Feasibility / Market Study
For Senior Living
Do you have questions about the following?
- Geography of the market you expect to serve
- Services or products to be offered
- Prices to be charged and the income necessary to afford those prices
- Characteristics and number of people who would be appropriate consumers (age- and income-qualified households in your market area)
- Number of residences that need to be sold in order to succeed
- Competitors who sell the same or similar service
- Possible risk and investment created by a new project, either expansion or new community
Leadership and potential lending institutions should always investigate the feasibility or viability of a senior living project before moving forward or funding.Bobby Sumner Consulting (BSC) works with a community to research relevant information and factors that might impact the success of a proposed endeavor. Our basic market study determines if there is unmet demand for a product or service. BSC considers current market conditions and trends, available purchasers in your market, and competitors and what they have to offer.
The probable need/demand is usually measured by a saturation ratio and a penetration ratio. Saturation occurs when there is enough supply to satisfy your project. Penetration is how much of the committed market your community needs to capture; it is based on what percentage of those qualified and unserved households must invest in your product in order to guarantee the success of your project. Saturation and penetration ratios are indicators of risk and resource requirements. The higher the ratios, the greater the risk. Higher percentages indicate a slower and more difficult fill-up, resulting in a greater expense to the project. Penetration analysis can also be used effectively to test the effect of changing program parameters (such as fees or size) on the time and resources needed for marketing.
Both leadership and lenders can benefit by information that determines a “go” or “no-go” as a next step. Additionally, the research can often reveal areas of interest or concern that can lead to fine-tuning the project to better serve the market. BSC can recommend the appropriate research scope, depending on the project’s developmental stage.
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