February 27, 2025 • 39 mins
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Episode Transcript
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Microphone (Yeti Stereo Mi (00:00):
High occupancy means nothing.
If your NOI is suffering, it'stime to shift our mindset and
lead with financial confidence.
Hi everyone.
It's Erin here.
Your person who gets it seniorliving.
Leadership is always abouttaking care of the residents and
(00:20):
your team, but it's just asimportant to take care of the
business that allows us to servethem.
So here's the problem.
Too many leaders step into theirroles without the financial
training or confidence that theyneed to make strategic decisions
that drive long term success.
(00:42):
If you've ever felt lost in abudget meeting, struggled with
NOI versus occupancy goals.
Or wondered how to tell yourcommunity's financial story.
You are not alone, I promise.
In today's episode, we'rebreaking down financial literacy
for senior living leaders.
Why it matters, how to masterit, and how understanding your
(01:04):
numbers can make you strongerand more respected as a leader.
So let's get into what I believeis a financial disconnect, let's
start with this simple question.
When was the last time that youlooked at your NOI or your
budgeted occupancy, your rentrole, or your general ledger
(01:26):
before the end of the month?
If the answer is never, I'm gladyou're here.
If the answer is sometimes, I'mglad you're here, and if the
answer is all the time, weshould talk because I think it
would be fun to know what youknow and to learn from you as
well.
But for those of you, who do youunderstand the value of, of
(01:49):
knowing your community?
Right?
We've got to understand ourcommunity story.
All of it.
The relationship piece, theregulatory piece, and the real
estate piece, which is thebusiness side of things.
Our occupancy matters.
(02:09):
lemme just say this, I made apost about NOI versus occupancy
on LinkedIn, and so many peoplehave asked me about that post,
and honestly, I felt nervousbecause I didn't want to post
that post.
Because I don't really talkabout the financial side of
things as much, but I did itanyways because it is a valid
(02:32):
question.
I didn't realize how manypeople, thought the same thing
or had the same questions andwanted to know people's
responses.
Here's, here's the, the rub iseverybody talks about occupancy.
Because that's the number thatwe tell everybody, right?
Like occupancy is like youdriving the brand new Lexus or
(02:55):
the brand new BMW and you'repaying$1,200 a month for it,
right?
I mean, that's flashy.
You drive a beautiful car, butyou are paying for that
significantly every month.
And I'm driving a 2015 minivanwith 216,000 miles on it.
(03:16):
But my NOI, you know, my monthlyrate, monthly car note is zero.
So occupancy is flashy, butmoney in the bank or less money
going out per month is wheresuccess lies.
Believe me.
I'm building a business, so Idon't have a lot of money in the
(03:38):
bank, but I do have less moneygoing out because I drive a
vehicle with no payment and ithasn't had a payment for a long
time.
I digress.
But that is the differencebetween NOI and occupancy.
I could sit here, I mean, ifyou're gonna see me driving,
you're literally gonna see medriving a car.
(04:00):
With the left bumper, I believeis where I ran into my culinary
director's vehicle on a verystressful day.
I was full of anxiety and I wasreversing in to unload some
things that I got for thekitchen and I accidentally hit
her vehicle.
I fixed hers.
(04:21):
I did not fix mine, the otherside of my bumper.
I accidentally grazed myhusband's truck in the driveway.
You know, it is what it is.
And then there's a little tinybump on the hood of my van
because as I was driving, backhome one day, someone's tire
decided to blow and a huge chunkof it landed on my hood on the
(04:46):
interstate, going somewherebetween 75 miles and 85 miles
per hour.
I was lucky that it didn't hitthe windshield.
Anyways, I haven't gotten any ofthose things fixed.
I just feel like authenticity iswhat it is, and I haven't gotten
a new car because I value my 300to$500 a month.
It's not going out right now.
(05:09):
And that's how we have to lookat occupancy versus in oi and
honestly the about financialliteracy inside of our
communities.
I mean, it's, it's reallydefining what success is.
Success to me is not having acar note at this moment, but let
me tell you what success isgoing to be.
Either getting a Volvo from theactual plant where I get to pick
(05:32):
it out and then travel overseasto go get it, which lemme tell
you, is fabulous.
This, the idea of doing that isfabulous.
Or I just saw Lexus five 50 theother day.
I really fell in love with thatone day.
I am going to get that, but it'snot gonna be today.
And it's not gonna be tomorrow.
And if I have to get a new car,I'll probably just get a new
minivan because that's the stageof the life that I'm in right
(05:55):
now.
Because if my kids aren't gonnatake care of it, I'm not gonna
be paying for it.
Right.
So I.
I say all that to say I am arelationship purist when it
comes to senior living, but Ialso understand that this
relationship piece of seniorliving needs to extend to money
(06:16):
and business strategy.
What does success look like toyou?
I have turned around fourdifferent struggling
communities.
They were struggling withregulatory issues, financial
issues, reputation issues, allthe things.
There are phases in a turnaroundof a community where you have to
(06:37):
choose, do I get some short-termwins and build long-term
strategy later?
And that's a choice that youhave to make with a corporate
person.
Not something that I wouldsuggest that you take on your
own unless you're the owner oryou have other, don't have
anyone else to talk to.
(06:58):
But if you start slashing ratesfrom 4,000 to 3000 for the life
of the agreement, you are goingto be down a thousand dollars a
month.
And if they are there for ayear.
$12,000 a year.
And if you do that for fiveother people, that's$60,000 a
(07:23):
year.
That's the business side ofthings.
And now lemme tell yousomething, I, I did this a lot.
I will tell you, my grandmotherlived in a community and they
gave her an amazing discount.
it was at the end of a month.
It was probably at the end of aquarter.
They needed the number and sothey made a decision.
This apartment has been emptyfor a long time, and they wanted
(07:47):
the move-in rather than an emptyroom.
And sometimes those aredecisions that you make.
You look at the budgeted ratefor that empty apartment.
You look at how much time thatapartment has been empty and
would you rather have.
$2,000 instead of$0 for anapartment that's budgeted for
(08:07):
$3,500 per month.
Right?
These are the decisions that youhave to make, and hopefully you
have somebody to help you thinkabout it that way.
I have gone through times in mycareer where I wanted to give
everybody a discount becauselet's face it, I do have a
bleeding heart, but you cannotdo that long term.
(08:28):
You cannot do that and expect tobe able to answer questions at
the end of the month of whywe're not meeting our budgeted
goals, and then your team startssuffering because we don't have
enough revenue coming in to dothe do all the different
activities that you might want.
So it's really, really importantto keep the overall perspective
of the community in the best waythat you wanna serve residents
(08:51):
in your community.
rather than always focusing ongetting a resident to move into
a community, you can still feelgood by giving short, burning
incentives to move in.
Paying for somebody's move intoa community is an excellent
incentive to move in, and ithelps people.
(09:11):
It's potentially 500 to athousand dollars.
