Dear Diane,

I live in central CA and my mom and I are interested in starting a RCFE. She is an RN and has worked in nursing homes and currently in an alzheimers living center facility. We have both attained our Administrators' Licenses. But going through the 40 hour required course and talking to different people has raised several questions for us. We are wondering if a 6-bed facility can really make it financially. We are both willing to be the main staff there and would look to hire a possible live in staff member as soon as feasible.

A.  Can a 6-bed facility make it financially? Yes, I believe that is still possible, however, it may be better to license for 8 or 10.  Since most facilities are now required to have fire sprinkler systems, or eventually will be required to have them (in my opinion), the 6-bed cut off is really no longer applicable.

If you do your business plan right, then you will know if the business you want to do will make it financially.  Quality sells, and you can create a niche market just catering to those who can afford your services.  In a 6 bed, it will take more than just you and your mother to run it.  I would recommend that you budget for at least a 30 to 40 hour employee weekly.  Your success will depend on the needs in your area.  You can look at all the statistic and census data you want, but doing good marketing research by calling the competition and seeing what services they provide and their vacancies is the most important research to do.  Call the hospital discharge planners to find out what there is a need for.  “See a need and fill it”, is one of the most important business principles to follow.  See Your Product

Q. 1) In your opinion what are the optimal states to do this in?

A.  Washington State, Florida, New York and Oregon and the best organized systems in my opinion, and have decent rates for Providers.  California is testing supplementing Providers, but the rates just barely cover what it cost to take care of the person.

Q. 2) What is the best size (number of clients)? The staffing issue was confusing to us, it sounded like 2 staff all the time from 1-99 clients.

A. Staff is always based on what the residents’ needs are.  If you have residents that have a lot of care needs you will need to have more staff.  See Staffing

3) Do you have any idea of how long it is taking a new facility to be filled and are most of them taking private pay only or a mixture of state/private, clients??

A. Each City will be different. So Cities need more care homes, others have too many.   However, in general, if you are doing your marketing right, about 6 months to a year.  See Marketing

4) Are there resources either online or otherwise that have some of this data - I have been a subscriber to your service for almost 6 months, and admittedly have not used it much yet. It seems like a very valuable resource for those actually in the business. What I'm
looking for is some preliminary data to make an informed decision on what size and where to open one.

A. If you decide to get licensed, you will find everything you need on our website.  Have you followed our “Getting into the business” recommendations?  Have you created your Business Plan see SBA Business Plans  There is no data, like the kind you what, that I know of for small facilities.  Remember success is an individual thing.

Thank you for any info you can provide...............John

Good Luck in finding your niche.

~Diane

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