business plan for a nursing facility

Nursing Home Business Plan – 7 Key Points

A nursing home business plan should contain seven key elements. Incorporating them into your document will help to ensure your success.

The U.S. is currently experiencing a shift in demographics. According to the U.S. Census Bureau , by the year 2034, older adults will outnumber children for the first time in U.S. history. By 2030, all Baby Boomers will be over the age of 65. As a result, this cohort will create more of a demand than ever for communities and facilities that care for the older adult population.

If you’re considering getting involved in the nursing home business, the first step you need to follow, after conducting a market feasibility study , as well as a financial feasibility analysis , is to create your nursing home business plan. A well-written and comprehensive business plan will not only help you focus on the vision for your business, but it will show investors and/or lenders that you’re committed to succeeding.

The skilled nursing business is a unique market, and success in this field requires a complete understanding of its many challenges. A business plan will help you convince financial institutions and investors that you’re well versed in the industry and have a clear picture of what you need to accomplish.

Challenges in Starting a Nursing Home Business

Operating skilled nursing facilities can be challenging in today’s market due to increased care costs for higher acuity patients, staffing shortages, reimbursement concerns, increased care alternatives, regulatory challenges, and liability issues.

This is why it’s crucial to guarantee your nursing home business plan is thorough and well-researched. Consequently, you’ll want to complete it before embarking on your new venture or attempting to procure funding. A properly formulated plan will not only convince lenders and investors that you have a viable business concept but it will also serve to hone your vision for your nursing home business.

Keep in mind that this is a brief overview of the many facets of information you’ll need to provide for your nursing home business plan. The nursing home business can be complicated, with a lot of information to cover.

The plan should contain s even main categories: (1) the executive summary, (2) a company summary, (3) the customer plan, (4) a market analysis, (5) a strategy for implementation, (6) the selection of a management team and (7) financial planning.

Items to Include in Your Nursing Home Business Plan

(1) executive summary.

The purpose of the executive summary is to give readers a brief description of your business. Thus, it must be well-written and concise. You want to draw your readers in and give them a brief synopsis of what your nursing home business plan is all about. So, keep it simple and make it engaging.

It may be the first part of your business plan, but it helps to write it last. Therefore, once you’ve covered all of the other details, it will be easier to write up the executive summary.

The executive summary should contain the following information:

(2) Company summary

In a company summary, you should state who you are, how you will operate your business, and what your goals are. The intent here is to provide your reader with a brief overview. Your company summary should include the following:

(3) Customer plan

Next, your customer plan should be a clear description of the service you’ll offer that emphasizes the benefits to your patients. One of the benefits of having a clear customer plan is it demonstrates that you have a firm and specific understanding of what your services are. You may include some of the following services:

(4) Market analysis

The market analysis is the section where you get to illustrate your knowledge of the industry and highlight your thorough research. Your intent should be to establish that you completely understand the market. This section should include the following:

(5) Strategy for implementation

In the next section, you need to summarize your sales strategy and describe your plans for implementation. “Failing to plan is planning to fail.” Thus, it is essential to articulate your implementation plan in detail.

(6) Management team

You’ll need to include a section detailing your business’s organizational team. An experienced and knowledgeable management is a key to operational success. Therefore, it is important to identify your team and their background. The following categories are relevant:

(7) Financial plan

Your financial plan is the final section of your business plan. You will not be able to complete this section until you’ve finished your market analysis and set your goals. If you engaged a third party to formulate a financial feasibility analysis, this is the section where you would place that analysis. You will need to include the following financial statements:

Do you need help creating your nursing home business plan?  If so, experts can help you dive into each of these categories to create a comprehensive plan.  Review some sample consulting engagements in nursing homes and assisted living to get started.

When you need proven expertise and performance

Craig fukushima, nha, mba.

Mr. Craig T. Fukushima’s health care experience spans more than 35 years with special expertise in the long term care sector, including implementation of innovative health care projects in domestic and international locations.

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How to write a business plan for a nursing home?

Creating a business plan for a nursing home is an essential process for any entrepreneur. It serves as a roadmap that outlines the necessary steps to be taken to start or grow the business, the resources required, and the anticipated financial outcomes. It should be crafted with method and confidence.

This guide is designed to provide you with the tools and knowledge necessary for creating a nursing home business plan, covering why it is so important both when starting up and running an established business, what should be included in your plan, how it should be structured, what tools should be used to save time and avoid errors, and other helpful tips.

We have a lot to cover, so let's get to it!

In this guide:

Why write a business plan for a nursing home?

• What information is needed to create a business plan for a nursing home?
• What goes in the financial forecast for a nursing home?
• What goes in the written part of a nursing home business plan?
• What tool can I use to write my nursing home business plan?

Being clear on the scope and goals of the document will make it easier to understand its structure and content. So before diving into the actual content of the plan, let's have a quick look at the main reasons why you would want to write a nursing home business plan in the first place.

To have a clear roadmap to grow the business

It's rarely business as usual for small businesses. The economy follows cycles where years of growth are followed by recessions, and the business environment is always changing with new technologies, new regulations, new competitors, and new consumer behaviours appearing all the time...

In this context, running a business without a clear roadmap is like driving blindfolded: it's dangerous at best. That's why writing a business plan for a nursing home is essential to create successful and sustainable businesses.

To write an effective business plan, you will need to take stock of where you are (if you are already in business) and where you want the business to go in the next three to five years.

Once you know where you want your nursing home to be, you'll have to identify:

• what resources (human, equipment, and capital) are needed to get there,
• at what pace the business needs to progress to get there in time,
• and what risks you'll face along the way.

Going through this process regularly is beneficial, both for startups and existing companies, as it helps make informed decisions about how best to allocate resources to ensure the long-term success of the business.

To maintain visibility on future cash flows

Businesses can go for years without making a profit, but they go bust as soon as they run out of cash. That's why "cash is king", and maintaining visibility on your nursing home's future cash flows is critical.

How do I do that? That's simple: you need an up-to-date financial forecast.

The good news is that your nursing home business plan already contains a financial forecast (more on that later in this guide), so all you have to do is to keep it up-to-date.

To do this, you need to regularly compare the actual financial performance of your business to what was planned in your financial forecast, and adjust the forecast based on the current trajectory of your business.

Monitoring your nursing home's financial health will enable you to identify potential financial problems (such as an unexpected cash shortfall) early and to put in place corrective measures. It will also allow you to detect and capitalize on potential growth opportunities (higher demand from a given segment of customers for example).

To secure financing

Crafting a comprehensive business plan for your nursing home, whether you're starting up or already established, is paramount when you're seeking financing from banks or investors.

Given how fragile small businesses are, financiers will want to ensure that you have a clear roadmap in place as well as command and control of your future cash flows before entertaining the idea of funding you.

For banks, the information in your business plan will be used to assess your borrowing capacity - which is defined as the maximum amount of debt your business can afford alongside your ability to repay the loan. This evaluation helps them decide whether to extend credit to your business and under what terms (interest rate, duration, repayment options, collateral, etc.).

Similarly, investors will thoroughly review your plan to determine if their investment can yield an attractive return. They'll be looking for evidence that your nursing home has the potential for healthy growth, profitability, and consistent cash flow generation over time.

Now that you understand the importance of creating a business plan for your nursing home, let's delve into the necessary information needed to craft an effective plan.

Information needed to create a business plan for a nursing home

You need the right data in order to project sales, investments and costs accurately in the financial forecast of your nursing home business plan.

Below, we'll cover three key pieces of information you should gather before drafting your business plan.

Carrying out market research for a nursing home

As you consider writing your business plan for a nursing home, conducting market research becomes a vital step to ensure accurate and realistic financial projections.

Market research provides valuable insights into your target customer base, competitors, pricing strategies, and other key factors that can significantly impact the commercial success of your business.

Through this research, you may uncover trends that could influence your nursing home.

You may discover that older adults are increasingly interested in living in nursing homes that provide more amenities and services. They might be looking for facilities that offer a wide range of activities and programs to keep them engaged and entertained. Another trend that market research could reveal is that older adults may be more likely to choose nursing homes with an emphasis on healthy and nutritious meals. They could also be looking for homes that provide specialized care for those with chronic conditions or disabilities.

Such market trends play a significant role in forecasting revenue, as they offer valuable data about potential customers' spending habits and preferences.

By incorporating these findings into your financial projections, you can present investors with more accurate information, helping them make informed decisions about investing in your nursing home.

Developing the sales and marketing plan for a nursing home

Budgeting sales and marketing expenses is essential before creating a nursing home business plan.

A comprehensive sales and marketing plan should provide an accurate projection of what actions need to be implemented to acquire and retain customers, how many people are needed to carry out these initiatives, and how much needs to be spent on promotions, advertising, and other aspects.

This helps ensure that the right amount of resources is allocated to these activities in order to hit the sales and growth objectives forecasted in your business plan.

The staffing and equipment needs of a nursing home

Whether you are at the beginning stages of your nursing home or expanding its horizons, having a clear plan for recruitment and capital expenditures (investment in equipment and real estate) is vital to ensure your business's success.

To achieve this, both the recruitment and investment plans must align coherently with the projected timing and level of growth in your forecast. It is essential to secure appropriate funding for these plans.

A nursing home might incur staffing costs such as hiring nurses, certified nursing assistants, and other healthcare personnel to provide care for residents. It might also incur costs for equipment such as medical beds, wheelchairs, and other medical supplies needed to provide care for the residents.

To create a financial forecast that accurately represents your business's outlook, remember to factor in other day-to-day operating expenses.

Now that you have all the necessary information, it's time to dive in and start creating your business plan and developing the financial forecast for your nursing home.

What goes into your nursing home's financial forecast?

The objective of the financial forecast of your nursing home's business plan is to show the growth, profitability, funding requirements, and cash generation potential of your business over the next 3 to 5 years.

The four key outputs of a financial forecast for a nursing home are:

• The profit and loss (P&L) statement ,
• The projected balance sheet ,
• The cash flow forecast ,
• And the sources and uses table .

Let's look at each of these in a bit more detail.

The projected P&L statement

The projected P&L statement for a nursing home shows how much revenue and profits your business is expected to generate in the future.

Ideally, your nursing home's P&L statement should show:

• Healthy growth - above inflation level
• Improving or stable profit margins
• Positive net profit

Expectations will vary based on the stage of your business. A startup will be expected to grow faster than an established nursing home. And similarly, an established company should showcase a higher level of profitability than a new venture.

