How to Write an Assisted Living Business Plan
The assisted living industry is a growing trend for several reasons. First, baby boomers are aging and retiring at a faster pace now than ever before. This has led to the demand for assisted living businesses.
Also, millennial’s and other younger generations want to make sure their loved ones are cared for in a house setting. With the increased demand for assisted living comes the need for an assisted living business plan by professional business plan writers. When attempting to write an assisted living business plan, make sure to tailor each segment of the business plan for your prospective industry. Our business plan writer has taken a few moments to highlight important aspects that should be concluded in every assisted living business plan.
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Executive Summary for an Assisted Living Business Plan.
In the executive summary section of the assisted living business plan, make sure to first discuss what type of business your organization will be. Some assisted living business owners prefer nonprofit enterprises. This allows the business owner to exploit the tax loophole involved. Other assisted living business owners prefer a limited liability company. This action will protect the owner for many types of lawsuits that may arise from daily operations.
Also, in the executive summary section, make sure to discuss how your business will look and feel for customers. In this type of setting, assisted living business owners tend to design their locations based on a home feel. What we mean by this is that the assisted living facility will resemble a house and have all the amenities of a home. Not only will this help clients acclimate to the new location but this will also help the business owner best care for the daily needs of their clients.
Company Information for an Assisted Living Business Plan.
The company information section of an assisted living business plan should start with explaining the problem that the company will solve for the client. In most cases, assisted living locations want to offer their residence a seamless transition from home living to group care. From this, the problem that the organization is attempting to solve is moving anxiety. With this said, make sure to have your business plan specifically tailored to address this problem in its entirety. With this problem identified, then the prospect of your business will make sense to the readers.
Product Description for an Assisted Living Business Plan.
Assisted living businesses generate revenues from individuals living at their locations. Often times, these locations will house up to five or six individuals plus a certified nursing assistant. Since the revenues are focused on monthly payments, the product description section for an assisted living business plan should focus on the daily activities offered by the business and then amenities the location will provide.
Competitive Advantages for an Assisted Living Business Plan.
The assisted living industry has been growing substantially over the last several years thanks to baby boomers aging. Because of the high competition in the assisted living industry, new business and trends should take time and create specific competitive advantages that may lessen their business plan. For example, a common competitive advantage for assisted living facilities may include transportation. The transportation may take guests to the malls weekly, doctors' appointments, or even trips to the beach. Just by having transportation services available, assisted living facilities may adequately differentiate themselves.
Location Description for an Assisted Living Business Plan
The location for a new assisted living facility is critical for the success of the business. For the interior of the business, adequate square footage is absolutely needed. As noted above, assisted living facilities often house 5 to 6 people plus a certified nurse. This does not include amenities like a porch, garage for storage, kitchen, and an adequate number of bathrooms. For the most part, the interior of the facility should be at a minimum of 2,500 to 3,000 ft.². Of course, the business owner may choose to go smaller in the house with fewer individuals or even larger in the house more. Regardless, make sure to adequately address the size needs for the business in this section.
As for the general location of the assisted living facility, our business plan writer has found that these types of businesses do well in locations near community amenities like pools, malls, and healthcare. Further, by placing an assisted living facility near subdivisions, ensures that visitors are near their loved ones in case of emergencies.
Target Market for an Assisted Living Business Plan.
A common misconception for an assisted living target market is that the actual target market is the elderly. And only the elderly. This is just not the case. The actual target market is also the loved ones of the elderly or disabled. By including the loved ones in the target market mix, assisted living business owners can design marketing plans to ensure their facility appeals to their target gas and also their family members. This will ensure an easier time making a decision to select your assisted living location.
Industry research for an Assisted Living Business Plan
Because this is a new industry, reliable research on the assisted living industry is scarce. Based on quick research, the main industry in which assisted living competitors to compete in the nursing care facility. The nursing care facility generates approximately $145 billion in revenues annually. In the last five years, the nursing care facility industry grew by about 2% annually. Over the next five years, this growth estimate is projected to increase substantially to about 5%. As of right now, about 23,000 businesses are competing in the nursing care industry, which includes assisted living facilities. However, over the next several years, this number is expected to grow substantially.
Owner and Management Section of an Assisted Living Business Plan
Owning and managing an assisted living business is quite different from other organizations. This is because owners often require substantial education to receive licenses. From this, make sure to include in your business plan a resume. On your resume, make sure to highlight all of your educational attributes and skills that correlate with the assisted living facility. Also, any type of management skills would be highly regarded for this industry as well. On a final note, make sure to include your resume in the appendix section and summarize your skills and expertise in the owner and management section of an assisted living business plan.
Funding Request for an Assisted Living Business Plan
Starting in assisted living business is actually quite expensive. Business owners need to acquire a property, provide furnishing, and then build amenities that will appeal to their customers. From this, a typical starting cost for an assisted living business range between $250,000 to approximately $500,000. Since this number is quite substantial, funding from banks or investors is often required. A starting point for the funding process is almost always having a professionally prepared assisted living business plan.
Financials for an Assisted Living Business Plan.
Financial projections and financial models for an assisted living business plan should first start with identifying how many monthly revenues will be received by the organization. This is calculated by multiplying your monthly fee for each guest by the number of guests your organization will house. Next, add in any additional revenues that your assisted living company may receive like transportation fees or additional meal charges. Once this is done, your financial model for the assisted living company should then align fixed costs with your revenues. The fixed costs may include rent or mortgage payment, utilities, and even your transportation vehicle payments and maintenance. Once this is complete, you then have your net income monthly for the assisted living facility.
Hopefully, these insightful tips and tricks for writing a business plan were helpful. As always, if you need help with a business plan or financial projections, just send us an email or give us a call.
Author: Paul Borosky, Doctoral Candidate, MBA., Author