakeven analysis. You know, it really takes into account your fixed costs and your variable costs. Your variable costs are what's dependent upon your volume. So think about it as, you know, if you have an intensive care unit, there's a certain cost, a fixed cost is just keeping the lights on, right? You're going to need staff, you're going to need equipment. All of those occur before you even start to see patients. And your variable costs are going to be what are the costs associated with per patient, per volume. And so the breakeven analysis, the breakeven point can determine when you're actually going to start to see that your investment is starting to make money for the organization. So it takes a new account. When are you going to overcome that investment for those fixed costs up front? And that's going to be very important to show that in your financial plan. And then I mentioned the three financial statements, income statement, balance sheet, and statement of cash flows. You're going to need to show pro forma or projected financial statements for anywhere from three to five years after your proposal. And again, this is something that if you haven't done one of these before, it's good to enlist some help and bring somebody from your finance team to help you out to put together these. You also need to talk about your milestones and your risks, talked a little bit about risks, but it's important to show a timeline for your key deliverables. You know, for example, if you're going to launch a website in quarter one, when are you going to develop a library of this? This was for a medical animation business plan that I wrote, but it gives you a timeline for when they're going to start to see progress towards that breakeven point. And so it's going to be really important to show what your milestones are and your key deliverables over time. And the administrators are going to want to see that as well. And then lastly, the risks, barriers, what happens? What are you going to do if some of your financial assumptions were incorrect, you know, or, you know, somebody that was important to the project, what if they leave? Those are the kinds of things that you're going to have to talk about in the risk section of your business plan. So that really is it. You know, I think what is really important to understand is that, you know, it's going to take some work. It's going to take some education. You know, there's a lot to writing a business plan. It's a lot like writing a grant proposal. I stated that at the very beginning, but I know that, you know, junior faculty, when they first learn to write a grant, they actually go through a course or a class or a program and they work with a mentor to help them write their first grant proposal. The same is true for a business plan. There are numerous courses out there that can explain how and teach you how to write an effective business plan. And as you think about, you know, if you're in a situation where you have to write a business plan, it would be important to take advantage of the resources that are out there. And with that, I know I can't answer any questions, you know, in the virtual world, but once again, I want to thank everybody for your attention and I really look forward to seeing you all in person and hopefully answering some questions in person as well. Thank you very much.

business plan

intensive care unit

hospital investments

financial viability

market analysis

key personnel