Plan For Starting Up Lifeline Healthcare Commerce Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Locum - someone (physician or clergyman) who substitutes temporarily for another member of the same profession. A Locum agency provides locum doctors in place of regular doctors when hospitals are short staffed or a doctor is absent.

Being a sole trader Charles should first identify the advantages and disadvantages associated with the same. These are listed below.

As an experienced business professional I would recommend Charles to use a systematic approach to start up his own new locum agency.

A systematic approach to starting up a business will involve the following steps.

Having a business plan - The first step towards starting up a business successfully is having the right business plan. Charles should develop a business plan for lifeline healthcare where he states the business goals, vision, mission etc. The Business plan will include sources of finance; since Charles has inherited a large legacy his main source of finance will be owners savings. The business plan will also include the location of the business the number of employees in it, and how does Charles plan to go about the entire business.

There are three primary planning methods these are listed below.

From the above three mentioned planning methods the apprentice model fits best for planning of lifeline healthcare.

Having the right organization structure- for a business to successful it is important for it to have the right structure.

Charles should have direction and scope for lifeline healthcare over the long term, Having the right structure will help Charles to fulfill the market needs and demands and also to meet stakeholder expectations.

Establish cash resources- Finance is one of the biggest constraints for new start up businesses, however for lifeline healthcare finance is not a restraint since Charles inherited a large legacy, which he wants to invest into his new business proposal of lifeline healthcare.

Knowing your market- before starting up a new business I would recommend Charles to carry out a market research so that he is updated about the market at present and of the current issues in the market, market research would also help him to identify the market gap, which he can focus on and fill. Charles should also have a good understanding about his future customers before starting up. This will make meeting their needs and demands easier and will help him to survive in the fierce market.

Implementing the plan- after all the above steps are successfully completed, Charles should implement his plan. It is important for Charles to monitor and evaluate the progress of the business during the start up stage. The initial few months are very crucial for a start up business and Charles needs to understand that and operate the business accordingly, his best efforts in these months should be for survival of the business.

1.2 Plan for starting up Lifeline healthcare

Company name- Lifeline healthcare

Company summary- Lifeline healthcare is a locum agency owned by Mr. Charles Dicksons. It is a sole proprietor firm

Services- being a locum agency it provides temporary doctors to hospitals and clinics as and when required. This company operates in the UK

Business type- Sole proprietor


To survive in the competitive market,

To make profits

Start up summary


Start-up Expenses



Recruiting new staff and their salaries





Other miscellaneous expenses


Total Start-up Expenses



Start-up Assets


Cash Assets


Other Current Assets


Long-term Assets


Total Assets



Total Requirements


Market analysis- the target markets that lifeline healthcare plan to focus at basically consists of hospitals in the UK.

The scope for locum doctors in the UK is vast according to a national survey "In the UK, the NHS on average has 3,500 locum doctors working in hospitals on any given day, with another 15,500 locum general practitioners. "

Marketing strategy -

A good marketing strategy for lifeline healthcare would be to advertise in healthcare magazines, talk to all the hospitals in the locality and offer them good deals during start-up. In the long run lifeline should focus on having loyal customers and providing quality services in the right price would mainly do this. Lifeline's USP can be that it tries to operate in the most cost effective way and focuses on good customer relationships.

Sales forecast

Year 1


Year 4

Total sales/£




Direct cost of sales/£






200000 (8%)


Financial plan- the start up funding will come from Charles directly since he has inherited a huge legacy. The advantages of this source of finance are that it does not have to be repaid to anyone and is interest free. Being a sole trader firm this business in unincorporated, so owners personal funding seems a good way to start up.

1.3 -

For starting up a new business Charles has several Strengths and weaknesses these are listed below.


Charles has 15 years of experience of working in a private hospital.

Charles just inherited a large legacy and hence financing the new business will not be a problem.

He has help from the author to strategize his future business plan.

Less bureaucracy since a small business.


Charles does not have experience in running his own business

Limited human resources and staff.

High cost of starting up

Services similar to competitors, there are other Locum agencies running in the same locality as Lifeline healthcare.

Carry out an analysis of the business using comparative measures of performance.

How would you review the performance of his business?

