How to write an IOP business plan a lender will believe

The outline to copy

This is the business plan outline from our client kit, with the additions every treatment program needs. It follows the same shape as the SBA's traditional business plan, so a bank's loan officer will recognize it. Write the executive summary last.

1. Executive summary (one page): what you're opening, for whom, where and when; what it costs to open; when you expect to break even; what you're asking for.
2. The program: legal name, entity and owners with percentages; mission in one or two sentences; services you will and won't offer; location and hours; target opening date.
3. The need: who you'll serve (ages, conditions, insurance, where they live); evidence of need such as wait lists, local data and referral sources asking for this level of care; why now and why you.
4. Competition: who already serves these clients nearby or by telehealth, which plans they take, and what will make you different.
5. Referral sources and marketing: where clients will come from, how you'll reach each source and what it costs, and the rule you'll follow: no payment or gift for referrals, and honest advertising.
6. Payers and pricing: the plans you'll join and when each should be effective, self-pay rates, and the expected payer mix in year one and year three.
7. Operations: first call to first session and how long it takes; your EHR, phones, scheduling and billing; HIPAA, consents and 42 CFR Part 2.
8. Staffing: who works there at opening and in year three, by role, with pay; the license or credential each role needs; supervision; hiring and retention.
9. Licenses, insurance and accreditation: every license and permit and its status; coverage and limits; accreditation plan.
10. Financial plan: the startup budget; monthly revenue and costs for 3 years with every assumption written out; break-even month and the cash needed to get there; how the startup is funded and how the money will be used.
11. Risks and responses: for each, the early warning sign and what you'll do. At minimum: credentialing slower or rates lower than planned; fewer clients; losing a key clinician or director; a rule or payer policy change.
12. Milestones: entity formed, license filed and issued, contracts effective, first admission, accreditation survey, break-even, first-year review.

Program additions

• Levels of care (PHP, IOP, OP) with days and hours for each.
• Admission, continued-stay and discharge criteria; for SUD programs, The ASAM Criteria.
• Clinical model, curriculum and evidence-based practices.
• The state facility license and inspection timeline (in Texas, HHSC's chemical dependency treatment facility license under 26 TAC chapter 564).
• Accreditation plan (Joint Commission or CARF) and target survey date.
• Census plan: capacity, expected daily census by month, average length of stay.
• Utilization review: who requests authorizations and continued-stay reviews, and how.
• Medical services: medical director, medications for addiction treatment, labs and drug testing.
• Governance: who sits on the governing body and how it decides.

Market and competition

A lender reads this section for one thing: proof that clients and referral sources exist before you spend their money. Use public data, named sources and your own conversations:

• Need: state and county substance use and mental health estimates from SAMHSA's data portal, and population, age and insurance coverage for your service area from data.census.gov.
• Competitors: list every program offering your levels of care within a reasonable drive using SAMHSA's FindTreatment.gov, then check which plans each takes and whether they run day or evening tracks.
• Referral sources: name the hospitals, detox and residential units, psychiatrists, therapists, employee assistance programs and courts you've spoken to, and what they said about wait times. Letters of support help; promises of volume in exchange for anything of value are illegal under the Texas Patient Solicitation Act and EKRA, and a lender's attorney will flag them.

Our feasibility step does this for clients: who in the area needs this level of care, who would refer, which plans pay for it and at roughly what rates, and how many clients a day it takes to break even.

Services and levels of care

The schedule drives both revenue and staffing, so state it in hours, not adjectives. Most payers expect about 20 hours a week for PHP and at least 9 hours a week for adult IOP. Show a sample week: which groups run when, who leads them, and how each group ties to treatment-plan goals. Name the billing codes you expect to use (commonly S0201 for PHP, H0015 for SUD IOP and S9480 for mental health IOP, or revenue codes on a UB-04), and say that you'll confirm them in each contract. The full licensing and program sequence is in our guide to starting an IOP or PHP in Texas.

