Thousands of new businesses are launched each day.

It takes a huge leap of courage to start your own business – it’s exciting and scary and it’s hard. But for those who succeed it is a highly rewarding journey.

But every day, as thousands of businesses launch an equivalent number close, the majority having struggled for a few years and finally called it a day. It’s a crying shame but it happens.

But for the care sector, it’s more than a crying shame. Every good care home that closes is a disaster. Residents are uprooted, staff lose their jobs and yet more beds are lost when our society needs more of them.

If you’ve read the latest edition (July 2021) of my report,   you’ll know that between 2015 and 2020, England alone lost 15,078 care homes and 48,607 beds.

From this report you also know the reason why the vast majority of these care homes closed – the business model of the sector is broken and essentially set up to make you fail.

But that is only part of the story and as you see in the report no care home has to fail.

Read report:

There are still plenty of care homes out there like ours that are doing well and so the broken sector isn’t the whole story and it doesn’t explain why so many businesses fail in other sectors.

If there is no major challenge like the credit crunch in 2008 and the current pandemic, and a sector is running ‘as normal’, plenty of businesses still don’t make it when other similar businesses do.

The reason comes down to how these businesses are run and how strong the foundation is that supports it.

Read more: Build a Strong Business Foundation

A strong business foundation gives a business owner, managers and staff, two vital elements – certainty and control.

Any business, including a care home, that lacks these elements is going to struggle because instead of certainty and control, their business is based on hope and luck.

They hope that what they’re doing will work and that, with a bit of luck nothing unexpected will happen to harm them.

Well, we all know that the unexpected does happen and plenty of businesses, including care homes, have fallen because of this latest challenge that none of us expected.

Building a business (whatever that business is, including care homes) based on hope and luck is like building your house on sand. Its foundation isn’t strong enough to sustain it, especially when things go wrong.

In your business – in your care home – you need to have the certainty of knowing what it is you need to be doing to build and maintain a strong care home. And you need to be in control to make it happen and keep your ship on course.

Now, of course you can’t have 100% certainty and control. We don’t have a crystal ball to spot every challenge ahead nor a magic wand to manage it – as I said, none of us saw the pandemic coming or knew the impact it would have.

Instead, you want to be certain that your business – your care home – is strong enough to handle challenges whether expected or not. And you want to be sure that you and your staff have what it takes to manage the situation and stay in control.

This is what a strong foundation gives you.

A strong foundation = certainty and control


Certainty and control come from the 3 fundamental building blocks that make up a strong business foundation.

The first building block is Strategy. When you and your business is strategic you know each day, week, month and year what you need to do to drive your business in the direction you want to take it.

As part of your strategy, you also identify the risks and threats to your business and to achieving your aims. For example, you know that every April the government increases the national minimum and living wages which has a huge impact on your running cost.

Your strategy should identify that known event and have a plan to mitigate for its impact. In this case you can’t eliminate the event or avoid it, but you can plan on how to reduce its impact by applying an extra 2% or 3% to your fee as a cushion against this impending extra cost.

Managing empty beds is another known risk. You know it is going to happen and so do you simply react to having empty beds or do you strategically plan for them?

For example, you could have a system in place for monitoring and predicting that a particular bed is likely become vacant in the near future and start looking for your next client to fill that bed.

You should also know the financial impact of an empty bed so that you don’t stress about it and fill the bed as quickly as you can regardless of whether the bed fee is good enough.

Read more: How Long Can Your Care Home Manage with Empty Beds?

There are a couple of examples of how having a good strategy and effective systems in place give you increased certainty and control. These building blocks support each other. One can’t work without the other.

And neither can they work without the 3rd fundamental building block – leadership. Only strong leadership in you, your managers and staff will ensure effective systems and processes are in place and working and that a coherent strategy is created and successfully executed.

All 3 building blocks are needed to make this strong foundation.


Manage the Unexpected.

But how does a strong foundation give you the certainty and control needed to handle the unexpected?

It’s the strength of the business (the strength of the foundation) that will see you through the unexpected.

Take the pandemic. So many care homes have been hit hard by it and been tragically left with empty beds and some gone under because of it.

With a strong enough foundation many of these care homes would still be around and others suffered less.

At the core of any strategy must be the need to return enough profit. I’ve said before profit is a business’ oxygen. Without it, it will die. Plain and simple.

A financially healthy care home was straight away in a better position to handle the pandemic. First it could better absorb the increased cost that the pandemic brought in the form of PPE, staff and client checks and tests, etc.

Care homes who simply accept the fees their LAs and CCGs wish to pay or signed-up to their general contracts won’t have been making enough profit (if any) to absorb this extra cost and stay financially viable.

I cover this cost in the report The Cost of keeping Coronavirus Out of Your Care Home. The pandemic will have cost you at least 10% of your revenue. I created a calculator to check and monitor the costs for our care homes. You can get the Coronavirus Cost Calculator here to see how much it has been costing your care home.

Get the: Coronavirus Cost Calculator

Care homes with robust systems and processes to ensure residents and staff are isolated if tested positive and the strict use of PPE, etc. have been better able to keep residents safe from the Coronavirus.

Our homes had/have effective processes in place. We also isolated any new resident regardless of whether the NHS said they had tested negative or not. We simply assumed the worst.

Strong leadership has been crucial to ensure rules were adhered to and have had to be particularly strong when under so much pressure to open doors to relatives.

With training and clear rules our managers were able to manage the day-to-day processes and lock the homes down if a positive test was recorded no matter how unpopular the move was. (One home was threatened by a relative who said he would return with a shot gun.)

By being financially resilient, having the right systems in place and strong leadership at all levels of staff, each home only suffered one death due to Covid-19.

A strong foundation based on these building blocks gives you the certainty and control needed to mitigate for both known potential risks and threats and unknown potential risks and threats.

Do you hope that your business – your care home – will achieve your aims or do you want to be as certain as possible?



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