The Medical Equipment Manufacturing Firm: Business Plan

The purpose of this assignment is to provide a detailed business plan in starting medical sports equipment which will be used by our target market to keep physically fit as well as rehabilitate injuries. It entails budget estimates, sources of capital, financial statements as well as the strengths and weaknesses of the plan (Ferreras-Garcia et al., 2019). The target population for the manufacturing firm will be physical fitness centers, home-based trainers, sports centers, health centers, and education institutions (Ellapen & Paul , 2016).

The company will ensure supply, maintenance, and repair of medical sports equipment to clients. This will ensure increased physical fitness and rehabilitation training. The outcome of the business plan is to ensure availability and access to medical training equipment by clients. The business is expected to break even after 1 year and continue making profits through research and manufacture of new products. This business plan will be used to look for investors who will aid in providing the capital base for manufacturing sports medical equipment. The business plan entails the purpose of the medical equipment manufacturing firm, the target population, the budget, and start-up costs, break-even analysis, cost-benefit analysis, marketing tools and strategies, SWOT analysis, and various financial statements (Ferreras-Garcia et al., 2019).

Cover letter

  • Address.
  • Date.
  • Address.

Dear sir/madam.

I am writing seeking approval of my business plan of start-up manufacturing firm of sport medical equipment. I have discussed the target market, estimated capital and sources of capital to fund the business, financial statements, break-even analysis, cost-benefit analysis, and SWOT analysis.

The manufacture of medical sports equipment will ensure that people can keep physically fit and thus improve their health. It will also aid in the rehabilitation of injured players back to health. The implementation of this business will also provide employment opportunities to many.

I look forward to your approval and feedback on the business idea.

Yours sincerely,

Executive Summary

There has been an increased demand for medical sports equipment as a result of increased participation in sporting activities and campaign of ensuring one is physically fit. The manufacture of these sports’ equipment will meet the market demand and needs of the sportsmen and sportswomen (Ellapen & Paul , 2016). The medical equipment manufactured will also be tailor-made to fit the needs of different clients.

This business aims to ensure a continuous supply of medical equipment to match the current needs and demands of the market. The business will also aid customers in making their purchases through an in-depth description of the various equipment it will provide. This equipment will enable its clients not only to keep physically fit but also monitor the progress of their training, help in rehabilitating their injuries as well as ensure that it boosts their competitiveness (Ellapen & Paul , 2016). The business will ensure that its market, physical fitness centers, home-based trainers, health centers, sports clubs, and educational institutions have continuous and quality medical sports equipment. It will also offer maintenance and rehabilitation services to our clients.

The firm will adopt digital marketing tools and use electronic media such as social media platforms, YouTube, and sports conventions to market our products (Finch, 2013). It will also use physical fitness trainers, players, and athletes as our brand ambassadors. This will aid in capturing the attention of the target population. The business is expected to break even after 1 year of operation. The profits of the business will be realized after selling 12,000 units of its medical equipment at USD 5 million as shown in Figure 2


The sports medical equipment manufacturing company will supply medical sports equipment such as treadmills, first-aid kits, exercise bikes, clinical massage equipment among others. It will also be servicing, repairing as well as aid its clients in making purchases of sports equipment that are tailor-made to fit their specific needs (Ellapen & Paul , 2016).

With increased awareness of the importance of physical fitness, the demand for sports equipment has increased gradually over the years. These have seen an increase in physical fitness and training centers. Due to the COVID 19, pandemic many of these centers were shut down to ensure health protocols are adhered to (Lim & Pranta, 2021). As a result, there has been an increase in the number of home-based trainers as well as demand for medical sports equipment. The equipment will be tailor-made to aid in the rehabilitation of various injuries.

This business aims to ensure the supply of medical sports equipment over the years. As shown in Figure 2, the business is expected to break even after 12,000 units of medical sports equipment have been sold and production costs of USD 5 million incurred.

Market Analysis

The target markets are physical fitness centers, home-based trainers, health centers, sports clubs, and education institutions. They will continually demand medical sports equipment due to the training of the sports teams as well as rehabilitation of injured players. Health centers, physical fitness centers, and home-based trainers will also require this equipment to keep fit.

