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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

Nursing Home SWOT Analysis

 

Strengths

 

Nursing homes are an important part of most countries. Elderly people generally require round the clock care once they become a certain age. One of the most important strengths of a nursing home is that they are able to remain profitable at all times. Once a nursing home reaches 100% occupancy, the profits of the business will continue even in times of economic recession. Many nursing homes receive their fees from patient co-pays, Medicare, Medicaid, publicly funded health systems, and private insurance. As such, the costs to families is reduced through these reimbursements. The barriers to entry for a new nursing home a relatively high depending on whether or not the entrepreneur purchases or leases the facility. The licensure requirements are substantial.  A new nursing home generally has startup costs of $500,000 to $2,000,000 depending on the size of the real estate to be acquired.


Weaknesses

 

Competitive issues are not a major issue with nursing homes as the demand currently far outweighs the number of spaces available in most markets. The primary weakness for a nursing home is that they have substantial regulatory issues. Additionally, the operating costs of a nursing home are extremely high. Facility, payroll, and insurance costs are very expensive for this type of business. In most states, it is required that a physician be kept on retainer in case of a medical emergency.

 

Opportunities

 

Nursing homes can really only expand by developing additional facilities once the initial location has reached 100% occupancy. Although not common, some licensed facilities develop home healthcare services so that round the clock nursing can be provided to patients that want to remain in their homes. In a sense, this is like starting a completely new type of business. However, there is a trend among existing nursing homes to establish these types of operations. The market for existing facilities that can be purchased is moderate. Financial companies almost always provide financing to established facilities given their highly profitable and economically secure nature.

 

Threats

 

Decreases in insurance reimbursements are a continued threat to most nursing home facilities. It is not expected that there will be increases in payouts for at least four years. As such, an entrepreneur needs to take this into account when developing a care facility.


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