I would certainly take somebodypaying the movers to pack up my
stuff and move them in righttime over money.
So just remember, you can stillbuild relationships and have
good relationships with thebusiness strategy inside of a
community.
(09:32):
Leadership is not just aboutpeople.
It's about business and numbersas well.
We have to be good stewards ofour residents dollars, our
dollars that we are paying ourteam and that we can use to
honor our team.
Many leaders rise to the ranksbecause they excel at management
(09:52):
or team culture andrelationships, but sometimes
when handed a budget.
They might get confused.
I will never forget, I was atthe corporate office of the
community that I was working inand I was called into.
I was there for executivedirector training, which I had
been working there for yearsalready.
(10:14):
Anyways, I was thankful for theopportunity.
I got called into the vicepresident and.
I don't know what the otherposition was.
He was CFO maybe, I'm not reallysure what his position was, but
it was around budget season andI never really understood how
the corporate level looked atcreating budgets because the
(10:35):
budget for my community wasalways off.
and there were times where I hadsay in it, and then there were
times that I did not.
Then they called me into the,off into an office and asked me
questions because I was thereand they were speaking about
this budget in terms and sofast, and I was nervous, and I'm
(10:56):
looking at the budget on thescreen and I have a million
questions that I would ask, butbecause I didn't feel
comfortable, I only said certainthings.
What I knew I needed I couldonly be as good as I could be in
the moment, and I realized Iwanna be able to read
spreadsheets so fast and tellthe story that these two people
(11:20):
can tell, just like them.
That takes time and intention.
And to be able to be comfortablewith the numbers, it's really,
really important for you torealize that numbers in your
relationship with the money isjust as important as the
relationship with your residentsin your community team, family
(11:44):
members and residents will moveout of communities if they feel
as if.
They may close if they're notdoing well.
I worked for another communityearly on in my career that
stopped paying their bills.
We would get water cutoffnotices and power cutoff
notices.
I.
You know, we don't want thatkind of experience for our, our
(12:08):
residents and our team members.
And so the more we know aboutthe money, the more confident we
are in talking and dealing withthe numbers and knowing what we
can cut and what we can't.
Helps us create the story thatwe need to live and work by.
When you don't understand yournumbers, you lose credibility
(12:30):
with both corporate teams andfamilies.
So the more you know, the betteryour relationships can be built
over time, and you don't have tobe a financial expert.
You do need to be financiallyconfident because you are
(12:52):
leading a senior livingcommunity, which is essentially
running a business.
Your NOI is your community'sfinancial pulse, okay?
Your NOI is your total revenueminus your operating expenses,
and that money is the money, isthe revenue that you are
(13:14):
generating.
That's important to know.
So if you're in OI goals or ahundred thousand dollars a
month, that means that you havecleared a hundred thousand
dollars and over 12 months.
That's$1.2 million per year, andthat means that you are an
executive director running abusiness that is generating$1.2
(13:38):
million a year of clearedrevenue.
That is powerful stuff.
As an entrepreneur, I don't makethat kind of money.
Maybe one day, but that's notthe goal, although it could be.
But as a executive director, Iran communities with that kind
(14:00):
of in OI goals.
I can confidently say that mycommunity cleared over a million
dollars.
Probably for the majority of thetime that I was an executive
director there, meaning myleadership made my company
anywhere between 5 million and$8million for the tenure of my
(14:23):
career.
That is a powerful stat.
And lemme tell you something Ididn't know about that when I
was inside the community.
I didn't look at it that way.
I didn't understand it that way.
I looked at it as I had amonthly goal and I wanted to
know how to answer questions ona variance report and make sure
that I knew what I was talkingabout on a financial review
call.
I didn't understand the businessside of being an executive
(14:48):
director over a community.
That had an NOI of over ahundred thousand dollars for the
majority of my time there,honestly and transparently.
I mean, the first year or so wasjust rebuilding that, but the
only time I was ever in the redwas during covid when we were,
(15:11):
when we got down to, you know,below 70%.
I remember clearly seeingnegative numbers, and never in
my career had I seen negativenumbers.
So there were times that werehard, but then we went from 67%
to 100% in a year and one monthfrom 2021 to 2022.
(15:36):
I saw those negative numbers andI went, oh no, this is not who
we are.
And we kept going.
So there are three financialconcepts.
Every senior living leader mustunderstand to make informed
decisions and gain credibilitiesfor their financial discussions,
One of them we've alreadydiscussed, but it's your NOI
(15:58):
your net operating income, whichis your community's financial
pulse.
NOI equals total revenue minusyour operating expenses.
This is what the corporate teamslook at first to measure
success.
Okay.
They wanna know what's your NOIevery month?
How are you controlling yourexpenses?
(16:18):
Do you know about your expenses?
Are you looking at overtime?
Are you looking at agency usage?
Are you able to talk about whyyou're needing that?
Are you able to defend youractions as to why you can't hire
people?
Or can you talk about all thesteps that you made to hire
people to alleviate agency?
(16:39):
This is a story I.
Don't let the numbers scare you.
The numbers help you create thestory.
Okay?
One of my favorite leadershiptips is to start reviewing your
general ledger regularly.
It's not to micromanage yourteam, honestly.
It's for you to understand everymonth what you're billing for
(17:02):
revenue, what you're generatingrevenue wise, and then what are
the expenses.
You look at it after payrollhits it.
You know, you look at it, I, Iused to look at the 401k piece,
which I had no control over.
I looked at the taxes, which Ihad no control over, but I just
kind of knew what was going outand when, and so I found the
(17:25):
rhythm of the community.
Right.
When you look at your generalledger regularly, you're able to
understand trends and makeinformed adjustments.
So number one, know your netoperating income is the
community's financial pulse.
Number two, budgeting and spindowns.
It's predicting versus reacting.
(17:47):
Budgets are forecasts.
They're going to tell you whatbased on trends and other types
of communities, what yourforecast should be, what your
goals should be, but actualspending tells the real story.
Biggest mistake leaders make isnot tracking the actual spending
(18:11):
throughout the month.
And so what is the tool that weuse to do that?
Spend downs.
Spend downs are just asimportant as the general ledger,
and in fact, a spend down insidethe community is, to me like the
actual general ledger because weare seeing spending in real
(18:36):
time, whereas the general ledgertakes time to get put on it.
So you can actually look at thegeneral ledger and the spin down
to see where we are in themoment.
The spend downs are somethingthat I would reference all the
time when talking to differentmanagers.
The common question would be,can I buy this?
And I would say, well, I don'tknow how much have you spent
(18:57):
this month?
And so then we would have aconversation about the spend
down, and we would pull it up.
The goal is to train your keydirectors to be able to use this
spin down and make thosedecisions on their own.
Or we need this tool, we needthis technology piece to upgrade
for this particular department,and here's what I haven't spent
and here's how I can split itacross two months.