The sports equipment industry has relatively low competition from existing firms and there is ease of entry into the industry.

The company aims at acquiring a relative portion of the market share through the provision of quality medical equipment, offering after-sale services, working with physical trainers, athletes, and players as brand ambassadors of our products. It will also participate in various sports conventions and conferences to ensure the marketing of its products.

Budget Cost

The start-up capital is estimated to be USD 10 million. This will facilitate the acquisition of plant and machinery, rents, salaries of employees, leasehold renovations, marketing, and advertising costs, research and development costs, distribution and transport cost as well as legal and registration fees. A breakdown of the start-up capital is shown in Table 1.

The start-up capital will be raised through contributions by various investors, selling of shares as well as loans and grants as shown in Table 2.

The shareholders and various investors will realize a return on the investment made after 1 year of business operation. This is because the business will break even after selling the first 12,000 sports medical equipment. Figure 1, shows the cash flow statement of the business after the second year of operation. An estimate of the profit and loss business after the second year of operation is shown in Figure 3. The balance sheet for the second year of operation is also shown in Figure 4.

Break-Even Analysis

Break-even analysis shows the point at which total production cost will be equal to the revenue generated from the manufacture of medical sports equipment (Finch, 2013). In Figure 2, the black horizontal line shows the fixed production costs at USD 3 million. The blue line shows the total revenue while the orange line shows the total production costs.

The breakeven point is estimated to be at USD 5 million of total production costs and sale of 12, 000 medical equip after the first year of operation. This is at the point at which the total production costs line intersects with the total revenue line (Ferreras-Garcia et al., 2019).

Cost-Benefit Analysis

Cost-benefit analysis critically examines the direct and indirect costs incurred by the firm and the benefits that will accrue due to these activities (Finch, 2013). The costs incurred by the firm accrue to monetary and non-monetary benefits as shown in the cost-benefit analysis table.


Plan Coverage

This is the business plan of a manufacturing firm of medical sports equipment. It entails the provision of services such as repair and maintenance of this equipment and expert advice of the best equipment to purchase to fit their needs. It also shows the target market of its products and services as well as the marketing strategies that will be used to penetrate the sports equipment industry and the plans of action to ensure it has a manageable proportion of the market (Ferreras-Garcia et al., 2019).

The plan also shows the budget of the various activities to start and run the business successfully. It also shows the start-up cost and various sources of capital. It also entails financial statements such as the income statement, statement of financial position, and the cash flow statement.

The break-even analysis, SWOT analysis, and cost-benefit analysis are included in the plan.

Strengths and Weaknesses of the Plan

The strengths of the business will be the strategic location of its retailing outlets, quality manufacturing plant, and machinery, access to essential raw materials through partnerships with suppliers. The creation and maintenance of a cordial relationship with suppliers will ensure a continuous supply of raw materials. The strategic location and branding of its retail shops will ensure easy access by clients.

The weaknesses of this business plan include training of qualified personnel, high advertising costs, and budget constraints. The success of the business is entirely dependent on highly qualified and trained personnel. This is done through training and the implementation of employee programs. Training and employee programs are expensive and time-consuming. During the first year of operation, the firm will operate with a tight budget to meet all its goals.

A Summary of the Strengths and Weaknesses of the Business Plan is provided in the SWOT Analysis Table 5

Approach for Approval

The approach for approval will be based on an emphasis on the strengths of the business plan as well as show strategies and measures that will be undertaken to overcome the weakness.

It will also show the viability of the business ideas, the marketing strategies that will be used to enter and secure a sizable market share. It will give a thorough breakdown of the break-even period and the estimated profits in the consecutive years as shown in Figure 5.


Ellapen, T. J., & Paul, Y. (2016). Innovative sports technology through cross-disciplinary research: Future of sports science. South African Journal for Research in Sport, Physical Education, and Recreation, 38(3), 51-59.

Ferreras-Garcia, R., Hernandez-Lara, A. B., & Serradell-Lopez, E. (2019). Entrepreneurial competences in a higher education business plan course. Journal of Education and Training, 61(7/8). 850-869. Web.

Finch, B. (2013). How to write a business plan (Vol. 35). Kogan Page Publishers.

