Fortunately, there are numerous experts available who have successfully navigated this path. When seeking guidance, select professionals who have relevant experience and collaborate with diverse industry peers. These professionals can provide valuable insights readily accessible to those closely involved with different providers in various markets.

Remember, by tapping into the wisdom of these experts, you can gain a competitive edge, avoid common pitfalls, and make informed decisions that contribute to the long-term success of your ABA practice.

____

Brandon Herscovitch, Ph.D., LABA, BCBA-D

Partners Behavioral Health offers business services, resources, and advocacy. Our team includes leaders with demonstrated success in ABA as well as more established healthcare disciplines.…let’s chat!

The post Growing Your ABA Practice? Seek Strategic Guidance from Experts appeared first on Partners Behavioral Health.

After watching the video, we would welcome any feedback: https://www.surveymonkey.com/r/SGJQCBG

To access the referenced spreadsheet, follow this link: https://partnersaba.com/product-and-service-packages/five-year-financial-projections-template

Follow this link to read our blog on business planning: https://partnersaba.com/blog/essential-elements-of-a-solid-business-plan

Very important disclaimers:

The numbers used in this demonstration/webinar are for illustrative purposes only, and do not imply suggested numbers in any capacity.

The numbers being used in this video are only for the sake of being able to run calculations to demonstrate how you may do your budgeting and financial projections. They do NOT reflect any particular combination of numbers for a give region. I specifically did not use all rates and expenses that apply to a given region to avoid any implications as to numbers one should use in any specific region.

This process involves starting with some numbers, then adjusting numbers to get to the margins you need to run a quality and ethically sound provider agency. For example, we discuss how you can find starting points for rates by looking up publically avialable rates such as medicaid and Tricare. We also discuss how you can find starting points for expenses by means of looking on job posting sites like Indeed.com. HOWEVER, the next and very important step is that you adjust those rates and expenses to find adequate margins to meet your company’s specific operational needs. So, just finding Medicaid rates and marking those up by a certain percentage is NOT going to be sufficient in this process, nor is that what I am recommending at all.

It is imperative you understand these factors and run numbers based on your own research for your own company needs in your own region(s). Even within a given region, two providers may want or need to use different rates for various reasons. For example, one may have a different organizational structure and therefore may need higher or lower rates than their competitor(s).

Again, the numbers used are for illustrative purposes only, and do not imply suggested numbers in any capacity.

The post Financial planning for ABA and autism service provider companies (video) appeared first on Partners Behavioral Health.

Profit and loss projections allow you to analyze your profit (or loss) over a designated period of time in the future. This analysis shows stakeholders how much you expect to make each month, for a predetermined amount of time. The profit and loss report, along with the cash flow statement, and the balance sheet are the three essential financial reports banks will be looking for. For new companies, a break even analysis is also valuable.  

For both the start-up, or the ongoing operation, financial projections help businesses to grow. Financial plans allow you to see when you might expect to break even, what your profit may be, and when you can expect to have the cash in the bank from those profits to pay for expenses. They help you set financial and operational goals like hiring new people, and are a good resource in obtaining financing for your business.

The profit and loss statement, also known as the income statement, provides helpful information about the financial health of a company. It outlines revenues, expenses, and profits, as well as associated profit margins. These margins allow for comparisons against other companies in the industry, as well as self evaluation. That is, evaluating a company’s progress against itself over time.

Stakeholders such as investors also like to see projected income statements. These projections provide investors with the financial impact of your company’s business plan, and its business plan over time. Your company’s projected income statement also helps prospective investors assess if the growth potential warrants investment. However, lenders are generally most  concerned about continuity of profits. By using a projected P&L to show how a bank loan will help your company achieve consistent revenue, and profits, you can increase your likelihood of obtaining a loan.

Report formats

Decide your method of analysis. Are you going to use a software like LivePlan, or will you prepare these in your spreadsheet. For beginners, using software will come in handy particularly in creating the analysis of cash flow, but also your balance sheet. 

