SCORE Presentation Senior Care as a business: Tips of the trade

1. SCORE PresentationSenior Care as a business: Tips of the trade Everything your clients want to know & how you can help

2. Lia Smith-Pratt, CEOA Better Solution Home Care & Nursing, Inc Founded 2000, Medicare Certified, and Franchise Systems • Began as a Caregiver/CNA 1990 • Opened ABS 19 years ago  • Currently 9th largest Privately-Owned Agency in SD at 4.8mm • Published Author: Available on Amazon • "Smart Steps to Big Dreams" • "The Home Care Bible" • "Aging with Dignity" • Board of Directors: Ca. Association for Health Services at Home  • Chair Elect: SD Regional Home Care Council • SCORE Mentor

3. Why do people want to get into the senior space? • Seniors are the fastest growing population in California — expected to double over the next 25 years.  • A whole range of experiences awaits them, from positive lifestyle changes to stresses in personal finance and access to healthcare and affordable housing.  • This population has the largest hurdles facing them and the least amount of choices • As we age and grow, no one is prepared • How many of you....Plan your vacations? Your children's college? Your retirement?  • We do not plan for home care. That makes it a necessity not a luxury and creates a booming business, with under-educated consumers • Most seniors want to age in place

4. When mentoring someone who wants to go into the senior care spaceWhat do you need to ask? • Why? Do they have a passion?  • The space is more difficult than it looks • Do you have a Partner? • It is very difficult to do ANY senior business alone • Are you well funded? • Starting a home care agency without a franchise system can cost up to 30K • Starting with a franchise system can cost up to 100K • Opening a facility you need a home • That home may sit empty for 18 months • Are you looking at starting on your own or with a franchise? (see above) • Facilities do not have franchises except Brightstar

5. What are the most lucrative businesses in the senior care space? • Home Care Agencies - can be very lucrative but have very low net margins: about 5%-15% depending on structure • Home Health Agencies are also very lucrative with about an 8% -18% net margin • RCFE facilities - 6 bed higher end will net you about $35-$50,000 per year • RCFE Facilities - 15 bed can net as much as $250,000 per year This Photo by Unknown author is licensed under CC BY-SA.

6. Most common Senior BusinessHome Care/Home Health

7. What is Home Care?

8. What are the barriers to entry into the Home Care Space in California?

9. Recommendations to give when a client wants  to open a Home Care Agency • Franchises are best in California • The licensing process is done for you • The marketing/billing/staffing/training is provided • The support is helpful • Con: the royalties can be up to 7% • Second option is a consultant • Many of them in the home care space • They will help you license, and some will coach you to get started • One flat fee or ongoing coaching (resources on the last page) • Third option is to open on your own • Not recommended unless you have previous experience

10. Home Health/Nursing - Medicare and Private/Insurance PayBarriers to entry • Tip to Mentors: Get on Medicare!! (Pro Tip) • Opening any type of skilled nursing agency in California requires a Registered Nurse on staff  • Pay range from $90K-$140K per year • They are hard to find • They either do paperwork or clinical • The wheels of Government move very slow when trying to get licensed • There is an over 100 page application process • You have to get licensed first by California, then by the Federal Government, then by an accrediting body • You can sit with no patients for up to 2 years • Waiting on survey • Very competitive Market • Marketers for HH cost up to $90K/Nurses up to $140K

11. Recommendations for those wanting to start a Home Health Agency • Get a consultant--Costs range from $8K-$15K  • They will guide you through the process • Make sure you have an RN who will work maybe part-time while you go through the process • Friends and family at times work best for this • They will "hang their license" for a fee • Make sure you have experience in Home Health • What do you know? Are you a Marketer or have you been a Director? • Make sure you are well funded - costs can be up to $75-$80K • Just your license costs are $2,670 • Your survey costs are $1,370 per day (usually a 3 day survey)

