Analytic Report: Business Plan for Residential Nursing Home

This report provides a detailed business plan for a residential nursing home, including management structure, market profile, marketing strategy, and cost and pricing strategy.

Analytic report
business plan

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
1. Business Overview.......................................................................................................................4
1.1 Summary...............................................................................................................................4
1.2 Core Products and services...................................................................................................4
1.3 Business Aims.......................................................................................................................4
1.4 Amount Required for investment..........................................................................................5
2. Management Structure.................................................................................................................5
2.1 Professional team skills.........................................................................................................5
2.2 Team member's roles and responsibilities............................................................................6
2.3 Skill Gap and advert..............................................................................................................7
3. Market Profile..............................................................................................................................7
3.1 Target Market........................................................................................................................7
3.2 Competitive advantage..........................................................................................................8
4. Marketing.....................................................................................................................................8
4.1 Market Research....................................................................................................................8
4.2 Competitor analysis...............................................................................................................8
4.2.1 SWOT Analysis.................................................................................................................9
4.3 Marketing strategy................................................................................................................9
5. Operations and Logistics............................................................................................................10
5.1 Equipment and set up costs.................................................................................................10
5.2 Legal requirements..............................................................................................................10
5.3 Business Insurance..............................................................................................................10
5.4 Fixed Monthly Cost............................................................................................................10
6. Cost and Pricing Strategy...........................................................................................................10
6.a Pricing Strategy...................................................................................................................11
7. Cash flow forecast......................................................................................................................11
7.1 Annual sales........................................................................................................................11

7.1.1 Net Profit..........................................................................................................................11
7.2 Assumptions........................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
The report highlights the business plan, management and lease planning with the
application of seed capital of up to £40,000. An analysis of the business is made for the
management and providing health care services to the residents of the residential nursing home
in London. The lease term is for 25 years. The rental value to be considered as £4000 per month.
Due to COVID-19 outbreak the residential nursing home is currently come out of special
measures.
MAIN BODY
1. Business Overview
1.1 Summary
A government-owned residential nursing home with 50 beds. Currently 21 people reside
in nursing home post COVID-19 outbreak. As the facility users are generally old age residents
they have various care needs to be addressed. The 60% of the staff of the facility is new and
subjected to enter into new service contract (Birt and et.al, 2020). The property and equipments
are in good condition and in last 6 months the rooms of the facility are repaired and decorated. A
rent free rate of 6 months and 4 months rent free period is granted. The lease term is for 25 years
on insuring and repairing basis and the landlord for the facility is local authority.
1.2 Core Products and services
The services offered by the residential nursing homes are as follows:
 To provide a place for living for the old age people of United Kingdom.
 To administer for the individual care to aged people viz. Cleaning, washing, personal
assistance.
 To provide medical attention.
 To offer 24 hour supervised attention to the aged people
 To provide a beds, rooms, daily meals, laundry and housekeeping services.
 To provide regular check-ups and organisation of social activities.
1.3 Business Aims
The objectives of the care homes is to offer health care facilities which helps in increase
their life expectancy. Currently, 21 residents are living in the facility, so to provide and ensure

quality of services that are offered to them (Quinlan and et.al, 2019). The capacity of the nursing
home is 50 beds, so to fulfil the occupancy is the immediate aim of the business. Also to repay
the grant amount.
The future goal is to create an exceptional residential nursing home that provide every kind of
services and generate good revenues.
1.4 Amount Required for investment
As operating a residential nursing home is a challenging task. To provide quality
healthcare services good amount of capital is required. For the purpose of running and
maintaining the property and to install safety measures to the property according to COVID-19
guidelines it takes funds. The available seed capital for investment is £40,000 and whole of the
amount is required for the initial investment. As the lease term is for 25 years more funding is
required later on to effectively manage the facility.
2. Management Structure
2.1 Professional team skills
Nursing Staff
1. Team work and people interaction
2. Observation
3. Ability to take initiative
4. Work in pressure situations
5. Capacity to recover from tough situations
Health care workers
1. Caring and people handling
2. Understanding
3. Supportive
4. Competence
Administration staff
1. Management
2. Book keeping
3. Customer service
4. Communication

