Organic Growth – Getting More Out of What You Already Have

Organic Growth – Getting More Out of What You Already Have

“You’ve Got Questions . . . We’ve Got Answers”

 Is there something really important that I should focus on in 2017?

 

You should focus heavily on “organic growth” in 2017.  My definition of organic growth is reducing expenses and enhancing revenues of existing properties.  Committing substantial capital investments in terms of new development and construction is not the only way to realize additional future growth.  Here are three basic organic growth strategies:

  1. Revenue Enhancement – Sharpening your pricing strategies while staying competitive and market-responsive.
  2. Improving Occupancy – Since most of your fixed costs are probably already covered, the incremental profit margin for each additional unit occupied soars to approximately 65% for assisted living and up to at least 80% for independent living.
  3. Expense Reduction – As an example, a community consisting of 120 independent living and 35 assisted living/memory care units operating at 90% occupancy results in approximately 50,000 annual resident-days. Reducing operating expenses by just $2.00 per resident-day (PRD) would result in $100,000 of additional cash flow in 2017.  The median operating expense benchmark for the above defined community is approximately $112 PRD.  A $2.00 PRD expense reduction would decrease operating costs by 2%.

The central budgeting theme for 2017 should be – organic growth – getting more out of that which you already have.

 

MDS can tailor our services based on your need of revenue enhancement, occupancy and/or expense reduction. An operations analysis can uncover a way to increase your cash flow.  Call us today and let’s get started on your success.

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To Understand What Works, Drill Down

To Understand What Works, Drill Down

 

[This article by Jim Moore previously appeared in the industry publication McKnight’s Senior Living]

It is generally recognized that the senior living business is becoming more complex with increasing need for operational sophistication and innovative best practices. The senior living continuum of products and services is growing. There is a pressing need to optimize the financial viability of existing communities through revenue enhancement and expense reduction.

financialYet in spite of these generally recognized complexities and challenges, many sponsors and owner/operators still focus exclusively on tracking and evaluating their financial position on a broad consolidated basis. This is a great big-picture summary approach, but the true financial dynamics and sensitivity of the organization must address the development of individual cost and profit centers within the continuum. Simply combining three or four businesses within a community into one simple consolidated income statement of revenues and expenses is not the best practice for the future. In reality, each of these major product and service businesses should meet reasonable industry financial benchmarks of:

  1. Revenue
  2. Expenses
  3. Net operating income
  4. Profit margins
  5. Cash flow

Each cost center must initially stand alone before being merged into the consolidated financial statement. Just using consolidated financials can frequently mask unacceptable subpar performance of one cost center, while penalizing another one.

Clearly owner/operators must provide a seamless consolidated continuum of products and services for their aging residents. But this consolidated continuum is really composed of a number of individual business models with unique challenges and opportunities. Each key element of this continuum must first be segmented as standalone cost and profit centers and then (and only then) combined to track the results on a consolidated basis. Each business element must be successful individually.

Let’s take a look at a typical example. One of my clients operates a comprehensive CCRC that has independent living, assisted living/dementia/memory care, nursing/rehabilitation and assistance-in-living/wellness as major components in their seamless continuum for their residents. These components have each been segmented as these standalone profit centers. Individual income statements exist for each one. These individual income statements include earned operating revenues, operating expenses including direct costs and an appropriate overhead allocation that applies to that cost center, individual net operating income, profit margin and cash flow. These financial statements also include monthly and year-to-date budget versus actual results and, where appropriate, a discussion of why variances occur.

This approach also quantifies and enhances the objective assessment of key staff member performance. Coupled with resident satisfaction scores, this provides an objective criteria for addressing important initiatives.

The senior living continuum is becoming more complex, with services like comprehensive assistance-in-living within independent living, geriatric assessment, memory care and external continuing care at home. Financial performance sensitivity is also increasingly putting more pressure on profits, debt service coverage and capital investment needs impacting overall cash flow for aging physical plants.