According to PallabDutta "A performance review is a crucial process of the employment and human resources-defined practices of an organization. It is a formal discussion as well as a documented process involving managers, HR and even top management about an employee's development and performance. Performance reviews executed diligently can reflect an organization's overall health, employee management practices and overall productivity."

"Performance measures should aim at the long-term and should be forward-thinking initiative designed to fundamentally change the way corporations do business. It is not a post-mortem of what happened but a step towards how we do better in the future."

The above stated definition of Performance review is quite well defined and gives a wholesome idea of what performance review means.

Charles can review the performance of Lifeline healthcare by using several ways. Comparative measures of performance would help Charles to review his business performance. Comparative methods include comparing the business to other locum agencies in the same geographical area and of the similar industry or to its previous year. To review the entire business performance using this method Charles would have to compare all aspects of the business.

Financial- Charles can compare his net profit or sales revenue to that of other locum agencies and see where his company stands. Ratios are a good way to conduct financial comparison.

Services- Customer feedback and response can help Charles to review how Lifeline healthcare is doing in terms of services it provides in comparison to that the other locum agencies provide. This can aid in Charles knowing if other locum agencies are providing better services this can be in form of price, more qualified doctors etc, this knowledge can be essential for him to survive in the competitive market.

Marketing - Charles can compare Lifeline healthcare's marketing strategies to that of other locum agencies by comparing the popularity of the businesses, Charles can then compare its marketing strategy and techniques to that of the popular and well-known agencies and see how they promote themselves. Knowing the promotion techniques of well known locum agencies can provide Charles with an idea about what path to be followed for marketing Lifeline healthcare.

Human resources- Charles can review the performance of his business by comparing the number of employees employed by Lifeline healthcare and other locum agencies.

Use of technology- Charles can review the performance of his business by comparing the use of technology by Lifeline to that of other companies similar to Lifeline. Through this comparison Charles can learn how to be more efficient by adapting similar techniques to that of other companies. For example if it is seen that other Locum agencies get orders directly through the Internet and their website, Charles can also build a website where the orders can be placed directly, this will also help if the telephone lines are busy.

Action plan to overcome weaknesses during start up


Weakness to conquer



How could the activity be done?


Conduct a market research

Services similar to competitors, there are other Locum agencies running in the same locality as Lifeline healthcare.

To know the competitors and the state of the market, also to be prepared to enter the market

This should be done as soon as possible since knowing the market can help during planning.

Through a market research agency, or can be done independently however this can be time consuming and expensive.

For financing all the activities in the action plan Charles could use various sources of finance. Internal source of finance is the one that the author would recommend Charles to use, since he has inherited a large amount. Also Charles could make use of the retained profit of the business to make changes and follow the action plan for making Lifeline healthcare more efficient.

Reduce unnecessary costs.

High cost of starting up

Reduce some costs will aid in capital not being less for required activities.


Activities, which are not necessary and can be avoided, should be avoided.

Get experienced specialized people to work.

Limited human resources and staff

Though people in a small business are less getting a team of specialized people will help toward achieving the goals of the company.

This activity should be done before the start up and during the start up. Recruiting and selecting the right candidates can be time consuming and would at least take a month to prepare the right team.

Following a well-planned recruitment and selection process can do this.

Action plan to capitalize on strengths

The ways in which the business existing performance could be maintained and strengthen

The current annual turnover of the company is £2.5 million. The company is projected to double its turnover in the next 24 months. Net profit is 8%.

There are several ways in which a business existing performance can be maintained and strengthen.

The most common revenue generating strategies revolve around three main factors mentioned below.

Customer retention- this is very important for any firm. To retain its existing customers a firm should provide the right quality services at the right price and at the right place. Lifeline healthcare operates in a competitive market and hence customer retention becomes more difficult. To retain its present customers Charles needs to competent and updated with the market at all times. He needs to try to aim at providing better services at the right price.

Customer attraction- this focuses on attracting new customers, Customer attraction makes use of various above the line and below the line promotional techniques. Charles could advertise Lifeline healthcare in special medical books or in hospitals, since the customer base of Lifeline healthcare is very specific.

Customer acquisition- This refers to acquiring new customers from the competitors. Providing better services or better prices can do this, being a locum service if doctors reach the hospital fast and when they are required would Lifeline to acquire new customers.

Expanding the business could also help Lifeline healthcare to strengthen its performance. This is discussed in detail in the later part of this report.

