With lots of merger and acquisition activity, you may be wondering if it’s time for you to follow suit. I’ve been niched in seniors housing and healthcare for close to fifteen years. I regularly see the clients we have served throughout the years featured in the media and seniors housing news channels due to mergers, acquisitions or as part of a REIT purchase. While the industry is getting bigger, it actually seems to be getting smaller. So what do you do?
If you plan to keep your business where it is right now, be prepared for the many changes you need to make to continue “business as usual.” With the future of care here, you will need to invest today to prepare for what’s coming in the next two to three years. This means being able to compete with the big boys in the form of outcomes, data, information sharing and more. Don’t be intimidated or discouraged, with proper planning you can do it- and there is still plenty of time.
Should you be considering your options, the best thing you can do right now is build the value of your company. Should you decide to sell or merge, you will be better compensated for your efforts if you have a higher value. I find it amazing how many companies sell when occupancy and revenues are average versus strong or excellent. The cash flow and profits that go directly to the bottom line when occupancy averages 96-100% at market rate is astronomical compared to when it’s not. Additionally more buyers will be competing over your purchase.
I once asked a mentor of mine if I should get into seniors housing management. I asked, “What is the most difficult aspect of being a management company?” I was floored when he said, “Sales!” He went on to explain that operations, while not easy, could be mastered quickly. Sales on the other hand- not so easy. Operators regularly struggle to move the occupancy and revenue needle and in turn fail to meet financial expectations- it’s just not something people get or in most cases like to do. Of course I loved what he was saying because sales is our thing around here! At Bild & Company, teaching people to sell is like instructing them to ride a bike- it’s fun and easy (so long as the student is ready to learn).
Here is my challenge to you. Get your ducks in a row now to ensure you have more options tomorrow. Maintain average occupancy and receive mediocre offers for what you worked so hard to build. On the other hand, invest in your people; implement solid sales infrastructure, systems and a culture that demands full capacity at market rate rents and play hardball. When investors start knocking and offers rolling in, you will have something viable to look at and that can be pretty exciting!
So what does it involve to do what I’m talking about? You need to access your sales department as a whole: Who is running it, what is his/her experience, what results are he or she producing, how are new hires trained, what sales systems (if any) are being used, what does your compensation plan look like, do Sales Directors understand it, is that plan competitive compared to competitors, what is the expectation in the sales department and is it clearly communicated, what happens if someone doesn’t meet those expectations, who manages sales results, is community outreach being done and if so, in what capacity, how many referrals does each community get and who is referring, how do they perceive what you do, what message is your website conveying, how many people are visiting it and where are they coming from, why don’t you get leads from your site, what does the community at large think about you and what do they think you do- could they think you are a nursing home when in fact you are assisted living and what is being done to correct that misconception- or is everyone acting like it isn’t happening? Need I say more? There is so much to do in order to get ready for the next phase of business. Yet- as my favorite quote reads, “It’s a game of inches!” Don’t panic. Prioritize and take it one step at a time.
This sales memo will probably do one of two things for you- put you into a mental panic or get you ready to take action. Business is always about learning, growing and pushing its leaders and teams to do better, be better and leave a bigger footprint on the world. Let this memo inspire you to take action and pull you out of the box and into the future of care, as an innovator, leader and an organization others seek to model.
If you want to do something yet don’t know exactly what to do, it’s okay; you’re not alone. Take a deep breath and know that help is on the way- your challenge is our passion. No matter where you are, odds are we’re familiar with your market, product type and situation. That’s what 15 years of focus on revenue growth in seniors housing and care will do for a company. We would love to help you start the conversation and should you want to take action, we would love to help with that too! Please, reach out to our CEO, Seth Garber at SGarber@TraciBild.com to schedule a brief call so you can close your eyes and sleep tight tonight!
Written by Author Entrepreneur & Founder of Bild & Company Traci Bild