What steps are needed in creating profit and loss projections

1. First, create a monthly list of all your revenue sources over the upcoming 3 to 5 years. I’d recommend completing your revenue build up by looking at a sum of the individual services (including the individual breakdown). For example, how many hours of 9151, 97152 are you using per assessment. For adaptive behavior treatment codes, how many hours or units of 97153 are you providing or planning to provide to clients on a monthly basis. What percentage of that is direction of technician, 97155, and therefore how many hours for that same period of time as 97153. How many hours of caregiver training do you want to provide per month per client in your model?  Are you going to provide other services such as 97154, 97157 or 97158? If so, include that in your modeling as well. Then for each service item, what is the rate by which you multiply that number of hours per month. Then list the total expected revenue per service item and in total. Providing a breakdown by service line provides a clearer picture to banks and other stakeholders of how you come to the revenue you did. A revenue build, or a sales forecast, is an important part of the complete analysis. 
2. Second, create a list of all your expenses for the upcoming same period of time. Start with your direct costs; that is, the employee costs associated with the procurement of services. Separating out this allows for the analysis of gross margins, that is, sales revenue minus costs of goods sold. This is a helpful metric to have in business and PBH is working to help identify benchmarks for these metrics among its clients. 
3. Next, consider all other costs associated with being open for services. Consider upfront start up costs such as a clinic remodel, and ongoing expenses. Pro tip. It helps to have a list of vendors and expenses from prior months to calibrate the projections. See Top 80 expenses to consider when starting or running an Applied Behavior Analysis (ABA) company.
4. Look at your gross profit. Gross profit is calculated by subtracting cost of generating the services from overall sales. So, if someone charges 100 dollars per hour for a service, for one hour, and the person and related expenses are 40 dollars per hour, then the gross profit for that hour is 60 dollars per hour. Gross profit only includes variable and direct costs, not fixed costs. Gross profit assesses a company’s efficiency in using labor in generating its services. This metric lets you see how much you keep on the dollar after accounting for the cost of generating the service/revenue. 
5. Calculate gross profit margins. To do this, divide cost of generating the service by the total revenue. In the above example, you would divide 40 by 100, so gross profit margins would be 40% in this case. Monitor this metric overtime to evaluate your efficiency with labor costs over time.  
6. Look at your overall net profit (or loss) by month and by year for that same period of time and adjust the numbers, in a realistic manner, to achieve desired profit over time. That is, revenue minus all expenses. As a business owner or senior level manager, you will need to be familiar with the net profit margins. 
7. Calculate net profit margins. To do this, divide net profit by revenue. This measure will report profit as a percentage of revenue.  

Remember, a major focus of this exercise is to make sure you turn a profit while delivering quality services.  Doing so will enable you to provide consistent and ongoing services to the people you serve. Hone your numbers. How can you increase your revenue? How can you reduce expenses over time? This exercise will help you run a profitable operation. 

Partners Behavioral Health (PBH) can help with these financial analyses and projections, as well as much more. See our services page for more details. https://partnersaba.com/services1. Contact us at info@partnersaba.com with any questions or to obtain our professional services.  

The post 7 steps for creating profit and loss projections for an insurance funded Applied Behavior Analysis (ABA) business appeared first on Partners Behavioral Health.

1. Retirement plan
2. Continuing education credits (CEUs)
3. Marketing for clients
4. Staff recruitment
5. Association membership fees
6. Automobile and other travel expenses
7. Bad debt
8. Annual banquets or staff events
9. Charitable contributions
10. Cleaning services (if you have an office)
11. Seasonal expenses which may apply such as slow removal, if that applies to your location
12. Are you using a vendor for collections? If so, include that here. 
13. Remodeling or updates over time (painting, new carpets, etc)? Include that as well.
14. Computer and internet expenses
15. Credit card processing fees
16. Allocation of employee benefits
17. Vacation wage expense
18. Garbage disposal
19. HIPAA compliance fees
20. Hiring and training
21. Special trainings
22. Commercial auto insurance if applicable 
23. General liability
24. Professional liability
25. Workers comp
26. Meals and entertainment
27. Clinical meeting snacks
28. Professional outings
29. Miscellaneous expense
30. Moving expenses if applicable
31. Office supplies
32. Books
33. Clinic budget if applicable
34. Clinical directors
35. Copier lease
36. General office supplies
37. Office furniture
38. Office materials
39. Staff supplies
40. Current staff material
41. Current staff technology
42. New staff materials
43.  New staff technology
44. Other employee related expenses including payroll, payroll fees, and payroll taxes
45. Background checks
46. FSA fee
47. Staff training and development
48. Travel expenses
49. Wages and benefits – BTs
50. Wages and benefits (i.e. employee related expenses such as healthcare, dental, life) – BCBAs
51. Wages and benefits – support staff
52. Wages – training and development
53. Wages – bonuses
54. Wages – holiday bonuses
55. Wages – monthly bonuses
56. Postage
57. Accounting
58. Legal
59. ABA Business consulting
60. Billing
61. Program materials
62. Publications
63. Rent
64. Repairs and maintenance
65. SBA line of credit fee
66. Ongoing monthly loan/SBA payments
67. Shredding
68. Accounting software (QBO is a good option to consider)
69. Anti-virus
70. Business email
71. Credit monitoring for owner
72. File sharing
73. HR software
74. Scheduling software
75. Special occasions gatherings
76. Staff appreciation
77. Subcontractors
78. Telephone
79. Utilities
80. Website expense
81. Taxes

While there could be any number of expenses in an ABA provider organization, the previous list should function as a guide to some of the more common ABA company startup costs for providers up to about 4 million in annual revenue. Larger providers or providers with a different service model other than insurance funded ABA services, will still find valuable elements in this list.  

