Business Plan for a Residential and Day Treatment Facility

Business Plan Assisted Living Facilities

Residential and Day Treatment Facility

Business Plan

Residay Home and Residential Care provides assisted living solutions for senior adults. Residay Home and Residential Care is dedicated to making the provision of the highest quality care to senior citizens requiring or desiring an assisted living facility. Residay Home and Residential Care is located in the Tennessee Valley Area of North Alabama and is an alternative to the generally larger and less personal senior assisted living facilities specializing in the ability to make provision of a very high level of care in a smaller and more personal environment. Residay Home and Residential Care makes provisions of assistance to seniors in their activities of daily living including assisting with medication, meals, reminders, personal grooming, physical therapy and other such assistance. Further provided by Residay Home and Residential Care are opportunities for companionship, entertainment, and activities, which seniors enjoy and which assists them in self-fulfillment.

Carol Green, the owner and operator of Residay Home and Residential Care has previously utilized her home for a senior citizen and family member. Carol gained experience and knowledge through this experience while simultaneously developing her talent for helping others. Carol has made the decision to convert her home into a residential and day treatment center for seniors who are at the stage of their life, which requires them to seek the attributes of assisted living. Provided as well by Residay Home and Residential Care are amenities such as a chapel, a meditation garden and a wading pool.

There is presently a sufficient market for Residay in the North Alabama area due to the large number of senior adults in need of assisted living arrangements.

Mission & Vision

Mission Statement

Residay Home and Residential Care's mission is to maximize the quality of life of seniors in need of assisted living arrangements by providing high quality and personalized care in a facility that promotes safety and healthy living in a caring environment and that assist the senior individual in realizing self-fulfillment in their daily living.

Core Values

Core values of Residay Home and Residential Care include:

(1) Making the provision of a safe environment for seniors;

(2) Promoting physical and mental health of seniors;

(3) Hiring and training qualified and ethical staff members;

(4) Providing a quality of care that is superior to the competition; and (5) Realizing a profit through the quality of care provisions to the seniors living at Residay Home and Residential Care.

Core Purpose

To provide senior adults with an alternative to paying for assistance at home or living in larger and less personalized facilities and ultimately to increase the quality of life of the seniors served by Residay Home and Residential Care.

SWOT ANALYSIS

1. Residay's Strength and Resource Capabilities

Team leader qualifications: The owner has a MBA degree with concentration in healthcare management combined with 10 years work experience.

Culture-centered philosophy: Residay is a unique small size home and houses residents from the same cultural and ethnic group. The program is designed to fit the specific cultural need of the seniors of Residay Home and Residential Care.

A powerful strategy aiming at brand reputation.

Healthcare information system design: Residay will develop an integrated information system by gathering customer data, operation data, employee data, supplier/partner/collaborative all data and financial data. Gradually the information system should be capable to support different functionality, such as: medical records, client admission and billing system, accounting and medical office management The Information system enables the company to provide consistent high quality and cost-effective services.

A family-like work environment and ongoing training for staff members.

Unique advertising and promotional know-how.

Consistent good customer services

2. Residay's Weakness and Resource Deficiencies

Start-up company lack of brand image and reputation

Short of financial resources to fund promising projects

Lack of experienced workforce and high turnover rate

3. Residay's Market Opportunities

Ability to grow rapidly because of strong increases in market demand

Expand into new geographic market and even international market.

Growing Healthcare Information system facilitates cost-effective and high-quality service

Product innovation and expansion production line to meet different groups' needs.

4. Threats to Residay's Future Profitability

Likely rapid expansion of industry leaders and entry of new competitors

Costly New federal and state regulatory requirements.

Workforce competition due to short of trained RN and caregivers.

Growing bargaining power of customers because of a large variety of choices.

Marketing Mix Design

1. Product

Guided by Residay's mission statement, Residay affords families peace-of-mind by providing today's seniors with a range of personalized assisted living services. From assistance with activities of daily living such as eating, bathing, dressing and medication monitoring to a specially designed program for seniors with Alzheimer's disease and other forms of memory impairment, Serenade provides residents with the help they need. Our services include:

(1) Security of caregivers that are dedicated and well-trained available 24 hours a day;

(2) Daily assistance with personal care needs, incontinence management and medication monitoring.

