Another assisted living facility?

WadeMWadeM Posts: 1subscriber
edited December 2007 in Startup Funding
A little background

I inherited an assisted living facility that is set up in a trust account that will be transfered to me 1/3 in 3 yrs, 1/3 in 5yrs, 1/3 in 7yrs. 
I will graduate with a bachelors degree in economics with a minor in small business entrepreneurship in August.

The ALF (assisted living facility) that I own is about 45 minutes away from where I want to live.  So I have been thinking about expanding the corporation to include more than one facility.  There isn`t very much equity to borrow against in the ALF that I currently own.  Some questions that I have are:
Are there places that will help me come up with the money to build, staff, and open another ALF?  I believe that my degree will make me look better in an investor eyes, but i`m not sure. 
 
I think that this is a good market to be in since the baby boomers are getting older.  This leads me to believe that there will be eager investors out there.  I need to meet one of these investors, however my "network" of people right now consists mostly of college students and professors.  I would like to open a business directly out of college, but without first getting a job it seems impossible to build a network of people in the real world.  Any comments and suggestions are greatly appreciated.

Comments

  • robertjrobertj Tampa Bay, FloridaPosts: 0subscriber Member
    Here are a few general comments:

    The usage and customer base for Assisted living facilities is expected to grow.
    Investors are attracted to strong teams with a "track record".
    Most investment capital in "early stage" companies - comes from the entrepreneurs "extended" network (i.e. 3degrees of separation or less).

    How is the current facility performing (profitable, etc)?
    Is someone managing that business?
    How important is your choice of location to reside?
    Could you commute to the existing place for a year?
     
     
     
     
     
     
  • WadeMWadeM Posts: 1subscriber
    The current facility is performing well, however it has a great deal of debt that all of the profits are being allocated to.  This debt should be paid off by the time the trust is transfered to me.  There is an administrator that happens to be a family friend.  I have an internship set up for this January where I plan to learn a lot more about the company.  The commute will be fine for the internship but any longer than that could pose to be a problem.  The town That I live in now has about 25,000 compared to the 100 where the ALF is now.  This is a reason that I think it is a good idea to expand, and build another facility in the bigger town.
    WadeM12/11/2007 8:11 PM
  • RoblueRoblue Posts: 0subscriber
    I don`t how much help I can be.  However, being that you are an established business and assuming you have no delinquencies or bankruptcies on your credit for the past seven years, you may be able to try a resource I tried, www.thesnaploan.com.
    However, I would also suggest that if you plan to approach conventional lending institutions that you have a properly prepared business plan and all your figures in place. 
    The bottom line with these institutions is you must be as low risk as possible on paper.  This can be rather tricky and seem pointless as you get turned; but don`t give up.
    There are unconventional resources available and growing every year that are addressing the niche market of start up funding.  I gave you one.  It is the one I found success with.  However, I`m sure as more members of this forum respond, you will find others.  Research them all and see which one well suits you.
    Good luck.
  • robertjrobertj Tampa Bay, FloridaPosts: 0subscriber Member
    The current facility is performing well, however it has a great deal of debt that all of the profits are being allocated to.  This debt should be paid off by the time the trust is transferred to me.  There is an administrator that happens to be a family friend.  I have an internship set up for this January where I plan to learn a lot more about the company.  The commute will be fine for the internship but any longer than that could pose to be a problem.  The town That I live in now has about 25,000 compared to the 100 where the ALF is now.  This is a reason that I think it is a good idea to expand, and build another facility in the bigger town.

     
    Wade,
     
    I would begin by "understanding" more details on how the current ALF is performing (including the debt) - then develop projections for the second facility based upon this information.
  • hardknocksmbahardknocksmba Posts: 1subscriber
    I would take it one step at a time.
    Right now you are a college student with no operational experience in the industry. It`s an industry that is all about operating expertise - this is not inventing a better mousetrap or starting a cool new web site; this is running a safe, legal, profitable facility. No one is going to invest in someone without strong operating expertise.
    Here`s another way to look at it. Someone loved you enough to leave you the facility. At the same time, they didn`t put it into your operating hands right now. There are a lot of possible reasons for that that do not reflect on you - it is a pretty standard structure for inheritances - but the point remains that if you are not yet trusted with operating control of the facility you will own, it`s a tough sell to persuade people to let you operate one funded by their money.
    So go get some operating expertise, or put together a team of people reporting to you that have operating expertise.
    Once you have the expertise thing handled, I would probably set up the new facilities as partnerships. Your team is the general partner and does the management. The investors put money, effectively own anything that can be owned, and get paid back with generous returns on a schedule. The investors like it because if your team really knows how to operate things, the risk is contained, the macro economic factors are favorable, and the payout beats Wall Street. You like it because you can build your business using other people`s money. There are models for this in the industry; as your operational expertise grows, you will see how other people have financed their expansion plans and that will help you put together a plan.
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