|
A
ZERO BASED BUDGET BUSINESS
PROPOSAL
Dr. Tauseefullah
Akhund M.B.B.S, MPH
(Sydney), (Australia)
Page 1
2 3
COST
PROJECTION
(A):
Fixed Cost
|
FIXED COSTS |
PER YEAR |
|
Start Up Cost
$105,000
per-bed x 18 = $1,890,000
(20 years life
expectancy)
Building
9 Bedrooms @ 2 bed
3 Shower rooms (en-suite)
3 Toilets
Kitchen
Lounge
Laundry
TV/Tape
Computer
Kitchen utensil
Air conditioning &
Heating system
Laundry machine
Sterilization
Accessibility
Wheelchair
Shower chair
Furniture
Bed
Nurse call system
Telephone
Hot water system
Fire Extinguisher
Electrical
Fitting
|
$ 94,500.00
|
|
Director of Nursing |
$ 55,000.00 |
|
Insurance |
$ 1,890.00 |
|
Trades |
$ 27,500.00 |
|
Cleaner |
$ 20,000.00 |
|
Clerical |
$ 33,000.00 |
|
RMR |
$ 3,500.00 |
|
Miscellaneous |
$ 1,500.00 |
|
Sub total |
$142,390.00 |
|
Total |
$236,890.00 |
(B): Variable Costs
|
VARIABLE COSTS |
PER HOUR |
PER WEEK |
PER YEAR |
|
Personal Salaries & Wages
Permanent Assistant
Nurse
|
|
|
|
|
2 Full time @ 8 hour
morning weekday |
$11.86 |
$948.80 |
$49,337.60 |
|
2 Part time @ 8 hour
morning weekend |
$16.13 |
$516.15 |
$26,839.65 |
|
1 Part time @ 4 hour
morning weekday |
$12.50 |
$250.00 |
$13,000.00 |
|
1 Part time @ 4 hour
morning weekend |
$17.00 |
$136.00 |
$7,072.00 |
|
2 Part time @ 4 hour
evening weekday |
$13.65 |
$546.00 |
$28,392.00 |
|
2 Part time @ 4 hour
evening weekend |
$18.56 |
$297.02 |
$15,445.25 |
|
Permanent Registered
Nurse weekday
1 Full time @ 8 hour
morning weekday
|
$20.75 |
$830.00 |
$43,160.00 |
|
1 Full time @ 8 hour
evening weekday |
$21.65 |
$866.00 |
$45,032.00 |
|
1 Full time @ 8 hour
night weekday |
$23.45 |
$938.00 |
$48,776.00 |
|
1 Part time @ 8 hour
morning weekend |
$28.22 |
$451.52 |
$23,479.04 |
|
1 Part time @ 8 hour
evening weekend |
$29.44 |
$471.10 |
$24,497.41 |
|
1 Part time @ 8 hour
night weekend |
$31.89 |
$510.27 |
$26,534.14 |
|
Permanent Chef
(qualified)
1 Full time weekday
|
$12.24 |
$489.60 |
$25,459.20 |
|
1 Part time weekend |
$16.65 |
$266.34 |
$13,849.80 |
|
Subtotal |
|
|
$390,874.10 |
|
Fringe & Benefit |
|
|
$27,361.19 |
|
Expenses Telephone,
Electricity, Gas & Water |
|
|
$3,650.00 |
|
Linen |
|
|
$3,420.00 |
|
Meal |
|
|
$137,970.00 |
|
Total |
|
|
$563,275.29 |
OPPORTUNITIES FOR EARNED INCOME
The proposed
Nursing Homes life expectancy target is 20-years and the Nursing Home
break-even is in five years, therefore the coming next five years are
the opportunities for earned income. The estimates income for five years
is: 15 years x 365 days x $92.94 x 18 residents = $9,159,237. If the
Nursing Home can stand longer then the opportunities for earned income
will increase as well, so we can say this is the best opportunity to
earn income as well as to help the aged peoples. We can increase the
income of Nursing Home by applying these three strategies in future,
By increasing
the fee for the services provided,
By increasing
the volume of services provided, or
By decreasing
either or both of the fixed or variable costs of providing the services.
