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Market Analysis Summary

OutReSources, Inc. is a business that has become necessary because of today’s ever increasing demand on the need for community health care.  There are an increasing number of providers who have become dependent on Medicaid reimbursement, which has created the need for training resources.  There are 100s of agencies providing fee-for-services reimbursed by Medicaid.  Combine this with regional Medicaid units being severely understaffed and underbudgeted and you have a declining system unable to meet the huge need for support.  OutReSources is therefore, ideally positioned to deliver these support and training services to provider companies and agencies.

4.1 Market Segmentation

The are many Medicaid providers.  There are 79 listed in the Centerville Yellow Pages under the Mental Health and Developmental Disability categories, most of which provide a variety of service treatments or therapies.  Several are either incorporated or franchised across the state.  All of them provide at least one Medicaid reimbursed service (most offer several) and are required to maintain certain standards, self regulate, and educate.  This creates the prime market for our services:

  1. Pre-Audit preparation which would be on a sliding scale from finding, fixing, and training.
  2. Certification Training (Specialist Certifications, CPR/First Aid, etc…)
  3. Supportive training options (Diversity, Language, Parenting, “Best Practice”, Business and HR in Health Care, etc…)

The segmentation of the market is a new concept within the Mental Health and Developmental Disabilities fields of service but is not new to the general health care industry, and other service fields leaving a strong need for specific services:

  1. Developmental Disabilities: Largest population in target with even larger body of regulations.
  2. Service Coordination: Little regulation but severe lack of quality service. 
  3. Psychology/Social Rehabilitation: Smaller population but strong need for improvements in both quality and quantity.

It makes logical sense for OutReSources, Inc. to primarily direct its marketing approach at these three segments.  In 2000, the market potential for the disabled service population is estimated to be around 200,498 people reporting some disability in Greenstate (Census 2000). Nationally the number was nearly 50 million.  At the same time, the market potential for the need of bilingual services was estimated to be around 127,609 people speaking another language other than English at home of which 85% speak Spanish.  Each of these populations are expected to grow at a steady rate of 5.6% per year.

In the table and chart below:

  • Agency Group 1 = State Licensed Developmental Disabilities Agencies
  • Agency Group 2 = State Licensed Service Coordination Agencies
  • Agency Group 3 = Other Medicaid Providers in Need of Cross Training and Continuing Education Units
Personnel management business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Agency Group 1 25% 60 75 94 118 148 25.32%
Agency Group 2 25% 40 50 63 79 99 25.43%
Agency Group 3 5% 100 105 110 116 122 5.10%
Total 16.55% 200 230 267 313 369 16.55%

4.2 Target Market Segment Strategy

OutReSources, Inc. chooses to make the above segments its targeted market is because we have the applied first hand experience and the credentials having provided these services for significant periods of time, earning credibility with substantial marks in quality.  Through our experiences as providers we have developed a strong knowledge of what services would be greatly needed, appreciated and valued. 

We have and are continually increasing our credentials as providers to improve our current services allowing us to utilize those gained credentials in support of our new offerings.  Through the years we have developed a reputation of providing high-quality services among state regulators, providers, and the community.

4.3 Service Business Analysis

Consulting participants range from major international name-brand consultants to tens of thousands of individuals.  One of OutReSources’ challenges will be establishing itself as a real consulting company, positioned as a relatively risk-free organizational purchase. 

There really is not much local competition specific to the field of Mental Health and Developmental Disabilities, only small private entities that are usually sole proprietors consulting from the basis of that one individual’s own knowledge and/or theories, and their own interpretations but with varying levels of practical application experience. 

Our program will minimize its starting cost and have almost no overall risk by developing our new offerings based on the services  services Flowstone, Inc. currently provides.  This allows us to minimize up front cost and overhead while improving services within OutReSources.  Flowstone will provide the inial start-up expenses in return for partial ownership, profit, and free access to services rendered.

4.3.1 Competition and Buying Patterns

The key element in purchase decisions made at the OutReSources’ client level is trust in the professional reputation and reliability of the consulting firm.