(19:20):
These kind of questions withsolutions on the back end.
Are brilliant, especially whenthey come from your team.
I had amazing ways of learninghow to divide things up into
months just by looking at thespend out, and I don't wanna
give you any like bad tips, butinsider tip would be your credit
(19:40):
card.
Has a stop date.
Typically, if it's in the middleof the month, you can, that's
gonna go towards one month.
And then if you use cash, that'sgonna go towards another month,
depending on the timing of whenthe credit card, closes out for
the month.
So there is an insider tip.
Use discretionary, and two, youadvantage and not to your
(20:03):
disadvantage.
Okay.
Insider tip, don't tell anybodyit came from me, right?
But the biggest mistake thatleaders make, not tracking
actual spin downs throughout themonth, use them.
And if your directors are notusing them, it's because you're
not following up with them.
You need this information.
They need this information.
(20:25):
This is a respect.
A respect of people's money, arespect of financial literacy
and confidence inside of thecommunity.
A respect towards your corporateoffice, who's entrusting you
with this potentiallymultimillion dollar business?
It's a respect tool.
Use it, it's knowledge.
(20:45):
It's empowering so your keydirectors don't have to ask you
questions.
They can figure it outthemselves and bring to you a
solution and say, here's what Iwant.
Here's how I'm gonna make itwork, and here's how it's going
to affect the month.
Boom, those conversations shouldmake you very, very happy.
Don't panic when you have to goover budget for expenses.
(21:07):
I mean, it just is what it is.
There's things that you can'tcontrol, right?
Instead have data to explain whyit happened and a solution to
move forward.
You know, if you have to replacethe fire alarm panel or the air
conditioner fan motor went out,you know, these things aren't
always cap accessible.
Sometimes they are, sometimesthey aren't.
(21:29):
Explain it, explain thevariance.
Then come up with a solution.
And then one thing that I didyear over year is I would write
down these big over budgetedexpenses.
Like landscaping for some reasonwas always put in the wrong
month when we got our colorchange.
And so I would make a note andthen around and a binder, and
(21:51):
then the next.
budget season, I would say.
Can you please make sure ourcolor is in budget is in April
and October instead of May andAugust, right?
Keep it in some kind ofdocument, whether it's a binder
or some kind of EOC or GoogleDoc or whatever that you use,
that you can communicate thesebecause the forecasting is
(22:15):
important.
And you're in the middle of it.
Corporate office is gonna makethese budgets and these
decisions, but you are in thethick of it.
And so when it comes to budgetseason, you can give them data,
real time data.
This would help if this was inthis month versus this month.
That's important.
And when you have over budgetmonths, explain it.
(22:38):
The worst thing you can do is tonot be able to explain it and
tell the story.
Alright, number one, for threefinancial must knows for every
senior living leader was NOI.
Number two is budgeting and spindown strategy, predicting versus
reacting.
And number three is financialcommunication and transparency.
(23:00):
Building or breaking trust.
Again, this is aboutrelationship with money and
numbers and one of the biggest.
Areas to focus on buildingrelationships and building trust
is when we bill our residents.
The billing, the generating ofthe statements is a very, very
(23:20):
important process.
And then the automaticwithdrawal is also a very, very
important process.
The more that you are open andhonest and transparent and hear
people's complaints or concernsabout the billing and the
statement and the withdrawingprocess, it is very, very
important because you'rebuilding trust.
(23:41):
You are taking large sums ofmoney out of somebody's account,
and that money is directly your,is your monthly revenue coming
in.
So it's important that you keepthe lines of communication and
transparency open.
Because it's easy for somebodyto get mad at you because they
(24:01):
weren't aware of how much moneywas coming out or that we double
drafted their account, which hashappened to me weird, but it
did, or that it was overdrawn,and we have to have that
conversation with the loved one.
Or the resident itself.
So being able to buildrelationships during the hard
money conversations are really,really important.
(24:25):
Build trust.
Financial mistakes happen, buthow you handle them and overcome
them to determines the trustthat you're building or that
you're breaking.
The other thing in communicationand transparency when talking
about money and building trustis having a strong relationship
(24:46):
with your corporate accountant.
To me, based on my experience,having your accountant be one of
your biggest allies is very,very important, especially in
financial reviews because theycan give you a heads up of the
questions that are being askedconsistently.
If you are on a list, you wantto get off the list, that would
(25:09):
bring negative attention to yourcommunity or your corporate
accountant.
Make them happy.
Give them the re, give them allthe reports that they need, get
everything closed out in atimely manner so they're not
waiting on you and askquestions.
And when you're looking at yourgeneral ledger, ask questions
(25:29):
with your accountant and helpthem.
Let them help you understand howto read the general ledger in a
way that that builds confidence,that you can start looking at it
for yourself in a confident way.
Okay?
The key takeaway here isunderstanding NOI.
Budgets and financialcommunications doesn't just help
(25:52):
you.
It helps your residents, yourteam, and your entire community
succeed.
So it's really, really importantthat you know what your
community's financial pulse,your NOI, that you understand
budgeting and spin the spindown, which is predicting versus
reacting, and to keep an openline of communication with your
(26:16):
families, your residents, andyour associates and your key
directors about budgets and, andbilling and.
Automatic withdrawals that couldbe coming out of their accounts
hugely.
It's very, very important.
Okay.
Back to the LinkedIn post that Idid, NOI versus occupancy.
(26:38):
What really matters?
Here's the question, highoccupancy does not.
Well here.
Here's a myth.
We're gonna bust today.
High occupancy does not meanfinancial success.
Again, it goes back to the BMWbrand new, shiny, awful lot
(27:01):
versus, you know, a minivan thatis making it right.
Dave Ramsey, who I havefollowed.
Will tell you that mostmillionaires don't drive the
fancy BMW and that the mostfinancially literate and
(27:23):
successful people live wellbelow their means.
So occupancy.
Doesn't a lower occupancy, anoccupancy at 85% doesn't
automatically mean that acommunity at 95% occupancy is
making more money than acommunity at 85% occupancy
(27:43):
because they could have been sodesperate to get to 95% that
they rented rooms at half thebudgeted rental rate.
Now I came into a community as anew executive director and that
community had probably 30% ofresidents at an enormously below
(28:05):
budget rate.
I mean, the gap was wide andtrying to rebuild from that.
Is really, really hard.
And the other thing is thatresidents talk and these
residents who had these lowerrates were residents who were
healthy and independent and weregonna live and did live at that
(28:27):
community for a very long time,a very, very long time.
And I was happy for him.
But every month I had to answerquestions about why we were not
hitting our NOI goals.
I was speaking to anotherexecutive director recently who
had moved to an executivedirector role into a community,
and she was sharing with me andshe was turning this community
(28:51):
around that all of.
Is a strong word, but a largepercentage of these residents
were paying well below thebudgeted rental rate.
And you can find thatinformation on the rent roll.