The projected balance sheet of your nursing home

The balance sheet for a nursing home is a financial document that provides a snapshot of your business’s financial health at a given point in time.

It shows three main components: assets, liabilities and equity:

• Assets: are resources owned by the business, such as cash, equipment, and accounts receivable (money owed by clients).
• Liabilities: are debts owed to creditors and other entities, such as accounts payable (money owed to suppliers) and loans.
• Equity: includes the sums invested by the shareholders or business owners and the cumulative profits and losses of the business to date (called retained earnings). It is a proxy for the value of the owner's stake in the business.

Examining the balance sheet is important for lenders, investors, or other stakeholders who are interested in assessing your nursing home's liquidity and solvency:

• Liquidity: assesses whether or not your business has sufficient cash and short-term assets to honour its liabilities due over the next 12 months. It is a short-term focus.
• Solvency: assesses whether or not your business has the capacity to repay its debt over the medium-term.

Looking at the balance sheet can also provide insights into your nursing home's investment and financing policies.

In particular, stakeholders can compare the value of equity to the value of the outstanding financial debt to assess how the business is funded and what level of financial risk has been taken by the owners (financial debt is riskier because it has to be repaid, while equity doesn't need to be repaid).

The projected cash flow statement

A cash flow forecast for a nursing home shows how much cash the business is projected to generate or consume.

The cash flow statement is divided into 3 main areas:

• The operating cash flow shows how much cash is generated or consumed by the operations (running the business)
• The investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.)
• The financing cash flow shows how much cash is raised or distributed to investors and lenders

Looking at the cash flow forecast helps you to ensure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.

It is also a best practice to include a monthly cash flow statement in the appendices of your nursing home business plan so that the readers can view the impact of seasonality on your business cash position and generation.

The initial financing plan

The sources and uses table or initial financing plan is a key component of your business plan when starting a nursing home.

It shows where the capital needed to set up the business will come from (sources) and how it will be spent (uses).

This table helps size the investment required to set up the nursing home, and understand how risks will be distributed between the business owners, and the financiers.

The sources and uses table also highlights what the starting cash position will be. This is key for startups as the business needs to have sufficient funding to sustain operations until the break-even point is reached.

Now that you have a clear understanding of what will go into the financial forecast of your nursing home business plan, let's have a look at the written part of the plan.

The written part of a nursing home business plan

The written part of a nursing home business plan is composed of 7 main sections:

• The executive summary
• The presentation of the company
• The products and services
• The market analysis
• The strategy
• The operations
• The financial plan

Throughout these sections, you will seek to provide the reader with the details and context needed for them to form a view on whether or not your business plan is achievable and your forecast a realistic possibility.

Let's go through the content of each section in more detail!

1. The executive summary

The executive summary, the first section of your nursing home's business plan, serves as an inviting snapshot of your entire plan, leaving readers eager to know more about your business.

To compose an effective executive summary, start with a concise introduction of your business, covering its name, concept, location, history, and unique aspects. Share insights about the services or products you intend to offer and your target customer base.

Subsequently, provide an overview of your nursing home's addressable market, highlighting current trends and potential growth opportunities.

Then, present a summary of critical financial figures, such as projected revenues, profits, and cash flows.

You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.

Lastly, address any funding needs in the "ask" section of your executive summary.

2. The presentation of the company

In your nursing home business plan, the second section should focus on the structure and ownership, location, and management team of your company.

In the structure and ownership part, you'll provide an overview of the business's legal structure, details about the owners, and their respective investments and ownership shares. This clarity is crucial, especially if you're seeking financing, as it helps the reader understand which legal entity will receive the funds and who controls the business.

Moving on to the location part, you'll offer an overview of the company's premises and their surroundings. Explain why this particular location is of interest, highlighting factors like catchment area, accessibility, and nearby amenities.

When describing the location of your nursing home, you could highlight its potential for growth. It may be in an area that is rapidly expanding, with a diverse population and a strong economy. You could also emphasize how it is positioned in a convenient location that is easily accessible by public transportation, and that it is close to hospitals and other health care facilities. Additionally, you might point out the potential for a larger customer base, as well as the opportunity to attract a broad range of customers from a variety of backgrounds.

Finally, you should introduce your management team. Describe each member's role, background, and experience.

Don't forget to emphasize any past successes achieved by the management team and how long they've been working together. Demonstrating their track record and teamwork will help potential lenders or investors gain confidence in their leadership and ability to execute the business plan.

3. The products and services section

The products and services section of your nursing home business plan should include a detailed description of what your company sells to its customers. 

For example, your nursing home might offer 24 hour medical care, physical therapy, and counseling services to its customers. These services provide the elderly with access to medical care at any time, helping them to maintain their health and independence. Physical therapy is important for elderly individuals to remain active and maintain mobility, while counseling services provide emotional support and mental health care. These services are essential for the elderly to continue living a healthy and enjoyable life.

The reader will want to understand what makes your nursing home unique from other businesses in this competitive market.

When drafting this section, you should be precise about the categories of products or services you sell, the clients you are targeting and the channels that you are targeting them through. 

4. The market analysis

When outlining your market analysis in the nursing home business plan, it's essential to include comprehensive details about customers' demographics and segmentation, target market, competition, barriers to entry, and relevant regulations.

The primary aim of this section is to give the reader an understanding of the market size and appeal while demonstrating your expertise in the industry.

To begin, delve into the demographics and segmentation subsection, providing an overview of the addressable market for your nursing home, key marketplace trends, and introducing various customer segments and their preferences in terms of purchasing habits and budgets.

Next, shift your focus to the target market subsection, where you can zoom in on the specific customer segments your nursing home targets. Explain how your products and services are tailored to meet the unique needs of these customers.

For example, your target market might include elderly individuals who are in need of long-term care and support. This could include people who can no longer live independently, and need help with activities such as bathing, cooking, and dressing. Additionally, it could include people who require medical services such as physical, occupational, and speech therapy.

In the competition subsection, introduce your main competitors and explain what sets your nursing home apart from them.

Finally, round off your market analysis by providing an overview of the main regulations that apply to your nursing home.

5. The strategy section

When writing the strategy section of a business plan for your nursing home, it is essential to include information about your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

The competitive edge subsection should explain what sets your company apart from its competitors. This part is especially key if you are writing the business plan of a startup, as you have to make a name for yourself in the marketplace against established players.

The pricing strategy subsection should demonstrate how you intend to remain profitable while still offering competitive prices to your customers.

The sales & marketing plan should outline how you intend to reach out and acquire new customers, as well as retain existing ones with loyalty programs or special offers. 

The milestones subsection should outline what your company has achieved to date, and its main objectives for the years to come - along with dates so that everyone involved has clear expectations of when progress can be expected.

The risks and mitigants subsection should list the main risks that jeopardize the execution of your plan and explain what measures you have taken to minimize these. This is essential in order for investors or lenders to feel secure in investing in your venture.

Your nursing home could face a number of risks. For example, there may be a risk of a data security breach or a cyber attack. Such an incident could result in the loss of valuable information or the exposure of confidential resident data. Another risk your nursing home might face is a fire or other natural disaster. Such an event could cause serious damage to the facility and its residents, as well as disrupt operations.

6. The operations section

The operations of your nursing home must be presented in detail in your business plan.

The first thing you should cover in this section is your staffing team, the main roles, and the overall recruitment plan to support the growth expected in your business plan. You should also outline the qualifications and experience necessary to fulfil each role, and how you intend to recruit (using job boards, referrals, or headhunters).

You should then state the operating hours of your nursing home - so that the reader can check the adequacy of your staffing levels - and any plans for varying opening times during peak season. Additionally, the plan should include details on how you will handle customer queries outside of normal operating hours.

The next part of this section should focus on the key assets and IP required to operate your business. If you depend on any licenses or trademarks, physical structures (equipment or property) or lease agreements, these should all go in there.

You may have a number of key assets and IP as a nursing home. For example, you could have proprietary software that is used to manage patient records and medication schedules. Additionally, you might have patented medical devices or treatments that are exclusive to your facility. These assets are important to your operation and need to be protected.

Finally, you should include a list of suppliers that you plan to work with and a breakdown of their services and main commercial terms (price, payment terms, contract duration, etc.). Investors are always keen to know if there is a particular reason why you have chosen to work with a specific supplier (higher-quality products or past relationships for example).

7. The presentation of the financial plan

The financial plan section is where we will include the financial forecast we discussed earlier in this guide.

Now that you have a clear idea of what goes into a nursing home business plan, let's look at some of the tools you can use to create yours efficiently.

What tool should I use to write my nursing home's business plan?

In this section, we will be reviewing the two main solutions for creating a nursing home business plan:

• Using specialized online business plan software,
• Outsourcing the plan to the business plan writer.

Using an online business plan software for your nursing home's business plan

Using online business planning software is the most efficient and modern way to write a nursing home business plan.

There are several advantages to using specialized software:

• You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can access a library of dozens of complete business plan samples and templates for inspiration
• You get a professional business plan, formatted and ready to be sent to your bank or investors
• You can easily track your actual financial performance against your financial forecast
• You can create scenarios to stress test your forecast's main assumptions
• You can easily update your forecast as time goes by to maintain visibility on future cash flows
• You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .

Hiring a business plan writer to write your nursing home's business plan

Outsourcing your nursing home business plan to a business plan writer can also be a viable option.

Business plan writers are skilled in creating error-free business plans and accurate financial forecasts. Moreover, hiring a consultant can save you valuable time, allowing you to focus on day-to-day business operations.

However, it's essential to be aware that hiring business plan writers will be expensive, as you're not only paying for their time but also the software they use and their profit margin.

Based on experience, you should budget at least £1.5k ($2.0k) excluding tax for a comprehensive business plan, and more if you require changes after initial discussions with lenders or investors.

Also, exercise caution when seeking investment. Investors prefer their funds to be directed towards business growth rather than spent on consulting fees. Therefore, the amount you spend on business plan writing services and other consulting services should be insignificant compared to the amount raised.

Keep in mind that one drawback is that you usually don't own the business plan itself; you only receive the output, while the actual document is saved in the consultant's business planning software. This can make it challenging to update the document without retaining the consultant's services.

For these reasons, carefully consider outsourcing your nursing home business plan to a business plan writer, weighing the advantages and disadvantages of seeking outside assistance.

Why not create your nursing home's business plan using Word or Excel?

I must advise against using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write your nursing home business plan. Let me explain why.

