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Saturday, June 10, 2006

Planned Parenthood: An American business 'success' story

Wonder how the business of Planned Parenthood is doing? Very well, thank you:
There is one enterprise that has received very little attention for its commercial acumen because most people don't view it as a business. But it is. Let's take a few moments to look at this business, review its business model and determine the secret to its success.

First, let's look at some of the numbers associated with this business. Last year, it had gross revenue of $882 million and a net profit of $63 million. This marks the 19th year in a row that the enterprise has increased its gross revenue and made a profit. In fact, over those 19 years, it has a total profit of $649.6 million on gross revenue of $10 billion.

Like many franchise businesses in our country, it has achieved this level of success by working out a sound business model and then replicating that model all across the country. It began in 1916 with a single site in Brooklyn, N.Y. Since that time, it expanded to 938 facilities in 1995, but has seen some contraction since that time. Its latest annual report states that it operates 860 sites.

One of the interesting parts of the business model for this endeavor is that it has been able to tap into government money and avoid paying even one penny of taxes on its profits. Of the $10 billion the company has taken in over the last 19 years, 39 percent ($3.9 billion) has come from the American taxpayer. It was after it began receiving these funds in 1964 that its explosive growth began – more than doubling its locations over the next nine years.

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