In this first discussion the focus will be the market feasibility study which can provide demographic substantiation for a campus repositioning or re-sizing.
There are many necessary contributing factors for a senior living master plan to be successful and workable. These diverse factors require an integrative melding of market, financial and built environmental feasibility in order to provide a full and complete picture of opportunities and obstacles for moving forward. Far too many master plans are initiated by engaging one or two of these studies without consideration of the third. While this approach provides partial insight, it ignores the complete picture and overlooks potential challenges which could be addressed sooner in the process that may otherwise might crop up at inopportune times with less ability to effectively and economically modify the plan.
There are three main components to a senior living campus master plan that contributes to its workability: market feasibility, conceptual design of the built environment that addresses the market opportunities and a financial feasibility plan which cements the master plan together. In this three part discussion, a logical approach that includes comprehensive and collaborative data gathering and analysis will be explored providing the necessary components to develop a senior living campus master plan that works and can be implemented.
The compilation and analysis of demographic data by an experienced consultant can provide a market profile, identify the depth of the market and determine the competitive marketplace. This knowledge becomes the foundation of a logical master plan that can physically, financially and competitively transform a campus.
One of the first necessary steps for a workable master plan is identifying the market feasibility of modifying or adding to the existing campus product offering. The questions to answer are what the primary market area (PMA) will support and at what price point as well as the size of the target market. In addition, examining competitors who are targeting consumers within the PMA must be analyzed in terms of their strength and to determine portions of the target market that they may capture and maintain.
Looking beyond zip codes when identifying the PMA can be critical. Consumer attitudes toward the offered product can be affected by natural or man-made physical and geographical barriers such as intervening interstate highways or dividing rivers, as well as physiological or “imagined” barriers such as a perception of the campus being too expensive and provider reputation that might encourage or discourage acceptance of a new campus offering.
Assembling appropriate demographic data is the starting point of a market study. Determining the number of individuals in the PMA who are age qualified upon project completion offers a snapshot of the focused target market. It is important to look at PMA trends, while it is well known that there is an impending crush of aging population as the baby boomer generation ages, it is also important to note that these individuals most likely won’t be considering congregate senior living for at least another five years.
Economic qualifications of potential residents are also critical to knowing what sector of the identified PMA cohort are financially able to afford an anticipated senior living product and at what acceptable price points. Understanding individual income and assets, such as home value and sources of income are important to this equation. If the anticipated product happens to be a new or reconfigured healthcare component such as skilled nursing, assisted living or memory support assisted living, the market feasibility study should include an analysis of the need for such care services as well as the current and anticipated market penetration of these services.
Having examined all these parts of a comprehensive market feasibility study, one final confirmation step is the conducting of focus groups of potential and qualified individuals. These focus groups often reveal challenges that were not previously considered and can confirm acceptable price points for the PMA candidates.