Profitability in care company

[niord1883]

Hi all

Obviously the governments tax and NI increase hits social care companies hard.

Does anybody have any tips to boost profitability for a business in the sector?

 

[UKSBD]

Increase your charges

 

[WaveJumper]

The Governments actions are hitting all companies across the board and unfortunately if a Care Business cannot trim costs like any other, and I say this, unfortunately (and this is speaking to someone who has their mother currently in a home) your charges may well have to increase.

 

[JEREMY HAWKE]

It's an absolute time bomb to many. People are old and knackered and there is simply no money to fund anything..

As they have said prices need to go up

 

[WaveJumper]

Care can quite easily destroy an inheritance my advice would be if you got assets for God-sake think about it now especially if you hope to leave something to your family

 

[Mark T Jones]

If you're mostly supplying state funded places, increasing charges isn't really an option.

The alternative is to rationalise costs wherever possible.

I dont think there is a third way

 

[Newchodge]

If you're mostly supplying state funded places, increasing charges isn't really an option.

The alternative is to rationalise costs wherever possible.

I dont think there is a third way

But the care industry pays well below the necessary wages, so there is a huge recruitment and retention crisis. There are 3 primary costs in the care industry - staffing, property and regulatory compliance. None of those can realistically be cut. The only answer is to reverse the destructive privatisation of care services and return them to local authority control. That way you remove the profit element, rationalise costs, and return the 'industry' to a public service. Possibly keep a private provision for those who are willing and able to pay for it

 

[Mark T Jones]

But the care industry pays well below the necessary wages, so there is a huge recruitment and retention crisis. There are 3 primary costs in the care industry - staffing, property and regulatory compliance. None of those can realistically be cut. The only answer is to reverse the destructive privatisation of care services and return them to local authority control. That way you remove the profit element, rationalise costs, and return the 'industry' to a public service. Possibly keep a private provision for those who are willing and able to pay for it

I don't disagree, but it doesn't really address the initial; question.

There are sometimes areas that can be rationalised without impacting customer care (utilities, mortgage rates etc) - but really it requires the economies of 3 - 5 homes to really work for independents.

As you say, it's a market of 2 distinct & separate halves - In the leafy suburbs, private care is a money-printing machine!

 

[Newchodge]

I don't disagree, but it doesn't really address the initial; question.

There are sometimes areas that can be rationalised without impacting customer care (utilities, mortgage rates etc) - but really it requires the economies of 3 - 5 homes to really work for independents.

As you say, it's a market of 2 distinct & separate halves - In the leafy suburbs, private care is a money-printing machine!

I think the initial question doesn't have a realistic answer. Those homes with high levels of LA funded clients are not profitable, even if they are in a group of 3 or 4 homes. Even the economies of scale cannot mitigate for the rising costs and limited income. I am, perhaps biased by living in the north east where self-funded care is rare; and I remember having exactly this argument with Newcastle council in the late 90's/early 2000's when they privatised their remaining care provision.

 

[JEREMY HAWKE]

I think the initial question doesn't have a realistic answer. Those homes with high levels of LA funded clients are not profitable, even if they are in a group of 3 or 4 homes. Even the economies of scale cannot mitigate for the rising costs and limited income. I am, perhaps biased by living in the north east where self-funded care is rare; and I remember having exactly this argument with Newcastle council in the late 90's/early 2000's when they privatised their remaining care provision.

You are absolutely right and I agree with you Why anyone would want to go into business on these terms is beyond me

We are however supposed to help Reading the other comments and your slightly contrasting comments
Maybe the conclusion is for the OP to close the firm and walk away if they are unable to negotiate more profitable rates

 

[Newchodge]

You are absolutely right and I agree with you Why anyone would want to go into business on these terms is beyond me

We are however supposed to help Reading the other comments and your slightly contrasting comments
Maybe the conclusion is for the OP to close the firm and walk away if they are unable to negotiate more profitable rates

A lot of places are doing just that - handing their contracts back to the LA who then have to find places for all the residents as they are not allowed to consider running the places themselves.

 

[DontAsk]

It's an absolute time bomb to many. People are old and knackered and there is simply no money to fund anything..

As they have said prices need to go up

There's a lot of money tied up in Boomers' property and pensions. More and more will be liquidated, to spend on care, as they pass, over the next few years.

 

[JEREMY HAWKE]

There's a lot of money tied up in Boomers' property and pensions. More and more will be liquidated, to spend on care, as they pass, over the next few years.

Is it wise to put yourself in an effluent position in later life
Your not going to keep it so you might as well add a few more holiday destinations to your favourites this afternoon and make summer 2026 a good one .