Interested in learning more? For more blogs from our series on critical considerations for starting a successful ABA company and strategic financial planning for ABA companies, or to learn more about how PBH can help with these or other ABA business, executive coaching, or OBM needs, please email us at info@partnersaba.com, or check us out at www.partnersaba.com where you can sign up at the bottom of the page for further blogs and emails. You can also like us on Facebook and Linkedin to follow our posts. 

To learn more about the author, Brandon Herscovitch, PhD, BCBA-D, LABA, click on this link.

Partners Behavioral Health can help with your clinical and business standards, compliance, and outcomes. We can help you scale an ethical ABA practice you’re proud about.

The post Top 80 expenses to consider when starting or running an Applied Behavior Analysis (ABA) company appeared first on Partners Behavioral Health.

First

Know what you’re getting into. There are many responsibilities and tasks you’ll need to take on as a new ABA business owner from selecting a name, to writing a business plan, to contracting with insurance companies. At the end of this article we include a link to a free project planning tool you may find helpful. For someone doing this for the first time, it could easily involve several hundred hours to get up and running. Still interested? Great! Move on to the next step.

Second

The next thing you need to do is figure out where (which state/region) you want to open up shop, at least initially. This will determine things like regulations, licensure requirements, rates, expenses, etc, all of which are important parts of the strategic financial and business planning process. There are different reasons for selecting locations. You may simply want to provide services in the area where you currently live. Alternatively, you may look at this from a slightly more strategic perspective and ask what are the publicly available rates in those areas and what is the state of licensure and regulations in the select states. Both are reasonable approaches. 

Third

Determine the general model you envision. That will drive a lot of the business and financial planning. Do you want a clinic, multiple clinics, do you want to scale slowly or quickly. What services do you plan to deliver? What infrastructure do you want to have? Do you want BCBAS, BTs, a clinical director, a scheduling coordinator…. Who else, and at which point in the process? Are there other expenses you want to take on which are not necessary for operations, but have value nonetheless, like a researcher? These among other questions are important to consider in planning for your ABA company. Your PBH consultants have collectively worked at small, medium, and large providers and can help you adequately plan for this structure over the course of the agency’s growth. 

Fourth

Do your strategic financial planning. This minimally includes projected profit and loss and projected cash flow statement, and potentially even your opening and projected balance sheet and your start-up expenses. Properly planning in this regard will help you identify precisely how much money you need for your start up ABA company.

To start, prepare a projected profit and loss (how much you’re making on paper when you subtract expenses from revenue) and cash flow statement (cash in and out) for 5 or so years in the future depending on yours or your bank’s needs. The profit and loss projections would look at a revenue build for that period of time, as well as expenses during that same time period, and project profit. The projected cash flow statements would look at cash in and out for each period of time. So, it allows you to see how much cash you’ll have to pay bills, reinvest, etc, after considering things like time to payment from funding sources, new funding sources in particular, time to credentialing, time from hiring new staff to when you’ll be paid for their services, etc. The strategic financial planning also considers other factors like taking on a new location, training, and turnover for example. You can purchase a template for this here: https://partnersaba.com/product-and-service-packages/five-year-financial-projections-template

PBH can help you with your strategic financial planning needs to help ensure adequate funds and a viable plan for your startup or growth period, as well as ongoing analyses and planning thereafter.

Fifth

Determine the feasibility of your plan. Do you generate sufficient profits? Do you have adequate cash flow, that is, the cash to pay for your bills on an ongoing basis? Consider doing a pro con list. Is the work and perhaps of greater importance the responsibility which may ultimately come back to you worth the pay? If the feasibility analysis is favorable, you will want to move on to the business planing phase. You can access a template for that here: https://partnersaba.com/product-and-service-packages/business-plan-template-semi-complete-will-be-priced-at-299-and-availble-for-download-in-april

Conclusion

By now you should know whether your plan is a viable one. Your next step is preparing a business plan to secure the funding, or at least prepare your business for success. 

