Owners and sponsors of current or new assisted living developments usually feel a high amount of distress because they have not followed a carefully crafted plan for development, or because they have tried to save time or money and skipped one of the essential steps to planning their project. But several planning considerations can steer your endeavor onto successful terrain.

DEVELOPMENT CONSIDERATIONS

Anyone planning to develop a new assisted living project or expand an existing one should follow these steps for a successful project.

1. Thoroughly research your market. Market research is more than identifying demographics and demand. A detailed market analysis means you must:

clearly define the geographic area from which you expect to draw the greatest number of new residents

review existing services in that geographic area and potential new competitors

open up discussion with referral sources and decision-makers, soliciting their perceptions and expectations for assisted living

identify potential unfilled market niches.

Before you undertake a multimillion dollar assisted living project, dedicate sufficient resources to assessing and researching your market to avoid developing a white elephant.

2. Complete a realistic financial feasibility analysis. Your financial feasibility analysis must include a capital budget and operating and cash flow projections. Be sure that your capital budget includes all costs related to land, development, construction and financing. Don't forget to figure in the architectural and engineering fees and contingencies for the project and legal and accounting fees. Be sure to include adequate dollars for pre-opening marketing and operations.

Your operating projections should involve several different scenarios with varied pricing, program and amenities options. Use the results of your market research about primary competitors to benchmark your revenue and expense projections. When completing your cash flow analysis, remember that important reserve fund to carry you through the fill-up period. Finally, things don't always work out as planned, so be sure to run a financial sensitivity analysis, showing different absorption rates and accounting for such factors as more agency staffing or delays in the opening date.

Be honest about whether the project really makes financial sense. Ask your most critical and analytical colleague to review the financial data and carefully weigh his or her counsel before proceeding.

3. Assure that your program and product drive physical plant design. Before you call the architect and begin the exciting process of designing your building, develop your models of care and service. Many owners and sponsors venture far down the building design path without spending the necessary time on developing the assisted living program.

Keep in mind that service delivery is more effective and less costly in a physical plant designed to match the program. You also will have fewer change orders during the construction process if you position the program and product to drive the physical plant design.

4. Detail your plans for special programs to fill market niches. Successful assisted living providers identify market niches to creatively meet the needs of persons in their market areas. Recognize unmet needs in your market area and determine whether your project is capable of filling those needs.

To pinpoint these needs, look outside the typical assisted living market that serves frail, elderly persons. For example, market niches may include:

short-stay and respite services

day programs integrated into the regular assisted living programming

services for the non-senior market (e.g., pediatric care, younger adult assisted living, specialized programs for persons with multiple sclerosis, arthritis, Parkinson's or memory loss).

To successfully capture a market niche, you must develop innovative programs with detailed descriptions that operate off realistic budgets and appropriate staffing.

5. Market, market, market and then market some more. Many people think that marketing begins when the project is ready to open and new residents can move in. But marketing already began the day that you conceived of the project. Each decision you made along the way was a marketing decision.

Commit to making decisions that will positively affect your ability to communicate the product and pricing to referral sources and decision-makers. Develop a written marketing plan before groundbreaking, defining strategies to reach target audiences during pre-opening through project fill. Train staff to develop marketing action plans every six to 12 monthsonce full occupancy is achievedand to continually update the plans to adjust for changing market conditions. Resident turnover statistics mandate that you obtain adequate human and financial resources to market on an on-going basis.

6. Be compulsive about operations planning and implementation. Operating assisted living facilities today is not for inexperienced managers. Hire a manager with a track record of successful assisted living operations. It is best to find a manager who is compulsive about planning and implementing all of the steps for pre- and post-opening of the facility.

Use project planning software or even a notebook to list steps and timelines for all of the key operating processes, including budgeting, staffing, policies and procedures, regulatory issues and licensure, supplies and equipment, external contracts, administrative procedures, and all of the other steps that go into a pre-opening plan.

At first, conduct a weekly monitoring and reporting system, and as the opening date draws near, rely on daily monitoring and reporting systems. Make sure that the detailed plan extends into the first six months after opening, since there will be staffing additions as occupancy increases and procedural kinks that will have to be addressed during the initial operating period.

A new or expansion project that goes according to plan is exciting and fun. But first, you have to create your plan. The six aforementioned steps of the "must-do" list represent the beginning of a beautiful plan.

Kathleen M. Griffin is national director, post-acute and senior services, Health Dimensions Group, and president of Valley Consultants Inc., Scottsdale, Ariz. Moraine Byrne is senior vice president of marketing, Health Dimensions Group, Minneapolis.