Firstly, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is highly technical and requires a strong grasp of accounting principles and financial modelling skills. It is, therefore, unlikely that anyone will fully trust your numbers unless you have both a degree in finance and accounting and significant financial modelling experience, like us at The Business Plan Shop.

Secondly, relying on spreadsheets is inefficient. While it may have been the only option in the past, technology has advanced significantly, and software can now perform these tasks much faster and with greater accuracy. With the rise of AI, software can even help us detect mistakes in forecasts and analyze the numbers for better decision-making.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Moreover, software makes it easier to compare actuals versus forecasts and maintain up-to-date forecasts to keep visibility on future cash flows, as we discussed earlier in this guide. This task is cumbersome when using spreadsheets.

Now, let's talk about the written part of your nursing home business plan. While it may be less error-prone, using software can bring tremendous gains in productivity. Word processors, for example, lack instructions and examples for each part of your business plan. They also won't automatically update your numbers when changes occur in your forecast, and they don't handle formatting for you.

Overall, while Word or Excel may seem viable for some entrepreneurs to create a business plan, it's by far becoming an antiquated way of doing things.

• Using business plan software is a modern and cost-effective way of writing and maintaining business plans.
• A business plan is not a one-shot exercise as maintaining it current is the only way to keep visibility on your future cash flows.
• A business plan has 2 main parts: a financial forecast outlining the funding requirements of your nursing home and the expected growth, profits and cash flows for the next 3 to 5 years; and a written part which gives the reader the information needed to decide if they believe the forecast is achievable.

We hope that this in-depth guide met your expectations and that you now have a clear understanding of how to write your nursing home business plan. Do not hesitate to contact our friendly team if you have questions additional questions we haven't addressed here.

Also on The Business Plan Shop

• How to write a business plan to secure a bank loan?
• Key steps to write a business plan?
• Top mistakes to avoid in your business plan

Do you know entrepreneurs interested in starting or growing a nursing home? Share this article with them!

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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How To Write a Business Plan for Nursing Home in 9 Steps: Checklist

By alex ryzhkov, resources on nursing home.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

Are you considering opening a nursing home to provide quality care and assistance to seniors and people with disabilities? This blog post will guide you through the process of creating a comprehensive business plan for your nursing home in just nine steps. By following this checklist, you can ensure that your nursing home is well-prepared to meet the individual needs of your residents and provide them with a comfortable and safe living environment.

Before diving into the steps, let's take a look at some statistics about the industry. According to the American Association of Retired Persons (AARP) , the number of adults aged 65 and older is expected to nearly double from 52 million in 2018 to 95 million by 2060. This growing demographic presents a significant opportunity for the nursing home industry. In fact, the National Investment Center for Seniors Housing and Care (NIC) reports that the occupancy rate for nursing homes has steadily increased over the past few years, reaching 87.1% in the second quarter of 2021.

Now, let's dive into the nine steps to creating a successful business plan for your nursing home. From conducting market research and identifying your target audience to establishing a financial plan and determining legal and regulatory requirements, each step is crucial to the overall success of your nursing home venture.

By investing time and effort into each step of the process, you can ensure that your nursing home is well-positioned to provide exceptional care, comfort, and support to its residents. So, let's get started on creating a business plan that will make your nursing home stand out in the industry.

Conduct Market Research

Before starting a nursing home, it is crucial to conduct thorough market research to gain a deep understanding of the industry and identify potential opportunities and challenges. This research will help in shaping your business plan and making informed decisions.

Here are some important steps to consider when conducting market research for your nursing home:

• Identify the demographics of your target audience: Determine the age group, gender, and specific needs of the seniors and individuals with disabilities in your target market.
• Evaluate the demand for nursing home services: Analyze the existing demand for nursing home facilities in your area. Consider factors such as the number of existing nursing homes, waiting lists, and the availability of services for seniors and people with disabilities.
• Assess the competition: Research and analyze the existing nursing homes in your area. Consider factors such as their services, pricing, reputation, and capacity. Identify any gaps in the market that your nursing home can fill.
• Understand regulatory requirements: Familiarize yourself with the regulations and licensing requirements governing nursing homes in your area. Ensure that you comply with all legal obligations to operate your facility.
• Conduct surveys and interviews: Interact with seniors, their families, and healthcare professionals to gather insights on their preferences and expectations regarding nursing home facilities. This will help you tailor your services to meet their specific needs.
• Analyze financial feasibility: Evaluate the financial viability of your nursing home by estimating the initial investment required, recurring expenses, and potential revenue streams. This will help you determine the profitability and sustainability of your business.

Tips for conducting market research:

• Utilize online resources: Make use of online databases, industry reports, and professional networks to gather relevant information on the nursing home industry.
• Visit existing nursing homes: Tour existing nursing homes to gain firsthand insights into their operations, facilities, and services. This will provide valuable inspiration for your own nursing home.
• Seek professional guidance: Consult with healthcare experts or business advisors who specialize in the nursing home industry. Their expertise can provide valuable guidance and help you navigate the complexities of market research.

Identify Target Audience

Identifying your target audience is a crucial step in developing a successful business plan for a nursing home. By clearly understanding who your potential residents are, you can effectively tailor your services, facilities, and marketing strategies to meet their specific needs and preferences.

1. Research demographics: Start by gathering demographic information about the area where your nursing home will be located. Consider factors such as age, gender, income level, and any specific health or disability-related needs prevalent in the community.

2. Define your ideal resident: Determine the specific characteristics of the individuals you aim to serve. Are you targeting seniors with specific medical conditions or disabilities? Do you want to cater to a particular socio-economic group or provide specialized care for veterans? Clearly defining your ideal resident will help you create a focused and tailored approach.

3. Conduct surveys and interviews: Engage with potential residents or their families to gain insights into their preferences, expectations, and challenges. This firsthand information will help you refine your services and ensure that your nursing home meets the needs of your target audience.

Consider the local demand:

Stay updated with industry trends:, collaborate with healthcare professionals:, analyze competition.

When starting a nursing home business, it is essential to analyze the competition in the market. This step allows you to understand the existing players and determine how your nursing home can stand out and attract clients.

1. Identify the competitors: Begin by identifying other nursing homes in the area. Look for both local and national chains, as well as any smaller, privately-owned facilities.

2. Evaluate their services: Take a close look at the services provided by each competitor. Consider their range of healthcare options, dietary offerings, recreational activities, and social services. Pay attention to the quality of care they provide and what sets them apart from others.

3. Assess their target audience: Determine the target audience of each competitor. Identify if they primarily cater to seniors, individuals with disabilities, or both. Understanding their target audience will help you refine your own marketing strategies.

4. Analyze their pricing: Study the pricing structures of competitors to gain insights on their rates and payment options. Find out if they offer any discounts or special packages. This information will assist you in designing competitive and flexible pricing plans for your nursing home.

• Visit competitor websites and review their online presence to learn about their mission, values, and unique selling points.
• Consider reaching out to former employees or residents who may offer valuable insights about the competitor's operations and service quality.
• Attend local healthcare conferences or industry events to network with professionals and gain knowledge about the competition.

Assess Financial Feasibility

Assessing the financial feasibility of your nursing home business is a critical step to ensure its success. It involves evaluating the financial resources required to start and operate the facility, as well as determining if the venture will generate enough revenue to cover expenses and achieve profitability.

To begin, conduct a thorough analysis of the expected costs involved in opening and running a nursing home. This includes expenses such as facility construction or renovation, equipment purchases, staffing salaries, insurance, and licensing fees. It is important to consider both one-time start-up costs and ongoing operational expenses.

Next, estimate the potential revenue sources for your nursing home. This may include income from private or government-funded insurance programs, resident fees, and any additional services offered, such as therapy or specialized care. Be realistic in your revenue projections and consider factors such as market demand and potential occupancy rates.

• Consult with financial professionals or accountants to ensure accuracy and to help you navigate the complex financial aspects of the nursing home industry.
• Consider creating multiple financial scenarios to assess the impact of different variables on the financial feasibility of your nursing home, such as different occupancy rates or pricing structures.
• Stay updated on market trends and changes in government policies or regulations that could impact the financial viability of your nursing home.
• Explore potential funding sources, such as loans or grants, to help cover start-up costs or bridge any financial gaps.

By thoroughly assessing the financial feasibility of your nursing home business, you can make informed decisions and develop a realistic financial plan. This will not only help you secure the necessary funding but also provide a solid foundation for long-term success in the industry.

Define Business Goals

In order to successfully start and operate a nursing home, it is crucial to define clear and achievable business goals . These goals serve as a roadmap for your nursing home and provide direction for your overall operations and strategies.

• Identify your mission and vision: Begin by determining the purpose and values of your nursing home. What is the ultimate mission you want to accomplish? What do you envision your nursing home to be known for? Answering these questions will help you establish a solid foundation for your business goals.
• Set measurable objectives: Your business goals should be specific, measurable, attainable, relevant, and time-bound (SMART). This means your objectives should be clearly defined and capable of being evaluated. For example, you may set a goal to achieve a specific occupancy rate within the first year of operation.
• Consider both financial and non-financial goals: While financial goals, such as revenue targets and profit margins, are important indicators of success, it is equally important to consider non-financial goals. These may include resident satisfaction rates, staff retention rates, and community involvement.
• Align goals with your target audience: Your business goals should align with the needs and expectations of your target audience – the seniors and people with disabilities who will be residing in your nursing home. Consider their preferences, desires, and expectations when defining your goals.

Tips for defining business goals:

• Involve key stakeholders, such as residents, family members, and staff, in the goal-setting process to ensure their perspectives are considered.
• Regularly review and update your business goals as the nursing home progresses to adapt to changing circumstances and opportunities.
• Ensure your goals are realistic and attainable, taking into account factors such as market conditions, financial resources, and regulatory requirements.

By clearly defining your business goals, you will provide your nursing home with a sense of purpose and direction. These goals will guide your decision-making processes and help you measure the success and progress of your nursing home over time.