You are gonna look at whatapartment is budgeted for what
amount, and then you canactually look and see what the
actual rate, the actual revenuethat we're generating from that
(29:15):
apartment.
And that gap is the gap that youhave to try to overcome.
And this particular executivedirector was talking with me
about how every month she has toanswer the same questions
because every month they forgetthat she came to this community
with, let's just say 45% of theresidents paying a thousand
dollars or less under budgetedamount, and that's not that
(29:39):
executive director's fault.
She will have to answer thatquestion continuously until more
time passes and they're able toget more residents in at the
budgeted rate.
And that's why NOI matters, andthat's why what we charge our
residents matter.
Are we true to the rate?
Because the other thing thathappens is this, and I have had
(30:01):
this in my community where I'vehad.
Residents who are paying$2,000 amonth for a one bedroom
apartment, which should be atthat time, this was years ago,
you know, around$3,800 a monththat eventually we're going for
over 4,000.
And so that's an$1,800 a monthdifference.
(30:23):
And so when somebody's moving inand they're paying$3,800 for the
same apartment that someone elseacross the hall is paying$2,000
a month.
What happens there?
A lot of animosity, a lot ofpeople who are upset because
there's an$1,800 difference andnow all of a sudden you have to
(30:44):
explain why residents are goingto talk.
Family members are going totalk, especially when you have
friends and family referring toyour community Apartment rental
consistency rate consistency isvery, very important because
that's building trust.
It's building credibility.
Again, the goal is to have agood occupancy with a healthy
(31:08):
NOI and to be able to giveincentives to move in that burn
off quickly.
It can generate the revenue thatyour business needs to succeed
and to create a thrivingcommunity that has
entertainment, that has fancydinners, that has the
opportunity to serve its teamand its residents in a very
(31:30):
impactful way.
So I like to think of it thatoccupancy is the book cover.
Never judge a book by its cover.
Right?
And NOI is the actual wholestory.
Just because your occupancy isat 85% doesn't mean that your
financial health of yourcommunity is worse than the
(31:51):
communities at 95%, because thewhole story is what are all
those residents paying per monthto get to 95%?
That's the good question, right?
Concessions and discounts mightfill apartments.
But they create long-termfinancial challenges.
If we're not careful and we usethem as a crutch for too long.
(32:14):
A good sales director, a goodexecutive director, knows their
community story and can buildthe value of that community and
why somebody would wanna paythat monthly rate.
Because if you discounteverything, what is the true
value of your community?
What is it and your communitystory and the transformations
(32:39):
that your community brings topeople?
It's worth the full rate.
It is because you can tell thatstory.
I believe in quick wins.
I believe in building momentum.
I believe in being a blessing topeople when we can, but I also
believe in being true to rates,to being consistent around the
(33:00):
board, to build that trust andto know that my community is
worth the monthly rate becausehere is what we're gonna do for
you.
When you can sell it that way,you're going to get the rate
that's budgeted.
You just have to believe it.
And be able to communicate thestory well enough.
And as a new sales and marketingdirector and even a new
(33:22):
executive director, I struggledsometimes saying the rate per
month because as a 24-year-old,I was never gonna be able to
afford$2,500 a month for anapartment as a 44-year-old.
I understand that a little bitdifferently now.
And as someone who has beenshopping at Communities for
(33:43):
their loved one, they understandhow much it costs.
They do.
And that's when you ask, do youhave long-term care insurance?
Do you have the VA benefit?
Do you know about these thingsthat can help you?
And yes, we're not for everybodyand sometimes that hurts, but
you can help them solve theproblem by finding a community
(34:03):
that they can afford if theycan't afford yours.
You can be like my family andhave family pitch in financially
to help them.
You just have to ask theappropriate questions through a
good, meaningful and impactfuldiscovery.
Okay, so your NOI is the wholestory.
(34:25):
Concessions and discounts areimportant, but to me, rate
consistency is more important.
And leaders, we must askourselves, are we prioritizing
short-term occupancy wins overlong-term sustainability?
Know your financial story so youknow what works for you and what
(34:46):
does not.
The key takeaway here is beforeyou make any pricing decisions,
Think about it as it's going toimpact you for the next six.
Months to a year just like itdid with me, not just today.
So if we make this decision now,we're cutting the rate by a
(35:06):
thousand dollars per month, youcan assume they're going to be
here for 18 months becausethat's the average stay.
So that is$16,000 overall.
And if you do that too manytimes, you're looking at a lot
of money lost per year.
Can you do that?
can your community handle that?
(35:26):
It's an important question toask when your sales director
comes to you and ask that.
All right, I'm gonna give yousome tactical advice.
Financial knowledge is not justabout numbers, it's about
influence and influences.
The modern day leader'ssuperpower, in my opinion,
leaders who understand theirnumbers, make better decisions
with confidence, gain trust fromtheir corporate teams and
(35:49):
families, and they createsustainable communities, not
just high occupancy ones.
Okay.
Here's your tactical advice.
Know your numbers before everycompany meeting.
You need to know them.
Those numbers tell you a story.
Data, financial storytelling.
Know what's going on in yourcommunity and be able to talk
(36:09):
about it.
Track your move-ins and moveouts and projected revenue gaps.
Focus on move-ins throughout theentire month.
Look, I don't know why thisphenomenon of move out to the
end of the month, I don't know.
It happened to me too.
I completely get it, but try tofocus because.
Where you focus your energyflows in that area.
(36:31):
Let's get move-ins throughoutthe month.
Every month if you have move-inshappening at the end and move
outs happening at the beginning,you will stay financially in the
same place you are consideredstuck.
The quicker you get the residentin, the more revenue you're
generating for the month.
So try to focus on move-insthroughout the month, not just
at the end.
(36:52):
And these fast moving, fastburning concessions will help.
They will help by gettingmove-ins in the beginning of the
month.
If we start talking about thatin the tours and discoveries and
follow ups and use radicalaccountability, which is one of
my favorite phrases, own yourfinancial mistakes.
Know the story and learn fromthem.
(37:14):
Be honest about them, whathappened, why they happened, and
what we're doing to prevent themin the future.
Okay.
Numbers tell a story.
Be the leader who knows how toread, interpret, and communicate
that story effectively.
(37:35):
It's very, very important.
I hope this episode helps.
I love mentoring.
It's my favorite thing to do.
I am always available to you.
Reach me LinkedIn.
you can message me.
I am open to coaching, youindividually as well as building
mentorship programs within acompany that you work with or
work for.
(37:56):
It is my passion.
Share this episode if you feellike somebody on your team or
somebody, a colleague that youknow needs to listen to it.
And if you have time, leave areview on Apple Podcasts, or a
rating so we can continue togrow.
This podcast is growing and I'mso happy that you are listening
and sharing.
(38:16):
I appreciate your supportRemember, the more you know, the
better you are.
Confidence starts with action.
Keep going.
