![How to plan and track the budget of your nursing home [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-5_7dbfe6ef-ff83-486c-9371-88ef89a6e0c5.png?v=1715856484&width=1100)
If you don’t plan and track your nursing home budget properly, you're setting yourself up for failure.
When we developed our strategy pack for nursing home administrators, we saw a lot of administrators struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial revenue.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your nursing home's finances around and set you on the path to success!
Get the budget tracker tailored for nursing homes
Most nursing home owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for nursing homes
Here is an example of a (very) detailed budget for a nursing home, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for nursing home facility | $10,000 | $120,000 |
| Electricity | Power consumption for rooms, common areas, and medical equipment | $1,200 | $14,400 |
| Water | Water usage for residents and facility operations | $500 | $6,000 |
| Gas | Gas for heating and kitchen | $400 | $4,800 |
| Internet & Phone | Internet service and business phone | $200 | $2,400 |
| Waste Removal | Garbage and medical waste disposal services | $300 | $3,600 |
| Pest Control | Monthly pest control services | $100 | $1,200 |
| Insurance | Property and liability insurance | $1,000 | $12,000 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Administrator | 1 | $6,000 | $6,000 | $72,000 |
| Registered Nurses | 5 | $4,500 | $22,500 | $270,000 |
| Certified Nursing Assistants | 10 | $2,500 | $25,000 | $300,000 |
| Housekeeping Staff | 4 | $2,000 | $8,000 | $96,000 |
| Maintenance Staff | 2 | $2,500 | $5,000 | $60,000 |
| Dietitian | 1 | $4,000 | $4,000 | $48,000 |
| Activities Coordinator | 1 | $3,000 | $3,000 | $36,000 |
3. Medical & Care Supplies
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Medical Supplies | Bandages, gloves, syringes, etc. | $2,000 | $24,000 |
| Medications | Prescription and over-the-counter medications | $5,000 | $60,000 |
| Personal Care Items | Shampoos, soaps, lotions, etc. | $1,000 | $12,000 |
| Cleaning Supplies | Detergents, sanitizers, etc. | $500 | $6,000 |
| Paper Goods | Toilet paper, paper towels, etc. | $300 | $3,600 |
| Medical Equipment | Wheelchairs, walkers, etc. | $1,000 | $12,000 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $300 | $3,600 |
| Social Media Management | Managing social media accounts | $500 | $6,000 |
| Print Advertising | Flyers, posters, newspaper ads | $200 | $2,400 |
| Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
| Email Marketing | Email campaigns and newsletters | $150 | $1,800 |
| Community Events | Special events and promotions | $200 | $2,400 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of medical and facility equipment | $500 | $6,000 |
| Uniforms | Staff uniforms and scrubs | $300 | $3,600 |
| Licenses & Permits | Health permits, operational licenses, etc. | $200 | $2,400 |
| Software Systems | Medical records and management software | $300 | $3,600 |
| Contingency Fund | Emergency repairs and unexpected costs | $500 | $6,000 |
| Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
| Staff Training | Training programs and materials | $300 | $3,600 |
Some nursing homes make 5x more profit than you!
We have studied the strategies of the best nursing homes in the world. Replicate them now!
What are the biggest expenses for a nursing home?
Be mindful of these significant expenses. Here are five major costs every nursing home administrator needs to consider, along with some tips on how to manage them effectively.
- Medical and care suppliesThese can consume a large portion of your budget. You're dealing with essential items like medications, medical equipment, and daily care supplies, which can vary in price due to supply chain issues and quality. To keep these costs in check, focus on bulk purchasing, negotiate better prices with suppliers, and minimize waste. It's easy to overspend by buying too much or opting for high-end supplies that don’t add enough value.
- The staff at your nursing homeYour staff is your backbone, but paying for their wages, benefits, and training can be expensive. This cost is always high because you need a certain number of employees to provide quality care and keep things running smoothly. You can optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. However, be careful not to underpay or overwork your staff, as this can lead to high turnover and poor care quality.
- Rent and utilities of your nursing homePrime locations come with high rent, but they can attract more residents and their families. Utilities like electricity, gas, and water are essential but add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient appliances and lighting. Overspending often happens when you choose a location that's too large or too luxurious for your needs.
- MarketingYou need to get the word out about your nursing home, but advertising can be pricey, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we give in our pack. Overspending can happen if you invest in flashy campaigns without a clear return on investment.
- Facility equipment and maintenance costsThis includes everything from medical equipment to furniture and safety installations. These are expensive because quality equipment and regular maintenance are crucial for smooth operations and resident satisfaction. Optimize by investing in durable, energy-efficient equipment and maintaining it regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets you don’t really need.