Develop A Staffing Plan

A crucial aspect of running a successful nursing home is having a well-developed staffing plan in place. This plan is essential for ensuring the highest level of care and support for the residents. Here are some important steps to consider when developing your staffing plan:

• Identify the required roles and responsibilities: Begin by identifying the specific positions you will need in your nursing home, such as registered nurses, licensed practical nurses, certified nursing assistants, administrative staff, and other support personnel.
• Assess staffing needs: Determine the number of staff members needed to meet the needs of your residents and maintain optimal care. Consider factors such as the number of residents, their healthcare requirements, and any additional services you plan to offer.
• Recruitment and hiring: Develop a recruitment strategy to attract qualified and experienced individuals for your staff. Consider advertising job openings, utilizing recruitment agencies, or networking within the healthcare community. Establish thorough hiring processes to ensure you select the most suitable candidates.
• Training and development: Provide ongoing training and development opportunities to equip your staff with the necessary skills and knowledge to excel in their roles. This can include specialized training in elderly care, disability support, and other relevant areas.
• Employee scheduling: Establish an efficient scheduling system to ensure adequate coverage and maintain a balanced workload for your staff. Consider factors such as shift rotations, vacation time, and any additional staffing requirements during peak periods.
• Employee retention: Implement strategies to promote employee satisfaction and retention. This can include offering competitive wages and benefits, fostering a positive work environment, providing opportunities for career advancement, and recognizing and rewarding outstanding performance.
• Regularly assess staff performance and provide constructive feedback for continuous improvement.
• Establish clear communication channels to promote effective coordination and collaboration among your staff.
• Consider offering additional training and support for staff members dealing with challenging cases or specialized care needs.
• Maintain open lines of communication with your staff to address any concerns or issues promptly.
• Prioritize staff well-being to prevent burnout and enhance overall job satisfaction.

By developing a comprehensive staffing plan, you can ensure that your nursing home has a dedicated and skilled team of professionals who are committed to providing exceptional care to your residents.

Create A Marketing Strategy

When starting a nursing home business, it is crucial to develop a comprehensive marketing strategy that effectively communicates your services and attracts potential residents. By creating a strong marketing strategy, you can increase awareness of your nursing home and differentiate yourself from competitors.

First and foremost, identify your target audience . Determine the specific demographic of seniors and people with disabilities that you want to cater to. Understanding their needs, preferences, and interests will help you tailor your marketing efforts and develop targeted messaging.

Research the competition to gain a better understanding of their marketing strategies and identify any gaps or opportunities in the market. This analysis will provide valuable insights that can be incorporated into your own strategy to differentiate your nursing home.

With these insights and knowledge, you can then develop a unique selling proposition . Highlight the unique features and benefits that set your nursing home apart from others. This could be the quality of care, specialized services, or the comfortable living accommodations you offer.

• Consider collaborating with local healthcare professionals and organizations to increase referrals and build a strong network.
• Utilize various marketing channels, such as digital media, print advertising, and community events, to reach a wider audience.
• Design an informative and engaging website where potential residents and their families can learn more about your nursing home and its services.
• Invest in search engine optimization (SEO) to improve your website's visibility in search engine results.

Establish clear marketing goals that align with your overall business objectives. These goals could include increasing brand awareness, generating leads, or boosting resident occupancy rates. Make sure these goals are specific, measurable, achievable, relevant, and time-bound (SMART).

Develop a marketing budget that includes allocation for various marketing activities, such as advertising, promotions, website development, and community outreach events. Ensure that your budget is realistic and tied to your expected returns on investment.

Once your marketing strategy is defined, create detailed marketing tactics that outline the specific actions and activities required to reach your target audience. This may include implementing digital marketing campaigns, conducting community outreach initiatives, hosting open houses, or participating in local healthcare fairs.

Regularly monitor and evaluate the effectiveness of your marketing efforts. Track key performance indicators, such as website traffic, lead generation, and resident referrals, to determine the success of your marketing strategy. Make adjustments and improvements based on the data collected to optimize your approach.

By creating a well-thought-out marketing strategy, you can effectively promote your nursing home, attract the right residents, and position yourself as a trusted provider of quality care for seniors and people with disabilities.

Determine Legal And Regulatory Requirements

When starting a nursing home, it is crucial to be aware of the legal and regulatory requirements that are applicable to your business. Compliance with these requirements is essential to ensure the safety and well-being of your residents, and to avoid any legal issues that could arise.

Here are some important factors to consider when determining the legal and regulatory requirements for your nursing home:

• Licensing and Certification: Research the specific licenses and certifications required to operate a nursing home in your area. This may include obtaining a healthcare facility license, as well as certifications for your nursing staff.
• Building Codes and Regulations: Familiarize yourself with the building codes and regulations that are applicable to nursing homes. Ensure your facility meets all safety and accessibility standards, such as sufficient exits, wheelchair accessibility, and fire safety measures.
• Staffing Regulations: Understand the staffing requirements and regulations set by governing bodies. This includes regulations on nurse-to-resident ratios, background checks for staff members, and training requirements.
• Health and Safety: Familiarize yourself with the health and safety requirements for nursing homes. This includes infection control protocols, medication management procedures, and reporting requirements for incidents or accidents.
• Documentation and Record-keeping: Establish comprehensive systems for documenting resident information, care plans, and medical records. Ensure compliance with privacy laws, such as the Health Insurance Portability and Accountability Act (HIPAA).
• Insurance Coverage: Investigate the insurance coverage necessary for your nursing home. This includes liability insurance to protect against legal claims, as well as workers' compensation insurance for your staff members.
• Consult with legal professionals or experts in the healthcare industry to ensure you have a thorough understanding of the specific legal and regulatory requirements for your nursing home.
• Regularly review and update your policies and procedures to remain compliant with any changes in regulations.
• Maintain open communication with regulatory agencies and seek guidance when needed.

Establish A Financial Plan

Creating a financial plan is a crucial step in ensuring the success and sustainability of your nursing home business. It involves carefully assessing and managing your financial resources to meet the needs of your facility and provide the highest quality care for your residents.

Here are some important considerations when establishing your financial plan:

• Evaluate your start-up costs: Calculate the initial expenses required to establish your nursing home, including building renovation, equipment purchase, licensing fees, and administrative costs.
• Estimate monthly expenses: Determine your ongoing costs, such as staff salaries, utility bills, insurance premiums, medical supplies, and maintenance expenses.
• Forecast revenue: Project your income based on the number of residents, their payment sources (private pay, insurance, Medicaid), and their length of stay.
• Develop pricing strategies: Set competitive and sustainable rates for your services by considering the local market, cost of operations, and desired profit margin.
• Create a contingency plan: Prepare for unexpected expenses and financial challenges by setting aside reserves or establishing lines of credit.

Additionally, it is crucial to consult with a financial advisor or accountant experienced in healthcare facilities to ensure the accuracy and feasibility of your financial plan. They can offer valuable insights and help you make informed decisions regarding budgeting, revenue generation, and expense management.

Remember, a well-planned and well-executed financial strategy is essential for the long-term success and sustainability of your nursing home. Regularly review and update your financial plan to adapt to changing market conditions, regulatory requirements, and resident needs.

In conclusion, creating a business plan for a nursing home involves several important steps that are crucial for its success. By conducting market research, identifying the target audience, analyzing the competition, assessing financial feasibility, defining business goals, developing a staffing plan, creating a marketing strategy, determining legal and regulatory requirements, and establishing a financial plan, you can ensure that your nursing home meets the needs and expectations of its residents while staying compliant with industry regulations. By following this checklist, you can lay the foundation for a thriving and successful nursing home business.

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Business Plan Template for Nursing Home

• Great for beginners
• Ready-to-use, fully customizable Subcategory
• Get started in seconds

Starting and operating a nursing home facility requires careful planning and strategic decision-making. With ClickUp's Business Plan Template for Nursing Home, you can easily outline your strategies, financial projections, marketing plans, and operational details to ensure a successful venture.

This template is designed to help entrepreneurs and business owners:

• Create a comprehensive business plan that attracts investors and secures funding
• Effectively manage and grow their nursing home facility
• Streamline the process of outlining strategies and financial projections

Whether you're just starting out or looking to expand your existing nursing home, ClickUp's Business Plan Template for Nursing Home has everything you need to take your business to the next level. Get started today and make your vision a reality!

Business Plan Template for Nursing Home Benefits

A Business Plan Template for Nursing Home can provide numerous benefits to entrepreneurs and business owners in the healthcare industry, including:

• Streamlined planning process with a pre-designed framework and structure
• Clear and concise documentation of strategies, goals, and objectives
• Detailed financial projections and analysis to attract investors and secure funding
• Comprehensive marketing plans to effectively target and reach potential clients
• Thorough operational details and guidelines for efficient management and growth of the nursing home
• Ability to make informed decisions based on market research and industry insights
• Increased credibility and professionalism when presenting the business plan to stakeholders
• Improved risk management by identifying potential challenges and developing contingency plans
• Enhanced accountability and monitoring of progress towards business goals
• Flexibility to customize the template to fit the specific needs and requirements of the nursing home facility.

Main Elements of Nursing Home Business Plan Template

When it comes to starting and managing a nursing home facility, ClickUp's Business Plan Template has got you covered with the following elements:

• Custom Statuses: Keep track of the progress of different sections of your business plan with statuses like Complete, In Progress, Needs Revision, and To Do.
• Custom Fields: Utilize custom fields such as Reference, Approved, and Section to add additional information and categorize different aspects of your business plan.
• Custom Views: Access 5 different views to effectively organize and analyze your business plan, including Topics, Status, Timeline, Business Plan, and Getting Started Guide.
• Collaboration Tools: Collaborate seamlessly with your team by utilizing features like comments, task assignments, and notifications, ensuring everyone is on the same page throughout the planning process.

How To Use Business Plan Template for Nursing Home

Creating a business plan for a nursing home may seem overwhelming, but with the help of ClickUp's Business Plan Template, you can break it down into manageable steps. Follow the steps below to create a comprehensive and effective business plan for your nursing home:

1. Executive Summary

Start by writing an executive summary that provides a high-level overview of your nursing home business. This section should include key information such as the mission statement, target market, unique selling proposition, and financial projections.

Use the Docs feature in ClickUp to create an executive summary that captures the essence of your nursing home business.

2. Market Analysis

Conduct a thorough market analysis to understand the demand for nursing home services in your target area. Research the demographics, competition, and trends in the industry. Identify your target market and outline how your nursing home will meet their specific needs.

Utilize the Table view in ClickUp to organize and analyze market research data, such as population statistics, competitor analysis, and industry trends.

3. Operational Plan

Develop a detailed operational plan that outlines how your nursing home will be structured and managed. Define the organizational structure, roles and responsibilities of staff members, and the processes and procedures that will be implemented to ensure high-quality care.

Create tasks in ClickUp to assign responsibilities for various operational aspects, such as hiring staff, obtaining necessary licenses and certifications, and setting up healthcare partnerships.

