Organizational Charts: Key to Assisted Living Success!
Nov 08, 2024
Running an assisted living business can be challenging, especially when it comes to managing operations and staff. One of the tools that can help you succeed is an organizational chart. This chart serves as a visual guide to the structure of your facility, showing who’s responsible for what and how your team works together. Whether you’re working with lenders to get funding or managing your day-to-day operations, an organizational chart is an essential tool for keeping your business running smoothly.
In this blog, we’ll cover the two main types of organizational charts used in assisted living: the lender-focused chart and the operational chart. The lender-focused chart helps financial institutions understand the ownership structure of your business, while the operational chart helps you manage the daily tasks and roles within your facility. By understanding and using both, you’ll set up your assisted living business for long-term success.
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The Lender’s Organizational Chart: A Focus on Ownership
When you apply for financing for your assisted living facility, lenders will want to see an organizational chart. This chart shows the ownership structure of your business and is crucial for helping lenders understand who owns what percentage of the company.
Here are some key points to keep in mind:
- Ownership Structure: This chart highlights the ownership breakdown. For example, if you own 50% of the business and a partner owns the other 50%, the chart will reflect that.
- Simple and Clear: Lenders don’t need to see the day-to-day operations of your business. They just want a clear picture of who owns the company.
- Ownership Percentages: If there are multiple owners with different shares, like one owner with 50% and two others with 25% each, the chart will show that.
The Operational Organizational Chart: Managing Your Facility
While the lender’s organizational chart is important for financing, the operational organizational chart is the key to running your business. This chart shows how your team is structured, making it clear who is responsible for what within the facility.
Here’s a breakdown of the typical components of an operational chart:
- Ownership Group: This includes the owners and major stakeholders who make the big decisions about the direction of the business.
- Administrator: The administrator manages the daily operations of the facility, overseeing staff, residents, and external contacts. They are the go-to person for both employees and residents.
- House Manager, Med Techs, and Caregivers: Below the administrator, you’ll find the house manager (if applicable) and caregivers. The house manager is in charge of the building, while med techs and caregivers provide direct care to the residents.
- External Contractors: You might see dotted lines connecting the administrator to external contractors like nurses or cleaners. These contractors provide important services but aren’t direct employees of the facility.
Though it’s not legally required to maintain an operational chart, it’s highly recommended. Regularly updating this chart helps keep communication clear and ensures that everyone knows their role. It’s a simple but effective way to keep your assisted living business organized.
Do You Need to Maintain Your Organizational Chart?
While you’re not legally required to update your organizational chart regularly, it’s a good idea to do so. Lenders may request an updated chart when renewing loans, especially for SBA loans. Also, reviewing your operational chart with your facility administrator once a year can help keep everyone aligned with your goals and adjust any roles or responsibilities as needed.
By keeping your organizational chart current, you minimize the chances of miscommunication and ensure that your facility runs smoothly.
Final Thoughts
Organizational charts are more than just a formality—they are a key tool for successfully managing your assisted living business. Whether you’re securing financing or managing your team, these charts provide structure and clarity, making it easier to navigate the complexities of the assisted living industry.
Remember to download our free Business Plan Checklist to help you create a successful business plan for your facility. In addition, consider applying to our Assisted Living Investing Mastermind program. This 12-month course is designed to guide you step-by-step toward owning and operating your own assisted living facility. With the added benefit of personalized coaching support, the program ensures you have the resources and guidance needed to succeed in this rewarding industry.
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