Webinar: How to Grow in Senior Living

4 speakers on Eldermark webinar

In this webinar, join us as we delve into the experiences and strategies that have led to remarkable growth and M&A success in the senior living industry.

We spoke with 2 industry leaders and investors who shared their personal journeys and advice on scaling operations and enhancing community performance in senior living. Whether you're a seasoned operator, an investor new to the industry, or somewhere in between, this webinar offers valuable perspectives on navigating mergers, acquisitions, and management contracts effectively.

Key Highlights:

  • From Director to Owner: Learn how one seasoned operator transitioned from an Executive Director to an owner of 25 growing properties.
  • Investor Insights: Discover the strategies a new investor implemented to build a successful growth trajectory in the senior living sector.
  • Leveraging Technology and Data: Understand the crucial role of data metrics, software tools, cultural alignment, and IT systems in the success of M&A activities.
  • Optimizing Revenue: Explore methods to identify revenue opportunities and enhance community performance.

Watch the full webinar below:


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Webinar transcript:

Everybody, welcome to our webinar today. This is a webinar as part of our leadership forum webinar series. Happy to have you join us, today for this. These webinars are scheduled periodically, primarily geared to support those who are in leadership positions, in the senior living space. However, we often, are are graced with with many other professionals from other areas that touch senior living in different ways. But we we have these webinars in this series to help our our participants learn about new technology solutions that maybe can help us achieve our goals as leaders in the senior living space.

We share information and other resources relevant to our work, trying to keep up especially with current events or current concerns that come to light, and primarily to support each other, in our work. Primarily, again, connecting each other as leaders within the senior living space. I'm Mark Anderson, licensed assistant living director and chief client officer with Eldermark.

I'm usually the host for these meetings, but, my, my leadership forum webinar series, today is being hijacked by my colleague, Kevin.

Good afternoon, everybody. Yes. I am Kevin O'Connor, the chief revenue officer for Eldermark, and I am figuratively kicking Mark off the moderator chair today and into the panel discussion because of his unique experience, both on the partner side as well as his experience as an operator. So I am just absolutely excited about this topic. So, before we dig into it, just a couple quick housekeeping things.

Everyone is muted for for this webinar series. That doesn't mean we don't wanna hear from you. We absolutely do. We've had hundreds of folks register for this webinar. It is a hot topic. We've had over one hundred questions come in related to this topic before we even got here.

So we absolutely love that. We wanna continue to field your questions. Go ahead and type your questions in throughout the webinar. We will try and set aside time at the end to get those questions answered. And if there are any questions we don't get addressed during today's webinar, we will make sure that we reach out to you individually and get your question answered. So please submit those. You will also receive a link to this recording afterwards so you can double back.

And you obviously are welcome to contact any of our presenters today afterwards, and you'll have our contact information to do so.

With that said, today's topic that is in such high demand is the concept of mergers, acquisitions, and management contracting in the senior living space. Because let's face it, in today's senior living market, there is a tremendous amount of change and, who's run and who's running the business. Right? Every day, senior living operate operations are getting acquired. They're merging.

We have this concept of management contracting.

And so this is, today's webinar, how to grow in senior living. So we're gonna hear from some outstanding panelists today who have very dichotomous views on this space. Someone who's new, up and coming, and someone who's been around the block now and kinda grown it from from one to dozens of of newly acquired buildings and management contracts. So we're gonna hear from them today, and we're gonna get this thing going. Before we do, I think we should kick this thing off. We've had a lot of questions with, you know, wanting to understand what the smoothest acquisition was.

Can smaller players operate in this space? Tell us about the man the strategies that you go through to get here.

People wanting to understand more about how technology supports that, and how people leverage data and software to drive these decisions. And we're gonna dig in to all of them. Before we do, let's kick this thing off with a little bit of an introduction.

Today's panelists, we're here to welcome Michael Morris, president of Willow Ridge Senior Living. Thank you, Michael, for joining us. As well as PJ Strain, managing director and principal at Dionysus Real Estate, as well as our very own talented Mark Anderson, our chief client officer here at Eldermark.

So let's get rolling. Casey, would you please kick us off with a poll to start the show here? So we wanna hear from you. We're gonna start with a poll. So first poll, for those of you out there in the audience today, what is the biggest reason for keeping you from undertaking or exploring a merger, acquisition, or management contracting opportunity.

We're gonna let those those answers come in, and then we're gonna get to know our panel. We've got stuff going all over the place.

Looks like finances, knowledge, risk aversion, they're all right up there in the top. Well, here's here's the good news.

We have the experts today who are gonna help you navigate these waters so that you can overcome, these challenges for dipping into the space. So without further ado, let's meet our panelists.


PJ, welcome. You're a newcomer in the space. Would you please introduce yourself to the audience?

Yeah. Absolutely. Thanks for, the introduction, Kevin, and having me on, Mark, and, elder Mark team here.

Really honored to be here. My name is PJ Strain. I'm from Howard County, Maryland. It's about thirty minutes from Baltimore, forty five from DC.

I have been, due to the assisted living space. I've been in hospitality and restaurant ownership restaurant tour for the last thirteen plus years.

And I started doing some real estate investing, and it kind of led to an interest and, a little bit of an obsession with the assisted living space, for a number of reasons, which we'll get into a little bit later on here. But, yeah, I'm brand new. We should have had a deal closed, already. We thought we would when we originally planned this, but, things didn't work out as they often don't.

And, we're on to another deal. We have one under contract right now, and we're working on another one. We hope to be in something soon, but, if not that one, the next one. We believe in the space, not necessarily individual deals.