 

[DontAsk]

Is it wise to put yourself in an effluent position

Life's pretty good actually.

 

[WaveJumper]

Without taking this thread completely off track and you might have guessed this topic is pretty close to home for me here at the moment.

The average basic cost for care home here in Essex is currently around the £87k /£90k per year if you need anything over basic currently we are looking at around £4k a week here or well over£208k a year

If you can find something around the basic level you are extremely lucky as you pretty much looking at a waiting list (someone else to pop their clogs) Others on offer are in the £8k to£10k plus a week

On a separate note I know someone who owns a care company offering home visits etc and he's making an absolute killing, appears to be a real gold mine.

Going back to the OP I find it quite interesting someone in the business is struggling, as my first thoughts in this area, this year were, bloody hell there's money to be made in the care industry.

 

[Mark T Jones]

Without taking this thread completely off track and you might have guessed this topic is pretty close to home for me here at the moment.

The average basic cost for care home here in Essex is currently around the £87k /£90k per year if you need anything over basic currently we are looking at around £4k a week here or well over£208k a year

If you can find something around the basic level you are extremely lucky as you pretty much looking at a waiting list (someone else to pop their clogs) Others on offer are in the £8k to£10k plus a week

On a separate note I know someone who owns a care company offering home visits etc and he's making an absolute killing, appears to be a real gold mine.

Going back to the OP I find it quite interesting someone in the business is struggling, as my first thoughts in this area, this year were, bloody hell there's money to be made in the care industry.

An industry of 2 halves

State funded vs private/monied

In either case, you are looking at very high running costs with few avenues for cost cutting

 

[Newchodge]

Without taking this thread completely off track and you might have guessed this topic is pretty close to home for me here at the moment.

The average basic cost for care home here in Essex is currently around the £87k /£90k per year if you need anything over basic currently we are looking at around £4k a week here or well over£208k a year

If you can find something around the basic level you are extremely lucky as you pretty much looking at a waiting list (someone else to pop their clogs) Others on offer are in the £8k to£10k plus a week

On a separate note I know someone who owns a care company offering home visits etc and he's making an absolute killing, appears to be a real gold mine.

Going back to the OP I find it quite interesting someone in the business is struggling, as my first thoughts in this area, this year were, bloody hell there's money to be made in the care industry.

It depends entirely on the area. Here in the north east the majority of care is LA funded and they have absolute (and low) limits on how much they will pay. If a care provider manages to get a privately funded client their charges are increased to fund the LA clients.

When the employer NI increases came in last year there was a ridiculous split. All employers could claim the NI allowance of up to £10,500. Except for employers whose income was primarily state funded. So the care homes up here where most clients are LA funded had to pay the full NI increase without getting the £10,500 allowance. Those down south whose clients are mainly self-funded could claim the allowance.

 

[EnterprisePro]

I'm guessing its a local business to serve people in the local community. Could it be worth an attempt to raise awareness of the challenges with the local MP and perhaps even local businesses could donate to get some sort of tax break? I could be completely wrong about this, but I think its worth exploring. Some businesses might like to enhance their brand perception by showing their local community how they're serving them. I know this could be easier said than done and will need time, but worth keeping in mind. Involve the local MP for sure.

 

[ZipserSir]

Hi all

Obviously the governments tax and NI increase hits social care companies hard.

Does anybody have any tips to boost profitability for a business in the sector?

It probably depends on the type of business you operate: how many people you support, how they are funded, and what you are doing for them. As others have said here, this is both a rags and riches sector and it might be better for your answers if you could spell out a little more about what you do.

 

[niord1883]

We are fairly highly weighted towards local authority clients with fewer private clients - which limits our pricing power.

 

[ZipserSir]

Ditto. We spent two years "rationalising" very significant inefficiencies, but no customer facing redundancies. Was a very inefficient organisation. Sorry if I tell you to suck eggs, but: review your local authority contracts - we found money that we were'nt picking up, and were overdelivering on service; very inefficient internal processes, and overweight in the core team; learned a lot from building a better relationship with the LA - I suspect they are invested in your success.

 

[Chris Ashdown]

We are fairly highly weighted towards local authority clients with fewer private clients - which limits our pricing power.

Why no private customers would be a good question to answer

 

[Newchodge]

Why no private customers would be a good question to answer

Local demography?

 

[FreddyG]

Is it wise to put yourself in an effluent position in later life

My elderly Great Dane, Dexter, is in that position, but then he does suffer from severe incontinence.

 

[JEREMY HAWKE]

My elderly Great Dane, Dexter, is in that position, but then he does suffer from severe incontinence.

I bloody loves this feckin phone Freddy

People have started messaging me for just entertainment