12. Hidden difficulties with Senior Carethat most aspiring owners don't think about

13. Questions to Ask: Home Care/Home Health • Can you manage people? • The more clients you have the more caregivers you need to manage • The family members of facility residents can be a handful • Can you multi-task? • You will need to staff clients, market, payroll, billing, etc. • You will need to deal with assessments • You will need to deal with regulations  • Do you enjoy marketing? • Home care is constant marketing and networking • Every business in the senior care space requires marketing to Hospitals, Skilled Nursing Facilities and other healthcare providers

14. SCORE Resources: • Home Care clients may be long term  • Home Care clients need a variety of mentors (Financial-Marketing-insurance ect.) • Business Plan Webinar/ Business Canvass Webinar (Free) by Jim Horan • Quick Start Marketing Tool:  • 12- month Projection Profit and Loss:  • Creating a P&L : (courses on demand) free workshop • For Funding: Business Plan Template in the library and a financial mentor.

15. Facilities and other Senior Space Businesses~~Clients Ask about • Placement  • Residential Care Facilities • Senior Movers • Conservators

16. Other Senior Business OptionsThat You May Hear About • Placement Agencies • These agencies are very easy to start and the business model is simple and clean. Owners are paid to place seniors in Communities and Assisted Living Facilities where they have contracts. There is no cost to the seniors; the Communities pay for the service • Board and Care or Residential Care Facility for the Elderly (RCFE) • These are harder to open but in high demand • You can charge from $3,500-$10,000 per bed (depending on location) • They can be 6 beds up to 15 beds for certain regulations and over 16 beds have higher regulations  • They can be opened with an ADA compliant home and are licensed by the DSS • Including fire inspection/home inspection/interviews

17. Mentoring On: Opening Board and Care Facilities ~~ Questions to Ask your clients

18. Other Senior Business Options Board and Cares (Cont.) • Your home must be approved by the state • You must submit application • You need caregivers • Independent Living Facilities • Not regulated at all • Many are lower income (not much profit) • You don't need caregiving staff • Medical Devices • Lifeline/Med alert franchise systems • Senior Movers - Helping seniors' transition from their home to a community • Must have Hoarding Experience • Senior Conservators/Fiduciaries • And many others 

19. Mentoring On: Opening Board and Care Facilities ~~ Questions to Ask 

20. Questions for Facilities as a business Cont.

21. Business Options: Senior SpaceMedical Device Sales, Senior Movers~Conservators, Fiduciaries, Adult Day Care • Lifeline/Life Alert, etc. are franchise systems easily purchased • Must be mechanically inclined to be able to install the unit • Senior Movers tend to need "hoarding training"  • Most seniors that move have crowded households • They tend to require estate sales or options for extra furniture and household goods • Conservators must be willing to go to court and handle difficult client situations • These are watched carefully by the Probate Court • Adult Day Care options - must be approved by Medicare This Photo by Unknown author is licensed under CC BY.

22. Summary: Senior Care Space This space is very lucrative when done correctly. and with the right mindset, but is often misunderstood, as easy, or quick. Prospective business owners must have a passion to help others and be detail oriented in this space.  Seniors are running out of money quickly and the cost of labor is rising, so business plans are necessary for those that are new to the industry.  Guide people correctly in the senior care space - many people cannot handle the stress and the long term ramp up that this business opportunity requires.  Mentorship in the Senior Space is on-going, as the industry is changing. Your Clients:  • Clients must be well funded • Clients must have experience in the senior space • Clients must understand what they are getting into • Clients must be guided through the process • Clients should have prior business knowledge

23. Resources: • California Department of Social Services - CDSS Public Site • For Home Care and RCFEregulations         www.cdss.ca.gov • The Home Care Bible. L. Smith- Pratt • S&S Consulting Home Health http://sshcconsulting.com/about.html • CAHSAH California Association for Health Services at Home  https://cahsah.org/index.php • Home Health  www.cdph.ca.gov

24. Thank you lsmith@absihc.com