Lim, M. A., & Pranata, R. (2021). Sports activities during any pandemic lockdown. Irish Journal of Medical Science, 190(1), 447-451.


Financial Tables

Cash flow statement.

Activities Amount Amount
Net Income 4,200,000
Adjustments 500,000
Depreciation 1,700,000
Tax deductions
Cash used for operations 3,000,000
Capital Expenditure (1,000,000)
Cash used for investing (1,000,000)
Creditors 500,000
Dividends 1,000,0000 (1,500,000)
Cash Balance 500,000
Cash flow statement.
Figure 1: Cash flow statement.

Figure 2: Break-even analysis.

Income statement.

Net sales 10,000,000
Cost of finished goods 4,000,000
Opening Stock 1,000,000
Closing stock (2,000,000)
Cost of sales 3,000,000
Gross Profit 7,000,000
Rent 500,000
Advertising costs 500,000
Distribution costs 500,000
Salaries 1,500,000
Depreciation 1,500,000
Dividends 1,000,000
Net profit 1,500,000
Income Statement.
Figure 3: Income Statement.

Figure 4: Estimated profits.

Budget costs.

Activities Amount USD
1 Acquisition of plant and machinery 3,000,000
2 Rent 500,000
3 Leasehold renovation 500,000
4 Salaries 800,000
5 Research and development 2,000,00
6 Distribution and transport costs 500,000
7 Marketing and expenditure 1,000,00
8 Operating cash flow 1,500,000
9 Legal and registration fees 200,000
Total 10,000,000

Table 1: Budget Estimate.

Sources of capital.

Sources Amount
Contributions from investors 5,000,000
Sale of shares 3,000,000
Loans and grants 2,000,000
Total 10,000,000

Table 2: Sources of funding.

Statement of financial position/ balance sheet.

Non-current Assets Dep. NBV
Plant and machinery 3,500,000 500,000 3,000,000
Vehicles 4,000,000 1,000,000 5,000,000
Furniture and fitting 1,200,000 200,000 1,000,000
8,500,000 1,700,000 9,000,000
Current Assets
Cash 1,000,000
Bank 5,000,000
Stock 8,000,000
Raw materials 4,000,000
Work in progress 2,000,000
Less: Current liabilities
Creditors 2,000,000 20,000,000
Financed By:
Capital 21,000,000
Long-term Liabilities
Loans 8,000,000

Figure 5: Financial position for the second year.


SWOT Analysis.

  • Partnerships with suppliers
  • Differentiation and customization of our training equipment.
  • The strategic location of our retailing
  • Branding of our retailing outlets.
  • High personnel training costs.
  • Budget constraints
  • High product development costs.
  • Expensive employee programs
  • Expansion into international markets.
  • Sponsorship of sporting teams.
  • Contribution to technological advancement in the medical sports equipment fields.
  • Unfriendly legal environment.
  • COVID 19 Pandemic.
  • Patent rights on raw materials

Table 3: SWOT Analysis.

Cost-Benefit Analysis

Costs Benefits
Production costs Increased supply of medical sports equipment
Distribution costs Increase in monthly sales
Advertising and marketing costs Increased market share
Employee training and programs Increased employee productivity and morale
Research and development costs The invention of new medical sports equipment
Increased revenues and profits
Improved customer loyalty
Increased competitiveness

Figure 6: Cost-Benefit Analysis.

Cite this paper

Select style


BusinessEssay. (2022, December 15). The Medical Equipment Manufacturing Firm: Business Plan. Retrieved from


BusinessEssay. (2022, December 15). The Medical Equipment Manufacturing Firm: Business Plan.

Work Cited

"The Medical Equipment Manufacturing Firm: Business Plan." BusinessEssay, 15 Dec. 2022,


BusinessEssay. (2022) 'The Medical Equipment Manufacturing Firm: Business Plan'. 15 December.


BusinessEssay. 2022. "The Medical Equipment Manufacturing Firm: Business Plan." December 15, 2022.

1. BusinessEssay. "The Medical Equipment Manufacturing Firm: Business Plan." December 15, 2022.


BusinessEssay. "The Medical Equipment Manufacturing Firm: Business Plan." December 15, 2022.