New Nursing Home

SuperO'B

Hi guys,

Currently at the early stages of researching construction of a new nursing home in the mid-west region. Anybody have any experience in the industry which could lend advice to profitability or tips?

How open are the banks to lending for new businesses at the moment?

gctest50

few bits of ideas

if you had the space - a few of these out the back for those that don't need 24/7 care but need care to be close by

AvyStreet

SuperO'B wrote: »

Hi guys,

Currently at the early stages of researching construction of a new nursing home in the mid-west region. Anybody have any experience in the industry which could lend advice to profitability or tips?

How open are the banks to lending for new businesses at the moment?

Duncan Banatyne apparently got his big break in that sector. Maybe worth looking up his history in that sector.

SuperO'B

That's solid advice, cheers for that, I'll definitely do it.

My partner is a health care professional specialised in older persons care but I have no experience in this industry. I'd be the business side of it so looking to get feel for the numbers on it.

SuperO'B

gctest50 wrote: »

few bits of ideas

if you had the space - a few of these out the back for those that don't need 24/7 care but need care to be close by

This is something that we had considered for when the business is after initial setup and running smoothly. The idea that married couples could move in and be comfortable but have care nearby if required. Hard to thread a line between a retirement village however.

antoinolachtnai

It is a big complicated field and there are plenty experienced operators.

You need a site that you can get planning for and is reasonably close to a population centre and has public transport links. You need a building that allows you to comply with all the regulations in a cost effective way and is sufficiently large to be viable. You need to budget income. The HSE is the price setter in the market and you need to understand how they do business.

Obviously it all costs a lot of money and expertise. I would be inclined to find a partner.

elastico

SuperO'B wrote: »

How open are the banks to lending for new businesses at the moment?

The key word there is "NEW".

An existing customer, call him an experienced and well funded Takeaway business owner, would get support for something like an another chipper that its obvious he is already good at and make sense.

The banks are not interested in speculative investments, so we want to buy 2 acres and build 8 houses or a nursing home or a supermarket etc. on it won't fly.

However, if there are guaranteed government subventions for residents and you know what you are at, with a good bit of collateral yourself, they may look differently on it.

Best thing is talk to a bank.

SuperO'B

antoinolachtnai wrote: »

It is a big complicated field and there are plenty experienced operators.

You need a site that you can get planning for and is reasonably close to a population centre and has public transport links. You need a building that allows you to comply with all the regulations in a cost effective way and is sufficiently large to be viable. You need to budget income. The HSE is the price setter in the market and you need to understand how they do business.

Obviously it all costs a lot of money and expertise. I would be inclined to find a partner.

Do you feel public transport would be important in this? I had thought of it but had put it into the nice to have but not vital category. The site I have in mind is being assessed by an Engineer later this week to see if it is likely to receive planning permission for development. I think after that we will speak with the council, HSE and banks concurrently and see the thoughts and facts from each. We would be building from scratch so it would be a good opportunity to ensure all regulations both present and possible future can be factored in.

elastico wrote: »

The key word there is "NEW".

An existing customer, call him an experienced and well funded Takeaway business owner, would get support for something like an another chipper that its obvious he is already good at and make sense.

The banks are not interested in speculative investments, so we want to buy 2 acres and build 8 houses or a nursing home or a supermarket etc. on it won't fly.

However, if there are guaranteed government subventions for residents and you know what you are at, with a good bit of collateral yourself, they may look differently on it.

Best thing is talk to a bank.

Yes I can certainly see your logic on this. The whole idea came about because the number of people over 65 years of age in the Mid-west region is set to double by 2032 and as it stands there are waiting lists for nursing homes. I think positioning now for an ageing population could be a decent move. What would you consider to be a good bit of collateral on a loan of say €1.2M?

SuperO'B

SuperO'B wrote: »

Do you feel public transport would be important in this? I had thought of it but had put it into the nice to have but not vital category. The site I have in mind is being assessed by an Engineer later this week to see if it is likely to receive planning permission for development. I think after that we will speak with the council, HSE and banks concurrently and see the thoughts and facts from each. We would be building from scratch so it would be a good opportunity to ensure all regulations both present and possible future can be factored in.