(3) The security of well-trained and dedicated caregivers, available 24 hours a day.

(4) Daily assistance with personal care needs, incontinence management and monitoring of medications.

(4) Three delicious healthful meals per day, frequent hydration, plus snacks.

(5) Licensed administrator conducts regular wellness visits.

(6) Regular wellness visits by a licensed administrator

(7) Communication with each resident's personal physician and family

(8) Frequent opportunities for outdoor experiences

(9) Emergency response security system

(10) Housekeeping, personal laundry and linen services

(11) Therapeutic benefits of pets and regular visits with children

(12) A choice of a private or a companion suite in a specially designed, secure area

2. Promotion

A. Residay's Slogan: Residay -- There's no place like home.

B. Residay's ad:

Ad will be dispersed in the form of flyers to places where senior individuals frequently attend including such as Golf Clubs, travel agencies, hotels and motels, churches, hospitals, senior daycare centers, churches, and some restaurants in the area.

C. Residay's Website and Digital Video

Residay's website is designed to maintain and enhance the culture and brand name of Residay's. The website will be utilized as advertising media as well as an educational platform and will be used for posting news and other relevant information.

E. Residay's events

Each year Residay will elect the caregiver person of the year and the resident of the year.

E. Residay's seminar:

Residay will conduct a regular seminar, which is free of charge on how to help senior adults stay emotionally mentally and physically healthy. This seminar will involve residents and their family as well as the employees and others in the community.

Residay maintains a focus on locations that are closer to the various ethnic communities where residents have lived out their lives and strives to create a flexible atmosphere in which residents are able to maintain as many links with their home communities for as long as they are able to do so.

F. Pricing

Pricing is on a status quo pricing strategy meaning that the price charged is identical to or very close to the competition's price. In assisted living, status quo pricing enables small start-up firms to meet the competition as well as to keep a 30% to 50% gross margin level if the firm can reach at least 60% occupancy. The monthly charges at Residay are listed in the following table.

Pricing Chart

Care Needed

Private

Shared

Private room ( basic care)

$1,300-$1,500

$9,000-$1,100

Private room with bathroom (basic care)

$1,500-$2,200

$1,300-$1,500

Normal assisted living Care

$2,500

$1,900

Early Stage Alzheimer's Care

$3,000

$2,300

Middle stage Alzheimer's Care

$3,200

$2,600

Late Stage Alzheimer's Care

$3,800

$3,100

Incontinent Services

Wanderguard

Escort/companion to appointments

28 per hour

V. IMPLEMENTATION PLAN:

Budgets are developed for steering ample resources into activities critical to Residay's critical success. Crafting a second human resource policy includes job analysis, recruitment and selection as well as development and evaluation. Establishment of operating policies and procedures that serve to align actions and behaviors with strategic objectives serve to enforce consistency in service.

Institution of best practices and striving for continuous improvement and benchmarking the performance of the facility and its performance of specific tasks and activities against the best in industry performers and on-the-job training. Healthcare information systems installation will be conducted enabling administrator to monitor daily operations. Design of a strategic supportive reward system will be on the basis of incentives related to results being achieved. A spirit of high performance will be constructed as well as ethical standards and values.

Industry Participants

There are various national level associations that promote business and excellence in operations in assisted living communities while offering information at one place to the senior citizens. These associations are inclusive of the following:

Assisted Living Federation of America

Elder care

National Center for Assisted Living

American Association of Homes and Services for the Aging

The Florida Assisted Living Association

California Assisted Living Association

National Investment Center for the Seniors Housing & Care Industry

Competitors

Competitors in North Alabama include the following assisted living facilities:

