Scan

A privately-owned care home group in the Midlands had grown “organically”, but then found the competition from nationwide groups harder and harder to beat. To win new residents they were simply cutting prices. It was a road to nowhere.

Evaluate

The owner-director had the right caring and entrepreneurial instincts, and his team were good at running the homes day-to-day, but had no real direction, strategy or plan for growth.

Recommendations

Decide whether to “milk the cow” or grow the herd: the consensus was that growth was the only realistic strategy. The key recommendation was to firmly position the business as a caring, “family” business in contrast to the efficiency-and-facilities positioning of the “big guys”.

First, margins had to be improved: prices were put up, suppliers negotiated down, NHS referrals  accepted at private rates. Then we launched three initiatives: Home From Home Care focusing on residents feeling at home, and being treated like family – a home, not a hotel. A Fair Prices campaign, and a Care Home In The Community plan to recruit prospective residents, and ensuring current residents stayed active.

Results

Net profits increased from 12% to close to 24% in 18 months because now people chose these care homes, and prices could float up. The home-from-home care experience could be reproduced in new homes, and an accelerated programme of new home openings could be started.