Yes I can certainly see your logic on this. The whole idea came about because the number of people over 65 years of age in the Mid-west region is set to double by 2032 and as it stands there are waiting lists for nursing homes. I think positioning now for an ageing population could be a decent move. What would you consider to be a good bit of collateral on a loan of say €1.2M?

To get 1.2mil if you have no background in the business you would be very lucky to get it if you yourself put in the same 1.2mil and bought the land too. As the other poster said being new is a major roadblock for a bank, they will probably dismiss it out of hand unless you can personally sign for the loan and put a personal asset against it.
If you had experience in the business and put in 300-400K of your own money they might look at giving you 1.2mil using the land as an asset.

elastico

SuperO'B wrote: »

What would you consider to be a good bit of collateral on a loan of say €1.2M?

You really need to speak to the bank but last I heard 30% - 50% is what you are talking, so €750K - €1.2M of your own funds. They won't let you put up your private home as capital either.

You would need a really solid business plan but as I said talk to a bank.

SuperO'B

Deleted User wrote: »

To get 1.2mil if you have no background in the business you would be very lucky to get it if you yourself put in the same 1.2mil and bought the land too. As the other poster said being new is a major roadblock for a bank, they will probably dismiss it out of hand unless you can personally sign for the loan and put a personal asset against it.
If you had experience in the business and put in 300-400K of your own money they might look at giving you 1.2mil using the land as an asset.

elastico wrote: »

You really need to speak to the bank but last I heard 30% - 50% is what you are talking, so €750K - €1.2M of your own funds. They won't let you put up your private home as capital either.

You would need a really solid business plan but as I said talk to a bank.

Thanks guys. There's no way I would put my private home up either, I think business should stay business. If it can't be done in those confines then I'm not willing to go for it.

pedronomix

SuperO'B wrote: »

Thanks guys. There's no way I would put my private home up either, I think business should stay business. If it can't be done in those confines then I'm not willing to go for it.

Given the circumstances you have outlined so far, it is highly unlikely you would secure bank funding with everthing you own pledged to a bank, without it....... I think you are wise to follow your last sentiment.

doolox

From my limited experience working in nursing homes those that have easy access to public transport can have access to a larger pool of labour and have less hassle keeping posts filled and routine jobs done. All the carers, cleaners, and ancillary staff may be recent arrivals to the country and may not want to own and run a car to get to work. Those that do run a car will cost more as their transport costs are higher. Having a nursing home in a remote area far from public transport may be cheaper to acquire in terms of land and build costs but may be harder to fill and harder keep staffed.

SuperO'B

Very true, I had looked at it from the viewpoint of those staying at the nursing homes and their families. I hadn't thought about the work side of it.

How do you find working in your nursing home at the moment? Do you find there are waiting lists to get on or free beds regularly?

gctest50

.
Combined heat and power might be a good saving, since heat would be needed 24 hours a day :

23% saving in fuel in this example :

Mount Tabor was opened in 1998 and offers general and specialised nursing care to the
elderly.
Due to the activities on site, there is a continuous thermal demand and micro-CHP appliance was installed in the heating system to satisfy the heat load

The site achieved primary energy savings of 23%, meaning 23% less fuel is required at the central power plant to satisfy its needs

about page 58 of this :

http://www.seai.ie/Publications/Renewables_Publications_/CHP/Commercial_micro-CHP_Field_Trial_Report.pdf

Water John

If you can build to A BER standard.
In management the patients are the easy part. The main headaches are staff and relatives.

SuperO'B

Yes this is where I deploy the secret weapon of my "other half" and retreat to an office somewhere. I would have no experience in these situations however she works with elderly people day in/out and has good experience with the difficulties that family can create for staff and such with family meetings.

We had also looked at the heating requirements taking account of a 24/7 requirement but that's a very good point to note as well. Building from new would offer the opportunity to get the tried and tested efficiency technologies. Now to deal with the banks.. Still waiting for the Engineer to assess the site in question to find out if it's even viable for the location we want. Can't tick that public transport box unfortunately so will have to give that some serious consideration even if funding becomes available.

doolox

I do not work for one particular nursing home so I cannot say what the main problems regarding management would be but I would say that a few relatives and one or two residents will give you 90% of your problems and the rest will be fine and manageable.

