This means that there will need to be approximately 1 million additional senior living units constructed by 2040 – especially those offering Assisted Living, Skilled Nursing and Memory Care. While senior living communities continue to be constructed across the country, plenty of opportunity remains for investors looking to expand their holdings.
However, opening an Assisted Living business requires specific considerations, business needs and planning. Individuals and organizations considering investing in this specific type of care community will need to do their research and invest wisely to ensure future success.
One excellent way to do this is by partnering with an experienced senior living management organization such as Charter Senior Living. Our unique Virtual Partnership management services offer comprehensive strategic consulting, marketing, operations management, business management and more. We have a deep understanding of the senior living industry, and we can help grow your business by putting that expertise to work for you.
5 Steps for Starting an Assisted Living Facility
1. Develop your business plan.
A good business always starts with a good plan. You’ll want to research your options and create a solid plan for operating an assisted living home, addressing questions and issues such as:
- Startup costs
- Licensing requirements
- Your target market for assisted living residents
- Levels of care available
- Faculty requirements
- Fees and costs for residents
- A financial timeline for breakeven and ROI
2. Form an LLC.
Once you have your business plan in place, work with your lawyer to structure your organization as an LLC (limited liability company). This will protect you as the owner and your personal assets from personal liability should your business be sued. It’s a good idea to hire an in-house lawyer or have a trusted agent on retainer with whom you can work moving forward to assist with any business-related legal issues.
3. Get your finances in order.
As with any small business, you’ll want to make sure everything is above board, financially speaking. You’ll want to register your business for federal and state taxes by first getting an EIN (Employer Identification Number) from the Internal Revenue Service. Next, you’ll want to set up a business account with your preferred bank to keep personal and business finances separate. Finally, you’ll want to partner with an accountant who can help keep your financial records accurate and well organized.
4. Obtain licensure and insurance.
Assisted living facilities will need to ensure their permits, state licenses and insurance are accurate and correctly reflect the rules and regulations for each applicable state as well as for the types of businesses that provide certain levels of care. Working with an experienced partner or attorney will help you get the articles you need in order, such as workers’ compensation Insurance, general liability insurance, and any other facility requirements your organization will require.
5. Brand and market your facility.
Branding is the process of giving a meaning to a specific organization, company, product or service by creating and shaping how it’s viewed in customers’ minds. Think of Nike, Patagonia, Trader Joe’s, or any other national company. While each company may sell items similar to those of competitors, their brand – the personality, if you will – is what sets them apart.
For assisted living facilities, having a specific brand will help them stand out from the sea of competitors, allow them to stay in the forefront of customers’ minds, and ultimately, gain market share. Having a solid brand enables your facility to promote and market to future residents more successfully. A successful marketing campaign will involve aspects of digital marketing, social media, and direct-to-consumer opportunities for attracting prospective residents and their family members.
Costs of Starting an Assisted Living Facility
As with beginning any business, an assisted living facility will have costs and expenses associated with it, both one-time and ongoing. Working with an experienced senior living management partner can help you better understand the costs involved as well as options for streamlining and reducing expenses.
One-time expenses for an assisted living facility can include:
- Construction of the facility
- Emergency and security system installation
- Specific building code requirements
- Furniture and supply costs
- Medical equipment
- Software purchases and other electronics
Ongoing expenses for an assisted living facility include:
- Employee wages
- Utilities (water, heating, electrical, internet, etc.)
- Mortgage or rent payments
- Medical supplies and bedding
Challenges of Starting an Assisted Living Facility
All businesses have expected and unexpected challenges that novice entrepreneurs may not be aware of. Assisted living facilities have different challenges from other sorts of businesses, including:
- Often confusing federal and state regulations, as well as compliance rules and regulations – all of which can differ from state to state
- Specific labor requirements to properly care for elderly residents
- A limited customer market, especially when it comes to Medicaid and Medicare funding
- A potentially saturated market with fierce competition from existing competitors
- Proper, ongoing staff training to keep licenses up to date and valid
How Charter Can Help
Our family-owned and -operated senior living organization has extensive experience in the senior living space. We have an intrinsic understanding of the ins and outs of senior living communities, and we are proud to be able to offer a unique Virtual Partnership approach to management that will help your organization grow and thrive.
Charter and our virtual partners can seamlessly manage your community’s day-to-day operations as well as provide high-level services such as capital needs assessment, expense management, systems development, and customized organizational structure.
If starting a senior living community is your goal, let Charter Senior Living help guide your way. Contact us today at 331.472.2078 to learn more.