Cooks and kitchen assistants
1. Pay attention on details
2. Understanding of health and hygiene
3. Ability to learn fast
Domestics and laundry staff
1. Organisation and management
2. Care and support
3. Arranging beds and washing laundry
Security staff
1. Understanding of safety and security
2. Ability to remain calm in stressful situations
3. Stay alert and aware
2.2 Team member's roles and responsibilities
In a team various persons have different types of roles and responsibilities to perform. In
a nursing home there are also different members who performs various activities that are as
follows:
Nursing staff: Their job is to provide medical attention to the patients. In nursing homes they
check the health of the elderly people and medical treatment when necessary.
Health care workers: These workers deliver personal care to the elderly people to improve their
life as they cannot take care of self. They have the specialisation in attending aged, sick, disabled
and children. The health care workers generally work at health care facilities or they are hire by
the clients to provide services at homes (Ng and et.al, 2020).
Administration staff: They look after the general administration and over all management of
the facility. The administration provide support services like office management, answering
phones, maintaining records and so on.
Cooks and kitchen assistants: The job of the cooks to prepare a balanced and healthy diet up to
the health standards provided and the kitchen assistants are to help the head cook in the
preparation of the meals.
Domestics and laundry staff: The job of the staff is to take care of laundries and personal
clothing cleaning. They ensure that the rooms are properly clean and sanitised.

Security staff: The job of the security is to secure the facility, performing surveillance and to
prevent any kind of loss or damage within the premises.
2.3 Skill Gap and advert
The skill gaps are the difference between the skills that is required for performing a job
and the skills possessed by the employees. A skill gap analysis is been performed by the
employer to find out the skill gaps in the employees for to perform a specific job (Rodge and
Gupta, 2020).
A need for technical assistant is been found out to perform technical task like creating
data files, managing databases and handling soft-wares for the nursing facilities.

3. Market Profile
3.1 Target Market
The target market is health care and social assistance. The companies in this market
provides health care and assistance to an individuals. The focus on health care has increased due
to out-break of COVID-19. The areas and facilities that provide these services are hospitals,
allied health care facilities, nursing homes (Fern and et.al, 2018). The proposed customer base is
elderly people of United Kingdom.
3.2 Competitive advantage
As the residential care home is previously held by the local authorities, so it has a
reliability and a sense of trust in the people of UK. Although COVID-19 outbreak already create
fear in the mind of the people of UK but the facility is taken special preventive measures to
prevent any dispersion of COVID-19 Virus and also proper sanitation is provided. It provide an
advantage to attract the new customers as the nursing home is offering a reliability which is
creating a good reputation (Bashir and Verma, 2017). The unique selling proposition (USP) for
the care home is its pricing. As the pricing are set to be at £750 weekly per bed.
4. Marketing
4.1 Market Research
The year 2020 is challenging and it had create affects on residential nursing homes also.
It had been seen that the occupancy of the nursing homes are down 8.5% in mid 2020. There are
1,12,000 care beds available present in 819 UK towns and cities. Fees for the nursing homes
increases further 5% in 2020. Nursing home operators started to adjust fees with the rising costs.
The average weekly fee for residential nursing homes in UK in 2020 was £953 (Park and et.al,
2020). The cost of the property also increases due to COVID-19 on average £2,399 and food
costs are increases by 3.1%. The cost of the Nursing staff rises to £29,322 and personal care
employee to £21,351. The profitability margin declines to 26.8%.
4.2 Competitor analysis
Two competitors that are chosen for the analysis are Kenbrook care home and Antokol
care home.
About:

Belmont nursing home: It was established in 1994. The nursing home use Discharge to asses
model (D2A) to provide health care services properly at right time. The nursing home is
registered for 60 users for service. Total availability 60 rooms and for admission the person must
be of 50 years of age or above.
Antokol care home: In the year 2011 it was registered as residential nursing home under
Industrial and Provident Societies Act 1965. The care home has 36 rooms and 50 staffs to
perform operations. It has registered for 36 users for the services. For admission the person must
be of 65 years of age or above.
4.2.1 SWOT Analysis
Strength
 50 Beds occupancy
 60% New staff
 Property and all equipments in a good state of repairs
 Government-owned
Weakness
 Low occupancy
 Low brand reputation
Opportunity
 Health awareness increases due to COVID-19
 Government policies and grants
Threats
 COVID-19 outbreak
 High Competitive environment
4.3 Marketing strategy
For the marketing strategy to produce effective social media campaign 4 p's of marketing
is been identified and described as follows:
Product: The product are the services the residential nursing home offers i.e. personal healthcare
and assistance to elderly people of UK.
Price: Pricing is the important factor as due to COVID-19 all the nursing homes has increased
per bed pricing. We have adopted economical or value pricing model and keep our prices low
and economical as possible without reducing the quality in services.

