Bright House
Financial Plan
Forecast
Key assumptions
A "full" elder care facility is generally 90% to 95% full. Our non-standard model allows us to forecast for full occupancy in the main building, since turnover rates for assisted living residents are expected to be quite low (1-2 per year, at most). The skilled nursing facility, on the other hand, requires a certain number of empty beds to offer the flexibility needed to accommodate shorter stays. We therefore are projecting reaching "capacity" of our eleven-bed facility at 10 full beds.
Our resident monthly prices are based on the current Medicare nursing-hours-per-resident-day rates for our kind of services. Medicare patients are billed at roughly $135/day for nursing care, not including the cost of any medication to be administered by our staff. Our private patients are billed at a slightly higher rate to account for the low Medicare reimbursement rate, but also to pay for the extra benefits they receive as part of living at Bright House. Our rates are roughly 2/3 of our nearest competitors, the difference being made up for in donations, and savings gained through staff retention and the use of highly trained, flexible, Elder Assistants.
The small size of our facility allows us a cost savings on maintenance and grounds.
One other important assumption concerns payables: We have assumed collection days of 60, which averages our private residents’ monthly up-front payment, and the typical 60-90 day reimbursement rate from Medicare.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of funds
Start-up Expenses
One of the largest items in our Start-up budget is a computerized medical records system. Preliminary designs of this system have already been constructed by DigInfoMedTel. In addition to the obvious benefit of allowing multiple care-team members to easily exchange information as they change shifts, this system will allow our residents and staff to keep track of chronic conditions, monitor gradual but serious changes in condition which might be overlooked in day-to-day interactions, and corroborate quantifiable medical data for our Medicare patients in the skilled nursing facility.
Start-up Assets
Current (Short-term) Assets include $6,000 of start-up inventory (bedding, cleaning and disposable medical supplies) and non-expensed, smaller medical equipment that will depreciate quickly, and will need to be replaced in year four or five.
Long-term assets include our existing location, the former Wayfield Bed and Breakfast, currently assessed at $400,000 including renovations. The location was willed to us by Evelyn and Jack Bright last February, with the condition that we include a small Medicare facility as part of the overall plan. This category includes new Long-term Assets needed as follows: $200,000 for (long-term, resalable) medical equipment, and $150,000 for initial furnishings, after the renovation.
Medical Equipment:
- 1 Fully-loaded Crash Cart
- Standard monitoring equipment (blood pressure, sugar, etc.)
- Call-button system
Furnishings:
For the common areas of both buildings, we will need couches, self-lifting recliners, tables, and chairs suitable to our residents’ needs. We have allocated $35,000 for furnishing the four common rooms.
Each private room will need a hospital-capable bed, linens, a dresser, and a phone, at the minimum. With the remaining funding, that leaves just over $6,000 per room. This budget will allow us to provide attractive, functional, and comfortable surroundings to our residents in their new homes. Each bedroom in the main building will have enough remaining space that residents can bring plenty of familiar furniture with them (up to two side tables and wingback/reclining chairs, and a second dressing table or its equivalent).
