Senior Living and Housing Strategy
brought to you by Moore Diversified Services, Inc. (MDS)
There is no better time than NOW, the beginning of a New Year, to look back and more importantly, to look FORWARD. It is time to make a plan for growth and success. Evaluate where you are, set some new and challenging goals, make a plan and LET”S GO!
This information was taken from chapter 50 of Jim Moore’s book, Independent Living and CCRCs; Survival, Success & Profitability Strategies for Not-for-Profit Sponsors and For-Profit Owner-Operators.
Putting It All Together
Survival, Growth, Success and Profitability in the 21st Century
It’s time to focus on two frequently heard sound bites:
- “What happened to the good old days?”
- “Senior living is not what it used to be.”
I’ll add a third one to think about:
- “A recession is a terrible opportunity to waste”
Our industry is fundamentally sound, but both the external economic environment and senior living business are getting increasingly complex. In senior living, we have a multifaceted business model involving:
- Real Estate
- Property Management
- Food and Beverage
- Social Services
- Health Care Delivery
- Limited Risk Pool Health Insurance Provider (Type ‘A’ life care CCRC.)
- Risk Management
- Asset Management
- Information Technology
Here is an outline of a six point strategic plan to put it all together:
1. Focus on organic growth. First and foremost, focus on enhancing your existing operations. No single strategy will likely have a higher pay-off. This will involve executing three strategies:
- Optimize stabilized occupancy
- Enhance existing financial operations – increasing revenue while possibly reducing expenses
- Consider synergistic growth on your existing campus(es) by adding new revenue producing living arrangements and/or offering synergistic ancillary services such as assistance in living into independent living and , possibly, home health services.
Strike a delicate and critical balance between implementing these strategies without impacting resident satisfaction, standard of care or quality of life.
2. Future growth can be a sound strategy. Increasing the number of revenue producing units can increase the efficiency of both your individual properties and your central office. But always ask this defining questions; “How much is enough?” Growth for a public company must be relentless. The investment community expects additional good news every 90 days! The public companies use the fancy term “accretive” when referring to the expected outcomes of sound financial decisions. Accretive can also mean that our future strategies and financial plans result in positive and prudent growth; such as increased cash flow, financially responsible expansion in resident services or an increase in your mission objectives.
3. Make market-driven not situation-driven decisions. Seniors and their families are primarily focused on product, price, value and choice. They care little about your challenge or situation; their interests are market-driven. Their frame of reference is likely to be heavily influenced by what your competitors offer. How realistically do you stack up?
4. Constantly ask “what if” questions. This involves conducting internal financial sensitivity analysis while keeping an eye on the external competitive market and financial situation. There will always be boom/bust business cycles that will require execution of prudent business recovery plans.
5. Everyone needs an exit strategy. This applies to you even if you plan to hold your property indefinitely. Why? The reason is simple; your long-term holding strategy will not be successful if it doesn’t consider an acceptable exit strategy.
Simply stated, an exit strategy asks the hypothetical question: “If I sold my community based on current market conditions, would I be pleased or disappointed by the financial results?” If you’d be disappointed , ask yourself an additional question: “What can I do in the next 12 to 18 months to improve the outcome of this hypothetical transaction?” The “hypothetical” exit strategy is the acid test for project viability.
6. Take a realistic look at the future. Finally, revisit the past with 20/20 hindsight but, equally important, look at the future with an entrepreneurial vision.
Jim Moore is president of Moore Diversified Services, Inc., a national Senior housing and health care consulting firm based in Fort Worth, Texas. He has written several books about assisted living and Senior housing, including Assisted Living Strategies for Changing Markets. A new book titled Independent Living and CCRCs is available. Jim Moore can be reached at 817-731-4266 or email@example.com.
Previous Articles Featured on our “Senior Living and Housing Strategies” page
Don’t Judge a Book by It’s Cover…or a Prospect by Their Car. (December 2012)
Financial Planning for Seniors; A Necessary Financial and Estate Planning Tool for Seniors (September 2012)
Responding to the Housing Market Bubble (January 2012)
Misconceptions Stile Sales (Part 2 of 2) (June 2011)
Misconceptions Stifle Sales (Part 1 of 2) (May 2011)
Capital Investment; Four Simple Strategies That Can Produce Dramatic Results (March / April 2011)
“It’s Time to Focus on Organic Growth” (September 2010)
“Learning From the Ones That Got Away” (July 2010)
“Creating a Community of Choice” (May/June 2010)
“Community of Choice or a Price Sensitive Commodity?”(April 2010)
“Hiring and Retaining the Right Teams” (February 2010)
“2010 . . . Modest Improvement For Senior Living” (January 2010)
“Are You Properly Planning for the Future” (December 2009)
“Cost Recovery for Campus Improvement” (November 2009)
“Communities Also Age in Place” (September 2009)
“Focus on Direct Care to Control Labor Costs”
“Straight Talk About Senior Consumer Finances”
“Old Concepts Take on New Meaning in 2009″
Visit Moore Diversified Services, Inc. – www.m-d-s.com to review a full spectrum of Senior living consulting services.
To review information regarding Jim Moore’s new book – http://www.westridgepublishing.com/ILandCCRCmain.htm
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