Own your story so you can createthe future you want and always
aspire for more for you.
High occupancy means nothing.
If your NOI is suffering, it'stime to shift our mindset and
lead with financial confidence.
Hi everyone.
It's Erin here.
Your person who gets it seniorliving.
Leadership is always abouttaking care of the residents and
(00:20):
your team, but it's just asimportant to take care of the
business that allows us to servethem.
So here's the problem.
Too many leaders step into theirroles without the financial
training or confidence that theyneed to make strategic decisions
that drive long term success.
(00:42):
If you've ever felt lost in abudget meeting, struggled with
NOI versus occupancy goals.
Or wondered how to tell yourcommunity's financial story.
You are not alone, I promise.
In today's episode, we'rebreaking down financial literacy
for senior living leaders.
Why it matters, how to masterit, and how understanding your
(01:04):
numbers can make you strongerand more respected as a leader.
So let's get into what I believeis a financial disconnect, let's
start with this simple question.
When was the last time that youlooked at your NOI or your
budgeted occupancy, your rentrole, or your general ledger
(01:26):
before the end of the month?
If the answer is never, I'm gladyou're here.
If the answer is sometimes, I'mglad you're here, and if the
answer is all the time, weshould talk because I think it
would be fun to know what youknow and to learn from you as
well.
But for those of you, who do youunderstand the value of, of
(01:49):
knowing your community?
Right?
We've got to understand ourcommunity story.
All of it.
The relationship piece, theregulatory piece, and the real
estate piece, which is thebusiness side of things.
Our occupancy matters.
(02:09):
lemme just say this, I made apost about NOI versus occupancy
on LinkedIn, and so many peoplehave asked me about that post,
and honestly, I felt nervousbecause I didn't want to post
that post.
Because I don't really talkabout the financial side of
things as much, but I did itanyways because it is a valid
(02:32):
question.
I didn't realize how manypeople, thought the same thing
or had the same questions andwanted to know people's
responses.
Here's, here's the, the rub iseverybody talks about occupancy.
Because that's the number thatwe tell everybody, right?
Like occupancy is like youdriving the brand new Lexus or
(02:55):
the brand new BMW and you'repaying$1,200 a month for it,
right?
I mean, that's flashy.
You drive a beautiful car, butyou are paying for that
significantly every month.
And I'm driving a 2015 minivanwith 216,000 miles on it.
(03:16):
But my NOI, you know, my monthlyrate, monthly car note is zero.
So occupancy is flashy, butmoney in the bank or less money
going out per month is wheresuccess lies.
Believe me.
I'm building a business, so Idon't have a lot of money in the
(03:38):
bank, but I do have less moneygoing out because I drive a
vehicle with no payment and ithasn't had a payment for a long
time.
I digress.
But that is the differencebetween NOI and occupancy.
I could sit here, I mean, ifyou're gonna see me driving,
you're literally gonna see medriving a car.
(04:00):
With the left bumper, I believeis where I ran into my culinary
director's vehicle on a verystressful day.
I was full of anxiety and I wasreversing in to unload some
things that I got for thekitchen and I accidentally hit
her vehicle.
I fixed hers.
(04:21):
I did not fix mine, the otherside of my bumper.
I accidentally grazed myhusband's truck in the driveway.
You know, it is what it is.
And then there's a little tinybump on the hood of my van
because as I was driving, backhome one day, someone's tire
decided to blow and a huge chunkof it landed on my hood on the
(04:46):
interstate, going somewherebetween 75 miles and 85 miles
per hour.
I was lucky that it didn't hitthe windshield.
Anyways, I haven't gotten any ofthose things fixed.
I just feel like authenticity iswhat it is, and I haven't gotten
a new car because I value my 300to$500 a month.
It's not going out right now.
(05:09):
And that's how we have to lookat occupancy versus in oi and
honestly the about financialliteracy inside of our
communities.
I mean, it's, it's reallydefining what success is.
Success to me is not having acar note at this moment, but let
me tell you what success isgoing to be.
Either getting a Volvo from theactual plant where I get to pick
(05:32):
it out and then travel overseasto go get it, which lemme tell
you, is fabulous.
This, the idea of doing that isfabulous.
Or I just saw Lexus five 50 theother day.
I really fell in love with thatone day.
I am going to get that, but it'snot gonna be today.
And it's not gonna be tomorrow.
And if I have to get a new car,I'll probably just get a new
minivan because that's the stageof the life that I'm in right
(05:55):
now.
Because if my kids aren't gonnatake care of it, I'm not gonna
be paying for it.
Right.
So I.
I say all that to say I am arelationship purist when it
comes to senior living, but Ialso understand that this
relationship piece of seniorliving needs to extend to money
(06:16):
and business strategy.
What does success look like toyou?
I have turned around fourdifferent struggling
communities.
They were struggling withregulatory issues, financial
issues, reputation issues, allthe things.
There are phases in a turnaroundof a community where you have to
(06:37):
choose, do I get some short-termwins and build long-term
strategy later?
And that's a choice that youhave to make with a corporate
person.
Not something that I wouldsuggest that you take on your
own unless you're the owner oryou have other, don't have
anyone else to talk to.
(06:58):
But if you start slashing ratesfrom 4,000 to 3000 for the life
of the agreement, you are goingto be down a thousand dollars a
month.
And if they are there for ayear.
$12,000 a year.
And if you do that for fiveother people, that's$60,000 a
(07:23):
year.
That's the business side ofthings.
And now lemme tell yousomething, I, I did this a lot.
I will tell you, my grandmotherlived in a community and they
gave her an amazing discount.
it was at the end of a month.
It was probably at the end of aquarter.
They needed the number and sothey made a decision.
This apartment has been emptyfor a long time, and they wanted
(07:47):
the move-in rather than an emptyroom.
And sometimes those aredecisions that you make.
You look at the budgeted ratefor that empty apartment.
You look at how much time thatapartment has been empty and
would you rather have.
$2,000 instead of$0 for anapartment that's budgeted for
(08:07):
$3,500 per month.
Right?
These are the decisions that youhave to make, and hopefully you
have somebody to help you thinkabout it that way.
I have gone through times in mycareer where I wanted to give
everybody a discount becauselet's face it, I do have a
bleeding heart, but you cannotdo that long term.
(08:28):
You cannot do that and expect tobe able to answer questions at
the end of the month of whywe're not meeting our budgeted
goals, and then your team startssuffering because we don't have
enough revenue coming in to dothe do all the different
activities that you might want.
So it's really, really importantto keep the overall perspective
of the community in the best waythat you wanna serve residents
(08:51):
in your community.
rather than always focusing ongetting a resident to move into
a community, you can still feelgood by giving short, burning
incentives to move in.
Paying for somebody's move intoa community is an excellent
incentive to move in, and ithelps people.
(09:11):
It's potentially 500 to athousand dollars.
