You may find yourself identifying with the people and the issues described in the case studies below. We love helping our clients find solutions to their problems and we get results! Contact us today to learn how we can help your organization succeed.
When Cost Cutting Is Not an Option
When cutting costs is not an option and you are no longer profitable, how do you stay in business? Read this case study to learn how we helped a nursing facility get back on their feet, compete with their local competition, and become profitable again.
What Happens When Cost Cutting is Not an Option?
We were contacted directly by the Chairman of the Board of a rural based nursing facility. He had grave concerns about the organization's ability to survive due to several successive years of losses. Specifically, he was interested in benchmarking his organization against others in the industry, and we were engaged by the Board to provide an analysis of potential cost cutting options.
Our first meeting was with the CEO, who made it clear that she was unhappy that the Board had contacted us directly, feeling that they consistently disregarded her suggestions and advice. As is our policy, we assured her that we would include her throughout the process, as well as review our preliminary findings with her prior to finalizing our report to the Board.
We reviewed the organization's financial statements and bench marked its financial operations against industry and client data. We also learned that the local hospital had recently constructed independent living and assisted living facilities, and was actively marketing both. Our client's facilities, however, were constructed during the 1960's and 1970's, and the CEO believed some sort of imminent change was needed for them to survive any longer.
Despite their desire to cut costs, we determined this was not a realistic option if they wanted to continue providing quality care. It was clear and certain to us that they had only one option — raise revenues.
Our meeting with the Board proved challenging. Their initial reaction was one of doubt, as they did not believe they could compete with the hospital's new facilities. To support our recommendation, we urged them to hire a market research company to gauge the likelihood of their future success. What we learned was incredibly reassuring: while the hospital had invested a lot of money in very nice independent living and assisted living facilities, they did not have the features that people wanted. Specifically, there was a strong demand in their market area for independent living facilities with a second bedroom, a garage, and storage space.
We prepared a financial feasibility study to determine the financial outcome for our client, helped them to obtain financing, and were pleased to watch the new independent living facility being constructed.
Prior to meeting with us, the organization was losing several hundred thousand dollars a year. It had diminished financial reserves to help offset these losses.
Today, the organization has experienced five solid years of profits ranging from $100,000-$300,000 per year. The Board now spends its time planning for the future of the organization rather than attempting to micro-manage daily operations. They are currently developing a campus master plan that will add an assisted living facility and entirely replace the old nursing center. Finally, both the new independent living facility and the existing nursing center have waiting lists for the first time, confirming that the organization is indeed in touch with the needs of its community and by all indications has a very bright future.
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