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Understanding where your senior living community stands, whether an Assisted Living Facility (ALF), Skilled Nursing Facility (SNF), Memory Care or all three, relative to industry benchmarks is essential for identifying opportunities and demonstrating performance to stakeholders. Let's explore key financial and operational metrics that matter most.
Industry average occupancy rates currently hover around 82-86% for independent living, 85-88% for assisted living, and 87-90% for memory care. However, these averages mask significant regional variation. Best-in-class operators maintain occupancy rates 5-10 percentage points above regional averages through superior sales processes, quality of care, and reputation management.
Beyond overall occupancy, leading communities track studio vs. one-bedroom vs. two-bedroom occupancy, private pay vs. Medicaid census mix, average length of stay, and move-in vs. move-out trends.
Average monthly revenue per occupied unit varies dramatically by care level and geography. Independent living typically ranges from $2,500-$4,500 monthly, assisted living from $4,000-$7,000, and memory care from$5,500-$9,000. Top-quartile communities achieve 15-25% higher revenue per unit through effective pricing strategies, strong value proposition, and successful ancillary service programs.
Healthy senior living communities operate with EBITDA margins of 25-35%. Communities below 20% face sustainability challenges, while those consistently above 35% demonstrate operational excellence. Key margin drivers include labor efficiency, occupancy rates, revenue optimization, and expense management.
Sage Intacct, in partnership with Blytheco, can streamline your backend accounting, giving your organization more time and resources to spend on corporate initiatives.
Labor costs as a percentage of revenue should generally fall between 55-65%, though this varies by care level. Memory care communities typically run higher due to staffing ratios. Important labor metrics include hours per patient day, overtime percentage, agency staff utilization, and turnover rates.
Industry average caregiver turnover ranges from 60-100% annually, creating significant recruitment and training costs. Best-in-class operators maintain turnover below 40% through competitive compensation, strong culture, and career development opportunities.
The industry average for AR aging is 35-45 days, but leading communities maintain less than 30 days through proactive billing, multiple payment options, clear communication with families, and systematic follow-up processes.
High AR ties up working capital, increases bad debt risk, and signals process inefficiencies.
Beyond labor, other key expense categories deserve monitoring. Property operating expenses (maintenance, utilities, property taxes) should range from 18-24% of revenue. Administrative expenses should fall between 8-12% of revenue. Dining services typically consume 8-12% of revenue, and marketing and sales usually run 3-6% of revenue.
For owners and operators, capital efficiency metrics matter greatly. Revenue per bed, occupancy stabilization time, and return on invested capital all indicate how effectively you're deploying resources.
Strong communities maintain several months of operating reserves, manageable debt service coverage ratios above 1.25, and adequate capital replacement reserves.
Benchmarks are starting points, not absolute standards. Your specific market, property age, and strategic positioning influence appropriate targets. Use benchmarks to identify outliers, prioritize improvement initiatives, set realistic goals, and communicate performance to boards and investors.
Achieving and maintaining top-quartile performance requires robust financial visibility. Modern financial management systems enable real-time KPI tracking, automated variance analysis, peer benchmarking, and predictive analytics.
Assisted living occupancy rates, memory care financial metrics, and senior living operations margins are key metrics to consider. Without strong systems, you're managing by looking in the rearview mirror. Contact us for a complementary ERP Consultation or reach out to solutions@blytheco.com to begin your journey with an ERP built for your industry.
Sage Intacct Solutions Engineer
Todd has over two decades of experience in marketing, sales, presales, and professional services and held roles as Director of IT and CFO. Throughout his career, he successfully established and developed nine practices from the ground up. This experience equipped him with a proven track record of implementing and managing various accounting and ancillary software solutions, including Sage Intacct. He leverages his vast business and software background to lead companies to successful and efficient solutions.
