Assisted Living & Adult Care Businesses in Tucson
Critical Success Factor:
Ratio of Expenses to Sales @ 65-70%
When we refer to the assisted living business, there are actual several different levels of “assistance” that we may be referring to. A given business in the assisted care industry in Tucson may offer some or all of these levels of service, listed below:
1) Home Health Care: personal care, basic home maintenance and limited nursing services for those still able to live in their own home.
2) Congegrated Living: residential, meals and limited housekeeping related services to adults considered to be otherwise self-sufficient
3) Assisted Living: residential, meals, housekeeping related services, medical related programs, and access to 24 hour nursing care for those not considered to be self-sufficient.
4) Continuous Care: comprehensive service offerings for retired persons, including: meals, housekeeping, social offerings and medical services. Typically offers options on a sliding scale based on need, from self-sufficient to the option of 24 hour care. Residents must often purchase a share in the community in return for lifetime care.
5) Nursing Homes: 24 hour care for those who can no longer care for themselves.
For more valuable information to assist you in planing to start or buy an assisted living or adult care facility in Tucson, check out the resources provided by:
- American Health Care Association: www.ahca.irg
- Assisted Living Federation of America: www.alfa.org
- American Association of Homes and Services for the Aging: www.aahsa.org
Background: Things to think about before starting or buying an Assisted Living Facility in Tucson.
One need only look at demographic trends to confirm that the number of aging Americans is at an all-time high, and continues to grow. As of 2010, there were over 12 Million Americans who required some form of long-term care. Statistics show that 40% of people 65 and over will enter a nursing home at some point in their life. Since that is the highest level of adult care, it can be deducted that an even higher number of individuals will require some level of assistance. As a business buyer or investor, it will be important to understand demand, supply, and occupancy levels in the community where you plan to do business..
In spite of the attractive market outlook for this industry, potential buyers and business investors should not assume that it is without its areas of potential concern. Businesses in this industry must operate 24/7, with everything that implies. They are also high-risk, and face associated insurance costs. There is also a strong likelihood that federal regulation of the industry will increase over the next several decades as the percentage of the population requiring these services grows, and healthcare cost concerns continue to invite scrutiny.
The average resident in an assisted care facility pays around $3,000 per month, and expenses should run no more than 65-70% of revenues. Since this is a real-estate intensive business, the SBA keeps an eye out to make sure that buyers are intending to be operators, not just passive investors.
Seller financing for 5-10 years is typically part of any deal, so don’t conclude prematurely that you won’t qualify as a buyer of a Tucson Assisted Living business.
To learn more about this growing industry and the opportunity it represents to Tucson Business investors, either Contact Us or give Carrie Allen a call at 520-909-8242.