4. Financial Projections

Estimate the financial projections for your nursing home, including revenue, expenses, and profitability. Consider factors such as occupancy rates, pricing strategies, staffing costs, and capital investments. Create a comprehensive financial forecast that demonstrates the viability and potential return on investment of your nursing home business.

Use the Goals feature in ClickUp to set financial targets and track progress towards achieving them. The Gantt chart can help visualize and manage the timeline of financial milestones.

By following these steps and utilizing ClickUp's Business Plan Template, you can create a well-structured and data-driven business plan that sets your nursing home up for success.

Get Started with ClickUp’s Business Plan Template for Nursing Home

Entrepreneurs or business owners looking to start and operate a nursing home facility can use the ClickUp Business Plan Template to streamline the process of creating a comprehensive business plan.

First, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to create a successful nursing home business:

• Use the Topics View to organize your business plan into different sections such as Executive Summary, Market Analysis, Financial Projections, and more
• The Status View will help you track the progress of each section, with statuses like Complete, In Progress, Needs Revision, and To Do
• The Timeline View will give you a visual representation of the deadlines and milestones for your business plan
• The Business Plan View will provide an overview of your entire plan, allowing you to easily navigate between sections
• The Getting Started Guide View will provide step-by-step instructions on how to use the template and create your business plan
• Utilize the custom fields Reference, Approved, and Section to add additional information and categorize your business plan
• Collaborate with team members to gather data, conduct market research, and refine your business plan
• Regularly update the statuses of each section to keep track of progress and ensure completion
• Review and revise your business plan as needed to reflect changes in the industry or your business goals
• Use the template as a living document to guide your decision-making and measure your progress as you launch and operate your nursing home.
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Nursing Home Business Plans

Home health care services business plan.

Wheatland Health Services offers a unique combination of premier home health care and community-based social services to Southeastern Kansas.

Nursing Home Business Plan

Bright House aims to be a home for 14 lucky full-time assisted living residents, offering medically-skilled care in a respectful, self-sustaining community, and offering skilled nursing care for short-term residents.

Home Health Care Business Plan

CaringCompanion provides high-quality, personalized home health care services to seniors and individuals with disabilities, letting them maintain independence and comfort within their own homes.

With the aging global population, the demand for high-quality elderly care will only continue to increase. And with current nursing home operations being either extremely costly or potentially lacking in quality, it’s an industry prime for disruption.

If you have an idea for a better nursing home or at-home care experience, then it’s time to put together a business plan. Download one of our Nursing Home Sample Plans today to get started on your own plan and make sure you have everything you need to launch your business.

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How to Start a Nursing Home

Starting a nursing home can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful nursing home.

Importantly, a critical step in starting a nursing home is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

14 Steps To Start a Nursing Home :

• Choose the Name for Your Nursing Home
• Develop Your Nursing Home Business Plan
• Choose the Legal Structure for Your Nursing Home
• Secure Startup Funding for Your Nursing Home (If Needed)
• Secure a Location for Your Business
• Register Your Nursing Home with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Nursing Home
• Buy or Lease the Right Nursing Home Equipment
• Develop Your Nursing Home Marketing Materials
• Purchase and Setup the Software Needed to Run Your Nursing Home
• Open for Business

1. Choose the Name for Your Nursing Home

The first step to starting a nursing home is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your nursing home:

• Make sure the name is available . Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple . The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing . Come up with a name that reflects the desired brand and/or focus of your nursing home.

2. Develop Your Nursing Home Business Plan

One of the most important steps in starting a nursing home is to develop your nursing home business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your own assisted living facility.
• Company Overview – this section tells the reader about the history of your nursing home and what type of nursing home you operate. For example, are you a long-term care facility, assisted living facility, or an independent living facility?
• Industry Analysis – here you will document key information about the nursing home industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target market are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer 
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract prospective customers to your nursing home? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your nursing home make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business

Finish Your Business Plan Today!

3. choose the legal structure for your nursing home.

Next you need to choose a legal structure for your nursing home and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the nursing home and the business are the same legal entity. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a nursing home together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a nursing home include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a nursing home is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your nursing home, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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4. Secure Startup Funding for Your Nursing Home (If Needed)

In developing your nursing home business plan , you might have determined that you need to raise funding to launch your business. 

If so, the main sources of funding for a nursing home to consider are personal savings, family members and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a nursing home that they believe has high potential for growth.

5. Secure a Location for Your Business

The first step in finding a location for your nursing home is to decide what kind of environment you want for your nursing home residents. Do you want a rural setting with plenty of open space, or a more urban environment with easy access to medical care and other amenities?

Once you’ve decided on the environment, you’ll need to research the locations that fit your criteria. There are many online databases of nursing homes. You can also contact your state’s department of health for a list of licensed and skilled nursing facilities in your area.

Your next step is to take a tour of the homes on your list. The right location should feel like a home, not only for you but also for your potential residents and other employees.

6. Register Your Nursing Home with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your nursing home’s name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

8. Get a Business Credit Card

You should get a business credit card for your nursing home to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

Assisted living facilities provide residence and care for the elderly population or disabled people who can’t live independently. To start a nursing home, you’ll need a business license and a permit to operate a healthcare facility. You’ll also need to meet several requirements for staff, patient care, and the facility itself.

If you live in a state that requires inspections, nursing facilities are licensed by each state’s department of health. In states where there isn’t a licensing requirement, nursing care facilities are regulated by the Centers for Medicare & Medicaid Services (CMS). Either way, you’ll need to obtain a license or a state permit.

In most cases, your facility will also need to meet requirements for staffing levels and staff training, patient care records, fire safety procedures, and building safety that are established by the state’s department of health or state legislature. In addition, nursing homes have federal standards they must follow including the CoP (Conditions of Participation), which details requirements for all healthcare facilities. All of these standards can be found on the CMS website.

If you plan to offer specialized care, such as a skilled nursing facility care for people with Alzheimer’s or dementia, your facility likely needs additional licensing or certification. For example, in order to receive reimbursement from Medicare or Medicaid, a facility that specializes in dementia care must be a Dementia Special Care Unit certified by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO).

10. Get Business Insurance for Your Nursing Home

There are different types of insurance that are necessary for the operation of a nursing home. 

Nursing Home insurance policies that you should consider include:

• General liability insurance : This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Workers’ compensation insurance : This type of policy works with your general liability policy to protect against employee workplace injuries and accidents. It also covers employees’ medical expenses and lost wages.
• Professional liability insurance : This protects your business against claims of professional negligence such as incorrect medication or medical treatment.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs. 

11. Buy or Lease the Right Nursing Home Equipment

To run your nursing home successfully on a day-to-day basis, you will need the following equipment: 

• defibrillators
• induction loops
• wheelchairs/walking aids
• wardrobes (for uniforms)
• medical beds (of various sizes depending on the number of patients)
• cots (for newborns or short-term stay patients)
• medical records storage facilities
• feeding equipment

The equipment that you need will vary depending on the size of your nursing home. You can run a small facility with less than fifty patients, but you still need to be able to provide round the clock care. A larger nursing home will need more staff members to keep it running smoothly.

12. Develop Your Nursing Home Marketing Materials

Marketing materials will be required to attract and retain customers to your nursing home.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your nursing home. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional nursing home website provides potential customers with information about the services and/or medical care you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media platforms will help customers and others find and interact with your nursing home.

13. Purchase and Setup the Software Needed to Run Your Nursing Home

The software you need to run a nursing home may vary depending on the type of nursing home. In general you’ll need software that can track patient information and manage medication schedules. If you are running a long-term care facility, you may also need software that can track resident information and manage billing and payroll.

The software you need to run a nursing home will vary depending on the specific needs of your home, but some common options include electronic health records (EHR) software, patient tracking software, and nurse scheduling software.

14. Open for Business

You are now ready to open your nursing home. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

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How to Start a Nursing Home FAQs

Is it hard to start a nursing home.

Starting a nursing home can be difficult, but with the right planning and execution it can be a successful endeavor. There are a few key things you need to do in order to get your nursing home up and running: 

• Plan your business carefully. This includes creating a comprehensive business plan and strategizing how you will market and run your nursing home. 
• Find the right location for your home. You'll need to consider factors such as zoning, accessibility, and the needs of your target population. 
• Establish good relationships with local healthcare providers. This will help you attract residents to your home and ensure that they receive quality care. 
• Manage your finances carefully, including the hiring and training of staff members. 
• Once you acquire residents, be sure to provide quality care and establish a strong culture within your home. By properly planning and executing these tasks, you will have a successful nursing home in no time.

How can I start a nursing home with no experience?

There are a few ways to start a nursing home with no experience. First, you may want to research the process and startup costs. You may also want to find a partner who has experience in the nursing home industry. Finally, you could also attend a seminar or workshop on starting a nursing home.

What type of nursing home is most profitable?

There is no one-size-fits-all answer to this question, as the profitability of nursing homes can vary depending on many factors. However, in general, for-profit nursing homes are often more profitable than nonprofit nursing homes. This is because for-profit nursing homes typically have lower overhead costs and can charge patients more for their services.

How much does it cost to start a nursing home?

The cost to start a nursing home can vary depending on the size and location of the home. Typically, startup costs can range from $200,000-$250,000 for a small nursing home business, with costs starting as high as $750,000 for a medium sized business. 

The following are some factors that contribute to startup costs in opening a nursing home: 

• Initial licensing fees 
• Building renovation and construction 
• Equipment (necessary medical equipment, furniture, kitchen utensils) 
• Landscaping (fencing, garden) 
• Business license 
• Advertisements 
• State and federal survey compliance (filing fees) 
• Professional services (architect/engineer/surveyor fees)
• Insurance fees

What are the ongoing expenses for a nursing home?

The ongoing expenses for a nursing home can vary depending on the location and the services offered. However, some of the more common expenses include room and board, medications, medical supplies, physical therapy, and occupational therapy . Depending on the needs of the patient, these expenses can range anywhere from $6,000 to $10,000 per month.

How does a nursing home make money?

Nursing homes make money by providing room and board, medical care, and other services to residents. The cost of these services is usually more than the resident can pay out-of-pocket, so the nursing home collects payments from insurance companies, Medicaid or Medicare, or the resident's family. Some nursing homes also have income from investments or rental properties.

Is owning a nursing home profitable?

