The main purpose of this project is to see which would be the more beneficial decision, and which would make more of a difference to the business in its success.
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Objectives
It is necessary to find out if there is a sufficient demand in Harrow for an Asian Muslim nursing home. Also to find out whether to build a new home or to get hold of and renovate an existing home that caters to a wider range of the market. So it is important to find out if there are enough Muslim elderly members interested in shifting to a nursing home and if they are near the locality that I am planning to set up my home. Also to find out what they expect in the home and what their main criteria are.
1.5 Vital Information Needed
In reference to purchasing the nursing home in Harrow, its most likely that the owner is selling it as many repairs will be needed to be made and there could be a number of problems that the current owner is having and due to that its necessary to have all the information to understand whether or not to buy this established home. Also I need to find out how much profit the firms been making and whether I will make a profit to cover my initial investment. Since this nursing home is established it should have a level of goodwill that might take my business, years to actually develop. It is important to find out how well the firm is known in its area and what reputation it holds.
To set up a new nursing home a lot of things will need to be considered such as building according to the Harrow local authority guidelines. Also it’ll be important to find the staff with certain requirements and to have knowledge of the Muslim way of living. All the materials and machines that need to be bought will need to be taken into consideration. Also since the house needs to be built there is no guarantee when it will wholly complete.
If I choose to purchase the already established home in Harrow, I know I will start to recover my investment instantly as the house would be ready to use after a thorough cleaning. However if I plan to go ahead with building the new house I will have no income and will be incurring heavy interest for quite awhile until the nursing home is completed and enters the market. It would be completely made to my requirements and the costs of building it would be cheaper in the longer run once the firm is operating at its full capacity. However a lot would be needed to be spent on marketing and advertising this development and getting suitable, specific clients.
- External Influences And the Economy
The UK economy is presently steady as the Bank of England’s base rate set at 3.75%, although some economists suggest that the country is heading towards a recovery.
Retails outlets are reporting increases in consumer expenditure and The Bank of England has set the base rate to a relatively low level in the recent history of the country.
These low interest rates would ensure that mortgages and other loans would be cheaper, and therefore investment projects will be more feasible than it would have been in the recent past.
Market
- Market Research
There is a huge demand for this service as it is catering to one of the minor communities in London and there are not many of them currently in the area. Considering all the pros and cons, it seems like a better idea to undergo investigation to find out which one of the following option is more viable.
The fact being that the established nursing home can provide good reputation as the existing clients have been happy with their facilities. Also later if this nursing home starts to do very well then it could be expanded upon later.
Though it is known that there is a demand it’s still important to figure out how many people are seriously interested in the idea of shifting into a nursing home that is going to be made fully according to their specified needs. It is important to take into account that though there is a significant demand, will the elderly Muslims be prepared to shift into a nursing home.
Due to this reason Primary and secondary research was carried out and the result are listed below.
2.2 Primary Research
A market survey targeted at the Muslim Asian elders themselves as they are the ones that are being catered. The method of sampling that was used is ‘stratified’ sample along with ‘cluster’ sample. The methods chosen were these as stratified sampling deals with interviewing those who are key characteristics required for the project and cluster tends to deal with a specified area.
Though the method of sampling has been decided, it is very important to figure out how many people should be interviewed, as taking a small sample will provide little or hardly any positive response in connection to the information that is required. It is mostly likely to take an average number of interviews to get a sample that can be actually relied on upon. The sample size chosen for our project was fifty questionnaires but managed forty six to be completed successfully.
All the surveys that were conducted were done face to face, as the interviewer could help to explain any unclear questions to the interviewee.
2.3 Questionnaire
The questions listed below were asked for the following reason:-
1. Have you heard of any nursing home in this area?
This question was asked to see how if there was awareness of residential care houses in that particular area.
2. Do you live at home or in a care home?
This question was asked to find out how many people live at residential care homes or at home.
3. Would you rather prefer a residential home or any other services of care in this area?
This was asked to figure out whether or not they would rather have a day care centre or a nursing home.
4. If a care home was specially set up and catered specifically for the needs of Muslim Elders would you use this service?
To find out if there was a market for my business project and if anyone in my target market was interested in the idea.
5. Is there a good range of residential care homes available in this area?
To figure out how well the other care homes were doing in the locality.
These questions were present in the Questionnaire to find out how most of the Muslim community felt about the services provided, whether there was any awareness of nursing homes in the area and if there was demand from the community that I am trying to set it up. It was a great help to figure out what the actual responses were as the people asked were very seriously considering shifting into a new one. Some of the people questioned had never been in a care home but said if there was one that catered to their needs they would really consider that they would shift.
- Secondary Research
The information that was obtained over the internet from the Harrow borough’s website was extremely useful. It helped to determine that overall there is a massive amount of place in the market and demand to set up for Elderly Asians a nursing care home in Harrow.
The information this diagram provide us with is that there is a minority of Muslims in Harrow. As shown below in the age structure bar graph we can see that there is an aging population though is seems to be less than other parts in England. The demand is enough to open up a nursing home for the Muslims.
Its estimated that over 29,900 residents are aged 65 or older, that being 14.5 per cent of Harrow’s residents, higher than the Greater London average of 12.4 per cent. This showing that there is an aging population that will need some new nursing homes.
Though in the area there are six nursing homes, out of them only two for them are catering to Asians but that is also to another ethnic group which is the Hindus. So it is important to notice also that all the other residential care homes are nearly at full utilisation and there is a waiting list for many of the Asian Muslims wanting to get enrolled.
