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The senior care industry is a fast pace growing industry. Life expectancy increased dramatically in the 20th century, especially in developed nations. Life expectancy at birth in the United States in 1901 was 49 years. At the end of the century it was 77 years, an increase of 57%.
The life expectancy will be increasing in the foresee future. So there will be more senior care facilities needed. Evergreen Senior Living is poised to take advantage of this trend.
Our company’s strengths are here: one of the founders is a Nurse Practioner and Registered Nurse with many years’ hands-on expertise in senior care industry and the other founder holding his Realtor license and has several years’ experiences in realty investment. Our founders’ background experience, skills, strengths will personally bring to this new venture. Therefore this is a perfect combination for the hardware (land/building) and the software (the care for the seniors) and it will make the company succeed.
Our major competitive strengths will be that since our facility is relative small and we should know each resident very well and make them feel like home. Also we will use the most energy saving air condition and other electrical devices to save our cost, so we can get a competitive pricing for our resident.
We have selected Corporation as our legal form of ownership. We did not select Sole proprietor, Partnership, nor Limited liability Corporation (LLC), because we think senior care industry is a promising and only Corporation can handle
I. Products and Services
We offer independent and assisted living for anyone who do not need 24/7 skill nursing services and can get out of beds using toilet on her/his own with little or no help from our staff. We also provide service for people who have Alzheimer's or other forms of Dementia. We provide meals three times a day and snacks twice a day for all our residents.
In the past few months, we have visited dozens of senior care facilities and researched all the possible information we could find on internet, libraries and county court houses about the senior care, so we strongly believe our facility and service will be a combination of all the goodies of all the facilities we visited and give our senior residents the best service. That extensive research will give us competitive advantages over other facilities.
We pick Forsyth County as the location for Evergreen Senior Living. The location is an advantage to other PCHs. Because from our research, we found out there are very few PCH in Forsyth County, but its population increased at the fastest pace among Georgia counties. From 2000 to 2005, its population increased 41%, comparing with its adjacent counties, such as Gwinnett County 23%, Fulton County 12% (http://en.wikipedia.org/wiki/Forsyth_County,_Georgia)
Furthermore, Forsyth County is a part of the Atlanta metropolitan area. The senior citizen may come from all over the metropolitan area.
Our pricing is competitive as follows:
Large room, with 250 square feet room, $80/day
Smaller room, with 200 square feet room, $65/day
Additional fee for assisted and Alzheimer’s care ranging from $10/day to $40/day.
II. Marketing Plan
We believe Evergreen Senior Living is great, but we still have effective marketing, and with careful, systematic research.
We start with secondary research using published information such as industry profiles, trade journals, newspapers, magazines, census data, and demographic profiles. Let’s first take a look at the stock charts for the top 6 public traded long-term care facilities companies by market cap:
Company Name Symbol Market Cap Chart link
Brookdale Senior Living Inc. BKD 4.96B http://finance.yahoo.com/q/bc?s=bkd&t=2y Manor Care Inc. HCR 3.96B http://finance.yahoo.com/q/bc?s=HCR&t=my Sunrise Senior Living Inc. SRZ 2.03B http://finance.yahoo.com/q/bc?s=SRZ&t=my Kindred Healthcare Inc. KND 1.28B http://finance.yahoo.com/q/bc?s=KND&t=my Genesis Healthcare Corp. GHCI 1.23B http://finance.yahoo.com/q/bc?s=ghci&t=5y Assisted Living Concepts Inc. ALC 836.13M http://finance.yahoo.com/q/bc?s=alc&t=6m
From above charts, we can immediately conclude that long-term care industry is a fast growing industry.
Recently, Brookdale Senior Living Inc. bought two private owned facilities with a total of 675 units for $101 million.4 According to these sales figures; it is about $150,000 per unit. For 24 units Evergreen Senior Living, it should be valued at about $3.6 million,
Our primary research starts with site visits to dozens senior care facilities in Dekalb, Forsyth, Fulton, Gwinnett and Cobb County ranging from a few residents to a few hundred residents. The price range for those facilities is from $1800 to over $4,000 per resident per month with a non-refund community fee or deposit equals to one month fee.
Economics
In metro Atlanta area, there are a few hundreds senior care facilities with a total sales of about 1 billion dollars. For those facilities we visited, the occupied rate is about 90% which is much better than most of the hotels.
· The total size of long term care market is a many billion dollar market. We can add the total valuation for the top 10 long term care companies. It is about $17B.
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Current demand in long term care is huge as we mentioned earlier that the Life expectancy at birth in the United States increased 57% from 1901 to the end of the century.
· Trends in target market— as people grow older, they are and less social and prefer stay in a smaller environment, as in the 24 beds only Evergreen Senior Living. Therefore smaller PCH has more growth potential and more opportunity.
· The barriers to entry do we face in entering this market with our new company:
o High capital costs – we estimated that to build the 24-beds facility, we need $600,000 to $800,000.
o High expenses – staff has to be 24/7 on duty and the salary expense is high.
o High marketing costs – no one knows Evergreen Senior Living, so to market our company, we need roughly $10,000 for senior placement agency, internet, brochure printing etc.
o Consumer acceptance and brand recognition - Evergreen Senior Living is new, so no one will recommend us based on his/her living experience.
o Training and skills – all our staff has to get CPR certified TB free check, and a few hours training credit each year.
· To overcome the barriers:
o Apply a loan for $600,000 for building the facility and for marketing. If the interest rate is %8.25, then the monthly payment is about $4,500 for 360 months. Use the equality line (about $200,000) as backup.
o Use senior placement agencies, internet, print brochures etc to get consumer acceptance and brand recognition.
o Work closely with government agencies to get all the necessary/required training and skills.
· How could the following affect our company?
o Change in technology – senior care is a labor intensive industry and has little connection with high tech, so the technology change will has little or no impact on us.
o Change in government regulations – yes, it will affect us, and we will abide by all the laws and regulations.
o Change in the economy – If the economy is bad, and people lost job, it will have limited impact on us. Senior citizens have no job, and they only have money in the bank or/and from retirement accounts. |
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发表于 2013-2-23 12:31:53
发表于 2013-2-22 19:17:31
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