Previously the author designed an action plan to convert the company's weaknesses into strengths, If Charles follows the action plan the companies existing performance can be maintained and strengthened.

The author feels that the use of several business tools can also help Charles to enhance his business performance. The tools/strategies Charles could use are Six-stigma strategy and value chain analysis.

Six-sigma strategy is "a business process that enables companies to increase profits dramatically by streamlining operations, improving quality, and eliminating defects or mistakes in everything a company does." Charles could make use of this strategy to enhance his business performance and to improve the quality of the services he provides and to eliminate defect right from the start.

Value chain analysis- Value Chain Analysis is a useful tool for working out how you can create the greatest possible value for your customers. Creating greatest possible value will help Charles to strengthen and maintain the existing business performance.

Value Chain Analysis is a three-step process:

Activity Analysis: First, you identify the activities you undertake to deliver your product or service. In this case it would be calling the locum doctors and sending them to the various hospitals where they are required.

Value Analysis: Second, for each activity, you think through what you would do to add the greatest value for your customer; For adding value to this service that Lifeline healthcare provides, Charles should find a way to make his staff more efficient; for example if the agency receives a call from a hospital the locum doctors should be able to reach the hospital in very less time. Also since Locum agencies provides services and not a physical products Charles should make sure that the locum doctors which are available for service through his Locum agency are qualified enough.

Evaluation and Planning: Thirdly, you evaluate whether it is worth making changes, and then plan for action.

Using a matrix structure.

As Lifeline Healthcare focuses on consumers they could adapt matrix structure. Since it has many advantages and fits best in this scenario. The advantages of matrix structure are highlighted in the diagram below.

New areas in which Business could be expanded

Expanding a business has several advantages and disadvantages,

Advantages for Charles in expanding are Economies of scale, more profit, higher market share, more loyal customers.

Disadvantages of expanding are Diseconomies of scale, more workload for Charles, Higher bureaucracy.

The author feels expanding would benefit Lifeline healthcare and hence has suggested few ways in which lifeline healthcare could expand.

Opening new branches -To expand the existing business Charles could open up new branches in areas where he does not provide service already. At present the company has a turnover of 2.5£ million and has a net profit of 8%, the turnover is predicted to double in the next 24 months, hence it can be said to branch out the company wont have problems in arranging finance.

Acquiring similar businesses- Charles could acquire similar businesses like Lifeline healthcare in order to expand. This would reduce the competition and hence reducing the bargaining power of the buyers while providing him with a larger customer base and also more revenue. This idea was also recommended by a venture capitalist.

Diversify-Diversification means to Enlarge or vary its range of products or field of operation

"Diversifying is an excellent growth strategy, as it allows you to have multiple streams of income that can often fill seasonal voids and, of course, increase sales and profit margins," says McGuckin.

Charles should consider this option to expand, as this spreads out risks of a business.Many hospitals in the UK are beginning to privatize, Charles could possible diversify into buying a private hospital however this requires a lot of capital and is a risky project.

Alliance -

"A number of foreign healthcare companies have begun to express interest in entering the UK hospital sector. These foreign companies, mostly American, are hesitant about their entry strategy. Many of these companies specialize in the management of healthcare establishments: they recruit, staff, and manage medical personnel, and are responsible for the operation of the medical facilities they manage."

Charles could form an alliance with such American companies since they are hesitant about their entry strategy, this would benefit both the companies since Charles knows and understands the UK market, an alliance would make entering the UK market sector easier for the American companies, and would help Charles to expand his business.

Changing the business type-

Lifeline healthcare operates as a sole trader firm, Charles could consider changing it to a private limited firm. Many of the employees of Lifeline have toyed with the idea of asking Charles for share options. This would have several Advantages and disadvantages for lifeline Healthcare. These are highlighted below.



Limited Liability: It means that if the company experience financial distress because of normal business activity, the personal assets of shareholders will not be at risk of being seized by creditors.

Growth may be limited because maximum shareholders allowed are only 50.

Continuity of existence: business not affected by the status of the owner.

The shares in a private limited company cannot be sold or transferred to anyone else without the agreement of other shareholders

Minimum number of shareholders need to start the business are only2.

More capital can be raised, as the maximum number of shareholders allowed is 50.