The standalone cost and profit center is a concept whose time has arrived. It is already being implemented by progressive sponsors and owner/operators. The benefits include sharpened pricing, focused cost controls and potential overhead cost reduction. Finally, the concept is fast becoming a key element of a state-of-the-art business practice.

Need help drilling down your financials? Contact MDS at 817-731-4266

 

Explanations Go a Long Way on Resumes

Explanations Go a Long Way on Resumes

 

Leaving off pertinent information is why so many Resume, pertinent information, Senoir Living Consultant, Senior Living Consultingresumes go in the trash.

It’s difficult to balance out the amount of information presented in a resume. With the shorter attention spans today, it’s important to get to the point. You don’t want to bog the reader down with reams of useless information — but you also need to make sure you include vital information that demonstrates why you are worthy of further consideration. You can’t just cut your resume down for the sake of word count.

Make Sure Your Resume Includes Pertinent Information

While there are many areas this tip could apply to, let’s focus on past employment. As a hiring manager, this is the first area of a candidate’s resume that I look at. I want to see if the candidate has any related work experience, and I want to see how stable their employment history is.

Most hiring managers are looking for long-term employees, and stability is important. Despite that, I receive more resumes today than ever before with tenures of five months here, four months there, and seven months here, with no explanation. Short job tenures are not bad in and of themselves, but without an explanation of some kind, the worst is assumed. I will usually not waste my time doing a simple phone screen — and definitely not an in-person interview — with a candidate that has a history of unexplained short-tenured positions.

Case in Point: A good friend of mine found herself unemployed at the end of 2013 due to staff cuts resulting from her company being bought out. Her unemployment dragged on for about six months, with very little activity.

After looking at her resume, I figured out why. She had a stable work history with three companies up until 2009, averaging eight years of tenure at each business. Then, after 2009, she had six jobs in a couple different industries. It was no wonder she was not getting any calls: It looked as if something had happened to make her very unstable in this period.

My friend had been employed in the building material industry for her entire career. Beginning in mid-2006, the housing slow down led to tough times in that industry. My friend had been laid off or downsized in company buyouts or mergers four times during this period. She was also a single mother and had to take a few part-time jobs to pay her mortgage and put food on the table.

Resume, pertinent information, Senior Living consulting, senior living consultantJust looking at her resume, you could not tell any of this. It looked as if something had gone haywire and hiring managers were reluctant to even call her. Don’t expect that a hiring manager is going to take the time to try and connect the dots on your resume. That’s not their job. It’s up to the candidate to try and fill in any holes in their own resume.

The Proof Is in the Details

My friend went back and filled in all the gaps on her resume by including the reasons why she separated from each company. Within in the first few days of using this updated resume, she began getting interviews and job offers worthy of her experience and talent. Within a month, she was hired by a leading specialty building material supplier.

My friend didn’t change anything about her fragmented work history. All she did was add a little explanation. This had the tremendous benefit of helping hiring managers — especially those that lived through the difficult economic times — understand why her resume looked the way it did.

Are You Explanations Satisfactory?

There are many satisfactory explanations for short job tenures — they just need to be noted for busy hiring managers to quickly and easily see them. The shaky economy of the last few years has increased the number of downsizings, closings, and mergers, all of which have resulted in many layoffs.

Similarly, some positions are, by nature, contract- and project-oriented. These roles will result in job changes every six months or so, but not because you are an unsteady or troubled employee.

Furthermore, there are also those younger adults who have been working internships to try and gain experience in various careers. In today’s new economy, there are also those part-time and stopgap positions that employees need to bridge the gap between permanent, full-time positions.

Resumes, Senior Living consulting, senior living consultantJust remember that having multiple short-tenured positions is not the kiss of death — if you take the time to provide a short explanation for your limited tenure, that is. It need be no more than a few words under the job title, such as “contract position,” “internship,” “temporary work,” “layoff,” or whatever the situation was.

Do You Take Advantage of PR or Public Relations Opportunities?