We're trying to make sure that we don't force something that isn't supposed to happen.

So yeah.

Outstanding. Well, thank you for taking the time. I know that I know that the audience is gonna is keenly interested to hear about why those didn't work out and the lessons learned, and we're gonna talk about all that as we go. Before we dig in, let me introduce Michael Morris. I had the pleasure of meeting Michael for the first time back over the holidays in twenty twenty three. And sitting down over dinner is kind of where, the idea of this webinar kinda sparked in my mind is is just listening to Michael's story and how he came into this space. So, Michael, would you please introduce yourself to the audience and and share a little bit about about your background?

Sure. Thanks, Kevin, and thanks, Mark, and the ElderMark team for having me. So Mike Morris, president and CEO of Boulder Ridge Senior Living. I grew up in the space, started as a dietary aid in an assisted living community in high school, spent three and a half years in the space, and I look back, and that's where I found my calling to work with with seniors and older adults. And, then came into the corporate world, through the the dining, the dining part of it. I was a dining services director for the Emeritus Corporation and, went into sales in two thousand twelve.

And then, of course, was acquired by Emeritus was acquired by Brookdale and spent the bulk of my career with Brookdale.

And I've held a variety of different roles with different large operators since before spinning out on my own in twenty twenty one.

Had the opportunity to work for Holiday Retirement, a smaller developer, from Western New York, primarily focused on active adult, and then most recently, with holiday retirement as a regional director of sales in the northeast. And then in twenty twenty one, we, my wife and I purchased a small, thirteen bed adult home and have, really just focused primarily on owner operating, our own properties. And, in twenty twenty two, we started, acquiring outside third party management contracts. And so the, the company has really taken off. And today, we have, ten communities and, you know, really excited to be a part of this to share our experience.

Excellent. And so you mentioned the portfolio's ten communities. Are those ten owned and operated, or does that also include your management contract?

We have, two that are owned and operated by, by Willow Ridge, and then we have slivers of equity throughout some of our other, our other properties that are in joint ventures. And then additionally, you know, third party management contracts as well.

Excellent. So you're gonna be able to bring and and this is why I love Avi here. You're gonna be able to bring a really holistic view on all of these different topics, which is great. So, again, thank you for taking the time to be here, and share your story and your journey.

And last but certainly not least, our very own Mark Anderson. I I've kicked you to the to the panel today, Mark, because you have experience on on both sides of this panel, both sides of the coin. Can you share a little bit about that with the group? Sure.

So I appreciated hearing Michael's story and how we got started in the business. I also began in this business in high school, as a caregiver. It was so long ago, Michael, we were called orderlies in those days, so just like know that.

But, then, graduated into about a little over twenty five years in in senior living management in various roles, across the community based continuum. So including skilled nursing as well as assisted living and all of the senior living components that are kinda comprised there.

Joined ElderMark about oh, it's almost twelve years ago now and, being able to bring that senior living world experience into the software, having been a user of the software for over ten years. And different than than PJ or Michael as far as they're right in the thick of these acquisition activities, you know, my work in that realm was after the acquisition.

And so, my role was to go in and do things like maybe reset some of the operational standards, optimize the various systems in place, including the systems within the technology, and even resetting the culture a little bit because, you know, as as I imagine you guys might touch on, but and our participants as well, you know, having standards in place really helps you get at the data you need to know what's going on and what to do next, and we're gonna touch on that a little bit later. But, yeah, I was I came in afterwards. I said to Kevin, we're talking about this kinda like to clean things up and reset things going forward. So that's my experience with acquisitions.

Very good. And now you help folks on the other side of the coin through all of March.

Get them set up financially, and we'll talk a little bit about that later on. Well, listen. I we have a lot of questions as it relates to culture and how do you establish that once you've acquired a building and and bring in do you bring in your own or not? So lots of questions on culture, lots of questions on technology, lots of questions on operations.

Before we get to any of those, I think some of the high level questions that I see a lot flying in are how you all are assessing and evaluating a merger and acquisition opportunity.

So So I guess I'll I'll start with PJ.

You know, as you're new into this space, you're passionate about the space. You said not necessarily particular building. What are you doing to evaluate, and and what things are you taking into account as you do evaluate these types of opportunities?

Sure. Yeah. I mean, because I don't have, experience in the assisted living space, I fall back to the things that I know better, which is, you know, business and personal management, and, real estate investment, to a slightly lesser degree because I'm a little bit newer at that. But, so I I start from kind of a the real estate investment side of things.

I, I scour Crexi and LoopNet and places like that, look for things for sale, talk to brokers. We've set up a couple systems of how we approach that. The first question to be asked of, brokers and sellers right when they're first starting, we have kind of a system set out for that. And then we start diving into the things you would normally dive into from a real estate investment standpoint.

The net operating income, the cap rates, then we go into the business side of things. The, you know, NOI goes into, EBITDAR. When it comes to the business side of things, we do operational margins, and we just kinda get a snapshot of, is this a healthy business in an area that we would like to be in?

And then we start diving into that. If those kind of boxes are checked, then we really start diving into the, business side of things to get more specific to assisted living and start analyzing the census, the time, the, you know, staff retention, particularly from the administrative perspective.

Our sort of, buy box has changed a little bit, kind of acknowledging our own weaknesses and, going more towards businesses that are already established with the idea that we're going to support an administrator who's already running the show and, sort of add value to that rather than trying to replace all the systems, which is kind of where we thought Eldermark became a really good fit for us, which we'll I think we'll get into a little bit later. But that's what I my lens is through, real estate investment. And I know there's a ton of differences in assisted living, but one of the things that is attractive about the industry is the fact there's a business tied to real estate, to real property, and there's all kinds of, amazing things you can do to grow, by leveraging real property.

