Page 5 - Traditions Policies and Procedures

VISION: Size of Organization:
 50-500 hospitals all varying in size but steadily up-trending.
o 3 within year 1
o 8 within year 2
o 18 within year 3
o 50 by year 5
o 500 by year 15
 No-Lo hospitals or those not in bidding competitions.
 Purchasing hospitals with huge potential after better management.

Time Commitments of Founders:
 0-10 hours/week per founder, preferably less than 5.
 Founders time limited in order to keep families the priority
 Founder has freedom on WHEN they choose to work
 More hours when/if acting in other roles (director, consultant, etc.)

Locations:
 Starting in Texas near DFW
 Moving to California
 Expanding to locations best for the organization, founders, and staff

Structure:
 Clearly defined roles of all founders with cooperation among all.
 Distributions paid equally among all founders.
 Extra disbursements/wages if founders needed in other roles.
 Major decision based on votes of founders with CEO acting as tie-
breaker.
 Written contingency plans on founders needing to exit.

Distributions and Profits:
 Minimum $1 mil GI per practice within 18 months of purchase
 Minimum 15% net income per practice within 18 months of
purchase
 Yearly Distribution per founder:
o Minimum $100,000 within 2 years (Avg. of 10% net X $500K
gross X 8 practices.
o Expected at 5 years $1.88 mil (15% net X $1.5 mil gross X 50
practices.)
 Practices net a minimum of 15% to the corporate entity.
 Clear, firm financial policy on reserves and distributions

Risk:

 Protected from virtually ALL risk to founders’ personal practices or
households.

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