Place: The chosen place is London. It is the capital of United Kingdom and all resources are
easily available here. The people tend to have good income and they are ready to pay premium
pricing for the health-care and nursing services.
Promotion: The promotion is done through digital media marketing through social media and
distribution of marketing pamphlets. As most of the nursing homes have shifted to the digital
marketing so, the physical distribution of pamphlets will help to increase human interaction as
most of the targeted customers are of old age (Londhe, B.R., 2014).
5. Operations and Logistics
5.1 Equipment and set up costs
The equipment is in good state of repair and did not needed to be replaced. So, the cost of
equipment is nil.
5.2 Legal requirements
Registration is made with the regulatory body Care Quality Commission. The
commission will evaluate suitability and various other criteria viz. Ability to handle business,
financials, fitness of both body and mind, prior criminal offence, etc.
5.3 Business Insurance
Insurance is a necessity for the care home. The standard insurance policy available in the
market offers variety of covers like building, contents, employer's liability and public liabilities.
5.4 Fixed Monthly Cost
Items Cost
Monthly repayment of Capital £5328.98
Staff Salary £15750
Human Resource Software Monthly Charges £50
Food Cost £1000
Insurance Premium £500
Total £22628.98
6. Cost and Pricing Strategy
Product/service name ( Select a single unit) Health Care and Nursing
Cost to your business per unit (p.a.) £24368.90

Price you charge per unit (p.a.) £36000
Profit margin (£) £11631.10
Profit margin (%)
(Profit / Price x 100 = Profit margin)
32.31%
Mark up (%)
(Profit / Cost x 100 = Mark Up)
147.73%
6.a Pricing Strategy
Value or economical pricing: It is a pricing technique in which prices are set for the
product or services on the basis of the economical value derived and offered to customers. This
pricing helps in to attract more customers who are willing to pay for the products and services
(Garrison and Towse, 2017).
7. Cash flow forecast
7.1 Annual sales
Year Sales
2020 £733000
2021 £756000
2022 £756000
7.1.1 Net Profit
Year Net Profit
2020 £221252.02
2021 £213852
2022 £213852

7.2 Assumptions
1. Sales amount for the month January of year 2020 is taken as £40000.
2. First 6 months of the year 2020 is taken as rate free period, after that the rate is taken as
£2400 per month.
3. First 4 month of the year 2020 is taken as rent free, after that rent is calculated at £4000
per month.
4. The residents of the residential nursing area is taken as 21 for all the 3 years and the price
charged for the services is £3000 per person per month.
5. Loan repayment amount of £40000 for 10 years are calculated to be £5328.98 per month.
CONCLUSION
At the end from the above study it is been concluded that operating of residential nursing
homes are a tough business activity. Although all the business activities are severely effected by
the outbreak of COVID-19. But the residential nursing homes are able to survive and able to
maintain good cash-flows. At the end the nursing homes are the essential business activities that
are supporting and providing necessary health-care services to the elderly people of the United
Kingdom.

REFERENCES
Books and Journals
Bashir, M. and Verma, R., 2017. Why business model innovation is the new competitive
advantage. IUP Journal of Business Strategy, 14(1), p.7.
Birt and et.al, 2020. Accounting: Business reporting for decision making. John Wiley & Sons.
Fern and et.al, 2018, May. Managing service quality, emotions and experience in healthcare
industry: a proposed framework. In ICMLG 2018 6th International Conference on
Management Leadership and Governance (p. 333). Academic Conferences and publishing
limited.
Garrison, L.P. and Towse, A., 2017. Value-based pricing and reimbursement in personalised
healthcare: introduction to the basic health economics. Journal of personalized
medicine, 7(3), p.10.
Londhe, B.R., 2014. Marketing mix for next generation marketing. Procedia Economics and
Finance, 11, pp.335-340.
Ng and et.al, 2020. COVID-19 and the risk to health care workers: a case report. Annals of
internal medicine, 172(11), pp.766-767.
Park and et.al, 2020. Strengthening the UK primary care response to covid-19. Bmj, 370.
Quinlan and et.al, 2019. Business research methods. South Western Cengage.
Rodge, M.V.N. and Gupta, R., 2020. A STUDY ON THE EMPLOYABILITY SKILL GAP OF
ENTRY LEVEL PROFESSIONALS: AN INDUSTRY PERSPECTIVE. PalArch's
Journal of Archaeology of Egypt/Egyptology, 17(12), pp.552-566.
Online
The 4 Ps of Marketing: Understanding the Marketing Mix, 2021. [Online]. Available through:
<https://emarsys.com/learn/blog/4-ps-of-marketing-importance/>
Legal Requirements For Operating A Care Home In England, 2021. [Online]. Available through:
<https://truelegal.co.uk/care-homes-and-nursing-homes/legal-requirements-for-operating-
a-care-home-in-england/>