I am working free lance as an activities person and entertainers in a number of nursing homes in the Eastern region. I find that the biggest problem I see is wandering residents taking personal items off other residents, starting rows or even one some extreme examples, hitting other residents or members of staff.

You may have 40 or 50 residents who are no bother at all and one or two will require constant intervention, supervision and containment by staff members and account for 90% of their work. This means that other activities such as feeding and looking after the less well able residents has to be reduced because of the behaviour of one or two residents. There is very little that can be done about this but it makes management of training, sick days, holidays etc very difficult if one or two residents act up and increase the workload of the carers unduly.

Stuff like this is very difficult to predict, you might be very lucky and have no troublesome residents so that all demands of the workplace can be met or you might have more than usual number of difficult residents at one time causing a crisis and barely containable situation. Nothing in this sector is readily predictable but in general I find that people working in this sector to be very well tuned in to the needs of the business and of high caliber compared to the average.

Water John

I would consider other sources of capital funding beside the banks if at all possible. High net worth individuals, taking them in as a minority equity partner.
There is a lot of money out there. Its hard to make good returns.
If your OH and yourself have the skill set, that has a large value that you can bring to a business. Someone looking for a long term investment, retired or sold an asset. They may be simply happy with a appreciating asset and a small dividend in the first few years. That would give the project a head start.
Just thoughts, if there helpful.

SuperO'B

doolox wrote: »

I do not work for one particular nursing home so I cannot say what the main problems regarding management would be but I would say that a few relatives and one or two residents will give you 90% of your problems and the rest will be fine and manageable.

I am working free lance as an activities person and entertainers in a number of nursing homes in the Eastern region. I find that the biggest problem I see is wandering residents taking personal items off other residents, starting rows or even one some extreme examples, hitting other residents or members of staff.

You may have 40 or 50 residents who are no bother at all and one or two will require constant intervention, supervision and containment by staff members and account for 90% of their work. This means that other activities such as feeding and looking after the less well able residents has to be reduced because of the behaviour of one or two residents. There is very little that can be done about this but it makes management of training, sick days, holidays etc very difficult if one or two residents act up and increase the workload of the carers unduly.

Stuff like this is very difficult to predict, you might be very lucky and have no troublesome residents so that all demands of the workplace can be met or you might have more than usual number of difficult residents at one time causing a crisis and barely containable situation. Nothing in this sector is readily predictable but in general I find that people working in this sector to be very well tuned in to the needs of the business and of high caliber compared to the average.

So we will just have to kick out all of the troublesome residents Only messing of course.. As I say I haven't had experience myself however my other half as worked in nursing homes while in college before working in a rehab unit for the elderly at the moment. Very good insight though so thank you for that. I believe that much of the issues you mentioned, while ultimately unavoidable due to the nature of residents can be minimised through design as much as possible if considered at the beginning.

Water John wrote: »

I would consider other sources of capital funding beside the banks if at all possible. High net worth individuals, taking them in as a minority equity partner.
There is a lot of money out there. Its hard to make good returns.
If your OH and yourself have the skill set, that has a large value that you can bring to a business. Someone looking for a long term investment, retired or sold an asset. They may be simply happy with a appreciating asset and a small dividend in the first few years. That would give the project a head start.
Just thoughts, if there helpful.

This is definitely sound advice, and something we have considered but not examined. Do we move in the right circles for this at the moment? Not really. I guess this is where the true skills in entrepeneurship are - getting other people to invest in you.

I believe a combination of the two, investment and then going to the bank with extra funding from the business might be the way forward. Anybody got a few hundred €K they'd like to venture? I can raise between €90k-100k a year in saving with work presently but realising the kind of figures to go to the banks with would be years away.

Water John

There is a lady from Cork who tells the story, of how she was on the train home from Dublin, having gone to make a business pitch for an idea shae and her OH had.
Not successful, she was tired and at the end of her tether. A man sitting opposite her struck up a conversation and she told him her story. By the time they got to Cork she had an investment of 500K.
So just keep your eyes and ears open. You may be very surprised as to who has and also who has not got capital finance. It might be more than one individual.
Maybe target some who are owner operators in the field, who have paid off any of their loans are now cash rich and looking to invest. Experience and capital together.
Hope I am of some help. Some family in the medical field.