How to spend less with your nursing home?
Here are practical tips to help you, as a nursing home administrator, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Food Costs | Partner with local suppliers for fresh, seasonal produce at lower prices and consider bulk purchasing for non-perishable items. |
| Labor Costs | Implement a scheduling software to optimize staff hours, reduce overtime, and ensure adequate coverage for all shifts. |
| Utilities | Install LED lighting and energy-efficient appliances throughout the facility to reduce energy consumption. |
| Marketing | Run social media campaigns for your nursing home and collaborate with local community groups for free exposure. |
| Cleaning Supplies | Train staff on efficient use of cleaning supplies to reduce waste and consider bulk purchasing for cost savings. |
| Equipment Maintenance | Set up a maintenance log for regular equipment checks and servicing to extend the lifespan of your equipment. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider moving to a less expensive location if feasible. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually to find the best deal. |
| Medical Supplies | Use cost-effective, high-quality medical supplies and consider bulk purchasing for frequently used items. |
| Furniture and Fixtures | Purchase high-quality, durable furniture that can withstand frequent use and consider refurbishing existing pieces. |
| Software Systems | Choose software systems that offer essential features with low subscription fees and integrate with other systems for efficiency. |
| Staff Training | Conduct regular in-house training sessions and use free online resources to keep staff updated on best practices. |
| Waste Management | Implement a waste tracking system to minimize waste and consider recycling programs for non-medical waste. |
| Technology | Invest in multi-functional medical equipment and utilize management software for patient records and scheduling. |
| Linen and Laundry | Partner with a cost-effective linen service and consider reusable options where appropriate. |
| Documentation | Use digital systems for patient records and administrative tasks to reduce printing costs and improve efficiency. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals, and ensure all staff certifications are current. |
| Transportation | Plan transportation routes for patient outings and medical appointments to maximize efficiency and reduce fuel costs. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital systems for administrative tasks. |
| Inventory Management | Use inventory management software to track stock levels of medical and non-medical supplies to reduce waste and ensure availability. |
| Pest Control | Schedule regular pest control services and maintain cleanliness standards to prevent infestations. |
| Activities and Entertainment | Use a streaming service for background music and host local performers or volunteers for resident activities. |
| Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
Copy the tactics of the best nursing homes in the world!
There are nursing homes that make way more money than you do. We have studied their tactics. Get them now!
Expenses that are just useless for a nursing home
Yes, some expenses for your nursing home are just unnecessary. They don't contribute to improving resident care or enhancing their experience.
| Nursing Home Expense | Reason It's Useless |
|---|---|
| Luxurious Decorations | Overly lavish decorations don't necessarily improve residents' well-being and can be a drain on the budget. |
| Premium Food Brands | Unless specifically required for dietary needs, most residents are satisfied with standard, nutritious options. |
| Excessive Activity Supplies | Having too many activity supplies can lead to clutter and waste, without significantly enhancing resident engagement. |
| High-End Medical Equipment | Top-of-the-line medical equipment is not always necessary and can be cost-prohibitive. |
| Paper Advertising | Traditional paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your nursing home. |
| Multiple Uniform Styles | Having various uniform styles increases costs without adding significant value to the resident experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving care quality. |
| Premium Subscription Services | Expensive subscriptions for music or magazines often go unnoticed by residents. |
| Exclusive Ingredients | Using rare ingredients can inflate costs and complicate supply chains. |
| Costly Furniture | High-end furniture is not always appreciated by residents and can be a significant expense. |
| Custom Printed Napkins | Personalized napkins are a minor detail that most residents overlook, and they can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Water Brands | Most residents are content with filtered tap water, making expensive bottled water unnecessary. |
| Extra Transport Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Renovations | Constantly updating decor and layout can be costly and disrupt operations. |
| Expensive Table Centerpieces | Elaborate centerpieces are often ignored by residents and add to the cost. |
| High-End Tableware | Luxury tableware is prone to damage and expensive to replace, often going unnoticed by residents. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Menu Designs | Frequently redesigning menus is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense.Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Catering Equipment | Specialized catering equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your nursing home!
Managing a budget for a nursing home when funds are tight can feel overwhelming. It's like being trapped in a situation where any unexpected expense can throw everything off balance.
This constant pressure makes it nearly impossible to invest in improvements or new programs, leaving you always scrambling to cover costs. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, cutting corners and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on increasing your revenue. More income means more resources to enhance the quality of care and services you provide.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of nursing homes just like yours. Get them now!
Make your nursing home more profitable
We have studied the strategies of the best nursing homes in the world. All their tactics are explained in our pack!
