As a senior living CEO, you’re responsible for increasing net operating income, and you’re no stranger to doing what it takes to ensure revenue is flowing and operations are successful.
While it doesn’t help that NIC is reporting assisted living occupancy has hit lows from 2009 and that several senior housing markets have seen inventory growth of over 10%, that’s not the worst part.
On top of intense competition…
Investors are pressuring you to achieve gains—with less resources than you’ve had before.
If you’re facing expectations to increase net operating income without the tools you need, this article provides a strategy to drive revenue across your portfolio. Here are our 3 tips for charting a path forward.
1. Identify Income-Producing Activities
Meeting revenue goals starts with identifying activities that actually generate income—not those that simply improve your bottom line.
While cutting operational expenses is important, it’s critical to recognize the value of the other activities your executive directors oversee.
The key to liquidity is moving the needle on occupancy, which means you’ll need to pinpoint the activities that actually create revenue. Take a moment, and consider what tangibly impacts occupancy across your properties. These can include…
- Communicating with and closing leads.
- Community outreach.
- Referral development.
- And more.
Once you’ve completed this step, it’s time to…
2. Rework Your Strategic Plan for Increasing Net Operating Income
Once you’ve outlined the activities that improve your top-line revenue, it’s time to rework your strategy for how you’ll increase net operating income.
For each income-producing activity, begin to outline….
- The key metrics that indicate the successful completion of your goals. Clearly define the numbers you want to achieve.
- The key sales benchmarks you expect your executive directors to meet. Executive directors should strategically define weekly benchmarks for sales, such as projected inquiries or referrals needed. To effectively drive results, they should also set standards for inquiry-to-tour and tour-to-move-in conversion ratios, follow-up call expectations, referral outreach visits, and more.
However, while executive directors should be the sales leaders—just as they lead all departments within their communities—they should not be responsible for both operating and selling. With high-acuity residents and employee turnover, the responsibility is too much. For communities with over 60 units, you must have dedicated sales professionals who are trained to sell in today’s competitive environment.
- The key sales infrastructure your individual communities need to experience growth. Driving net operating income is more than simply providing your properties with human resources. You’ll need established internal systems to meet your growth objectives.
This requires a defined system to…
- Clearly outline sales goals based on expected outs and actual conversion metrics.
- Identify at-risk residents early so you salvage as many from moving out as possible.
- Ensure sales and operations are working together.
- Empower operations and nursing to work as one cohesive unit to gain new residents while keeping current ones as long as possible.
- Provide proper reporting to measure and record success.
Once you’ve refined your plan, it’s time to get the resources you need to accomplish your goals. That’s when you’ll need to…
3. Offer Investors a Tangible Solution
Let’s face it. Investors are far less interested in hearing about your limited resources than they are about how you’ll positively impact their bottom line so they have something to report to shareholders.
If you want your REIT or organizational stakeholders to provide the resources you need to do your job, here are three things you must ensure.
First, you’ll need to educate investors about how your revenue-growth strategy will actually produce results.
Second, you’ll need to prove that certain resources are critical for achieving those results.
Third, you’ll need a strong accountability plan in place to ensure that education and investment in financial resources or patience pay off!
If you’re unsure of how to build a strategic plan that will increase net operating income and win the favor of investors, rely on Bild & Company.
We work with senior living investors daily and know exactly what they are looking for. Understanding what it takes to make them happy, we help you enjoy a win-win solution—investors get the returns they desire, and you get more investment for growth.
We recognize the pressure you’re experiencing, and we’re ready to help you…
- Create an overarching strategy for your portfolio.
- Identify solutions that close your revenue gaps.
- Make your case to investors so you get the support you need.
Our team attends investor calls, and we can prepare reports for your critical investor calls and board meetings.
Talk with Liz Simpson and Traci Bild to see how we can implement a revenue-driving infrastructure across your properties to help your portfolio net up and grow in 90 days or even less.
To learn more, simply contact us online, or give us a call at 1-800-640-0688; ask for Liz Simpson to set up a call with your core leadership team, Traci Bild, and Liz.
This will be the time to work ON, rather than IN your business.