Obviously, from the business side of things, it can be a lot harder to create momentum. So to have that real estate backing up the business, is something we're very attracted to. So we're not interested in businesses that do not own the real estate as well. So that's kind of a high level of how we go through, and start analyzing a deal.

And then it's about just like everything else, it's about people.

You know, we'll we'll go out to a facility and start talking to the administrator and, the seller and get to know, some of the key staff and talk to the residents and just get a feel for the business itself.

And I think a lot of times there's sort of intangibles there. Right? There's things that you will feel but you will never see on paper, whether this is a healthy business or something that can grow or has, positives that are hidden in it or, and there's also, you know, low hanging fruits. What's the low hanging fruit that you can do little tweaks and changes here and there to really move the needle when it comes to, profitability and from the business side of things.

That's Yes, Michael.

So same question for you and, specifically, anything you do differently when you're assessing, assessing an m and a opportunity.

Yeah. Thanks.

I think with, management contracts, the capital partners that we have, at Willow Ridge have a very high risk tolerance when it comes to operational distress.

So when we're looking at opportunities, a lot of it is no longer based on cap rates, but more on a price per unit basis. And they will look to me and say, alright, Mike.

If you had twelve months and we could fund some operating losses, what do you think you would do here to, you know, improve efficiencies, improve operations, to, maximize profitability. And so there's buildings that we've transitioned on a management level that we are just not capitalized enough to do on our own. So it opens it opens doors in a time where there's so much operational distress, you know, rising interest rates. There's operators and owners that are getting pushed out of buildings, and it's a great place to be for, you know, a growing manager who specializes in turnarounds.

I always say that Willow Ridge seems to find themselves in communities where things aren't going so well, and that's where we, you know, where we specialize. We go in and we trim, you know, unnecessary expenses. We restructure labor. We find efficiencies leveraging our scale.

And, certainly, our, you know, bread and butter is is occupancy growth. And, and so that's really where, our, you know, our focus is is trying to find those opportunities where we can create value.

You know, from a, owner operator perspective, acquisition criterias are really difficult right now.

The debt markets, which I'm sure we'll talk about in a little while, accessing funds for noncash flowing properties is pretty much nonexistent. So when evaluating new opportunities, really strong levels of equity are are absolutely required in today's market space.

So I think our our acquisition focus is really on building out our, third party management contract portfolio, diversifying into different markets, spreading out our risk, and, you know, and really seeing where we can, find some value for our our stakeholders.

You know, let let let's just stay there for a minute. You talked about accessing funds, and that's that's, a lot of the questions that we have here are, you you know, how do you access funds? How can I get creative? Because the market is so challenging right now. Can you elaborate a little bit more on that, Michael, as far as, you know, where you're getting your funds? And then and, PJ, I'd I'd ask you kind of the same same question.

Yeah. For me, we completed a a large, HUD, you know, a HUD insured finance refinance, back in December at our Manor Hills location in Wellsville, New York. We acquired the building in twenty twenty one with a SBA loan. The SBA seven a loan is a very good product. It has a five million dollar cap, but it's a great tool for, you know, young, you know, or newer owner operators just starting out. We were able to refinance out of that into the, you know, highly desired HUD financing, thirty five years amortization.

You know, interest rates are not where anyone would like them to be, but HUD is is always going to be the, you know, it's always going to be the lowest interest. So we got locked in. We put a really nice healthy deposit into capital expenditure reserve so we can maintain the building over time.

And, of course, it's nonrecourse. So great, you know, great position for us to be in for a long term hold.

You know, and we we do have a bridge loan, at one of our other buildings that is fixed rate interest only and really just short term vehicle to try to, you know, obtain, permanent financing when things, when things cool down and the debt markets cool when, you know, interest rates hopefully come down. And then, of course, there's, you know, there's different types of, like, preferred equity and other types of avenues that you can explore when opportunities come up. There's some really creative solutions that the REITs are putting out right now.

Not only are there, you know, triple net lease options, but they have, these, like, buyback programs and creative ways to deploy capital that allow, you know, newer owner operators to finance properties that may otherwise not be achievable. So a lot of, a lot of creative options in addition to seller financing. So seller financing is a really good tool if your building is not cash flowing, you need debt, you know, the debt levels to remain unlevered, you know, beyond a certain percentage, I think seller financing is a great way to reduce equity requirements. And, and believe me, we did not have buckets of cash when we got started. It was all through these creative, you know, creative ways to, you know, obtain financing, seller financing, very creative, just to get our foot in the door. And then over time, we are able to establish ourselves to get more, you know, more preferred routes of debt.

Incredible. Thank you. Thank you for sharing. BJ, would you add anything in in how you're assessing accessing cash and funds to to get started?

I mean, I'm trying to do exactly the same thing Michael was trying to do and has already done. So I I'm glad to see that it worked well for you because this is exactly what I'm trying to do right now. Yes. For us right now, it's all about the SBA seven a loan. There's FDA five zero four product as well, but that's more specifically towards real property. The seven a will wrap up business value in it.

But, as Michael said, the, SBA will guarantee up to five million dollars. Eighty percent of the loan value up to five million dollars.

So that backs, the banks or the lenders. What we found, people that are the most receptible are there's fourteen non bank lenders that are, preferred lenders for the SBA.