Sources of Funds
We will get a low interest loan for $210,000. We have collected donations and pledges of $291,000 Our founders will provide $407,000
Statements
Projected Profit and Loss
2018 | 2019 | 2020 | |
---|---|---|---|
Revenue | $2,184,120 | $2,791,200 | $2,850,720 |
Direct Costs | $218,412 | $279,120 | $285,072 |
Gross Margin | $1,965,708 | $2,512,080 | $2,565,648 |
Gross Margin % | 90% | 90% | 90% |
Operating Expenses | |||
Salaries & Wages | $657,600 | $877,608 | $1,106,151 |
Employee Related Expenses | $131,520 | $175,522 | $221,230 |
Marketing | $65,524 | $83,736 | $85,521 |
Fund raising | $21,841 | $27,912 | $28,507 |
Rent | $84,000 | $84,000 | $84,000 |
Utilities | $14,400 | $14,400 | $14,400 |
Insurance | $18,000 | $18,000 | $18,000 |
Vehicle payment – 2 vans | $26,400 | $26,400 | $26,400 |
Amortization of Other Current Assets | $0 | $0 | $0 |
Total Operating Expenses | $1,019,285 | $1,307,577 | $1,584,210 |
Operating Income | $946,423 | $1,204,503 | $981,438 |
Interest Incurred | $11,590 | $9,300 | $6,868 |
Depreciation and Amortization | $62,500 | $62,500 | $62,500 |
Gain or Loss from Sale of Assets | |||
Income Taxes | $52,340 | $67,962 | $54,724 |
Total Expenses | $1,364,127 | $1,726,459 | $1,993,375 |
Net Profit | $819,993 | $1,064,741 | $857,345 |
Net Profit/Sales | 38% | 38% | 30% |
Projected Balance Sheet
Starting Balances | 2018 | 2019 | 2020 | |
---|---|---|---|---|
Cash | $78,000 | $968,665 | $1,551,961 | $2,427,216 |
Accounts Receivable | $0 | $0 | $0 | |
Inventory | $6,000 | $23,160 | $23,760 | $23,760 |
Other Current Assets | $31,000 | $31,000 | $31,000 | $31,000 |
Total Current Assets | $115,000 | $1,022,825 | $1,606,721 | $2,481,976 |
Long-Term Assets | $750,000 | $750,000 | $750,000 | $750,000 |
Accumulated Depreciation | ($62,500) | ($125,000) | ($187,500) | |
Total Long-Term Assets | $750,000 | $687,500 | $625,000 | $562,500 |
Total Assets | $865,000 | $1,710,325 | $2,231,721 | $3,044,476 |
Accounts Payable | $0 | $0 | $0 | |
Income Taxes Payable | $20,774 | $16,849 | $13,390 | |
Sales Taxes Payable | $41,688 | $41,688 | $42,408 | |
Short-Term Debt | $37,130 | $39,420 | $41,851 | $44,433 |
Prepaid Revenue | ||||
Total Current Liabilities | $37,130 | $101,882 | $100,388 | $100,231 |
Long-Term Debt | $172,870 | $133,450 | $91,598 | $47,166 |
Long-Term Liabilities | $172,870 | $133,450 | $91,598 | $47,166 |
Total Liabilities | $210,000 | $235,332 | $191,987 | $147,396 |
Paid-In Capital | $699,000 | $699,000 | $699,000 | $699,000 |
Retained Earnings | ($44,000) | ($44,000) | $275,993 | $1,340,734 |
Earnings | $819,993 | $1,064,741 | $857,345 | |
Total Owner’s Equity | $655,000 | $1,474,993 | $2,039,734 | $2,897,079 |
Total Liabilities & Equity | $865,000 | $1,710,325 | $2,231,721 | $3,044,476 |
Projected Cash Flow Statement
2018 | 2019 | 2020 | |
---|---|---|---|
Net Cash Flow from Operations | |||
Net Profit | $819,993 | $1,064,741 | $857,345 |
Depreciation & Amortization | $62,500 | $62,500 | $62,500 |
Change in Accounts Receivable | $0 | $0 | $0 |
Change in Inventory | ($17,160) | ($600) | $0 |
Change in Accounts Payable | $0 | $0 | $0 |
Change in Income Tax Payable | $20,774 | ($3,925) | ($3,459) |
Change in Sales Tax Payable | $41,688 | $0 | $720 |
Change in Prepaid Revenue | |||
Net Cash Flow from Operations | $927,795 | $1,122,716 | $917,106 |
Investing & Financing | |||
Assets Purchased or Sold | |||
Net Cash from Investing | |||
Investments Received | |||
Dividends & Distributions | ($500,000) | ||
Change in Short-Term Debt | $2,290 | $2,431 | $2,581 |
Change in Long-Term Debt | ($39,420) | ($41,851) | ($44,433) |
Net Cash from Financing | ($37,130) | ($539,420) | ($41,851) |
Cash at Beginning of Period | $78,000 | $968,665 | $1,551,961 |
Net Change in Cash | $890,665 | $583,295 | $875,255 |
Cash at End of Period | $968,665 | $1,551,961 | $2,427,216 |