As our Break-even Analysis (below) shows, Bright House would need 13 residents per month to break-even at current funding levels. We intend, of course, to do better than this.
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.
We will be closely watching two things:
The projected surplus and deficit follows, below.
The following Break-even Analysis table shows that with our forecasted operating expenses, including personnel, we need to serve 13 residents to cover costs. We plan to reach this fairly conservative goal by the second month of operations (see the Resident Forecast, above).
Our projected Cash Flow follows. Of special note are plans to sell off two back acres at the far south end of the property in July to local developers who have approached us about planning two large, single-family residences. (Developers' sketches included in appendix.)
Also of note are future fundraising plans: With the help of our Development Officer, we plan fundraising campaigns in years two and three of $35,000 and $40,000, respectively. These funds will contribute to our forecasted long-term loan payments, since we plan to pay off the principal ahead of schedule.
Our projected fundraising goals and anticipated expenses are conservative, including only a modest expected increase in income from residents in years two and three; yet, even at these levels, our plan maintains a healthy, positive cash balance throughout.
Our Balance Sheet shows a continued high net worth, reflecting the value of our property, facility, and medical and communication assets.
The Ratios table which follows shows how we differ in asset and income structure from other continuous care facilities.