ASCOA Business / Clinical Model
Turnaround Budget Model
Typical project requirement: $2,500,000 investment, which includes the purchase price of the existing center.
Typical Financing: $1,400,000 on a limited recourse basis (guarantees limited to each partner's percentage interest).
Typical Equity/Capital: $1,100,000 with partner cash contributions.
Individual contribution (for 10% ownership in the center): Equity of $110,000 (10% x $1,100,000). Limited guarantee of $140,000 (10% x
$1,400,000).
Typical cost breakdown (purchase price, equipment, existing debt, and working capital reserves).
The total cost has four main components:
- The purchase price is dependent upon the past and current operating performance of an existing center and varies based on unique circumstances and the amount of liabilities assumed.
- Updating an existing center's equipment generally costs between $500,000 and $1,000,000, depending on the number of new specialties that are added to the project.
- Buyers are often required to accept a certain amount of the center's outstanding debt. As more debt is assumed, the purchase price is adjusted downward.
- A working capital injection of $300,000-$600,000 is common. These funds are necessary to pay regular operating expenses – rent, staff salaries,
utilities, etc. – until facility fee collection is sufficient to cover expenses(usually two to three months after the closing date of the acquisition).
Total cost: Between $1,300,000 and $3,300,000.
Development Budget Model
Typical Project requirement: $5,900,000 investment.
Typical Financing: $4,800,000 on a limited recourse basis (guarantees limited to each partner's percentage interest).
Typical Equity/Capital: $1,100,000 with partner cash contributions.
Individual contribution (for 10% ownership in the center): Equity of $110,000 (10% x $1,100,000). Limited guarantee of $480,000 (10% x
$4,800,000).
Typical cost breakdown (construction, equipment, furnishings,supplies, and working capital reserves).
The total cost has four main components:
- Architectural and engineering design ranges between $180,000 and
$265,000. This includes obtaining state approvals and completion of the
accreditation process.
- Construction costs are approximately $165-$255 per square foot and the typical size is 9,000-11,000 SF (between $1,500,000 and $2,800,000).
We contract for construction management and provide oversight of the project.
- Equipment and furnishings generally cost between $2,000,000 and $3,000,000 depending on the medical specialties in the surgical facility.
- Working capital of $900,000-$1,100,000 is required. These funds are
necessary to pay regular operating expenses – rent, staff salaries, utilities,
etc. – until facility fee collection is sufficient to cover expenses (usually six
months after beginning operation).
Total cost:Between $4,580,000 and $7,165,000.