What happens for them is they can move very quickly, but they also do all the underwriting in house. Anything that's preferred SBA lender, they do the underwriting in house, and then the SBA kinda checks the boxes versus the SBA doing the underwriting. So it changes the time scale a little bit. One of the things I hear about the SBA all the time from people that are on investment side is it takes forever, it takes forever, and it does.

However, there are paths to make it a little bit quicker. And if you go through a non bank, preferred SBA lender, they can open doors for you and move a lot quicker than other things. The other thing that's interesting about the assisted living industry is the collateralization on real estate. So because the SBA is backing the loan up to eighty percent of up to that five million dollar threshold, they don't need a lot of the, and there's real estate involved they can collateralize against.

They don't need a lot of the, collateralization that a normal lending lender would need. So it is a lot more friendly to people like myself who, like Michael, is coming into industry with not a ton of money, but a passion and, need wants to get a loan product that fits that. Well, normal bank loans, they they close the door on you all the time. That's happened to me over and over and over and over again, and I took I kinda took the long road to get to the point where I was even taken seriously by lenders, and all those lenders were SBA seven a lenders.

And then the goal would be to get into the HUD two three two loan, which Michael was talking about, or in certain areas, USDA, loans was there's, there's something that we're interested in right now that would qualify for USDA loan, and that is very attractive to us as well. However, that's a very long term loan process, and we would need the HUD, set the SBA seven a loan in order to get to that get into the acquisition and refinance through, the SBA. And then the the, sort of gap funding, if they're not, going to take all the because there are SBA seven a lenders that will only lend on the commercial value of the real estate itself.

And some acquisitions for assisted living, that's gonna work for you. In others, it's not. So that kind of, gap funding also exists. But a lot of times, they do want sort of collateralization for that because it is unclateralized, that one, as a business loan. But those are all the avenues that we're working that and, you know, private investors trying to work our our various, real estate investing, sort of groups and, finding people that have capital that are interested in the industry for for various reasons.

So, yeah, that's the we're in a similar boat, just lot, a lot less far along in the process.

Different periods of time. That's okay. And that's what makes, I think, this webinar so, so captivating for our audience members is because we have everybody that's at every different stage of their journey in this process, some that are even earlier stage than you, PJ, some that are further along than Michael. But there's something you're given something for everybody in the in the stories that you're sharing, so thank you very much. I'd like to transition over to more the operations, side of the coin. We have a lot of questions centered around technology and how you use it to support your merger acquisition and management contracting, acquisitions.

Let's go and and bring up our second poll of the day, two of three, as we kinda dig into this topic.

And let's see if it's there.

Casey, you got the poll handy?

Alright. Well, we won't wait for the poll, but let's we'll pop the poll up in a little bit. But, look, let's start this topic off with just kind of addressing the the elephant in the room, if you will. Right?

You both selected Elder Mark for to help you in your journeys, regardless of what stage you're at.

Because I'd like to understand, and I think the audience would like to understand a little bit more about why you made that decision.

PJ, you're new in the journey. You looked at a lot of different technologies, I would presume.

What was it about ElderMark that made you say, yeah. This is this is the right tech solution for us?

Yeah. I I looked at a lot of different software solutions. You know, I because I had been in the restaurant business for so long, I kind of saw this sort of, the POS revolution happen, point of sale system revolution. When I first the first point of sale system I ever bought was a Microsoft, Microsoft e seven system, which had, like it was basically just a transactional system with, like, some reporting in the background.

At the time, I thought it was slick. It's great. But now, I mean, these systems are like you know, you talk about Toast and Upserve and some of the other big players in that. They are full management solutions.

I mean, they are everything from marketing to, like, incentivizing social media sharing to online ordering to, integrated and counting systems to everything, their full management solutions. So when I first was approached, my business partner approached me about assisted living space. He kept throwing me assisted living deals, and we were on some other real estate deals. And I was like, dude, stop this.

I I don't know anything about health care at all, and, like, that scares me. Right? So I, and he but he kept he kept throwing them my way, and I kept seeing the, sort of the returns on them, and it piqued my interest. So I started, sort of obsessively, like I tend to do obsessively digesting as much information as I possibly could, reading books, listening to podcasts, just reading about the industry.

And then I thought about the, the times when I had been in, point of sale system demos for the restaurant industry. And even though I had been an operator and restaurant tour owner for a long time, I still felt like I was learning something about the industry or things I should be paying attention to from those demos. So when I remembered that, I was like, oh, there's gotta be this in the assisted living industry. Right?

So I started looking. I just googled, assisted living softwares, and I started calling companies. And I did I think there was, I don't know, ten or twelve that I made notes of, and I did at least six demos, maybe more like eight demos. And, really, honestly, that was the thing that made me feel like I could I could participate in this industry because it broke down the various aspects of the industry in a way that I could digest.

And I was like, okay. This makes sense. And now I've seen this repeated from what I consider the top software companies in the industry or at least from my Google searches, top software companies in the industry. This is what they're all saying that you need to do, and this is the industry.

So then I felt like I had a blueprint of what the key pieces of, assisted living from the business side of it was.

And then elder Mark just stood out to me. And, like, for for me, it's like a lot of things. It's really the it's the people, not the not the thing. Right?

I mean, ElderMark is a fantastic, powerful software solution, clearly. Honestly, there are other ones out there that I thought were amazing and powerful as well. But, really, it was my conversation with, Kevin, not this Kevin, but, Kevin Nguyen when I first talked to him. And, he really kind of, he just chatted with me for a long time.