Interested in learning more? You can see our free project planning tool here: https://partnersaba.com/product-and-service-packages/project-planning-worksheet-for-an-aba-company.

For more blogs from our series on critical considerations for starting a successful ABA company and strategic financial planning for ABA companies, or to learn more about how PBH can help with these or other ABA business, executive coaching, or OBM needs, please email us at info@partnersaba.com, or check us out at www.partnersaba.com where you can sign up at the bottom of the page for further blogs and emails. You can also like us on Facebook and Linkedin to follow our posts. 

.About the author

To learn more about the author, Brandon Herscovitch, PhD, BCBA-D, LABA, click on this link. 

The post Critical considerations for starting a successful ABA agency appeared first on Partners Behavioral Health.

Our business planning template includes a thorough outline of all essential elements that should be included. Furthermore, it includes detailed instructions for each section, sample content, links to additional resources, visuals, and worksheets.

If you would like to access our comprehensive business plan template, click here: https://partnersaba.com/product-and-service-packages/business-plan. It will be uploaded shortly. 

To access the accompanying budget and projections calculator, click here: https://partnersaba.com/product-and-service-packages/five-year-financial-projections-template. It will be accessible shortly.

To access a webinar on the financial planning process click this link: https://partnersaba.com/blog/financial-planning-for-aba-and-autism-service-provider-companies-video

The following is the table of contents from our business plan temlplate. Whether you are writing your business plan from scratch, or using our template, these are sections you may want to conisder including.

Table of Contents

1. Executive Summary 5
   1. Legal Information 5
   2. The Problem 5
   3. The Solution [Company Name] Offers 5
   4. Mission Statement 6
   5. Vision Statement 6
   6. Values 6
2. Business Overview 7
   1. Philosophy and Unique Value Proposition 7
   2. Primary Activities of [Company Name] 7
      1. List of Clinical and Therapeutic Services 7
      2. Regulatory Considerations 7
      3. Referrals to External Providers 8
   3. Additional [Company Name] Activities 8
3. Market Analysis 9
   1. Target Customers 9
   2. Customer Needs 9
   3. Market Overview (TAM, SAM, SOM) 10
4. Competition and Risk Analysis 13
   1. Direct Competitors 15
   2. Indirect Competitors 16
   3. Competitive Advantages 16
   4. Risk Factors 17
   5. Summary of Analysis 19
5. Marketing Plan 19
   1. Funding and Referral Source Categories 19
   2. Promotions and Distribution Plans 19
   3. Building a Community Online 21
6. Recruiting and Retention of Clinical Employees 28
   1. Recruiting 28
   2. Retention 29
7. Operations Plan 31
   1. Milestones and Timelines 31
      1. Phase 1 – Financials & Feasibility Analysis 31
      2. Phase 2 – Business Planning 31
      3. Phase 3 – Set Up Entity 32
      4. Phase 4 – Set Up Program 32
      5. Phase 5 – Initiating Services (Training & Support of Program Staff – 2 Months) 33
      6. Phase 6 – Ongoing Management (monthly) 34
   2. Accomplishments 34
   3. Key Operational Processes 35
   4. Key Performance Indicators 36
   5. Organizational Structure 38
   6. Management Team 39
      1. Staff Members 39
      2. Board Members 41
      3. Operations Team Gaps 42
8. Financial Model 42
   1. Revenue: Model, Pricing, and Assumptions 42
   2. Expense Assumptions 43
      1. One Time Expenses 43
      2. Non-Employee Expenses 43
      3. Employee Expenses 43
   3. Financial Projections 44
      1. Financial Summary 44
      2. Projected Profit and Loss Projections 44
      3. Projected Balance Sheet Projections 46
      4. Projected Cash Flow Statement 48
      5. Expenses 50
9. Details About Round Being Raised 51
   1. Required Capital/Funding Goal 51
   2. Allocation of Funds 51
   3. Source of Funds 51
   4. Exit Strategy 51
10. Appendices 52
    1. Appendix A – Revenue Model, Pricing, and Assumptions 53
    2. Appendix B – Detailed List of “Other” Expenses 53
    3. Appendix C – Detailed Employee Expenses 54
    4. Appendix D – Employee Headcount 57
    5. Appendix E – Charts 59
       1. Total Revenues 59
       2. Salary Expenses 60
       3. Total Expenses 60
       4. EBITDA 61
       5. Net Income 61
       6. Cash Flow 62
    6. Appendix F 62

Suggested external resources:

https://www.score.org/

https://www.sba.gov/

The post Essential Elements of a Solid Business Plan appeared first on Partners Behavioral Health.