Do You Take Advantage of PR or Public Relations Opportunities?

 

Public Reations, Roy Barker, Moore Diversified Services, Senior Living Consultant, Senior Living Consulting

 

PR or Public relations should be in everyone’s marketing communications tool kit.

As a Senior Living Consultant working with many Senior Living clients over the years, this is one form of community promotion that tends to be over looked the most. So what exactly is PR? PR or public relations, the noun, as defined by Meriam-Webster.com is as follows:

the activity or job of providing information about a particular person or organization to the public so that people will regard that person or organization in a favorable way

OR

the relationship between an organization and the public

What is PR?
PR is different from advertising in the fact that in advertising you pay for the privilege of controlling the timing, placement, and message associated with it. While with PR, since it is generally free, the control lies in the hands of the writer and media outlet providing you the coverage. I once heard that “Advertising is what you pay for, PR is what you pray for.”

There are many forms of PR. Most of the time the words PR conjure up images of events at opposite ends of the spectrum. Either a publicity stunt where someone is doing something that is outrageous and crazy to call attention to themselves, their company or their mission, or a company spokesperson trying to put a positive spin on a potentially bad situation that has arisen for the company.

Examples
An example of an outrageous PR stunt would be similar to the flash mob dancing troupe a few years ago that held an impromptu performance at Grand Central Station, it ended up netting them 28 million YouTube hits and a lot of media exposure. An example of positive spin on a bad situation would be the aftermath of the BP oil spill in the Gulf of Mexico. There have been subsequent news conferences and advertising campaigns trying to convince the public, that the gulf coast is now better than ever.

The kind of PR I am talking about is somewhere in the middle of these two extremes. The press release, media tours, special events, sponsorships, public service/public interest stories are all form of PR that your company/community can use to build brand awareness. These types of PR also show that your brand is part of the greater community and can generate loyalty in a larger audience.

Put PR To Work For You
One of the great things about PR is that it is happening all around us and while we get the intended message, we don’t realize the company or brand is promoting itself to us. Instead of thumping our chest telling everyone how great our company and/or products are through advertising, PR is a subtle way of getting a company name out by providing useful information and activities to others.

PR is also a way to have others validate you as an expert. The general thinking of readers or viewers is that they surely wouldn’t be quoting you or doing a piece on you or your company/community unless you were an authority, the best and most knowledgeable in your field.

November Public Relations Webinar
As part of MDS’ “Plug-In and Prosper” Webinar Series, the November 18, 2015 webinar will be “Generating Public Relations for Your Community”. The webinar will focus on the meaning and use of public relations and why it’s important. I will discuss PR as part of a well-rounded marketing communication plan, the benefits of PR, and how it can enhance your relationship between your company and the public.

So mark your calendar and join me on Wednesday, November 18 at 1:00 pm (CDT) for this important webinar.

I look forward to having you join me for this complimentary monthly webinar! You can also check out our past webinars on the Moore Diversified Services YouTube channel!

Registration Link

Roy Barker is Director of Special Projects at Moore Diversified Services, a Fort-Worth, Texas-based organization specializing in Senior Living operations analysis, marketing development, and investment advisory services. Roy is an authority in the field of employee turnover analysis and retention strategies.

More Wage Pressure Could Be On The Horizon!

More Wage Pressure Could Be On The Horizon!

 

 Wage Pressure Senior Living Industry

 

In a proposed plan by the White House, more exempt employees will be eligible for overtime compensation.

Not long ago I wrote a piece on the impact of increasing wages through both higher minimum wages and entry level wages in Is Your Business Prepared for the $15-An-Hour Entry Level Worker? Now, you should not only consider the impact of rising wages for hourly workers, but also potential wage impacts related to exempt employees. The proposed plan by the White House would raise the threshold of wages in which exempt works are eligible for overtime compensation.