The nursing home industry is one of the most profitable industries in the United States. There are several reasons for this, including the following:

• The demand for nursing homes is high. As the population ages, more and more people will need nursing home care.
• The cost of nursing home care is high. This means that there is a lot of money for nursing home administrators to make in the industry.
• The quality of nursing home care is often poor. This means consumers will pay higher prices for quality care.
• Government healthcare programs pay for a lot of nursing home care. This allows nursing homes to receive money from the government.

Why do nursing homes fail?

Nursing homes fail because they are often understaffed, which can lead to residents not getting the care they need. They may also be underfunded, which can limit the quality of care that residents receive. Additionally, nursing homes can be unpleasant places to live, which can cause residents to feel unhappy or isolated. If a nursing home is not financially stable, it can lead to staff quitting and residents being forced to move. All of the above issues lead to nursing homes closing down.

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Nursing Home Business Plan Sample

AUG.01, 2018

Do you want to start nursing home business?

Do you want to start a nursing home business? Well, it may prove the right choice if you want to serve people besides earning money. A nursing home is like a residential care center for elderly people who can’t be cared at home and are too healthy to be admitted to a hospital. Due to the advancements in medical science, life expectancy has been increased, especially in the developed countries. So, the elderly people who don’t have any caretakers at home or who choose not to live independently needs a timeless service in which they are provided with mental, medical, occupational, speech and physical assistance.

If you are determined to help the retired and elderly people and also want to generate a surplus amount of money, then this is the most suitable profession for you. Before you start the nursing home business, the first step is to make its comprehensive business plan, in which you include all the details about how to open a retirement home and how will you manage it etc. In case, you don’t know how to start a home nursing care business , you can take help from this sample business plan written for a nursing home business startup named ‘Kate Nursing Home’ owned by Kate Greene.

Executive Summary

2.1 the business.

Kate Nursing Home owned by Kate Greene, will be a home to elderly people who need daily assistance and care, located at a 5 minutes’ drive from DMC Heart Hospital, Detroit. Kate Nursing Home will be a 3-floored vast building with the capacity to accommodate about 35 people.

2.2 Management

Opening a nursing home is not just a business, it is a task of great responsibility and accountability. The owner of the business will be responsible for routine works of about 35 people. The whole system will be managed by Kate, her daughter and a hired manager. Moreover, Kate will hire recreational staff to meet social, emotional, intellectual and spiritual needs of elderly people, skilled nurses, nursing assistants, accountants, housekeepers, therapists and guards.

2.3 Customers

Before starting a nursing home business, you must acknowledge the type of your customers to plan your business according to their demands and needs. The customers of a nursing home will be usually the people living in Detroit of age 60 or above. You have to use all means to provide proper care and attention to the residents of your nursing home.

2.4 Target of the Company

Our target is to fill out all our rooms within the two or three months of our launch. We aim at providing excellent temporary and permanent caring services to the elderly people of our town, and to make them feel at home. Our major purpose is to provide the elderly people of our home with comfortable and friendly environment. Besides, we also have some monetary targets; the fundamental one will be to balance the cost of startup within the next three years of launch.

Our sales and revenue targets for the next three years are summarized in the chart below:

Company Summary

3.1 company owner.

Kate Greene will be the owner of Kate Nursing Home. Kate had been awarded an MD (Doctor of Medicine) degree by the University of Michigan. She had been working in the DMC Heart Hospital for the past 20 years. Now, she has taken retirement because she wants to open a nursing home. She will work on her nursing business plan ideas , with the assistance of her daughter, who is also a doctor, and an experienced and caring team.

3.2 Why the Business is being started

Kate was interested in serving and helping people since her childhood. She didn’t become a doctor for the sake of salary, but for improving the life qualities for others. Now she had enough money and time to open up a nursing home for the people who need assistance with their daily routine, but don’t have anyone at home to pay attention to them and their needs.

3.3 How the Business will be started

Starting a nursing business  requires a lot of effort, time and money. If you don’t just want to open a nursing home but also want to run it successfully benefitting more and more people, you have to put loads of effort into it.

Kate has decided to procure an existing building and turn it into a nursing home. She will rent a large building with 3 floors, at least 8 private rooms with attached baths, and 20 general bedrooms. Each floor will have five bathrooms, a kitchen, and a big sitting lounge. There will be a lawn with walking and running tracks and a therapy gym with basic equipment and machines. Each room will be well-furnished and every comfort will be provided to the residents. Kate will hire a team of housekeepers, nurses, assistants and therapists for the 24-hour assistance of the residents.

If you want to jump into this business but don’t have an idea of how to start a retirement home , we are here to help you by this sample business plan.

The costs for startup are as follows:

The startup requirements are as follows:

Services for customers

After getting the basic knowledge about how to open nursing home business , the next step is to add the services, you are going to provide, in your nursing agency business plan . Your services will decide whether you will be able to compete in the market or not.

If you want guideline on the services you should provide, you can take help from this sample business plan on how to start up a nursing home  and run it successfully. Kate Nursing Home will provide the following services:

• Specialty Care: For the disabled persons who need acute care and attention, we have licensed nurses and nursing assistants who will provide them with daily assistance and personal care by serving meals, taking care of their medicinal needs, transferring them from bed to chair etc. Besides, our skilled nurses will make a daily nutrition plan for them, to assist them in improving their health.
• Temporary Assistance (of 2 months): This type of assistance will be given to your loved ones if they are ill and need proper care and therapy until they are fit and healthy again. Usually, the temporary residents of a nursing home are fighting with some physical, mental or emotional disorder. For them we’ll provide three types of therapies:
• Occupational Therapy to assist residents in fighting with some illness or injury.
• Physical Therapy for assisting them to regain their strength and flexibility.
• Speech Therapy given to the persons who have trouble producing and evaluating speech.
• Permanent Assistance: We’ll assist our permanent residents by taking care of all their needs and requirements including physical, mental and emotional needs. Elderly people usually get emotional and behavioral sickness. So, we will hire a recreational staff for arranging birthday parties, musical events, religious services, art and crafts, adopting pets, outdoor activities and picnics for them to refresh their moods.
• Evening Activities: For the people above age 60, whether they are our residents or not, we’ll arrange evening activities like playing cards or chess or learning the use of technology, to assist them in maintaining their intellect and memory.

Marketing Analysis of nursing home business

If you are going to start a nursing home business , then you surely need to make a nursing home business plan . While designing your nursing home business plan template , you must focus on the marketing analysis segment. The accuracy of your nursing business plan depends upon how keenly you focus on your target market and analyze it in your personal care home business plan .

If you are finding difficulty at writing residential care home business plan , you will be glad to know that we are providing a nursing home business plan free of cost. You can take help from this sample personal care home business plan  or can also find more nursing home business plans  available online. However, if you are starting this business on a very large scale then instead of writing a plan by yourself by taking help from a sample business plan personal care home , you should hire services of experts to make for you an accurate personal home care business plan  according to your dimensions and finances.

5.1 Marketing Trends

Before starting a new business, you must study the marketing trends in detail to help you demonstrate the market potential of a new startup. A careful marketing analysis will help you to decide the most favorable location for your business. According to a report by IBISWorld, there are more than 31,000 nursing home businesses in the United States running successfully. The business is expanding at a rate of 2.3% and is expected to continue expanding at a much faster rate over the coming years. Because an estimate shows that 22% of the world population in 2050 will be comprised of the people of age above 60. The business is generating a revenue of $136 billion annually and is serving as a source of employment for more than 1.8 million people in the United States. These statistics clearly demonstrate that this is the good time to enter in this industry, and the business can prove extremely profitable for you if you plan it wisely and successfully.

5.2 Marketing Segmentation

While writing a business plan, you must clearly acknowledge the groups or segments of the society that can prove your prospective or potential customers. An accurate marketing segmentation can help you in devising your policies according to the demand of your customers. Our customers will include the non-acutely ill or companionless people of age 60 or above living in Detroit, or the one who has some disability and need 2-3 months of full-time rest and proper care. We will also be serving the people, whose family may be going to somewhere else for a short period of time and need a trusted care center for their loved ones. We also have arranged evening activities for the people who want some recreational and intellectual activity for themselves. Evening Activities will be available for the temporary and permanent residents of the nursing home as well as non-residents. Our experts have identified the following target groups for our services:

The detailed marketing segmentation of our target audience is as follows:

5.2.1 Elderly & Alone People: The first group of our customers will be the elderly people, who don’t have a family or any caretaker at home, who want to spend time in productive and recreational activities and can afford the charges of full-time assistance at a nursing home. Such elderly people can prove our permanent residents and we’ll provide them with our best services fulfilling all their nutritional, medical and recreational needs.

5.2.2 Disabled or Diseased: The second category includes the people who have some serious disorder or disease, and whose loved ones want them to be in a homey environment rather than a hospital. Such people need daily therapies to enhance their workability, besides the routine assistance. For such residents, Kate Nursing Home has hired experienced nurses and therapist who will make sure that the residents are given occupational, speech and physical therapies according to their needs. They will mostly be kept in specialty care or under temporary assistance.

5.2.3 Non-acutely Ill: The people whom we cannot declare as healthy, and who are not much seriously ill to be cared in a hospital will be our third and the biggest target group. Our honest and hard-working professionals will ensure that the best possible care is being delivered for such permanent residents. We will ensure that our caring and compassionate staff will treat the residents as their family. We’ll ensure extra care and attention along with the daily routine assistance to this category of our residents.

The detailed and comprehensive market analysis of our potential customers is given in the following table:

5.3 Business Target

Kate is not opening the nursing home just for the sake of money, but because she has the passion to serve humanity by helping the helpless. Our major target will be to provide a homey and comfortable environment for the elderly and disabled old people. We’ll hire the persons who are skilled, ethical, compassionate and ready to treat our residents as their own family members. Our target is to provide them with the care and assistance they need and deserve in this old age. For the sake of giving proper attention to our residents, we are not going to accommodate hundreds of people in our nursing home, instead, we will accommodate a maximum of 35 people and will comfort them with our best efforts and services.

To serve more and more elderly people efficiently, we have to make our business financially strong. For that monetary advancements, our business targets are:

• To become the most trusted and most successful nursing home in Detroit
• To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
• To balance the initial cost of the startup with earned profits by the end of the first year

5.4 Product Pricing

Product Pricing is the major leading factor in deciding the success and failure of a startup. If you are starting a new business, you have to keep your prices low at the initial stage, so that more and more people are attracted towards you. In this sample business plan, we are giving the product pricing scheme of Kate Nursing Home.

We haven’t priced our services very highly; we have the rates which are currently offered by other nursing homes in the city. However, we haven’t compromised on the quality of our business. All the inventory and things which our residents will need for daily usage will be available every time, and the rooms and furniture will be maintained on a daily basis.