1. Brookdale Place Jones Farm, 2815 Carl T. Jones Drive SE, Huntsville, AL

2. Cedar Springs Brookdale Senior Living, 2505 Spring Ave SW, Decatur, AL

3. Morning Glory Meadows Assisted Living, 2055 Main St., Fyffe, AL

4. Morningside Of Cullman, 2021 Dahlke Dr., Cullman, AL

5. Morningside Of Decatur, 2115 Point Mallard Dr. SE, Decatur, AL

6. Morningside Of Madison, 49 Hughes Rd, Madison, AL

7. Morningside Of Sheffield, 413 Cox Blvd, Sheffield, AL

8. Redstone Village, 12000 Turnmeyer Dr., Huntsville, AL

9. Regency Retirement Village, 2004 Max Luther Dr. NW, Huntsville, AL

10. The Terrace at Priceville, 200 Terrace Ln, Decatur, AL

11. Wills Creek Village Assisted Living, 1050 Airport RD W, Fort Payne, AL

12. Windsor House, Inc., 4411 McAllister Dr. SW, Huntsville, AL

Competitive Advantages

Residay's competitive advantage is reliant on the experience of care, which Carol Green has already established. Through her care for senior adults, she has established a detailed activity list which many assisted care facilities do not have. The amenities of the residential home which includes a wading pool allows for recreation during warm weather benefiting seniors who are not able to endure resistance training or workouts of a difficult nature.

Market Share

There are only a few assisted living centers in North Alabama with the primary limitation for these facilities being the number of residents they are able to accommodate. Residay will have only twenty beds although it has the goal of opening a new facilities in the future to fulfill demand.

Barriers to Entry

Due to the various Alabama state laws, regulations, and depending upon the type of facility that must be met in order to be a legitimate institution, barriers to entry in the state of Alabama are plentiful.

Alabama Laws on Assisted Living Facilities

The law governing assisted living facilities in Alabama is the Alabama State Board of Health, Alabama Department of Public Health, Division of Licensure, and Certification Administrative Code Chapter 420-5-4 on Assisted Living Facilities.

Sales and Marketing Plan

Sales Goals

During its first year Residay Residential and Day Treatment plans to have 20 long-term care residents and in its second year Residay plans to bring in five more residents bring the total to twenty-five long-term care residents at the care and treatment center.

Marketing Goals

Residay's marketing goals will be modest, due to the long-term relationship, Residay expects to have with its clients, and the present limited capacity a need does not exist for an intensive and ongoing marketing plan. The first year marketing goal is to build a waiting list of 30 prospective new residents, which will be accomplished at the beginning of Residay's second year of business with five prospective new residents being pre-screened and selected from the waiting list that has been constructed. In the event that an unexpected vacancy level occurs at any given time during operations, a more active marketing plan may at that time be instituted.

Target Market

Residay's target market includes senior citizens who are over the age of 60 years of age residing in the North Alabama area. These customers need basic assistance with their daily activities and routine. These customers are not critically ill although many of these customers are on medication, which will need to be administered on a daily and time-based routine. The targeted customers are such that enjoys the company of others and is presently in a living situation that has them living alone or living with their family and are such that would prefer to be part of an elderly adult community. Residay's target market will also be inclusive of more needy residents who may be suffering from Alzheimer's disease or Dementia.

Residay Residential Home and Day Treatment Facility -- Development Costs

Expense Category Estimated Amount

Land Costs

Purchase $100,000

Utilities, Site Work and Landscaping $25,000

Land Survey $2,500

Soil Tests $2,500

Environmental Survey $5,000

Title Insurance -- Owner's Policy $5,000

Subtotal -- Land Costs $140,000

Professional Fees

Planning/Consultants $60,000

Accounting $49,800

Legal $5,000

Subtotal -- Professional Fees $59,500

Construction Costs

Facility construction $2,260,000

Architect/Engineering/Design Fees $200,000

Construction Contingency $225,000

Inflation factor $120,000

Permits/Tap fees $15,000

Private Utility Deposits $1,000

Subtotal -- Construction Costs $2,281,000

Amount needed for Construction to Proceed $2,900,000 Land, Prof. Fees & Const.