I didn't feel like it was a sales pitch. I felt like he was really interested in showing me how the industry worked and the solutions that Eldermark has embedded in their software in order to address these things that are can be difficult for operators.

And then the more I talk to him, the more he was like, oh, you gotta talk to Mark Anderson. You gotta talk to Mark Anderson. You guys speak the same language.

We've got this business model design program. It's gonna be perfect for you. And then I had a a Zoom meeting with, Mark and Kevin, And it's true. Mark and I, I just felt like I had a kindred spirit in him. We spoke the same language. We started talking about, you know, Michael Gerber's E Myth and, like, you know, technicians versus visionary leaders versus managers and just we spoke the same language.

And I, you know, I I I can't help but approach everything from a hospitality lens because I was in the hospitality industry for a long time. And that's one of the reasons why I'm attracted to assisted living in general is I believe I can bring, some hospitality elements to assisted living that I'm uniquely suited to to do. And assisted living, like a lot of things, is hospitality.

There's a a a sort of a a great quote about hospitality that I always always try to lead with in restaurants is that hospitality is the art of, making strangers seen, making strangers feel seen, heard, and loved. And that's hospitality. If you can do that over and over again, that's hospitality. But as cheesy as it is, when I talked to elder Mark and Mark and Kevin, I was like, these guys heard me.

They saw me, and they love me. So that's a stretch, obviously. But there's a lot of a lot of the software solutions that I had. They were just, like, going through a sales pitch.

At the end of it, they were like, do you wanna buy it or not? Okay. Buy.

And being new to this industry, I've had a lot of people tell me that, you know, that it's the can't don't conversation. Oh, no. You can't do that. Don't do that. And I tend to run away from those conversations because I just think they're fruitless, and they speak more to the fears of the people giving them to you than they do to, like, actually what's in front of you.

But I had a lot of those conversations. And that conversations I had with Kevin and Mark were the total opposite of those, and it was about trying to help me navigate into this with obviously, I'm sure the sale was in the back of their mind, but it didn't feel like that to me. And so, really, honestly, it's it's the people, and it's the business model design program, which I told Mark on our second call. I think that's a huge differentiator for ElderMark. It's something that I saw nowhere else. The other key pieces, EMR, EHR, all those things, you see versions of that in all the softwares. But the people and the business model design, I didn't see in any other software solution.

So so so Let me pitch this over the fence then to Mark since you bring up business model design, and I'll come back to Michael in a second.

Mark, for those that aren't familiar, can you just share a little bit about what makes and I'm teasing business model design and giving you the answer. But what is it that Eldermark brings that's uniquely different than other providers to help folks in PJ shoes, Michael shoes, you know, that that are going through this merger acquisition management contracting that we do differently to help support them.

Yeah. Well, there's a lot there's a lot there, but yeah. And and thank you, PJ, for referencing our calls. And we we had some we had some great conversations.

PJ and I are both systems thinkers. So, you know, we just connected right away on that. So this business model design process that we refer to and and anybody familiar with Elle Mar has probably heard it before.

We'll talk about the process in a second, but what makes that whole process possible, and I experienced this as an operator before I started working here and that is the way that that Eldermark is designed. It has this elegant design of how it connects the dots in the background between clinical operations and business operations.

And they might these systems certainly work very independently well, but they also work well together.

And because of how they work together, we can engage in this process we call business model design, which is working with the customer to understand their goals. You know, what do you wanna do with, your care models? What do you wanna do with, with aligning that to your financial goals? What kind of market are you operating in? You know, we kinda get to know what do you wanna achieve as a caregiver and what do you wanna achieve as a business? And then we connect those dots in the background.

We help the client understand their true cost of care. We work with the customer to understand also what pricing might be tolerable in their market. We connect the dots to that resident assessment system and the service model, whatever that is, if it's level of of care or a la carte or all inclusive, whatever their model might be, and just connecting those dots in the background, those are all supported by our software platform. And so at the end of the day, we can help our customer optimize these systems so that indeed they all work really well you know, working you know, you know, working you you know, we operate under a real partnership culture here, and that's one of the things I I love about about working with with my colleagues here at Eldermark. And and thank you, PJ, for sharing that experience because that's what that's what we wanna get to.

But it's it's the design of the software. I think it's unique out there that makes our our efforts in this partnership process, possible and successful.

Thank you. Well, let me let me turn it over to Michael, and I'm gonna ask you a little bit differently than I ask because you come from the industry. Right? You grew up in in the, dining piece of the business and then as an operator and whatnot. So I'm curious from someone who's been in the business, used a lot of different tools.

Can you call out just a couple unique things about Elvermark that help you be successful when you're focused on management acquisitions, management contracts, whatever it might be.

Sure. I think the direct API integration into our general ledger software is what, is not what originally got me into Eldermark, but it's what is keeping me, you know, and retaining me as a customer at ElderMark. Because, historically, before we had this, this integration to our general ledger software, we were finishing month end reviewing our financials and then sending them off to either ourselves for ownership or to our third party owners. And by the time the end of the month came, it would be too late to know if revenue was going up or going down, and you're you're very, you know, you're held accountable to the end of the month when you're, you know, you're not working together.

We use the billing module with ElderMark, and we have a direct, every time there's a move in our census, a move in, a move out, a community fee collection, it ports directly over into our general ledger software, and we have real time data available at our fingertips. Our finance department pushes out, you know, a weekly reporting package that has, you know, our month to date revenue and then month to date revenue versus budget. And so the billing module has been a fantastic addition to, you know, our software infrastructure.