I would certainly take somebodypaying the movers to pack up my
stuff and move them in righttime over money.
So just remember, you can stillbuild relationships and have
good relationships with thebusiness strategy inside of a
community.
(09:32):
Leadership is not just aboutpeople.
It's about business and numbersas well.
We have to be good stewards ofour residents dollars, our
dollars that we are paying ourteam and that we can use to
honor our team.
Many leaders rise to the ranksbecause they excel at management
(09:52):
or team culture andrelationships, but sometimes
when handed a budget.
They might get confused.
I will never forget, I was atthe corporate office of the
community that I was working inand I was called into.
I was there for executivedirector training, which I had
been working there for yearsalready.
(10:14):
Anyways, I was thankful for theopportunity.
I got called into the vicepresident and.
I don't know what the otherposition was.
He was CFO maybe, I'm not reallysure what his position was, but
it was around budget season andI never really understood how
the corporate level looked atcreating budgets because the
(10:35):
budget for my community wasalways off.
and there were times where I hadsay in it, and then there were
times that I did not.
Then they called me into the,off into an office and asked me
questions because I was thereand they were speaking about
this budget in terms and sofast, and I was nervous, and I'm
(10:56):
looking at the budget on thescreen and I have a million
questions that I would ask, butbecause I didn't feel
comfortable, I only said certainthings.
What I knew I needed I couldonly be as good as I could be in
the moment, and I realized Iwanna be able to read
spreadsheets so fast and tellthe story that these two people
(11:20):
can tell, just like them.
That takes time and intention.
And to be able to be comfortablewith the numbers, it's really,
really important for you torealize that numbers in your
relationship with the money isjust as important as the
relationship with your residentsin your community team, family
(11:44):
members and residents will moveout of communities if they feel
as if.
They may close if they're notdoing well.
I worked for another communityearly on in my career that
stopped paying their bills.
We would get water cutoffnotices and power cutoff
notices.
I.
You know, we don't want thatkind of experience for our, our
(12:08):
residents and our team members.
And so the more we know aboutthe money, the more confident we
are in talking and dealing withthe numbers and knowing what we
can cut and what we can't.
Helps us create the story thatwe need to live and work by.
When you don't understand yournumbers, you lose credibility
(12:30):
with both corporate teams andfamilies.
So the more you know, the betteryour relationships can be built
over time, and you don't have tobe a financial expert.
You do need to be financiallyconfident because you are
(12:52):
leading a senior livingcommunity, which is essentially
running a business.
Your NOI is your community'sfinancial pulse, okay?
Your NOI is your total revenueminus your operating expenses,
and that money is the money, isthe revenue that you are
(13:14):
generating.
That's important to know.
So if you're in OI goals or ahundred thousand dollars a
month, that means that you havecleared a hundred thousand
dollars and over 12 months.
That's$1.2 million per year, andthat means that you are an
executive director running abusiness that is generating$1.2
(13:38):
million a year of clearedrevenue.
That is powerful stuff.
As an entrepreneur, I don't makethat kind of money.
Maybe one day, but that's notthe goal, although it could be.
But as a executive director, Iran communities with that kind
(14:00):
of in OI goals.
I can confidently say that mycommunity cleared over a million
dollars.
Probably for the majority of thetime that I was an executive
director there, meaning myleadership made my company
anywhere between 5 million and$8million for the tenure of my
(14:23):
career.
That is a powerful stat.
And lemme tell you something Ididn't know about that when I
was inside the community.
I didn't look at it that way.
I didn't understand it that way.
I looked at it as I had amonthly goal and I wanted to
know how to answer questions ona variance report and make sure
that I knew what I was talkingabout on a financial review
call.
I didn't understand the businessside of being an executive
(14:48):
director over a community.
That had an NOI of over ahundred thousand dollars for the
majority of my time there,honestly and transparently.
I mean, the first year or so wasjust rebuilding that, but the
only time I was ever in the redwas during covid when we were,
(15:11):
when we got down to, you know,below 70%.
I remember clearly seeingnegative numbers, and never in
my career had I seen negativenumbers.
So there were times that werehard, but then we went from 67%
to 100% in a year and one monthfrom 2021 to 2022.
(15:36):
I saw those negative numbers andI went, oh no, this is not who
we are.
And we kept going.
So there are three financialconcepts.
Every senior living leader mustunderstand to make informed
decisions and gain credibilitiesfor their financial discussions,
One of them we've alreadydiscussed, but it's your NOI
(15:58):
your net operating income, whichis your community's financial
pulse.
NOI equals total revenue minusyour operating expenses.
This is what the corporate teamslook at first to measure
success.
Okay.
They wanna know what's your NOIevery month?
How are you controlling yourexpenses?
(16:18):
Do you know about your expenses?
Are you looking at overtime?
Are you looking at agency usage?
Are you able to talk about whyyou're needing that?
Are you able to defend youractions as to why you can't hire
people?
Or can you talk about all thesteps that you made to hire
people to alleviate agency?
(16:39):
This is a story I.
Don't let the numbers scare you.
The numbers help you create thestory.
Okay?
One of my favorite leadershiptips is to start reviewing your
general ledger regularly.
It's not to micromanage yourteam, honestly.
It's for you to understand everymonth what you're billing for
(17:02):
revenue, what you're generatingrevenue wise, and then what are
the expenses.
You look at it after payrollhits it.
You know, you look at it, I, Iused to look at the 401k piece,
which I had no control over.
I looked at the taxes, which Ihad no control over, but I just
kind of knew what was going outand when, and so I found the
(17:25):
rhythm of the community.
Right.
When you look at your generalledger regularly, you're able to
understand trends and makeinformed adjustments.
So number one, know your netoperating income is the
community's financial pulse.
Number two, budgeting and spindowns.
It's predicting versus reacting.
(17:47):
Budgets are forecasts.
They're going to tell you whatbased on trends and other types
of communities, what yourforecast should be, what your
goals should be, but actualspending tells the real story.
Biggest mistake leaders make isnot tracking the actual spending
(18:11):
throughout the month.
And so what is the tool that weuse to do that?
Spend downs.
Spend downs are just asimportant as the general ledger,
and in fact, a spend down insidethe community is, to me like the
actual general ledger because weare seeing spending in real
(18:36):
time, whereas the general ledgertakes time to get put on it.
So you can actually look at thegeneral ledger and the spin down
to see where we are in themoment.
The spend downs are somethingthat I would reference all the
time when talking to differentmanagers.
The common question would be,can I buy this?
And I would say, well, I don'tknow how much have you spent
(18:57):
this month?
And so then we would have aconversation about the spend
down, and we would pull it up.
The goal is to train your keydirectors to be able to use this
spin down and make thosedecisions on their own.
Or we need this tool, we needthis technology piece to upgrade
for this particular department,and here's what I haven't spent
and here's how I can split itacross two months.
(19:20):
These kind of questions withsolutions on the back end.
