Getting a market study of an assisted living facility is a vital step toward creating a better facility. It will give you an understanding of the possible success of your business. It will also make you aware of many other important considerations. And, since timing matters, getting the market report at the right time will help avoid serious investment mistakes.
When Should I Get a Market Study of an Assisted Living Facility?
Getting a market study isn’t something you do only once. Multiple studies over time can check the potential value of a new facility or keep tabs on those are undergoing changes. The best times to get a market study of an assisted living facility include:
- Right before opening a new facility
- A year after opening up the facility
- Every 2-5 years afterward
- When problems are occurring in the facility (i.e. financial struggles)
- Before expanding your business in any way
- Before selling your business
- If anyone expresses interest in investing in your business
Having a market study at these crucial junctures can help you understand the value of your business in the current marketplace. The market demand and supply, as well as the overall market strength, will do a lot to dictate the value of your business. Even if your business is strong and succeeding, a weak market can decrease its overall value.
What’s In a Market Study of an Assisted Living Facility?
When considering purchasing or investing in a market study, it is important to understand what it includes. While the exact nature of the study will vary depending on the company providing it, they typically include most of the same items. For example, you can expect expert analysis of the following:
- The strength of the current market for new or expanded assisted living facilities- (Are people currently looking for assisted living in your area?)
- Profitability of investing in the current market or whether you’d lose money- (In other words, would it cost too much money to invest in one considering its possible profitability for you?)
- How your new facility would fit into your local economy- (Does the demand for one require the opening of a new facility or simply expanding an existing one?)
- Problems that could plague your facility- (Are there problems such as difficult licensing for the area or lack of potential clients/)
- Benefits of opening a facility- (Is there lack of a facility in the area or a currently strong market?)
- Feasibility of opening up a new facility
- Possible advantages of expanding a current facility
- Downturns that could occur in the market
- Advice on how to successfully open a new facility
- Suggestions on whether opening a facility is the right move
A good market study will give you a better idea of whether the time is right for an assisted living facility. It can be a hard process to understand, but the many benefits make it one you need to consider.
The Ways Assisted Living (AL) Appraisals Can Help
Just how does an assisted living appraisal or a market study of a facility help your business? It starts by presenting you with information that helps you understand the current market. Starting out on the right foot requires knowing exactly what kind of success to expect and what you can do to achieve it.
For example, it can indicate whether an assisted living facility is a good investment for a specific town. An analysis of the need for an assisted living facility and the competition around you gauges whether you should invest in one. If there is no strong need for a facility in a particular area, you can find a city or town nearby that does need one. Why not start your facility off on the right foot in the right are? Putting down roots in area that simply won’t enable your business to grow.
Beyond that, market studies also help you know when the time is right to open up a new facility. Right now, the market for assisted living is very strong. The baby boomers are continuing to age, and the current facilities are straining with overpopulation. However, in a few years, the market might see a downturn and become weaker. Or on the other hand, it might become even stronger. Only time and the right market study will tell!
Getting a market study of an assisted living facility is a great step in making sure your facility is a success. Using one properly requires fully understanding the nature of the study. This is where our team at Global Valuation can help.
Need a business valuation performed for a small business? The Global Valuation team can help you get the facts you need. Simply get in touch at (772) 215-5738 for more information.