Any business needs to carefully monitor its books and stick with its budget to thrive. Residential Care Facilities for the Elderly (RCFEs) are no exception.
In fact, all of the moving pieces at an RCFE make solid financial management strategies particularly important. For the facility to thrive — along with its residents and staff — it needs to have resources at its disposal. An ultra-tight budget could mean cost-cutting (or corner-cutting) that adversely affects the RCFE.
Fortunately, some proactive measures go a long way here. We have three suggestions to help residential care facilities for the elderly implement financial management strategies that drive them toward long-term success.
Invest in Your Team and Your Facility
As you look at your facility’s budget, it might feel like you should only spend on the necessities. Actually, though, investing in some key areas now can save you from a larger outlay of cash in the future.
Take your property as an example. Developing a thorough maintenance schedule and sticking with it — even when that means paying for services — helps to avoid major expenses. It’s a lot more affordable to properly maintain your HVAC system, for example, than to have to replace it because it breaks due to lack of upkeep.
Similarly, investing in your staff can help to keep them at your facility, in turn keeping costs down. By some estimates, you’ll pay the equivalent of 6–9 months of an employee’s salary if you need to replace them. Plus, people leaving lowers team morale, potentially creating a ripple effect of more turnover.
Long story short, investing in ways to keep your employees happy and engaged — from competitive benefits packages to continuous learning opportunities — can actually help you keep your overhead down.
Explore Ways to Boost Your Bottom Line
While you shouldn’t cut costs when it comes to your property maintenance and employees, there are some areas where it makes sense to try to save.
Specifically, regularly reevaluate your vendors. If you have a good relationship, explore their openness to negotiating lower rates with you. If you’re not committed to working with that particular vendor, shop other options to see if you could pay less for the same product or service.
Make it a point to do this regularly (e.g., twice a year). Failing to do so could mean paying more than is necessary.
To further bolster your bottom line, you might also periodically explore alternative revenue streams. Grant money and government subsidies regularly become available for organizations caring for vulnerable populations like the elderly.
Limiting Financial Surprises with the Right Insurance Coverage
Any good financial management plan needs to have a risk mitigation component. When something goes sideways at your facility, you need a way to handle it while limiting the monetary impact.
Insurance plays a huge role here. If a resident’s family sues you for negligence, for example, the right RCFE liability insurance helps you pay for the legal expertise you need to defend yourself. And even if you are found liable, that policy can pay out to cover your settlement (up to your policy limits).
Similarly, if a natural disaster strikes, good commercial property insurance means you can rebuild without wiping out your cash reserves.
To build out the insurance piece of your financial management strategy, our team of RCFE coverage experts is here. You can reach out to us at (805) 413-5668.