The Proposal

A recent White House Proposal will increase the number of exempt employees eligible for and entitled to compensation for overtime work beginning in 2016. The new regulation increases the minimum pay for overtime-eligible exempt employees from $455 a week to $970 a week, or $23,660 to $50,440 on a yearly basis.

Currently, hourly and salaried employees making under $455 a week or $23,660 a year are generally eligible for overtime compensation for hours worked in excess of 40 per week. If this proposal goes into effect, it will increase the eligibility for salaried employees making up to $50,440 a year to be eligible for overtime compensation. This will more than likely have an effect on most department managers and some administrative personnel currently employed at senior living communities who have previously been ineligible for overtime due to their exempt status.

Changes To Be Considered

If the proposal is approved, this will create a need to start doing a few things differently for the exempt employees making under $50,440 per year. The first thing would be to start tracking these newly eligible employees’ time closely, even if they work off-site or from home. If the employee consistently works overtime, the changes that can be considered will include: whether to institute a no more overtime policy, increase the employees pay to $50,500, or convert them to an hourly rate and adjust for overtime normally worked.

Policies for communicating with these employees during off hours by phone, text, or email will also need to be evaluated. It would also be prudent to consider the impact of employees who might cover for others due to no-calls, no-shows, or other absences. If the coverage situation happens at the end of the scheduled work week, then this employee would more than likely have already worked enough hours to be eligible to an overtime situation.

Definitive Action is Needed

It may be tempting for management and employees alike to take a laid-back view on this emerging situation. If you don’t get anything else from this article, the one piece of information you should remember is this: I can assure you that you will be better off planning ahead for the proposed rule change. Don’t be tempted to procrastinate, and don’t simply make a handshake agreement with an employee and think that nothing needs to be changed because everything will work out in the long run. Unfortunately, it doesn’t always work out, and the cost can add up.  The cost of the overtime work, penalties, time other employees will spend on this, and possible litigation will cost you more than it would have to initially just do be prepared from the start. Not to mention the hassle of having the Labor Department in your business for goodness knows how long.

Be Proactive

Let MDS help you evaluate the possible impact of wage increases in your community. I can work with you and your team to calculate your financial expose based on potential changes in over-time regulations for exempt employees. A proactive approach will allow us to develop alternative pay plans and work schedules to minimize the financial and service impact on your organization.

While we don’t know where minimum and entry level wages will eventually land, I will also help your team run “what-if” scenarios based on several factors to estimate the impact of multiple levels of increase. Putting this all together will help guide management’s approach to evaluating and setting monthly service fees, and service packages designed with minimal impact to the organization, its residents, and staff members.

Don’t procrastinate on these important wage-related issues. There is still plenty of time to design a well-rounded solution that has minimal impact to your organization.

 

As an update to the entry level worker pay story, the New York Wage Commission has endorsed the planned hike in fast food workers to $15 per hour.

 

Roy Barker is Director of Special Projects at Moore Diversified Services, a Fort-Worth, Texas-based organization specializing in operations analysis, marketing development, and investment advisory services. Roy is an authority in the field of employee turnover analysis and retention strategies.

Is “Cost Creep” affecting your income statement?

Is “Cost Creep” affecting your income statement?

 

Cost Creep, senior living consulting, senior living consultant

What is “Cost Creep”? How is it measured?  How does it affect your community, division, or company? What can you do to stay out in front of it?  These are some questions I hope to answer for you.

Cost creep, in its basic form, is providing more care to residents than you are being compensated for. This can come about for many reasons, such as:

  • an incorrect loaded hourly rate on which to base monthly service fees (MSF) and care tiers upon;
  • not having residents assigned to correct care tiers;
  • not catching resident’s decline soon enough; and
  • caregivers not understanding the dynamic of what they provide the resident and the company through their service.
Has Your Senior Living Community Adapted to the New Information Paradigm?

Has Your Senior Living Community Adapted to the New Information Paradigm?

 

New Information Paridigm, senior living consulting, senior living consultatnts, Moore Diversifed Serivces

Welcome To The New Information Paradigm!