Staffing

Show each role, FTE and pay at opening, and when you'll add people as census grows. This is the staffing plan from our projection model's example for a 24-client program:

Role	FTE	Pay per year	Cost per month
Program / clinical director	1	$85,000	$7,083
Counselors (LCDC / LPC)	3	$58,000	$14,500
Intake and UR coordinator	1	$45,000	$3,750
Behavioral health tech	1	$34,000	$2,833
Medical director / prescriber (contract)	0.2	$180,000	$3,000
Payroll taxes and benefits (10%)			$3,117
Staff	6.2	$374,000	$34,283

Back the pay with a public source: BLS's wage estimates for Texas by occupation. Spell out the credentials, too: in a Texas SUD program, counseling is provided by or under qualified credentialed counselors such as LCDCs, and counselor interns need their supervision. A plan with one counselor for 24 clients, or no medical director, tells the lender you haven't run a program.

Payer mix

Payer mix is where plans most often overreach. Write down, for each group of plans, the share of client-days, the rate per day at each level, and the date that contract should be effective:

Payer group	What to show the lender
Commercial plans	The plans you'll apply to after the license, the expected effective dates (about 90 days each after a complete application), and whether each requires accreditation. Use contracted rates once you have them; until then, label rates as estimates.
Texas Medicaid managed care	Enrollment with TMHP, then each managed care plan in your service area, and which of your services Medicaid pays for your license type.
Medicare	Usually none for a freestanding program: Medicare pays for PHP, and since 2024 IOP, through hospitals, community mental health centers and a few other provider types (CMS 2024 rule).
TRICARE	Only after accreditation (Joint Commission, CARF or COA).
Self-pay and single case agreements	How you'll serve clients before contracts are effective, with self-pay rates and the good faith estimates uninsured clients must get.

Our credentialing page shows typical times from a complete application to in-network by kind of plan, and the break-even calculator takes up to three payer groups and blends their rates for you.

Census ramp and break-even

Break-even census is the average number of clients a day whose collections cover your monthly costs. In our model's example, monthly costs are $50,083 and each client brings in about $4,438 a month after collections, so break-even is 11.3 clients a day. The grid shows how much rates and collections move it:

Rates (PHP / IOP per day)	75% collected	85% collected	95% collected
$320 / $180	16 clients	14.1 clients	12.6 clients
$400 / $225 (the model)	12.8 clients	11.3 clients	10.1 clients
$480 / $270	10.7 clients	9.4 clients	8.4 clients

Average daily census needed to cover $50,083 a month of costs, with 40% of clients in PHP 5 days a week and 60% in IOP 3 days a week.

The ramp is just as important. The model grows census evenly to 24 over 6 months and assumes insurance pays 2 months after the service; the month-by-month table and the cash it implies are in what it costs to start an IOP. Show your ramp month by month, and tie it to dates: no commercial census before the first contract's effective date.

The 3-year projection

This is what our projection model prints for its example program, unchanged. It's here to show the format, and because it's a good example of what a lender will push back on:

Line	Year 1	Year 2	Year 3
Client-days	3,753	4,740	4,740
Billed	$1,190,540	$1,503,840	$1,503,840
Collected	$798,915	$1,278,264	$1,278,264
Costs	$600,996	$600,996	$600,996
Net, before owner pay, debt and taxes	$197,917	$677,268	$677,268
Cash position at year end (after startup)	$86,915	$764,179	$1,441,443

The model's example output, unchanged. Years 2 and 3 match because the model holds census, rates and costs flat; a lender-ready projection adds raises, rate changes, staff added as census grows, owner pay, loan payments and taxes.

Before a number like that goes to a bank, a real plan adds what the example leaves out:

• The owner's pay and any nurse, therapist or admissions staff you'll actually need.
• Staff added as census grows, and raises each year. The example holds 6.2 FTE flat from 4 clients to 24.
• Loan payments, depreciation and income taxes, prepared with your CPA.
• Length of stay and authorizations: plans approve a set number of days and then review; denied days are lost revenue, not late revenue.
• Real rates from your contracts or written single case agreements, not market estimates.