And so we also leverage that with, acquisitions.

So when we're, transitioning communities, the ACH billing module, is is critically important for us. You have to alert the exiting operator, make sure you, you know, terminate all of your ACHs. We have all of our ACH forms. The Elder Mark team is very, you know, supportive. We added five buildings in twenty twenty three, and I feel like it's like clockwork now.

And, you know, to to throw out a few names, I think Tammy Ebling, our, you know, our account account manager is just phenomenal.

We do a monthly call with her. We review what our pipeline looks like. We have all of our you you know, and also Kelsey from training. And, of course, Kevin, when, you know, when you came on and we've just had I think to to summarize what PJ said, it's it's a clear that Eldermark, cares about the relationship, and it's not just about the transactional component of, you know, this operator is our customer or, you know, it's not transactional. This is purely a relationship based industry, and I think that's what helped me, you know, separate Elder Mark from the others.

Well, I'm I'm starting to blush. I might, bring it here.

We are I know I know that, I know that, you know, we take great pride in that, and we do feel like that is a differentiator for us.

And and we'll we'll transition off the infomercial here for a minute, but I I do wanna thank you both. I know, you know, the folks that you mentioned oftentimes, you know, it never everything doesn't always go perfectly. Right? I think you measure a partnership based on when things don't go well and how attentive you are.

I know all those people are wildly invested into making making sure that that we get things right for you. So thank you for sharing and calling out some folks. I know it's well deserved on their end. I wanna transition now to kinda what success looks like when you've done this.

I'm gonna pitch it to Michael and Mark for a minute who kind of have been through the transition now.

What is your strategy, Michael, for managing the transition within a community that you're acquiring?

Great question.

And I think it sort of segues into one of the polls or one of the questions about, you know, the smoothest transitions, that we've done in our careers.

But I attribute it all to the diligence, that we, you know, that we source on the front end. So the more information we have going into a new opportunity, the the better off we are. We've streamlined it down to an Excel spreadsheet that we kick over to the exiting operator and we request, I mean, everything from historical financials and real estate tax bills down to, you know, historical, you know, labor trends and staffing models and things of that sort. And I think the more information we do on the front end better prepares us for what we're walking into.

Talk about evaluating evaluating opportunities. There's things that you can uncover during that transition period that really can be red flags of things that you wanna steer clear of or, you know, areas that you need that, you know, need to be a focus.

One thing I've learned, you know, in my career is that and my team hears me talk about this all the time. When we say we're gonna do something, we need to follow through and honor that commitment. I talk about our movie matching, our soundtrack all the time. And and with that, when you're building trust with a new team, it's critically important that when you say you're going to do something that you ultimately follow through and and honor that commitment.

A lot of times there's, unnecessary stress, there's fear when, you know, the operator's getting changed out, the the name on their paycheck is is something different, And and there's a lot of fear that comes with that. And I think building trust, establishing these relationships, and really reassuring the the employees, and the residents and family members that we're, you know, we're here to stay and here's here's what we're going to do.

You know, my company did an exercise last month. We had a a leadership summit where we brought all of our executive directors and all of our sales directors to, our first annual leadership summit.

And we did not have, you know, values, mission, vision statements created, and and I pulled them all together to help build that out for Willow Ridge. And one of the, you know, the takeaways that I have is it's really easy for an operator to say we care about our residents and we care about our employees. But to ease transition, I think that's where the spotlight is on us to really show that that's what's enrooted in our values because transition is nothing spotlights who you really are than when things get tough and you're transitioning and you have employees that are threatening to leave, and how you navigate and handle that culture is so critically important. So, learned a lot over the years on what to do, what not to do, and how to best prepare and and all of that.

Fortunately for us and our our growing company, it's gotten easier and, more streamlined as as we grow further.

Mark, I'm gonna I'm gonna ask you for a quick follow-up on this having done on the receiving end, you know, of of being acquired. Are there any kind of best practices you can share, or learnings that you had in that process to help those go smoothly that would build on what Michael said or is you know, adds to what Michael mentioned?

Yeah. And I really appreciate Michael's comments. To to add to that, I guess, in my experience in having to be the one to manage the after, Strategies go I found that just being as transparent as you can possibly be was the key to the success, especially on culture changes. You know, to Michael's point, there there can be a lot of disruption whether it's real or perceived.

And so, you know, that transparency of of of be being present in the building, being being the go to person when people have things they need to talk about or or or share or report.

I mean, I remember first things do is you have your staff meetings, you deal with the workforce and then you have open and honest conversations public and private with residents and responsible parties.

Hey, everybody. This is what's going on. This is this is what's maybe gonna change. This is what's not gonna change. Here's what, what, you know, here's who we think you can talk to.

I I just think it's that it's that transparency thing. The more transparent and communicative that you can be in a transition, the fewer knocks on the door of the executive director's office of people who are upset or concerned or who have questions.

You know, for me, in my experience, it was the more transparent and communicative, the fewer issues there were. I mean, one of the things I always communicated to my teams was luck and kind of to PJ's thing about hospitality.

You know, the number one thing that we provide here is peace of mind.

Peace of mind to our colleagues, peace of mind to our residents, peace of mind to our visitors so that at the end of whatever interaction we have going on here, that other individual is is leaving us with peace of mind. And so I'd I would add to Michael's notes, really emphasize communication and transparency.


I wanna transition down just looking at time, and I wanna make sure we get, I know we wanna take a look ahead, and we wanna get your opinions on the market, and what's coming down the pipe for the rest of the year. And the the group wants to, you know, get some some notes on the lessons you've learned so far in this process for both of you. Before we get into that, I guess I'll I'll wrap this up. But from a technological standpoint, PJ, you talked a little bit about your experience in hospitality.

