Defining the mission and goals of a simulation center is an essential first step in the business planning process. A mission statement is an internal document that communicates in a concise and specific way what the business is and what it proposes to do. It is typically constructed by answering a series of questions including:

An expanded mission statement may also incorporate goals of the business in a qualitative and/or quantitative manner and may set out timeframes or other specific objectives of the entity.

A mission statement for a healthcare simulation center may also reflect factors including its:

The box shows an example of a mission statement for a medical school simulation center within an academic medical center.

A useful framework for analyzing a market and planning a competitive strategy has been described by Porter [5]. He described five forces that drive competition in an industry including the rivalry among existing firms, the bargaining power of both suppliers and buyers, the threat of new entrants, and the threat of substitute products or services.

According to Porter, the threat of new entrants depends, in part, on the industry-specific barriers involving factors such as the economies of scale, capital requirements, product differentiation, switching costs, access to distribution channels, regulatory policy, and other cost advantages unrelated to scale, such as the learning or experience curve. The following is an example of how Porter’s framework for competitive analysis may be utilized in planning a simulation center in an academic medical center.

Economies of scale accrue as a reduction in the unit cost of a product or operation as the output in a specific period of time increases. Scale economies accrue to a medical center that locates and organizes its simulation facilities for ease of use across several medical specialties. Capital investment advantages accrue to a medical center that leverages its existing physical plant, audiovisual and teaching lab equipment, and support staff in starting up a simulation center.

A simulation center may diversify its customer base to secure its competitive position. In its start-up period, the center may plan to target the medical students, residents, and faculty of the medical center. Later, this customer base may be expanded to include other community-based or affiliated trainees and faculty, ancillary healthcare personnel, and/or representatives of health-related industries to gain economies of scale.

A simulation center that is the first to enter a geographic market or that is the first to become known for quality ­services with a particular customer base secures loyalty and learning curve advantages and increases switching costs for customers who may be presented with new service provider options. These advantages may be bolstered by achieving certification and/or endorsement by professional organizations or regulatory bodies (see Chap.​ 48).

Academic healthcare training programs also control an important “distribution channel” of graduate trainees and alumni customers based on their long-standing relationships and/or reputation for quality education within these professional groups.

Finally, Porter identifies businesses that gain the most significant experience curve cost advantages as those with a high labor content when performing intricate tasks and/or complex assembly. Healthcare simulation centers require a major investment in human resources to design intricate clinical scenarios and execute sophisticated information technology tasks. Academic medical centers have a cadre of medical educators in place who are experienced in didactic and bedside clinical teaching methods that can be leveraged in the simulated education environment. These skills lend experience curve advantages that reduce costs by facilitating design and efficiency. Centers may also produce intellectual property that provides a source of supplemental revenue, reputational benefit, and product differentiation.

Financial projection and analysis of the investments required to initiate and maintain a new center are important business plan elements. The financial analysis section of a business plan must conform to the requirements of the business owners and investors. These requirements will vary by type of organization, size of project, availability of investment capital, and type of investor. Conformance to the business plan requirements alone, however, may not determine the success of the business plan. A study of the relation between the form and content of business planning documents and the funding decisions of venture capitalists found only a weak association and suggested that independent sources of information may be involved [6]. Business planners need to design a financial plan and analysis that presents the most robust cost/benefit projections and targets the needs and interests of the decision makers who will determine the fate of the proposal.