Risks of Running an Assisted Living in Rockford, IL
An assisted living home is a residence designed for older adults who are still mobile but need help with one or more necessary activities (bathing, eating, and so on). Roughly speaking, an assisted living home is the midpoint between an independent living community (where healthy, youngish seniors live) and a nursing home (which exists for the frailest of seniors who require 24/7 care). The typical assisted living resident is a woman, about 85, who stays for two years.
Unlike nursing homes, assisted living in Rockford IL operate largely free of federal regulation. Compliance and paperwork are state-specific; generally speaking, permits are easy to get.
Semantics vary by the state as well. In Rockford, where you live, small assisted living homes are known as adult family homes. In other states, they’re called care homes, adult care homes, residential care facilities for the elderly, or some other variation of terms.
It became clear that you hadn’t grasped three major risks of the business. Any one (or three) were capable of blowing a hole in my would-be business’s profitability.
The single biggest cost for an assisted living home is labor. Were you to open a home, you would need to pay caretakers around the clock. Either that, or you would be the overnight caretaker. At least in the early days, I’d be chained to the business. Many assisted living in Rockford, IL are family-run businesses. That means mom, dad, adult children, and extended family members alternate as caretakers. This type of arrangement minimizes wages paid (including overtime). Other homes make use of volunteer labor. Volunteers don’t do the care-taking, but they do provide other services for the residents (e.g., entertainment) that make care-taking easier. In some cases, high school and college students can earn course credit by volunteering at an assisted living home.
Limited Pool of Prospects
The monthly cost of an assisted living home—$3K and up—rules out the vast majority of the senior population as prospects. Most seniors cannot afford anything more than a short stay in an assisted living home. Unlike nursing homes, assisted living in Rockford, IL generally do not accept Medicaid or other government funding. They pay cash from their savings, or they sell their house in order to afford monthly payments. Which leads to the third risk.
A small pool of prospects means intense competition for every resident at an assisted living home. Typically, the family of a resident looks at two, five, even ten homes before making a decision. That means always selling, always being “on,” and hopefully, always closing. Many assisted living in Rockford, IL homeowners are nurses or nursing assistants. They have a deep reverence for the elderly and take excellent care of them. However, these same compassionate people sometimes feel dirty or unethical trying to close customers. So to keep their pipeline full, assisted living homeowners often rely on the referral agencies. These agencies charge a fee for every resident who moves in. Residential turnover is unpredictable and often high, regardless of satisfaction level (for example, instances such as death or illness). Which means an owner may pay multiple fees for the same bedroom in one year. Not surprisingly, owners come to resent these agencies.