Basically, we’ll have these three types of memberships:

• Membership for Permanent Residence for $600 per month
• Membership for Specialty care for $800 per month
• Membership for Temporary Residence for $400 per month
• Membership for Evening Activities for $150 per month

These are the charges for general accommodation, if you want a private and more comfortable room for your loved ones or for yourself, you have to pay additional charges for it. Moreover, for the people who need intense professional therapy, we’ll be taking a little bit more money to meet their medicinal needs.

If you are working on how to start a nursing home business , the most important part you should consider is your sales strategy in the business plan . Kate has done a lot of research on the sales, marketing, and advertisement techniques, so that more and more people will know about the new startup and can use the services of Kate Nursing Home either for themselves if they are above 60; or for their parents if they are unable to give them proper time or care.

Here is starting a nursing home business plan , which we have provided in order to help you in formulating yours.

6.1 Competitive Analysis

Our biggest competitive advantage is the devotion and determination of all our team. We have an excellent team which believe in serving the people who are unable to serve themselves. Our second biggest competitive advantage is the range of indoor and outdoor services we will provide to our residents. No other nursing home in this vicinity arrange the hobbies and activities for old people like adopting pets, playing games etc. Most significantly, we will teach our permanent residents to use latest social networks and websites so that they will conceive that they are not outdated and can compete with the new generation. Lastly, we have a wide parking area for the vehicles of the visitors whenever they visit their loved ones.

6.2 Sales Strategy

We will attract our customers towards us by various efforts, such as:

• We will advertise our nursing home in magazines, newspapers and social media
• We will arrange seminars and awareness sessions on giving the elders the required care and attention
• We will arrange transportation facilities with caretakers for our residents when they want to go out
• We will give 5% discount to the first 10 customers

6.3 Sales Forecast

Our sales are forecasted in the following column charts:

The detailed information about sales forecast is given in the following table:

6.4 Sales Monthly

Our forecasted monthly sales for the first year of startup are given below:

6.5 Sales Yearly

Our forecasted yearly sales for the first three years of startup are given below:

Personnel plan

If you are starting a nursing home care business , you must focus on the staff you are going to hire. You will need the staff which is compassionate enough to understand the misery and distress of the elderly people when they find that they are not cared like the way they deserve. You should keep in mind that you will be dealing with those people who get emotional at small things and hire your members accordingly if you really want to serve them.

7.1 Company Staff

Kate will hire the following staff for starting a personal home care business:

• 1 General Manager for managing the overall operations
• 2 Accountants for maintaining financial records
• 2 Cooks for preparing meals
• 5 Nurses for examining and treating the residents
• 10 Nursing Assistants for aiding the residents with their daily works
• 5 Recreational Workers for indulging residents in indoor and outdoor activities
• 5 Cleaners to maintain extreme cleanliness
• 2 Drivers for providing transportation facility
• 2 Physiotherapists for the therapy and physical exercise of the residents
• 2 Security Guards

7.2 Average Salary of Employees

The average salary of our staff is summarized in the following table:

Financial Plan

To run a nursing home business successfully you don’t only require the passion for it but also a large amount of money to meet with the daily expenses of so many people, among whom some can be disabled or suffering from any disease. For balancing your incomes with your expenses, you need a financial plan. A detailed and accurate financial plan must be devised before a personal care home business start up . In your financial plan, you have to develop an outline defining nursing home business profit and a record of your investment group business plan and expenses.

If you need some help regarding the formulation of a financial plan for your business, you can take help from this sample business plan on how to open a nursing home business. But if you are opening the nursing home on a very large scale, you must seek the help of financial experts to make you a financial plan according to your actual expenses and investments. The detailed financial plan of Kate Nursing Home for the next three years is given below.

8.1 Important Assumptions

8.2 brake-even analysis.

8.3 Projected Profit and Loss

8.3.1 profit monthly.

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

8.5 Projected Balance Sheet

8.6 business ratios.

Download Nursing Home Business Plan Sample in pdf

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How To Start or Buy a Nursing Home Business

September 28, 2022

Adam Hoeksema

The nursing home industry has grown significantly in recent years as the population of elderly people increases. As one of the largest components of the healthcare industry, the nursing home sector provides essential care and services to elderly individuals who are no longer able to care for themselves. Nursing homes offer long-term care services and typically provide 24-hour staff for the residents. Nursing home services include nursing care, physical therapy, occupational therapy, and recreational activities. Different amenities available in nursing homes may include private mini-suites for some residents and recreational areas for social activities.

Nursing homes have become increasingly regulated to ensure quality of care for patients. The Centers for Medicare and Medicaid Services (CMS) sets safety and quality standards for nursing homes and conducts periodic inspections to make sure that nursing homes are providing necessary services in a safe environment. Nursing homes are also required to be accredited in order to be eligible to receive reimbursement from the government. Accreditation is achieved by meeting certain criteria and quality indicators, such as having sufficient staff and qualified personnel. Nursing home staff must ensure that all nursing home regulations are followed in order to maintain the safety and quality of care for the elderly residents.

Thinking of Starting a Nursing Home Business? 

There are plenty of good reasons to open a nursing home, not least of which is that running your own business is a liberating and rewarding enterprise if it’s successful. Nursing homes provide a valuable service to those in need, and this is also a source of satisfaction for those who run them. 

They’re also profitable. The cost of living in long-term care facilities is increasing at a rate that outpaces inflation , suggesting that it’s’ becoming more profitable for nursing home business owners. However, if you’re considering running the home as a nonprofit, you may be interested to know that nonprofit facilities have better resident outcomes and better rates of staff satisfaction. 

In this article I want to walk through a number of tips to help you open your own nursing home, but first just a little bit of background.  My name is Adam Hoeksema, I am the Co-Founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and for internal planning.  We built a Financial Projection Template for Nursing Home Businesses which I will utilize and share some screenshots from as we walk through some of the financial aspects of building a nursing home business. 

In this post I plan to cover the following:

• Understanding the Market for Nursing Homes
• Funding Options to Start or Buy a Nursing Home
• Startup Costs for a Nursing Home
• Nursing Home License Requirements
• Business Plan for a Nursing Home
• Nursing Home Employees
• Patient Acquisition for a Nursing Home
• Nursing Home Profit Margins
• How Much Do Nursing Homes Make

 With that as a plan, let’s dive in. 

Tips on How to Start a Nursing Home from Scratch

You’re starting from the beginning, and you have little to no experience, so we’re going to break it down from the start. Of course, a comprehensive guide to starting a business of any kind would be well beyond the scope of any single article, so consider these as pointers to set you off in the right direction, but be sure to delve much deeper into each section using other sources before you get going. 

1. Understand your Market

The very first step to starting any business is market research. The early stages of this are free and they are absolutely invaluable, especially when planning to start a business with such significant startup costs like a nursing home. 

If you’re fixed in one location, your options will be limited to that market, but if you can move, you’ll do well to investigate areas with a greater need of your services. Then, you’ll have to identify and explore the competition and see what they do. 

You’ll be building an ideal customer as you go, and identifying unique ways to reach and supply them with your solution to their problem. Start looking for holes in the services that are currently provided, and build up your business model in your head, in a way that fills in these gaps. This is how you’ll stay competitive, and provide something that others don’t. 

One trick to understanding the current market demand for nursing home services in an area is to call all of the other nursing homes in your target market and see if they have any open rooms available.  If they all have rooms available, it might be that there is already an oversupply of nursing homes in that market.  If there is a waitlist or difficulty finding a room, then you know there could be an opportunity for additional rooms.  

2. Funding Options for a Nursing Home Facility

There are various funding options available to help you either build a new nursing home facility, convert an existing building into a nursing home, or to acquire an existing facility.  Before buying a nursing home business, considering a Quality of Earnings Report Sniff Test might clarify your financial path forward.

• SBA Loans - The SBA offers some of the best loan programs available.  The SBA 504 loan program can be a great fit for an assisted living facility.  This program offers financing for buildings and equipment which will be most of your startup costs. 
• Traditional Bank Loans – If you have a strong personal financial situation, you may not even need the SBA and you might qualify for a traditional bank loan.  
• Seller financing - I f you are looking to buy an existing nursing home facility, you might be able to secure some or all of your financing from the seller.  The seller could sell you the business on contract, or they could provide a portion of the financing through a seller note in conjunction with an SBA loan . 
• Investors – Another approach would be to get investors involved. With any loan, you will still need to come up with some amount of equity that is invested into the business.  Whether that is from your own savings or from outside investors you will need to have at least 5% of the total purchase price of an existing nursing home, or you will need at least 10% of the startup costs if you are starting from scratch.  Raising capital from investors means you will no longer have total control over the direction of your company as you’ll have to appease the shareholders. However, this money is invested at their own risk, not yours, so if you do fail, you won’t be left with a huge debt to pay back too. 

However, for the healthcare industry, it’s also worth considering grants . Again, do your own research on this, but look out for grants that might cover the cost of skilled services, nutrition programs, personalized care assistance, and other elements of your business model. 

Understanding the funding options is a good place to start, but to choose the right one for you will require you to know exactly what your costs are going to be, and where they’ll be coming from. For this, you’ll want to know who and what you’ve got to pay for.

3.  Startup Costs for a Nursing Home

This section alone takes some serious research. There are 3 primary startup cost categories when opening a nursing home:

• Working Capital for Payroll

You can get an idea of what it would cost to purchase a nursing home facility by looking at the nursing homes for sale on BizBuySell . 

If you’re buying a new building, you’re going to have to get it equipped, and if you’re taking over an existing assisted living facility, you’ll still need to know what equipment might need to be replaced in the near term. Some examples of equipment you’ll need for an assisted living facility are:

• General Furniture
• Specialized Furniture
• Medical equipment
• Bathroom equipment
• Kitchen Equipment
• Communications Equipment

There’s going to be a lot more to consider than just these listed, and from itemizing them you’ll also need to source and cost them to start building your budget. Once you’ve got your market research down, you’ll have a better idea of what size of facility you will build and how much equipment you’ll need. 

4. Nursing Home License Requirements

There are several licenses and permits that you may need to get for your nursing home or assisted living facility.  Here is a list of several:

• Building Permit
• Certificate of Occupancy
• Food Service License
• Business License
• Fire Safety Designation
• Health Care Facility Licensing
• Nursing Home License
• Medicaid/Medicare Certification
• Fire and Safety Inspection Certification
• Alcohol and Drug Certification

You will also need insurance to cover residents and staff alike, as well as the business itself and the property. 

