Assisted Living Market Study – Part Two

Assisted Living Market Study questions often asked . . . for today’s post, I’d like to cover a couple of questions which were not addressed in my prior blog: What is it and why is it important?”

First, it’s important to note that an assisted living market study is an essential first step as you ponder the viability of an assisted living project.  Omitting this step is ill advised at best, unless of course you have millions of dollars lying around and you don’t mind taking unnecessary risks-if you do, please call me, I’ve got lots of things to do with that money!  If you’re prudent like most of us are, then an assisted living market study can provide you with much needed affirmation on the potential for success of your project as well as vitally important peace of mind.

Okay, so let’s delve into a couple of questions we often receive about assisted living market studies.

Assisted Living Market Study “Can I do it myself?”

The answer is, “it depends”.  If you’re doing an assisted living market study to obtain some sort of financing or attract investors, then the answer is “no”, don’t do it yourself.  Most financing institutions and investors strongly prefer that an independent, third party expert provide the assisted living market study, the assessment of what the market data shows, for justifying your senior living project.  (Funny how those people seem to want an objective opinion isn’t it?) However, if you are doing it simply as an internal conformation tool, then perhaps it is something you can do yourself.  If you choose to do this, please make sure that you take the time and do the work required to perform a complete and thorough healthcare feasibility study.  Many of our clients choose to go with an independent third party expert even though they are not required to do so.  Why?  Well, when you’re about to spend many millions of dollars on a project, why not spend a small percentage of that to make sure you’re headed in the right direction.

Assisted Living Market Study “Is it right for me”

Believe it or not, it’s not always the right thing to do.  For example, if you’re already operating an assisted living community and you’re looking at adding on units because you can’t keep up with demand, then chances are, you’ve got a pretty good handle on the market.  And if that’s the case, congratulations and yes, I’m jealous!  In this situation, even if you need financing or investors, it might be worthwhile to explore if you really need the market study.  A financial proforma, determining your cash flow needs, may well be essential, however.

With the exception of a few specific circumstances, an assisted living market study is indeed the right thing for you.  Think of it as an insurance policy that helps in safeguarding the substantial capital that you’re about to spend building your vision.

I’m often amazed at the notion that people balk at spending the money to have an assisted living market study done but yet, are willing to invest large sums of money on a project that has not really been vetted by an independent third party.  But, if you’re reading this, then you are probably part of the prudent population that understands that the key to a successful project starts with a solid assisted living market study.

There are a couple of more questions we are often asked about an assisted living market study and I’ll cover that in my next blog installment.

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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