As you deploy technology within a space, what are you anticipating are some of the key metrics, KPIs, that you're gonna need from a from a technology partner?

I mean, I think for I'm not sure I fully understood that question. Sorry, Kevin.

From data perspective. Right? What what are you expecting you're you're gonna be looking keenly at, you know, post acquisition?

Or even pre acquisition, you shared a little bit about the financial, you know, KPIs you're looking for. So I guess I'm I'm curious on the back half after you go live.

What specifically do you anticipate you're gonna be paying the most attention to? Because I think the root of that question is how can a technology partner like ElderMark, you know, support you in that endeavor?

Sure. Sure. I mean, I think for me, it's a slightly bigger picture of kind of outsourcing responsibilities.

When I first started looking at this industry, and talking to people, talking to administrators, going to visit facilities, and seeing stacks of handwritten ledgers for medication administration records and and health records and all this stuff that takes all this time and energy and focus away from the highest level tasks, that was problematic for me from my experience in in management. You know, as Mark said before, I'm definitely a systems thinker. I don't actually believe you can manage people. I think you manage systems that drive behaviors that produce desired outcomes. That's what we're the goal is, and that's how we get people to do what we want to exist within these systems. And I saw administrators just kind of doing everything, you know, being responsible for fixing roofs and, like, you know, dealing with all this paperwork and all this stuff that to me was not high level at all.

So for me, it's about outsourcing unnecessary responsibilities to key employees to take burdens off their plate so they can hot they can focus on the highest level activities. Right? So, like, for administrator, the highest level activities is making sure, residents are, safe and well taken care of, making sure staff is well supported, making sure that, you know, they have emergency procedures in place, and communication with, you know, family members and community. Like, those are all high level things.

Doing the basic accounting work is not a high level activity of an administrator. Fixed you know, being there to, like, let someone in to fix a toilet is not a high level activity administrator. It might follow them sometimes, but it's not high level. So from my perspective, leveraging a software is about outsourcing and taking off taking those things off the plate of your key employees that they don't necessarily need to do.

And through software, I can see what's happening from anywhere and sort of start outsourcing. The two questions I like to ask people all the time is, where's the pain point? Where's the lag point? What is slowing you down, and what's causing interruption?

Or what are you just not good at and you don't like doing? And if we can possibly get that off your plate, let's do that because that's gonna add to the environment, and that's really what we're trying to do. Like, it doesn't really help the resident if the administrator is chasing down an invoice for, like, the last three weeks. Right?

That doesn't help any resident at all. So for me, it's about outsourcing. Just same thing that I would try to do with, you know, HR, try to go through PEO and outsource HR benefits. Same thing I would do with accounting, which is try to pull that through the ElderMark software and then, use, you know, an online bookkeeper rather than having an in house that gets in people's way and, like, you know, is just not necessary.

So for me, that's how I leverage software is really as a tool to outsource the unnecessary activities and distill down the, the key highest level tasks of key employees. I'm not sure if I fully answered your question there.

No. I I think you gave us a great perspective on it. I'm gonna come to Mark for another perspective. How does how does ElderMark support folks like PJ and Michael and operators, once they've acquired a community. You talked about business model design. How how do ElderSmarts and ePay and things like that really help support giving them the information, and the the information that they need to make critical business decisions.

Yeah. So I guess it's all around you know, again, the more we know about your your goals and where you wanna be, you know, what's what is the end of the story, you know, that you wanna get to, the more we can do to create and design and optimize and configure the systems within our technologies to support what the customer wants to do, especially around around the data. You know, it's and and we try to take that position of the customer doesn't know what they don't know, so we have to be the question asker and ask a lot of questions so that we can better understand what is it that you need from us at the end of the day so that we can help configure and design the systems to support that?

And, you know, I did a as you know, Kevin, I did a presentation at a a conference yesterday on, data driven quality assurance performance improvement.

And the the key factors that you need to to be able to understand what it is you wanna measure, what, you know, where do you wanna go. And fortunately, we have these systems both within the the platform dashboards, but also in in our analytics platform, elder smarts, to be able to get at some of the things PJ at you mentioned and and Michael mentioned earlier. It's like, look, what do you need to know and when do you need to know it? And and how can we align those things with your goals so that we're delivering to you those insights that are most important to you?

You know, as as we talk about here and and our CEO mentions when he talks about it's like, there's a hundred and fifty things that you could you could be informed about today. But, you know, what are the five things that move the needle for you? What are those things that you really need to know or be focused on to get to where you wanna go today or this week or this month or this quarter?

And I think that the data and analytics that we're now able to deliver our customers is probably the best example of the of the level of support that we can offer our customers, especially our customers who are involved in growth.

Yeah. I think, you know, PJ talked about offloading work. Right? I think about elder smarts and the prescriptive predictive nature of that to be able to just tell an executive director or an operator that, hey.

These five people are currently in the wrong level of care, and here's where they should be, and you should go move these, and here's the data. Just giving them that information, and that all happens because of the business model design, the technology, and then the elder smarts and the prescriptive predictive nature of what PJ's looking for. And then, you know, on the financial side, what Michael's talking about things like ePay where you can click a button, batch you know, run your batch, eliminate errors, have your funds the next day. You know, you worked with a a customer the other day.

I I think he he mentioned a quote to you. I I won't speak to him, but about how his financial situation had turned around and overnight almost. Do do you know the one I'm I'm referring to?

