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.
Check out the video too:
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.
Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
Show full transcript 👇
Transcript
00:00:00
hi everybody i'm brandon gustafson and i own and operate two assisted living facilities and i created this channel to help people like you learn the ins and outs of investing in assisted living welcome to assisted living investing [Music] in our last video we talked a little bit about how do i set expectations with my facility administrator go ahead and watch that video i kind of went over that process and today we're going to get into different types of organizational charts that you're going
00:00:42
to kind of encounter as you're going through the process of of trying to set up your facility and operating your facility and things like that so really there's going to be two different types of organizational charts that you're going to hear about as you kind of go through this process so just want to make sure that you're aware of that number one is going to be organizational charts that a lender is going to ask you for and it's going to be actually separate in nature from the organizational chart
00:01:09
that you're probably thinking about as you're setting up your facility the organizational chart for a lender is something that they they kind of want to see more the information around how your entity is is structured um is kind of the gist of what they want so when you're working with a lender you're going to see a request for an organizational charge the lender's organizational chart is is not the same thing that you'd have for operating your facility this chart is going to be a
00:01:36
little more focused on ownership structure like i mentioned typically going to be looking for something that is more focused around ownership so a simple structure would show something uh like this you've got your entity name at the top and then it splits into the different owners of the group and i'll have that down in a link here in the bio for you to kind of look at as a free resource i also put that on assistedlivinginvesting.net for you so you can use that if if you need it for lending purposes or just kind of
00:02:05
help you set up your your own entity first example what you've got is two ownerships and they each have 50 ownership so you have the the entity at the top the assisted living entity and then you've got two owners you can see the lines that go down and it goes into owner one and owner two and they each have fifty percent and so you just kind of label it that way it's very simple it's a super simple structure for how the lender is going to look for it that that's really all they need they don't need much more
00:02:33
than that let's use an example now where you have three owners um and let's say that one owner has 50 ownership and the other two owners have 25 ownership so this is what that's going to look like um you're going to have you know your entity up there at the top your assisted living entity owner number one is going to have the 50 ownership owner number two is going to have 25 and owner number three is going to have 25 you can adjust those numbers very easily um to match your needs you can add in
00:03:02
different ownership you know different owners and and how much percentage they own and and different things like that but this is the type of uh organizational chart organizational structure that the lender is going to look at that's what they need they don't need to know all of your different people within the the company or administrator all that stuff they want to know ownership um how that's structured and what it looks like so that's the example of what a lender wants it's a little bit different
00:03:31
all right now we're going to get into operational organizational charts and this is probably something that you're when you think of an organizational chart this is what you are probably thinking about so i wanted to spend a little bit of time on this um so when you're working at your facility your organizational chart is something that's going to be reflective of the way that your business is is structured so so the chart is going to look something more like this you've got your ownership
00:03:52
group at the top um it goes down there's a single line that goes to the administrator and then from there it's going to go to things like the house manager if you have one and caregivers and things like that there also might be some dotted lines that go over to people like nurses or cleaners or contractors or different things like that they would be dotted lines going up to the administrator maybe you have the house manager kind of managing those people or something like that but those are they're not
00:04:21
all in your organization they're not your employees they're more contractors and so they're dotted lines to each of those areas so this is the type of organizational chart that will be probably more valuable to you as an owner and also to your facility administrator as you're kind of getting in there now the next big question would be do you need to maintain that organizational chart the short answer is no there's no need to do it you might need to update it to submit your organizational chart to a lender on
00:04:54
an annual basis when you're renewing your loan which is a common practice for an sba loan so you might have to do it there but really that structure is probably not going to change all that much and so you probably don't even need to do that but it is something that you might want to visit on like an annual basis that organizational operational organizational chart with your facility administrator just to make sure that things are in line and you're clearly communicating your expectations which we
00:05:21
talked about in in our last video that i'll put in a card up here for you to kind of go and reference but it's probably a good thing for you to have that there just so that you can continually make sure things are are in line and what you expect and everything's good you don't need to identify anything that needs to change but you don't have to do it there's no legal requirement there's no there's really no requirement or anything like that there's no fines that
00:05:48
you're going to get or anything like that so you don't have to maintain that org chart it's just helpful to have in place it helps you kind of organize your thoughts and get things where you need them to be i again i've provided these sample org charts in a link below so you can go and use those they're also on my free resources tab on assistedlivinginvesting.net so please go and visit me over on the website i would love to see you over there in our next video we're going to be getting into
00:06:16
positions in an organizational chart for an assisted living so i talked a little bit about you know administrator caregivers house manager i'm going to get into a little bit more who those people are what their roles are and how they work so go ahead and watch that in the video up here um and you know in closing to learn more about investing in assisted living make sure you visit me on assistedlivinginvesting.net for other content set up consulting calls and also follow me on all my other social media platforms and and
00:06:44
just remember just keeping keep making step by step it doesn't take a lot just a little bit step by step by step you're going to get there keep making progress and you'll be successful thanks for watching have a great day [Music] you
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