5. Nursing Home Business Plan

Your business plan is more than just a formal document, it’s a journey into the inner workings and the future of your business. The business plan document is split into seven major sections:

• Executive Summary – The front page of your document will cover an introduction, leading the reader through the problems, solutions, and your value proposition. This should be a general overview, and it should be appealing, but never overblown or inaccurate. This page is probably going to be the last you complete, as it’s a summary of a lot of the material from within the document.
• Market Analysis – Your market research should give you a good idea of where your company sits among the competitors and the current state of the market. Include an overview of the industry, and identify how your nursing home will contribute something unique to that market. Lay out a simple plan of action that explains how you’ll take your share of the market, and whom that share represents in terms of ideal customers and their problems.
• Company Description – Now it’s time to go into more detail about who you are and why you’re the right company for the job. List the things you can do that nobody else can, and specify how you’re going to treat the pain points of your customers. Work to set your company apart from the others in your market.
• Organizational Structure – One of the ways you can expand on the company description and how you’ll stay relevant is to display the strengths of your team. Present the management and specialists that you have on board, and how what they can do will contribute to your success. This section can include profiles and resumes of your management team and specialists, where appropriate.
• Products and Services – Here you’ll list the services you provide in the nursing home, along with any products you may sell, if you plan to. Nursing homes often offer insurance packages along with partner organizations, and these should be included. Any services the home provides should be listed here too, along with the details of how the services will be administered and by whom.
• Sales and Marketing – This section will go over your approach to finding your nursing home clients and getting your name out there. List the media avenues, such as TV or radio, and lay out your campaign plans. Detail how you’ll reach potential residents once you get going.
• Financial Projections – Your pro forma income and cash flow statements, as well as your balance sheet , should be completed and accurate for you to be able to form detailed and realistic projections of the financial future of your company. These projections will be important for you, but also absolutely critical for any investment or loan you might want to take on in the future. 

For financial projections, consider using our Nursing Home and Assisted Living Projection Templat e that is specifically designed for a nursing home business and can be further customized with your input and by making use of the free support that comes with it. 

6. How to Hire When Starting a Nursing Home Business

Your budget and planning sections should have established who and what you can afford, so now hiring becomes a matter of reaching out to find them. Of course, every career will need the appropriate background check and disclaimers to be filled out, but how do you find them in the first place?

Headhunting from the competition is one method, especially if you have a better salary package or benefits available. As long as you create a comfortable working culture with good compensation, many staff in less-friendly companies will be happy to switch over. 

You can also start networking in appropriate groups and locations, and spread the word of your new home opening up. For lower-skilled roles, university graduates may be looking for experience, so get onto forums and social groups to find them. 

For specialists, consider people with a wide range of skills at first; those who can impart their experiences onto your new staff and build up skill sets from the inside. Early investment in training can save a lot in the long run, and focus strongly on retaining the staff you do get, to save on the future cost of talent acquisition. 

Once you have a team, you’ll be ready to open your doors. This means you’re going to want to have people to look after.

7. Patient Acquisition for a Nursing Home

You will likely find customers / patients for your nursing home through referrals from doctors, therapists, hospital systems, etc.  Additionally, you can advertise online through Google Adwords or through platforms like A Place for Mom that helps children find long term care for their parents. 

Because the lifetime value of a nursing home patient can be hundreds of thousands of dollars in revenue, the competition to acquire patients can be quite steep.  This means your customer acquisition costs can also be quite high.  You might spend thousands of dollars on advertising to acquire a single patient for example.  

8.  Nursing Home Profit Margins

Nursing home profit margins can range from 5% on the high end to 1% or even negative in some cases.  Even though profit margins are in the low single digits, nursing homes generate a significant amount of revenue per patient, so a nursing home can still generate a handsome profit for an owner. 

9.  How Much Do Nursing Homes Make

The average nursing home in the US generates roughly $3.9 million in annual revenue. 

We calculated this based on the fact that IBISworld estimates the US nursing home market to be $142 billion annually with 36,195 facilities.  This averages out to just over $3.9 million in annual revenue per facility. If we apply a 3% profit margin we can estimate an annual profit per nursing home of $117,695. 

In order to forecast how much profit your specific nursing home facility might generate, use our nursing home pro forma and build your own custom forecast. 

Setting up a nursing home is no easy feat. It’ll take lengthy planning, lots of paperwork, and significant overheads. However, with an aging population, the demand for such a company is always going to be high, and with the right business model and sufficient financial backing, you could be on your way to a lucrative and rewarding business opportunity. 

A business plan forms the framework of all of the preparation you’ll need to take on to get off the ground, so follow it clearly, and make sure your data is accurate. From there, get out and market your roles and your residential positions, and see how your idea quickly evolves into a valuable service. 

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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Sales & Marketing Plan for a Nursing Home (Example)

• December 29, 2023
• Business Plan , Sales & Marketing Strategy

Running a successful nursing home involves more than just providing excellent care; it requires a strategic approach to marketing and sales. This comprehensive guide aims to assist in crafting a tailored sales and marketing plan for the business plan of a nursing home .

In this guide, we’ll dive into the analysis of your market, shedding light on your competitors, and discerning the needs of your potential residents and their families. Following that, our focus shifts towards the creation of your nursing home’s brand identity and its strategic positioning in the market. 

Subsequently, we delve into an exploration of diverse marketing channels that will assist in effectively reaching potential residents and families. Finally, we scrutinize various sales strategies designed to elevate revenue and enhance resident satisfaction.

Nursing Home Business Plan

Download an expert-built 30+ slides Powerpoint business plan template

Market Analysis

Understanding the market landscape is crucial for positioning your nursing home strategically.

Competitive Analysis

To better understand your competitors:

• Identify Competitors: Identifying competitors goes beyond just understanding their services; it’s about comprehensively evaluating their strategies and how they position themselves in the market. Assess their strengths and weaknesses relative to your nursing home, including unique selling propositions (USPs), care quality, pricing models, and customer satisfaction levels.
• SWOT Analysis : The SWOT analysis should not only concentrate on internal aspects but also consider external factors. Explore opportunities to innovate, address weaknesses, leverage strengths, and mitigate threats. This analysis will help you tailor strategies that capitalize on your strengths and opportunities.

Target Audience Profiling

Gaining insights into your potential residents’ demographics and psychographics:

• Demographic Insights: Define the age range, health conditions, and specific care needs of your potential residents. Consider factors like the prevalence of chronic illnesses or specific care requirements within your target demographic.
• Psychographic Details: Gain deeper insights into their interests, preferences, and lifestyle choices. Understand what activities or amenities would appeal to their lifestyles, hobbies, and social preferences.

Branding and Positioning

Develop a strong brand identity for your nursing home to make it stand out in the market.

Brand Identity Development

Crafting a distinctive brand identity:

• Share Your Story: Craft a narrative that goes beyond the founding story. Emphasize the emotional connection by sharing compelling stories of residents and staff, focusing on compassionate care and the unique healthcare philosophies that drive your nursing home.
• Visual Identity : Develop a consistent visual identity across all touchpoints. Ensure that logos, color schemes, signage, and facility ambiance align with the nursing home’s values and resonate with your target audience .

Defining Your Nursing Home’s Unique Proposition

Articulating what sets your nursing home apart:

• Articulate Unique Offerings : Highlight and communicate what sets your nursing home apart. Be it innovative care programs, compassionate staff, specialized amenities, or advanced healthcare technologies, emphasize these unique offerings.
• Positioning Statement: Create a clear positioning statement that succinctly communicates your nursing home’s values, mission, and exceptional care approach. This statement serves as a guiding light for all marketing and communication strategies.

Marketing Channels

Utilize various marketing channels to increase awareness and attract potential residents and their families.

Digital Marketing

Leveraging online platforms effectively:

• Utilize Social Media: Utilize social media platforms like Facebook, LinkedIn, and Twitter not only for promotions but also for sharing resident success stories, health tips, and insights into daily life at the nursing home.
• Email Marketing: Develop engaging email newsletters featuring healthcare articles, upcoming events, resident success stories, and updates on the facility’s services and improvements.
• Website Development: Develop a website with intuitive navigation, providing comprehensive information about the facility, care services, staff profiles, testimonials, and blog content focusing on healthcare advice, wellness tips, and community engagement.

Local Promotion and Community Engagement

Participating actively in the local community:

• Regular Community Newsletter: Produce a community-focused newsletter highlighting events, resident stories, and healthcare tips. Distribute this newsletter to community centers, libraries, and local businesses to enhance visibility and engagement.
• Participate in Community Events: Host or participate in health fairs, senior expos, and workshops on relevant health topics. Offer talks and seminars addressing common concerns of the elderly community.
• Collaborate with Health Professionals: Forge strong partnerships with local healthcare providers, hospitals, clinics, or physicians for mutual referrals and collaborative care programs.

Promotional Strategies

Implementing strategies to entice potential residents:

• Offer Trial Stays: Provide short-term stay options for potential residents to experience the nursing home firsthand, interact with staff, and understand the care environment.
• Referral Programs: Offer discounts, additional services, or referral bonuses to current residents or their families who refer new residents to your nursing home.

Sales Channels

Implement effective sales strategies to ensure a smooth admission process and enhance resident satisfaction.

Admissions Process

Facilitating smooth admissions:

• Streamlined Admission : Simplify the admission process with clear documentation, providing supportive staff assistance and guidance throughout the admission journey.
• Personalized Tours: Offer tailored tours to prospective residents and their families, showcasing the facilities, accommodations, recreational areas, and personalized care options available.

Continual Improvement

Continuously refining and adapting sales and marketing strategies:

• Regular Review: Continuously evaluate the effectiveness of sales and marketing approaches, ensuring alignment with the evolving needs and expectations of potential residents and their families.
• Feedback Integration: Encourage and welcome feedback from residents, their families, and staff to refine and improve approaches, ensuring sustained enhancements in service delivery and communication strategies.

Collaboration with Health Professionals

Building relationships for referrals:

• Referral Programs: Establish referral programs with local hospitals, healthcare practitioners, and home healthcare agencies. Incentivize referrals by offering mutual benefits or exclusive services.
• Collaborative Care Programs: Form collaborative care programs with healthcare providers, offering comprehensive healthcare solutions that benefit residents. These programs ensure seamless transitions between care settings and facilitate coordinated care.

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