Scope of expansion is higher because easy to raise capital from financial institutions and the advantage of limited liability.


6) Review existing business objectives and plans.


During startup the company had objectives to survive and at least break even.

Since we know that the company has a turnover of 2.5£ which is predicted to double, and a net profit of 8%. It can be stated that the company has achieved its objectives.

Assessing Key areas where attention should be given

To assess key areas where attention should be given the author has used a tool called SWOT analysis.

SWOT analysis

A swot analysis provides a company with external and internal factors, which affect the business performance. Strengths and weaknesses are internal factors where as Threats and opportunities are external factors.

Strengths are the organization resources and capabilities that can be used as a basis for developing a competitive advantage.

Weakness are the absent of certain strengths.

Opportunities are the external environmental, which may reveal new opportunities for profit and growth.

Threats are external environment that may present threats to the firm.

The author has conducted a swot analysis for Lifeline healthcare, which is attached below

The weaknesses and the opportunities in the SWOT analysis are to be focused on in order to be more efficient and to make higher profits.

From the swot above we know that the key areas where attention should be given are

Managing Lifeline healthcare


Daily operations,

Motivating staff

Training current staff

Recruiting new staff members

Expanding the business

Revised business plans to incorporate changes.

Company name- Lifeline healthcare

Company type- sole proprietor firm

Owned and managed- Charles Dickens

Duration of existence- 24 months

Services- Locum agency

Revised Objectives

To expand

Profit maximization

To improve the working of the business and making it more efficient

Personnel-Charles and the staff of Lifeline healthcare


Finance options- the companies retained profit can be a good source of finance, the company could sell its extra assets which are not in use or could get capital by loans.

Forecasts- the companies forecast suggests that the turnover of 2.5£ is you be doubled in the next 24 months.

8) Action plans.The initial plan of the business concentrated on starting up the new business and on surviving in the market, however the author feels it is time to implement a new plan with revised objectives, which focuses on expanding and


Weakness to conquer



How could the activity be done?


Charles should pay more attention to Lifeline healthcare or recruit a person to manage the company in place of him.

Charles is still working in BMI, in addition he has a small private practice which is increasingly demanding more of his attention, hence Lifeline healthcare being neglected

It is important for Lifeline healthcare to have a manager who is looking at the company as a whole and just not concentrating on specific areas like the team members do. Having more attention from Charles would mean him evaluating the companies' progress on regular basis and hence making decisions, which will help Lifeline healthcare to achieve its goal.

Recruiting a manager is a time consuming task, since the entire recruiting process involves various steps and the post that Charles needs to appoint someone is his own, Charles should be able to trust the person since his job demands high qualification and experience.

To fulfill this aspect of the action plan Charles should decide on which company to make his priority, BMI and the private clinic both require his time. If Charles can devote the time Lifeline requires him to then he should consider appointing a manager who could help him to run the company.

For financing all the activities in the action plan Charles could use various sources of finance. Internal source of finance is the one that the author would recommend Charles to use, since he has inherited a large amount. Also Charles could make use of the retained profit of the business to make changes and follow the action plan for making Lifeline healthcare more efficient.

Pay more attention to administration.

Administration is not given the attention it deserves. Though sales are increasing cash in flow was less than projected, affecting the companies overdraft.

Paying more attention to administration will help improve lifelines cash in flows and overdrafts.

This should be an ongoing activity.

It is possible that the reason that the administration is not given the attention it deserves is due to the fact that Charles does not have that much time to devote to the entire company. Charles could appoint a person in charge of admin work, however this could take time and resources such as capital.

Appoint a person in charge of daily operations

There is no one officially in charge for daily operations.

This would make Lifeline healthcare a more systematic organization.

Charles should appoint a new person in charge of daily operations.

This activity could be completed systematically following a recruitment plan.

Motivate staff

The desire for CPD shows that the staff does not feel very motivated

Motivating staff would help to retain them in the organization, and avoid the entire process of recruiting and training new people. The existing staff understands the working of the organization well.

This should be an ongoing training.

Using various motivational factors such as fringe benefits could do this. Charles can make use of CPD as suggested by the staff members themselves.

Train current staff

Many of the staff members lack formal higher qualifications

Trained staff is more efficient and updated about the industry.

This could at least take a month.