Are brilliant, especially whenthey come from your team.
I had amazing ways of learninghow to divide things up into
months just by looking at thespend out, and I don't wanna
give you any like bad tips, butinsider tip would be your credit
(19:40):
card.
Has a stop date.
Typically, if it's in the middleof the month, you can, that's
gonna go towards one month.
And then if you use cash, that'sgonna go towards another month,
depending on the timing of whenthe credit card, closes out for
the month.
So there is an insider tip.
Use discretionary, and two, youadvantage and not to your
(20:03):
disadvantage.
Okay.
Insider tip, don't tell anybodyit came from me, right?
But the biggest mistake thatleaders make, not tracking
actual spin downs throughout themonth, use them.
And if your directors are notusing them, it's because you're
not following up with them.
You need this information.
They need this information.
(20:25):
This is a respect.
A respect of people's money, arespect of financial literacy
and confidence inside of thecommunity.
A respect towards your corporateoffice, who's entrusting you
with this potentiallymultimillion dollar business?
It's a respect tool.
Use it, it's knowledge.
(20:45):
It's empowering so your keydirectors don't have to ask you
questions.
They can figure it outthemselves and bring to you a
solution and say, here's what Iwant.
Here's how I'm gonna make itwork, and here's how it's going
to affect the month.
Boom, those conversations shouldmake you very, very happy.
Don't panic when you have to goover budget for expenses.
(21:07):
I mean, it just is what it is.
There's things that you can'tcontrol, right?
Instead have data to explain whyit happened and a solution to
move forward.
You know, if you have to replacethe fire alarm panel or the air
conditioner fan motor went out,you know, these things aren't
always cap accessible.
Sometimes they are, sometimesthey aren't.
(21:29):
Explain it, explain thevariance.
Then come up with a solution.
And then one thing that I didyear over year is I would write
down these big over budgetedexpenses.
Like landscaping for some reasonwas always put in the wrong
month when we got our colorchange.
And so I would make a note andthen around and a binder, and
(21:51):
then the next.
budget season, I would say.
Can you please make sure ourcolor is in budget is in April
and October instead of May andAugust, right?
Keep it in some kind ofdocument, whether it's a binder
or some kind of EOC or GoogleDoc or whatever that you use,
that you can communicate thesebecause the forecasting is
(22:15):
important.
And you're in the middle of it.
Corporate office is gonna makethese budgets and these
decisions, but you are in thethick of it.
And so when it comes to budgetseason, you can give them data,
real time data.
This would help if this was inthis month versus this month.
That's important.
And when you have over budgetmonths, explain it.
(22:38):
The worst thing you can do is tonot be able to explain it and
tell the story.
Alright, number one, for threefinancial must knows for every
senior living leader was NOI.
Number two is budgeting and spindown strategy, predicting versus
reacting.
And number three is financialcommunication and transparency.
(23:00):
Building or breaking trust.
Again, this is aboutrelationship with money and
numbers and one of the biggest.
Areas to focus on buildingrelationships and building trust
is when we bill our residents.
The billing, the generating ofthe statements is a very, very
(23:20):
important process.
And then the automaticwithdrawal is also a very, very
important process.
The more that you are open andhonest and transparent and hear
people's complaints or concernsabout the billing and the
statement and the withdrawingprocess, it is very, very
important because you'rebuilding trust.
(23:41):
You are taking large sums ofmoney out of somebody's account,
and that money is directly your,is your monthly revenue coming
in.
So it's important that you keepthe lines of communication and
transparency open.
Because it's easy for somebodyto get mad at you because they
(24:01):
weren't aware of how much moneywas coming out or that we double
drafted their account, which hashappened to me weird, but it
did, or that it was overdrawn,and we have to have that
conversation with the loved one.
Or the resident itself.
So being able to buildrelationships during the hard
money conversations are really,really important.
(24:25):
Build trust.
Financial mistakes happen, buthow you handle them and overcome
them to determines the trustthat you're building or that
you're breaking.
The other thing in communicationand transparency when talking
about money and building trustis having a strong relationship
(24:46):
with your corporate accountant.
To me, based on my experience,having your accountant be one of
your biggest allies is very,very important, especially in
financial reviews because theycan give you a heads up of the
questions that are being askedconsistently.
If you are on a list, you wantto get off the list, that would
(25:09):
bring negative attention to yourcommunity or your corporate
accountant.
Make them happy.
Give them the re, give them allthe reports that they need, get
everything closed out in atimely manner so they're not
waiting on you and askquestions.
And when you're looking at yourgeneral ledger, ask questions
(25:29):
with your accountant and helpthem.
Let them help you understand howto read the general ledger in a
way that that builds confidence,that you can start looking at it
for yourself in a confident way.
Okay?
The key takeaway here isunderstanding NOI.
Budgets and financialcommunications doesn't just help
(25:52):
you.
It helps your residents, yourteam, and your entire community
succeed.
So it's really, really importantthat you know what your
community's financial pulse,your NOI, that you understand
budgeting and spin the spindown, which is predicting versus
reacting, and to keep an openline of communication with your
(26:16):
families, your residents, andyour associates and your key
directors about budgets and, andbilling and.
Automatic withdrawals that couldbe coming out of their accounts
hugely.
It's very, very important.
Okay.
Back to the LinkedIn post that Idid, NOI versus occupancy.
(26:38):
What really matters?
Here's the question, highoccupancy does not.
Well here.
Here's a myth.
We're gonna bust today.
High occupancy does not meanfinancial success.
Again, it goes back to the BMWbrand new, shiny, awful lot
(27:01):
versus, you know, a minivan thatis making it right.
Dave Ramsey, who I havefollowed.
Will tell you that mostmillionaires don't drive the
fancy BMW and that the mostfinancially literate and
(27:23):
successful people live wellbelow their means.
So occupancy.
Doesn't a lower occupancy, anoccupancy at 85% doesn't
automatically mean that acommunity at 95% occupancy is
making more money than acommunity at 85% occupancy
(27:43):
because they could have been sodesperate to get to 95% that
they rented rooms at half thebudgeted rental rate.
Now I came into a community as anew executive director and that
community had probably 30% ofresidents at an enormously below
(28:05):
budget rate.
I mean, the gap was wide andtrying to rebuild from that.
Is really, really hard.
And the other thing is thatresidents talk and these
residents who had these lowerrates were residents who were
healthy and independent and weregonna live and did live at that
(28:27):
community for a very long time,a very, very long time.
And I was happy for him.
But every month I had to answerquestions about why we were not
hitting our NOI goals.
I was speaking to anotherexecutive director recently who
had moved to an executivedirector role into a community,
and she was sharing with me andshe was turning this community
(28:51):
around that all of.
Is a strong word, but a largepercentage of these residents
were paying well below thebudgeted rental rate.
And you can find thatinformation on the rent roll.
