You must create a strong business plan if you intend to seek money from private investors or obtain a bank loan (such as an SBA loan) for your nursing home. A business plan outlines your five-year growth strategy as well as a current picture of your nursing homes. It outlines your company’s objectives and your plan for achieving them. Market research is also included to help you with your plans.

You need a business plan if you want to build a nursing home or expand an existing nursing care. Your chances of success will increase if you use a business plan to plan the expansion of your nursing facilities and, if necessary, acquire money for it. As your firm develops and evolves, you should annually update your nursing home business plan.

Personal savings, credit cards, bank loans, and angel investors are the primary sources of finance for nursing facilities. Banks will want to analyze your company plan in order to determine whether they can trust you to repay the loan and interest.

The loan officer will want to see a professional plan in addition to your accurate financial information in order to get this confidence. They will feel more confident in your ability to run a firm successfully and competently if you have such a plan. The two most typical sources of funding for nursing homes are from individual savings and bank loans.

You need a business plan if you intend to open a nursing home or expand an existing one. An example of what should go in each component of a nursing home business plan is shown below.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of nursing homes you are operating and the status. For example, are you a startup, do you have nursing homes that you would like to grow, or are you operating nursing facilities in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the senior care industry. Discuss the type of nursing homes you are operating. Detail your direct competitors. Give an overview of your target market. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan. 

Company Analysis

In your company analysis, you will detail the type of nursing homes you are operating.

For example, you might operate one of the following types of nursing homes:

1. Skilled Nursing Care Facilities: this type of nursing home provides skilled nursing care, rehabilitation, activities, meals, supervision, etc.
2. Assisted Living Facilities: this type of nursing home provides 24-hour supervision, including meals, assistance with daily activities, healthcare service, and common services that include assistance with eating, bathing, dressing, using the bathroom, taking medication, transportation, and housekeeping.
3. Independent Living Facilities: this type of nursing home are communities that offer fully equipped homes or apartments to residents. They are ideal for seniors who can maintain their independence with few medical issues impeding them.
4. Alzheimer’s & Specialty Care Facilities: this type of nursing home offers 24-hour support for residents suffering from Alzheimer’s or dementia.

In addition to explaining the type of nursing facility you will operate, the Company Analysis section needs to provide background on the business.

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Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of patients in care, number of positive reviews, reaching X amount of patients served, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a residential care home business plan, your marketing plan should include the following:

• Product: In the product section, you should reiterate the type of nursing home company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to a nursing home, will you provide nutritional advice and meal preparation, daily activities, rehabilitation, and any other services?

• Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

• Place: Place refers to the location of your nursing home company. Document your location and mention how the location will impact your success. For example, is your nursing homes located in a busy retail district, a residential neighborhood, near a hospital, etc. Discuss how your location might be the ideal location for your customers.

• Promotions: The final part of your nursing home marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to websites
• Partnering with hospitals and rehab facilities
• Flyers
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

• Everyday short-term processes include all of the tasks involved in running your nursing homes, including coordinating nurses’ patient schedules, coordinating with doctors, communicating with family and loved ones of the elderly, managing staff duties, etc.

• Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to acquire your Xth patient, or when you hope to reach $X in revenue. It could also be when you expect to expand your nursing homes to a new city. 

Management Team

To demonstrate your nursing homes’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in managing nursing homes. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a nursing home or successfully running a hospital or rehabilitation facility. 

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements. 

Income Statement: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you take on one new patient at a time or multiple new patients? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality. 

Balance Sheets: Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your nursing homes, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time. 

Cash Flow Statement: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a nursing homes:

• Cost of licensing and training
• Cost of equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Appendix

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your nursing home location lease or list of nursing, assisted living, and rehab services you are working on.

Putting together a business plan for your nursing home is a worthwhile endeavor. If you follow the sample template above, by the time you are done, you will truly be an expert. You will really understand the senior care industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful nursing homes.