Charles could choose on -the-job -training or he could choose off-the-job-training ways to train his staff. I would recommend Charles to use on-the-job-training since this would not require the employees to work less and their training would be simultaneous with their work.

Recruit new staff members

Due to the increase in workload the existing staff feel that there is an urgent need for more manpower.

Reduce workload on existing staff and help better running of the company.

Recruiting new staff members could take at least a month since the recruitment process is time consuming.

This activity could be completed systematically following a recruitment plan. However this would require capital, and would result in expanding the number of people hence more workload on Charles since managing all the staff members is his responsibility.

making more profit. However in the previous part the objectives of the company have been revised. Hence the author has made action plans to implement the changes made to the business plan.

Action plan to improve the working and make the company more efficient focuses on the weaknesses and how to overcome them; the weaknesses used in this action plan are gathered from the analysis of the key areas where attention should be given conducted previously in 5.2. The action plan for the same is created below.

Action plan for expanding the business





How can the activity be done


Select the mode of expansion

Before undertaking expansion, Charles should analyze all the expansion ways and finalize on the one, which would be most beneficial for lifeline healthcare. The different options he has for expansion of the company are discussed previously.

Charles should complete this activity within a month.

Cost and benefit analyzes and a decision making tree could be used for Charles to select the best mode of expansion.

For financing all the activities in the action plan Charles could use various sources of finance. Internal source of finance is the one that the author would recommend Charles to use, since he has inherited a large amount. Also Charles could make use of the retained profit of the business to make changes and follow the action plan for making Lifeline healthcare more efficient

Plan the expansion

A well-planned expansion has higher chances of success.

The plan of expansion needs to be detailed and should cover all aspects of the expansion such as financial. The plan should contain details of how the company is actually going to expand. This activity will at least take 5 weeks.

Charles with the help of various stakeholders can plan the expansion.

Execute the plan

This is the most important part of the action plan; if execution is not as per the plan the project will not succeed.

This is the most time consuming part of the action plan, since actual expansion needs to be carried out.

This task should be done following the plan initially made.

Help Charles identify the basic impact of changes on the business and his management team.

In a business change is basically a "Coping process of moving from a unsatisfactory present state to a desired state" As it is said 'change is the only constant' it is important for a firm to deal with changes to survive.

There are reasons for external and internal changes in any organization these are listed below.



Competition Laws and regulations

Strategy modifications

New technologies

New equipment

Labor market shifts

New processes

Business cycles

Workforce composition

Social change

Job restructuring

Compensation and benefits

Labor surpluses and shortages

Employee attitude

The objectives of Lifeline healthcare have been monitored and changed, Mainly by internal factors such as new processes, labor shortages and strategy modifications. Out of the planned changes, expansion as a change will have a high impact on the business.


Profit maximization- the company's objective has changed to increase profits this could result in cost cutting and making the employees work harder and for longer times. This could make them de-motivated and also result in them being resistance to change.

Expanding- this would mean more work for the existing employees could also result in bureaucracy and de-motivation.

One of the objectives is to make the working more efficient, for this Charles is going to hire new employees and pay more attention to the organization working. This means that the organization working is going to become strict and more mannerly, the impact of this could be that some employees could feel de-motivated since they were used to the friendly laid back environment in he organization which is about to change, this might even make them resistant to this change.

One of the most basic impacts would be on the staff and their resistance to change.

One of the key new objectives is to expand Lifeline healthcare the existing workforce could be resistant towards this change due to several reasons

Lack of Information- They are not well informed about the change by Charles

Fear of the Unknown- The existing staff could be resistance to change since they are afraid about whether or whether not will they be able to cope up with the change and are uncertain about how the change is going to affect them and their jobs.

Habit- The existing staff could be used to their job and hence might be resistant to change.

Without the workforce accepting the desired change and making efforts to achieve the new objectives the change is unlikely to be a success, hence it is vital to overcome the resistance of the employees toward change.

Changes of the company could lead to chaos, miscommunication and de-motivation if not conducted accurately.

If Charles decides on recruiting someone to manage Lifeline, this change of management can have a negative impact since they new manager might not understand the organizational culture, and the difference in leadership and management style could mislead and confuse the existing employees.