Costs

Financing Cost

Construction loan:

Origination fee $19,150

Interest $100,000

'As built' appraisal $8,000

Lender Inspections $7,500

Permanent Loan:

Origination fee $20,000

Appraisal update $1,000

Title Insurance -- Lender's Policy $2,000

Recording Fees $250

Operating Reserve Needed at Startup $550,000

Subtotal Financing Cost $775,400

Furniture, Fixtures & Equipment

Kitchen/residential ranges & fridges/Washers & Dryers $75,000

Computers/LAN & Other Technology $10,000

Security/Fire/Communication Systems $5,000

Subtotal -- Furniture, Fixtures & Equipment $90,000

Total Development Costs $4,740,300

Based on these costs, just over $3 million or approximately 65% of the total cost will need to be borrowed to fully fund the construction of the Residay facility. The revenue sources and the net amount of loan needed to complete all financing are shown in the table below:

Residay Residential Home and Day Treatment Facility -- Funding Sources

North Alabama Council/BBC Grant $1,000,000 Application Submitted

Land Donation (In-Kind Match) $100,000

Cash Expended to Date $49,500

Cash that must be raised $500,000

Total Funds $1,649,500

Net Permanent Loan or Bond Needed $3,090,800

Employees

According to Alabama regulations on Assisted Living Facilities Section 420-5-2-.04 newly employed personnel "shall have a physical examination certifying that the employee is free of signs and symptoms of infectious skin lesions and diseases that are capable of transmission to residents through normal staff to resident contact newly employed personnel shall have a physical examination certifying that the employee is free of signs and symptoms of infectious skin lesions and diseases that are capable of transmission to resident through normal staff to resident contact. Employees have to be tested for tuberculosis. Employees must be vaccinated according to recommended CDC guidelines. Personnel records must be maintained on all employees. All assisted living facility administrators are required to have at least six hours of continuing education each year. All staff who are in contact with residents including administrators are required to have initial and refresher training each year. The assisted living facility is required to be staff at all times "by at least one individual who has a current certification from the American Heart Association or the American Red Cross in cardiopulmonary resuscitation (CPR). The living facility must be equipped with an automated external defibrillator and shall be at all times by at least one individual who has a current certification from the American Heart Association or the American Red Cross in AED utilization. Substitute training approved by the Department of Public Health as acceptable for EMS personnel may be utilized in lieu of those courses or certifications offered by the American Heart Association or American Red Cross in CPR or AED utilization." ( ) The assisted living facility is required to document all training that employees and staff received. (Code of Alabama 1975,, §22-21-20, et seq.)

Regulations for Care Of Residents.

The medical care of residents is required to be "under the direction and supervision of a physician. Each resident will be asked to designate an attending physician of their choice. In the event the resident is unable to designate an attending physician of his or her choice or does not desire to designate an attending physician, the facility will assist the resident in the identification of an attending physician to serve the resident. (Code of Alabama 1975,, §22-21-20, et seq.)

Back-up Physician Support

Each assisted living is required to have an agreement with one or more licensed physicians to serve in the event that the resident's chosen attending physician is unavailable and for the provision of temporary medical attention to any resident whose attending physician is not available. (Code of Alabama 1975,, §22-21-20, et seq.)

Observation

It is required that each assisted living facility will provide general observation and health supervision of the residents sufficient to develop awareness of changes in all residents' health conditions and physical abilities and awareness of the need for medical attention or nursing services. When a resident requires medical attention, or nursing services, or changes in personal care and assistance with activities of daily living provided by the facility is required to arrange or assist the residents in their receipt of the necessary services.( Code of Alabama 1975,, §22-21-20, et seq.)

Services Beyond Capability of Assisted Living Facility

When a resident is in need of hospitalization, medical, nursing or other care that is beyond the capacity of the assisted living center to provide, the assisted living facility is required to make arrangements to discharge the resident to the appropriate setting or to transfer the resident immediately to a hospital or other health care facility that is capable of providing the appropriate level of care. (Code of Alabama 1975,, §22-21-20, et seq.)