Setting up a budget for an assisted living facility can help you avoid financial crises. Your budget will have three components: "Operating" for expenses related to running the facility; "Capital" for those related to building and equipment improvements and acquisition; and "Cash" for the expected amount of cash inflow and outflow. Your operating budget is key as it guides day-to-day execution of your business plan. This guide will help you create an operating budget to open your assisted living facility with a solid foundation.
Write out the income and expenses associated with operating your facility. Income includes money received from each of the products and services your offer. Expenses include payroll, utility bills, food, tax, liability insurance, administration, maintenance, marketing and transportation.
Get estimates for your budget categories. Call utility companies to get estimated costs for your type and size of building. Get quotes for insurance, staffing and other outsourced services. RMA annual statement studies is a reference book that will allow you to benchmark various types of expenses against other assisted living facilities of similar size. The North American Industry Classification System (NAICS) codes to reference this information are 623311 and 623312. Industry guidelines for expenses in this category will be directly related to your revenue.
Decide on the number of residents that will stay in the facility. The current or past number of residents, the facility's residential capacity or number of staff you expect to hire will affect your residential capacity. Multiply the price you will charge residents by the number of projected residents to calculate a revenue budget.
Format this information as a table on a spreadsheet. Label the rows in one column with income and expense categories, respectively. List all revenue sources and display a total sum. Next, list all expenses and display a total sum. Create additional columns labeled "Budgeted", "Actual" and "Difference" next to the previous entries. These columns will display the budgeted amounts you create in this exercise, the actual amounts generated during the course of business and the difference between the two.
Review your state's regulations on resident to staff ratios, number of meals required per resident, amount of space required per resident and other particulars that will affect your expenses.