Long Term Care Facility Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Long Term Care Facility Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Long Term Care Facility business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
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Long term care facilities are almost always able to remain profitable and cash flow positive given that they cater to the needs of elderly and developmentally disabled people that need ongoing care. Additionally, these businesses are able to produce their revenues through publicly funded health systems, client payments, Medicare, and long term care insurance. Many people these days now plan for the expense of having to go through long term care, and as such – it is something that people will have the money readily available for when the time comes for them to move into a facility. The barriers to entry for a new long term care facility are extremely high given the amount of land and real estate that needs to be developed in order to operate this type of business. Also, there are a number of highly specialized professionals that need to be kept on staff or on retainer so that services can be properly rendered to residents. The gross margins generated from operating a long term care facility usually range from 80% to 85% depending on the services rendered. Many long term care facilities actually maintain service contracts with third-party professionals that render any healthcare or medical service to residents. Typically, the initial startup costs for a long term care facility range anywhere from $1 million to $5 million depending on the number of rooms within the location. In areas that are considered more highly densely populated these costs can increase as the cost of land is significantly higher. One of the nice things about these businesses is that they are always going to be able to remain profitable and over the next 20 years it is expected that these companies will have a strong growth rate given that many people at the Baby Boomer population are going to start require long term care on an ongoing basis.
Given the profitability of these companies and the fact that they purchase a significant amount of real estate as part of their operations – almost all banks, lenders, and investors are willing to put up a significant amount of capital in order to get these operations off the ground. Of course, a long term care facility business plan is going to be required. This document should include a three-year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page that features information that is common for the long term care facility industry. Beyond a well-developed financial model, a thorough demographic analysis should be developed as well to showcase the population size, population density, percentage of people over the age of 65, percentage of people that have developmental disabilities and require long term care, median home value, median household income, median family income. One of the ways that many of these facilities immediately begin to generate revenues is by developing ongoing relationships with physicians, surgeons, and home healthcare agencies. As part of the business planning process, a full scale long term care facility marketing plan should be developed and included as an addendum document to the business plan.
As it relates to the marketing plan – again, very strong relationships should be developed with medical professionals that will refer their clients and patients to the long term care facility. In many instances, an authorization from a physician or related healthcare professional is required before someone can receive financial assistance for entering a long term care facility. Once these relationships are developed in the ongoing need for an expansive marketing plan is somewhat diminished. However, there are always going to be a certain number of vacancies in any of these facilities. As such, it is important that a local and regional marketing campaign is developed and implemented so that the strong brand name of the long term care facility is understood by the general public. Almost all long term care facilities maintain expansive online presences through a standalone website as well as through social media pages. As it relates to social media marketing, this is not as big of a concern for a long term care facility as it would be for most other types of businesses. Relating to the website, usually an expansive overview of the facility, costs, and services rendered should be included as well. Again, the foremost marketing strategy that’s going to be used in order to ensure that occupancy is at near 100% at all times is ongoing referrals from medical professionals.
Once the business plan and marketing plan are developed, it is time to produce the long term care facility SWOT analysis. As it relates to strengths, the revenues generated from a long term care facility are completely immune from negative changes in the economy. Additionally, the growth will be significant for this industry as more and more Americans are now over the age of 65. For weaknesses, these businesses have extremely high and ongoing operating expenses given the scale of these facilities as well as the number of medical professionals that need to be on site at any given time. For opportunities, these businesses thrive when they can expand their operations quickly through the development of subsequent facilities. Also, many long term care facilities will have physicians, medical directors, and nurses on staff so that additional billings can be made to private insurance, Medicare, and Medicaid. For threats, as with any health and care focused business there are concerns that the federal government may decrease the amount of funding that is available for reimbursement. This is been an ongoing issue with these businesses since the inception of Medicare and Medicaid.