Well, it's the one I think you're referring to. We we, you know, we do periodic business review meetings with our customers, and I think that's the customer you're talking about, Kevin, where, you know, I'm just I'm just celebrating in my head. My thought bubbles are screaming way to go. And when, you know, the owner operator was able to report that, you know, they're invoicing now the the the the dollars they're invoicing now are the highest they've ever been since they opened the building.

And all of their accounts receivable ninety nine percent of their accounts receivable are in the bank by the twentieth of the month.

That's nice.

It's good news stories we like to share, and I I think we might have we might have lost Michael here. But, I know we only have his connection back.


Yeah. Well, I know we only have five minutes left. So, oh, here he is. Perfect timing. Speaking of. Yeah.

Speaking of, he right at the right time, he's like clockwork. He turned right back again. So as we wrap up in this last five minutes, we have a a a bunch of questions that, you know, maybe we'll get time for, but I think the audience would really like to hear, you know, a key lesson you've learned. We only have five minutes, so maybe just one of those lessons you've learned.

PJ, I'll start with you. You're early on in this. Is there is there a lesson learned or an moment that you've had in in as you've navigated the beginnings of this process?

I I think the same things I learn every time I try something new is, you will fail. And through failure, you learn a whole lot, so don't be afraid of failure. Failure is your friend if you take it the right way. If you have the right mindset about it, failure is the greatest thing you can do.

And, actually, it kind of, reminds me of what you said earlier, Kevin, which I used to think about in the restaurant business all the time is mistakes are actually an opportunity or errors are an opportunity to really connect to somebody. So in the restaurant business, you know, you don't want food to come out poorly. But if it does, that's an opportunity to really win that guest forever because they now have something meaningful that they can identify with, and they know that you care because you turned it around for them, and that's memorable. That plate of food might not have been, but that is memorable.

That relationship is memorable.

So I saw a quote like that the other day, which is successful people are just people who failed and got back up to the plate one more time.


Right? And I think that speaks volume. Michael, is there and you've been added a bit longer. Is there one piece of advice you'd give that trumps all others?

Yeah. One is tough. There's not enough time on this webinar to share all of my failures. But, I think that if I had to narrow it down to one, it's that growth is is exciting and pursuing growth, you know, it brings its fair share of challenges and to evaluate every opportunity very critically.

The worst thing that has happened to me is jumping into an opportunity that I later regret.

And, you know, there's residents, there's employees, there's, you know, our management companies, employees, and there's a lot that goes into it. So, I think my my learning lesson is to evaluate opportunities very carefully before I sign up to take something on that I may later regret.

Would you leave the audience with any advice? Obviously, you just just kinda shared your moment, but is there a piece of advice you'd give to someone who's trying to wade into the waters of this space for the first time, what what would you tell them? I'll start with you, Michael.


I think, what comes to mind immediately is I was shorting equity for, for a project, and, it was asked of me, you know, to share what my software infrastructure was, where my office space was, what my team looked like.

And, the reality was it was me and my wife and my shoebox, and I had I had nothing.

I had no team. It was it was really just me. And, a lot of the questioning that came in from from investors and from those around me were, well, what happens if Mike gets hit by a bus someday? You know? And and then all of our money that we've poured into your project is, you know, is up in thin air because you're the only one that's making this thing run. So I think getting started and and doing it over again, I probably would have invested more in our overall, operational infrastructure before venturing out, because all of the mistakes and all of the failures that we made were were from being inadequately prepared to take on the projects that we did.

So I think that that is my, you know, my message to anyone starting out is make sure you're prepared to take on because really hard to unwind, after you've already committed.

Yeah. PJ, any any advice you'd leave the group with one minute left that you'd leave the group with?

I love that advice from Michael. I you know, I think that, for me, I I'm a learn things a hundred fifty percent before I try things. It it has its weaknesses, but also its strengths. So for me, it's just learn as much as possible, figure out if there's a passion involved there.

If there's not a passion, probably move on and do something else because you need a passion to really do something well. I found that in, in on intellectual level and assisted living. We'll see what I say a year from now. Hopefully, you'll have me back, and I can talk about all my failures in the prior year.

But also know that, you know, you're if you're the if you're an expert now, you should be twice as good next year. I mean, like, you should if you're afraid that you're not doing it right and your future self is gonna look back and be like, that person didn't know what they're doing, well, then you're doing it right because that's that's growth. And, don't be afraid of that and know that you're gonna fumble through things and just get up and try again, I guess.

Well, I think you just gave us the next, webinar, you know, six to twelve months from now, which is lessons learned from failures and mergers, acquisitions, and management contracts.

I think we should know where are they now?

That's right. Where are they now? Well, listen. I look. We could talk for hours on this topic. We have dozens of questions that we didn't get to yet. I promise everyone in the audience we will get you answers.

Michael and PJ, I I know will support us in getting you the information that you're looking for.

Michael and PJ, I can't thank you enough for taking time out of your busy days to just share, and help everyone in that business get better, and and be more successful.

We love being a supportive partner for you and are proud to be it, and thank you for taking the time out of your day to do so. Everyone in the audience today, thank you for taking time out of your day to join us on this call.

We'll continue to try and bring you, great insight into the business in all aspects, so look out for our next our next webinar a month from now in this series. So, Michael, PJ, Mark, thank you very much for your time, participation, and thoughts. We appreciate it. I know the audience does too.

Thank you.

Appreciate being here.

Thanks, guys.

Thank you all. Cheers, everybody.

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