You are gonna look at whatapartment is budgeted for what
amount, and then you canactually look and see what the
actual rate, the actual revenuethat we're generating from that
(29:15):
apartment.
And that gap is the gap that youhave to try to overcome.
And this particular executivedirector was talking with me
about how every month she has toanswer the same questions
because every month they forgetthat she came to this community
with, let's just say 45% of theresidents paying a thousand
dollars or less under budgetedamount, and that's not that
(29:39):
executive director's fault.
She will have to answer thatquestion continuously until more
time passes and they're able toget more residents in at the
budgeted rate.
And that's why NOI matters, andthat's why what we charge our
residents matter.
Are we true to the rate?
Because the other thing thathappens is this, and I have had
(30:01):
this in my community where I'vehad.
Residents who are paying$2,000 amonth for a one bedroom
apartment, which should be atthat time, this was years ago,
you know, around$3,800 a monththat eventually we're going for
over 4,000.
And so that's an$1,800 a monthdifference.
(30:23):
And so when somebody's moving inand they're paying$3,800 for the
same apartment that someone elseacross the hall is paying$2,000
a month.
What happens there?
A lot of animosity, a lot ofpeople who are upset because
there's an$1,800 difference andnow all of a sudden you have to
(30:44):
explain why residents are goingto talk.
Family members are going totalk, especially when you have
friends and family referring toyour community Apartment rental
consistency rate consistency isvery, very important because
that's building trust.
It's building credibility.
Again, the goal is to have agood occupancy with a healthy
(31:08):
NOI and to be able to giveincentives to move in that burn
off quickly.
It can generate the revenue thatyour business needs to succeed
and to create a thrivingcommunity that has
entertainment, that has fancydinners, that has the
opportunity to serve its teamand its residents in a very
(31:30):
impactful way.
So I like to think of it thatoccupancy is the book cover.
Never judge a book by its cover.
Right?
And NOI is the actual wholestory.
Just because your occupancy isat 85% doesn't mean that your
financial health of yourcommunity is worse than the
(31:51):
communities at 95%, because thewhole story is what are all
those residents paying per monthto get to 95%?
That's the good question, right?
Concessions and discounts mightfill apartments.
But they create long-termfinancial challenges.
If we're not careful and we usethem as a crutch for too long.
(32:14):
A good sales director, a goodexecutive director, knows their
community story and can buildthe value of that community and
why somebody would wanna paythat monthly rate.
Because if you discounteverything, what is the true
value of your community?
What is it and your communitystory and the transformations
(32:39):
that your community brings topeople?
It's worth the full rate.
It is because you can tell thatstory.
I believe in quick wins.
I believe in building momentum.
I believe in being a blessing topeople when we can, but I also
believe in being true to rates,to being consistent around the
(33:00):
board, to build that trust andto know that my community is
worth the monthly rate becausehere is what we're gonna do for
you.
When you can sell it that way,you're going to get the rate
that's budgeted.
You just have to believe it.
And be able to communicate thestory well enough.
And as a new sales and marketingdirector and even a new
(33:22):
executive director, I struggledsometimes saying the rate per
month because as a 24-year-old,I was never gonna be able to
afford$2,500 a month for anapartment as a 44-year-old.
I understand that a little bitdifferently now.
And as someone who has beenshopping at Communities for
(33:43):
their loved one, they understandhow much it costs.
They do.
And that's when you ask, do youhave long-term care insurance?
Do you have the VA benefit?
Do you know about these thingsthat can help you?
And yes, we're not for everybodyand sometimes that hurts, but
you can help them solve theproblem by finding a community
(34:03):
that they can afford if theycan't afford yours.
You can be like my family andhave family pitch in financially
to help them.
You just have to ask theappropriate questions through a
good, meaningful and impactfuldiscovery.
Okay, so your NOI is the wholestory.
(34:25):
Concessions and discounts areimportant, but to me, rate
consistency is more important.
And leaders, we must askourselves, are we prioritizing
short-term occupancy wins overlong-term sustainability?
Know your financial story so youknow what works for you and what
(34:46):
does not.
The key takeaway here is beforeyou make any pricing decisions,
Think about it as it's going toimpact you for the next six.
Months to a year just like itdid with me, not just today.
So if we make this decision now,we're cutting the rate by a
(35:06):
thousand dollars per month, youcan assume they're going to be
here for 18 months becausethat's the average stay.
So that is$16,000 overall.
And if you do that too manytimes, you're looking at a lot
of money lost per year.
Can you do that?
can your community handle that?
(35:26):
It's an important question toask when your sales director
comes to you and ask that.
All right, I'm gonna give yousome tactical advice.
Financial knowledge is not justabout numbers, it's about
influence and influences.
The modern day leader'ssuperpower, in my opinion,
leaders who understand theirnumbers, make better decisions
with confidence, gain trust fromtheir corporate teams and
(35:49):
families, and they createsustainable communities, not
just high occupancy ones.
Okay.
Here's your tactical advice.
Know your numbers before everycompany meeting.
You need to know them.
Those numbers tell you a story.
Data, financial storytelling.
Know what's going on in yourcommunity and be able to talk
(36:09):
about it.
Track your move-ins and moveouts and projected revenue gaps.
Focus on move-ins throughout theentire month.
Look, I don't know why thisphenomenon of move out to the
end of the month, I don't know.
It happened to me too.
I completely get it, but try tofocus because.
Where you focus your energyflows in that area.
(36:31):
Let's get move-ins throughoutthe month.
Every month if you have move-inshappening at the end and move
outs happening at the beginning,you will stay financially in the
same place you are consideredstuck.
The quicker you get the residentin, the more revenue you're
generating for the month.
So try to focus on move-insthroughout the month, not just
at the end.
(36:52):
And these fast moving, fastburning concessions will help.
They will help by gettingmove-ins in the beginning of the
month.
If we start talking about thatin the tours and discoveries and
follow ups and use radicalaccountability, which is one of
my favorite phrases, own yourfinancial mistakes.
Know the story and learn fromthem.
(37:14):
Be honest about them, whathappened, why they happened, and
what we're doing to prevent themin the future.
Okay.
Numbers tell a story.
Be the leader who knows how toread, interpret, and communicate
that story effectively.
(37:35):
It's very, very important.
I hope this episode helps.
I love mentoring.
It's my favorite thing to do.
I am always available to you.
Reach me LinkedIn.
you can message me.
I am open to coaching, youindividually as well as building
mentorship programs within acompany that you work with or
work for.
(37:56):
It is my passion.
Share this episode if you feellike somebody on your team or
somebody, a colleague that youknow needs to listen to it.
And if you have time, leave areview on Apple Podcasts, or a
rating so we can continue togrow.
This podcast is growing and I'mso happy that you are listening
and sharing.
(38:16):
I appreciate your supportRemember, the more you know, the
better you are.
Confidence starts with action.
Keep going.
Own your story so you can createthe future you want and always
aspire for more for you.
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