Explain to Charles how the implementation of changes should be managed

As discussed previously it is vital for Charles to deal with the impact of changes, the biggest possible impact would be resistance to change by the workforce; the table below highlights 6 methods in which Charles could manage this change effectively.


Education and Communication- Charles should educate the employees about communicating about the change, so that the employees are well informed. This will make them more willing to accept the change since they will be aware about it.

Participation and Involvement-Charles should involve the employees in the change process. The expansion plans could be discussed with the staff in the meetings conducted; this would make them a part of the change process and hence motivate them to promote change in the organization.

Facilitation and Support-Charles should provide any assistance that is possible to the employees to get comfortable with the changes, this could also mean providing training.

Negotiation and Agreement-Charles should be able to negotiate and make the employees agree to the changes in a manner which is beneficial for both the company and the individuals. For example expanding the company would mean more working hours for the employees and this might differ from the initial employment agreement, Charles would now have to negotiate and come to an agreement with the employees.

Manipulation and Co-optation-If the employees of Lifeline are very resistant to change since they consider it to have a negative impact on them, Charles could manipulate the employees in believing that the change is better for them than it is for the organization.

Coercion-if none of the above stated methods make the employees accept the change then Charles would have to force them to accept it, however this is the least recommended way and may leave the employees highly de-motivated.

For hiring new employees and appointing someone to manage Lifeline healthcare Charles should conduct the recruitment process in an apt manner to get suitable employees who will blend with the organization and its culture and work towards achieving the organization goals.

For effective change management Charles could use the John P kotter's 'eight step model of effective changes'. This model is related to peoples approach and response to change, in which people see, feel and the change.

Kotter's eight-step change model is illustrated in the diagram below

Charles is worried that the change process could go wrong. TO assuage his fears, explain to Charles how possible it would be to monitor changes in improvements and performance.

Change in Lifeline healthcare was initiated due to the new objectives of expanding, profit maximization and to improve the business working and making it more efficient.

The monitoring process will include the steps illustrated below.

To monitor if the change has been effectively made or not Charles could review each area where Change was introduced on a timely basis.

Profit maximization-

To monitor this change financial performance of the company is a very good indication of the companies overall performance. Charles could check the company's cash flow and make use of different financial ratios such as gross profit margin and net profit margin to monitor and see weather the company is performing as per the plan.


a good indication of whether the company is on track for expansion would be the number of employees working currently.

To monitor efficient working of the company Charles should answer the following questions

Did you meet your new objectives, including the measures of achievement you specified?

Did you stay within budget and timelines?

Could you have done anything better?


To monitor the change Charles could conduct meetings to see if the working of the organization is going as per the plan. Meetings where all the employees speak up will be a good indication for Charles to see if the employees have accepted the change or not.

Charles could make use of anonymous feedback forms to monitor whether the employees are motivated or not.

If Charles realizes that the changes are not going as per the plan, he would need to re-revise the plan to see the viability of it and make new changes. After the new changes have been made getting feedback again from the employees would be a good idea and will help Charles to see If the changes were successful or not.

To monitor changes in performance of the employees Charles could also make use of CCtv's in the office to monitor the employee behavior during work, this could help him to know if the employees are motivated or not.

Charles could also accommodate an anonymous complain box in the office where the employees could leave their complains, and recommendations.


Starting up a business is one of the most difficult stages of a business life cycle. The first three tasks of this assignment include how Charles could start up a new business Lifeline healthcare. During start up there will be several weaknesses that Charles would need to overcome in order to successfully start, hence the assignment includes ways in which the start up weaknesses could be concentrated on and how their impact could be decreased; The assignment also includes ways in which the start up strengths could be capitalized on to have competent start for lifeline healthcare.

After a certain time expansion becomes a vital step in a business life cycle, the assignment includes various methods in which Charles could expand Lifeline healthcare.

Following that reviewing the current performance of the business is a must for better operations in the future since objectives would vary with time. After reviewing the current position a revised business plan is made for Lifeline healthcare. The revised plan includes new objectives; to achieve these objectives the author has prepared action plans.

All changes have an impact, and dealing with the negative impact is a necessity for positive outcomes of the change, the assignment also highlights the impacts of the changes and how they could be condensed for successful changes. After changes have been made Charles would have to monitor the changes and review them, the ways in which Charles could do this is also included in the Assignment.