BREAK-EVEN ANALYSIS
Variable cost
per resident-day = $563,275.29 / 365 days / 18 residents = $85.73.
Charge per
resident-day = $92.94.
Contribution
margin per resident-day = revenue variable costs
= $92.94 - $85.73 = $7.21.
Fixed costs
p.a. = $236,890
Break-even
units (resident-day) =
Fixed costs
Selling price per unit Variable cost per unit
(Charge per resident-day) - (Variable cost per resident-day)
= 236,890 / 92.94 85.73
= 32,856 resident-days (approximately five years for 18 residents per
day)
Break-even
value =
Fixed costs
________________________________________________
Variable costs per unit (per resident-day)
________________________________________________
1- Selling price per unit (charge per resident-day)
= 236,890 /
[1 (85.73 / 92.94)]
=
$3,053,613.95.
BREAK-EVEN GRAPH
Break
Even Graph Table
|
Resident-day |
0 |
8200 |
16400 |
24600 |
32800 |
41000 |
49200 |
57400 |
|
Fixed Costs |
236890 |
236890 |
236890 |
236890 |
236890 |
236890 |
236890 |
236890 |
|
Total Costs |
236890 |
939876 |
1642862 |
2345848 |
3048834 |
3751820 |
4454806 |
5157792 |
|
Total Revenue |
0 |
762108 |
1524216 |
2286324 |
3048432 |
3810540 |
4572648 |
5334756 |
CONCLUSION
The
conclusion is very clear that New South Wales need more Nursing Homes,
so this is the best opportunity to earn income by building Nursing Home,
a care place to help and takes good care of older people. To achieve a
goal it is important to manage the daily activities of Nursing Home by
evaluation, monitoring and take corrections. The proposed Nursing Home
promises the investors to earn big return from their investments with
helping the community by providing Nursing Home to take care of older
peoples.
Page 1
2 3
REFERENCES
Courtney, M. (1997),
Financial Management
in Health Services,
Sydney: MacLennan and Petty.
Life expectancy
continues to increase ABS,
Australian Bureau of Statistics (2001),
http://www.abs.gov.au/ausstats/abs@.nsf/dddcf05472f88677ca2568b5007b8615/543c8451189fa8ebca2568a90013636b!OpenDocument
Residential aged care
in Australia 199900 a statistical overview,
Australian Institute of Health and Welfare (2001),
Canberra.
Cost of Nursing Home
and Hostel Care Services,
Coopers and Scott (1985),
Canberra: Department of Community Services.
Report On The
Construction Costs Of Residential Aged Care Facilities Prepared For
Uniting Care Aging & Disability Service NSW,
Hanna Newman
Associates Pty. Ltd. (2001), New South Wales, Australia.
Aged Care Act 1997,
http://scaleplus.law.gov.au/html/pasteact/2/3051/pdf/AgedCare97.pdfz
Population by age and
sex, Australian
States and Territories,
Cat. No 3201.0.
Canberra, Australian Bureau of Statistics (2000).
Classification
Principles 1997,
Minister for Family Services, Principles under subsection 96-1 (1) of
the
Aged Care Act
1997.
http://frli.law.gov.au/s97.vts?action=View&VdkVgwKey=1998B00255&Collection=FRLI&ViewTemplate=frliview.hts
Raising the Standard:
Resident Centered Nursing Home Regulation in Australia,
Housing and
community Services Aged and Community Care Division (1993), Department
of Health, Canberra, Australia.
The Reliability and
Validity of Nursing Home Standards,
Housing and community
Services Aged
and Community Care Division (1993), Department of Health, Canberra,
Australia.
Sadler. P, (2001)
Thousands Wait Months
For Nursing Homes,
Sydney Morning Herald,
http://www.smh.com.au/news/specials/natl/ballot01/0109/14/ne ws 1.html
Home and Community
Care Program Unit Costs,
Housing and
community Services Aged and Community Care Division (1993), Department
of Health, Canberra, Australia.
|