The numbers lenders question

Expect each of these to be tested. Show the downside case yourself, before they ask. Here is our model's example with one assumption at a time made worse:

Case	Break-even	Net a month at 24	Cash needed	In the black
The model's example	11.3	$56,439	$258,072	Month 5
Rates 15% lower	13.3	$40,460	$270,873	Month 6
75% collected instead of 85%	12.8	$43,907	$267,427	Month 6
Full census takes 12 months, not 6	11.3	$56,439	$328,431	Month 8
Paid 3 months after the service, not 2	11.3	$56,439	$308,156	Month 6
All four at once	15	$29,808	$425,420	Month 11

Each line changes only what it names; everything else is the model's example. Break-even is the average daily census; net is before owner pay, loan payments and income taxes; in the black is the first month cash in covers costs for good.

1. Daily rates. Where did $400 for PHP and $225 for IOP come from? Contracts beat estimates; estimates need a source.
2. Census ramp. Why will 24 clients come in 6 months? Named referral sources, letters and your own track record carry this.
3. Collection rate. 85% of billed charges assumes authorizations are in place and claims go out clean. Show your benefits verification process and who does utilization review.
4. Days until paid. Texas requires state-regulated PPO plans to pay clean electronic claims within 30 days (Insurance Code chapter 1301), but self-funded employer plans aren't covered, and the clock doesn't start until there's a contract and a clean claim.
5. Licensing timeline. After you file with HHSC, you have 6 months to show you meet the rules. A plan that assumes revenue in month one of the lease is a plan that hasn't counted the license.
6. Working capital. The cash needed, startup included, is the deepest point of the running total ($258,072 in the example), not the startup budget.

Funding and the ask

State what you're asking for, what it pays for, and what the owners put in. Options to weigh with your CPA: savings, partners or investors, a bank or SBA 7(a) loan, and a line of credit for working capital. Show the use of funds line by line from the IOP startup budget, plus the reserve. Cima Consulting isn't a lender or a broker, isn't a law or accounting firm, and doesn't place loans.

Questions

How long should an IOP business plan be?

Ten to twenty pages, plus the financial tables. Lenders read the executive summary, the payer and census assumptions and the financials first; long market narratives don't help.

Do I need a business plan if I'm not borrowing?

Yes. The same numbers tell you how much cash to hold, when to hire each counselor, and whether a lease is affordable. Our roadmap puts the business plan before the lease for that reason.

What break-even census should an IOP plan show?

Whatever your costs and rates say, shown with the math. In the model's example it's 11.3 clients a day against a planned 24. If your break-even is close to your capacity, a lender will see no margin for a slow month.

Can I use industry-average rates in the projection?

Only as labeled estimates until you have contracts. Each plan sets its own rates and codes, and rates vary by plan, level of care and region. Replace them as contracts arrive and say which ones are still estimates.

What does your business plan service include?

For $1,250: market and competition, services, staffing and payer mix, the startup budget, break-even and a 3-year projection, built on our program model with your numbers. It's included in the IOP / PHP Program Launch.

See the business plan service with our other services and prices, or check your own numbers in the IOP break-even calculator.

Sources

• U.S. Small Business Administration, Write your business plan and 7(a) loans
• SAMHSA, data and FindTreatment.gov; U.S. Census Bureau, data.census.gov
• ASAM, The ASAM Criteria; Texas Administrative Code, 26 TAC chapter 564
• U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, Texas
• CMS, CY 2024 outpatient payment rule fact sheet and No Surprises Act; TMHP
• Texas Legislature, Insurance Code chapter 1301 and Occupations Code chapter 102; 18 U.S.C. 220 (EKRA)
• Outline, staffing, grid, projection and stress tests: Cima Consulting's business plan outline and program projection model (Texas, 2026).