There has been a new day dawning concerning the flow of information in the Senior Living industry the last few years. Some in marketing/sales have gotten this and some haven’t quite embraced the movement yet. The larger movement has been from transaction-based selling to relationship building. Transaction-based selling is where the sales person shows the prospect the living unit and dining area and then does a 30-minute information dump about their community.

Relationship building involves a lot more listening than talking, asking the right questions, really being interested in the prospect’s current situation, their history, wants and needs, and opinions, and really CARING about them, not just lip service.  In this piece I’m not going into the entire relationship building concept, but more how the information is exchanged today. The New Information Paradigm!

Continue reading “Has Your Senior Living Community Adapted to the New Information Paradigm?”

Webinar Recap:  Back To Basics in Professional Selling

Webinar Recap: Back To Basics in Professional Selling

 

sellilng senior living, Back to basics, senior living consulting, senior living consultant, Moore Diversified Services

Senior Living expert Roy Barker, Director of Special Projects at Moore Diversified Services, recently shared in a webinar what he has learned in his years of experience in the Senior Living industry about Professional Selling and how important it is to go “Back to the Basics.”  Barker specifically used his mystery shopping experiences to highlight some of the main mistakes Senior Living sales staffs are still making, mostly without even realizing it.  If Senior Living sales staffs take Roy’s advice and implement his suggestions, it could have a big impact on the bottom line.

If you missed the webinar, you can view it in its entirety by clicking on the video below at the end of this article.  You can also view past webinars on the Moore Diversified Services Senior Living YouTube channel. This article gives a brief recap of some of the main points of the most recent webinar.  Roy broke up the Sales Process into three stages:  the Beginning, the Middle, and the End.  But first, Roy talks about a Shift in Focus needed in Senior Living sales.

Continue reading “Webinar Recap: Back To Basics in Professional Selling”

Is Your Business Prepared for the $15-An-Hour Entry Level Worker?

Is Your Business Prepared for the $15-An-Hour Entry Level Worker?

 

increase in entry level wages, senior living consulting, senior living constultant, Moore Diversified Services

Is your company or community ready for the financial impact of rising entry level worker pay? While $15 an hour is the new “rally cry” for the minimum wage, whether it will happen nationwide can be debated. But it still begs the question, “Can your current financial structure handle entry level wages increasing to $14, $12, even $10 per hour?” Reality is there are a lot of communities that struggle even with current entry level wages somewhere between $8 to $10 an hour. A recent Wall Street Journal article indicated U.S. wages were on pace to increase at rates not seen since 2008. So while we don’t know where entry level wages will land ultimately, it is certain that wages will continue to increase, and more than likely increase at a faster pace than over the last few years.

Continue reading “Is Your Business Prepared for the $15-An-Hour Entry Level Worker?”

We Decide Our Own Path

We Decide Our Own Path

Businessman Forward Path
Choose Your Own Path

As we get further into 2015, most of us are still planning for both business and personal success this year. Some of us may be realizing our plans are not working out as we had originally intended. This realization doesn’t mean we that we have to throw up our hands and pack it in for 2015. Rather we, at any time, can effect and create the change we desire in our lives! I listened to an inspiring interview the other day and I wanted to share the concept with you.

Neil Patrick Harris has been making the rounds plugging his book entitled “Choose Your Own Autobiography”.  While I have not read this book yet, the title really struck me.  It’s very simplistic and yet very powerful at the same time.  Choose your own autobiography should be the model we live by every day!  It’s not always simple, and there are a lot of outside influences in our personal and professional lives that affect our decisions and life direction.  However, if we keep the idea that we are in control of our own fate in the forefront of our thoughts, it will have a huge impact on our thinking and decision making throughout the day.  Living with this in mind will then impact the course of our lives. We don’t have to be stuck in the spot we are in today forever. We have control of our destiny and can make our future whatever we choose. We can take a poor situation and make it work for us.

Continue reading “We Decide Our Own Path”