Though there is a threat of establishing a new residential care home to the existing other care homes, it can be seen as a benefit to them as it can relieve the demand of Asian Muslims. It is also not seen as a threat to any specialized care home as this is the first Muslim Asian care home that is being built in the area.
2.5 Results
Primary research was carried out in the area to find out the potential market for my service and to figure out how much demand there was for it. It’s important to notice that I am catering to a specific ethnic group so I needed to know whether the Muslim family members really thought it was a good idea to open up a nursing home in the locality.
Though there is a lot of utilisation of these services, the elderly Muslim population are finding it hard to find a suitable place that they would feel comfortable in. The Asian community also find it hard to adjust to the British lifestyle so they really don’t try to move in to places where there is a majority of white people they tend to find out or try to seek accommodation where more people of their own culture and background can be found.
Other services such as day care centres and social service home visits are also utilised by the majority of the elderly Muslims. The amount of Asian elderly Muslims using any of the services listed above felt that though they were satisfied with there current nursing homes facilities, they still felt that nursing homes should be opened up that cater to their specific demands.
All this information indicated that though those who were interviewed are presently satisfied they still felt they could move into a residential home that was made exactly to their requirements.
Legislation
- Human Resources
The members of staff need to be completely motivated to help the elderly members. Though it is known that they are mostly encouraged through monetary rewards, when being in such a profession it is more about the inclination to do a ‘feel-good’ deed by helping society. It is important that the staff members are completely and wholly committed to making sure that the clients are at ease and should find no hindrance in interacting with them.
It is important to make sure that the head of staff has the necessary experience and qualifications for a management position. It is important that the person appointed has good friendly contact with the other staff members and makes sure that all duties are done without any kind of problems as the daily running will be performed by them.
They will need to make sure that the daily affairs are managed smoothly and carefully. It is necessary that they keep personal contact with all the clients and make sure they feel at their best. It is also good if staff members put forward ideas on how to improve upon the standards of the nursing home so that the home can be improved. Problems should be dealt with immediately and should hardly ever occur.
Staff members tend to get motivated by getting recognition within the institution. By making sure that it is on a rotation basis all employees will have a fair chance and stand at a position to get acknowledged by senior staff members. Their achievement should come from their insistent work which will make them feel like putting more effort. Though it is possible to motivate staff through cash bonuses or fringe benefits, it is most certain that staff working in the nursing industry tend to feel that it is more got to do with the feeling and pleasure you get out of helping elderly people and in turn society.
- Hygiene
It is said that there is to be a wash basin in every room, and a one toilet at least on each floor. Bathing facilities must be provided with one such facility per twelve residents and one per floor. All areas occupied with elderly residents must be heated to 21°c and laundry facilities must be located in convenient, accessible areas. All long corridors and staircases will be fitted with hand-rails to assist the elderly on both their left and right hand sides.
Residents rooms should be properly furnished unless a resident wishes to furnish the room him/her self in which case they will be allowed to do so providing everything is in compliance with safety regulations and provides no heath risk.
Finance
The Income and Expenditure figures for the year 1999 can be found below.
Costs at year end 1999
1 Resident 25 Residents
Salaries and wages 3235 80875
Sundry expenses 230 5750
Heat and light 260 6500
Food 896 22400
Rates and Water 1340 33500
Repairs 383 9575
Motor expenses 256 6400
Insurance 129 3225
Phone 54 1350
Postage and stamps 62 1550
Cleaning 91 2275
Bank loan interest 7065 7065
Medication 28 700
Subscriptions 47 1175
Advertising 174 4350
Deprecation:
Fixtures and fittings 320 8000
Motor Cars 95 2375
Rent 1500 37500
Entertainment 440 11000
General expenses 1000 25000
Total costs £ 17605 £ 270,565
As shown above the total costs for 25 residents that in the nursing home would be roughly about £ 270,565.
Projected Income
The above costs adapted from a home, obtained £500 per resident, per week which is an average figure for the homes in this area. This includes payment of food, rooms and care staff. At full capacity an average annual income of £600,000 could be obtained. Deducting this form the expected annual cost of £270,565 this would leave me with a profit of £329,435.
This would suggest that the home would incur losses during the first year of its trading.
Break-Even Analysis
The following break even chart shows that after the first year of trading, the nursing home will break even at just 8 residents.
I have used the formulas to calculate a more precise figure and so its shows that actually at 8 residents.
Contribution = Sales – Variable costs
= 28000 - 19078
= 8922
Break-even = Fixed Costs / Contribution
= 70000 / 8922
= 7.84577449002 residents
The total fixed costs were calculated by using the figures of AMA generics, which is another nursing home that is owned by a friend in the same area. The figures used are very realistic and reliable. This determines that at just over 7.8 residents the house can break-even, showing us that the idea of opening up a nursing care house will be very successful.
Conclusion
This projects main objective was based on finding out which option was more practical and feasible. The two options that were present were to either open a new nursing home or to purchase an existing nursing home. The area that was considered was Harrow as the residential house being established and the one that had already been established in Harrow. This residential nursing home was being built in harrow as the market for an Asian Muslim community.
The problem with the first option of buying a ready made established nursing home is that there is an investment of £1,000,000 to purchase it. Any new ways of practising may not be allowed or accepted well from the staff that is presently use to the old ways of doing work. Though it would benefit form a few from gaining back the profits instantaneously and also would gain a ready made house from which the business could start running at once. As well as the established nursing homes goodwill will come in handy as many people will already have known about it and so the satisfied residents can help promote the image.
Establishing a new home from scratch has its own advantages and disadvantages. Firstly there are a number of formalities that will need to be completed in order to build and set up a new nursing home. A long with that the delay in starting the business trading to the fact that it needs to built. As well as specially trained and qualified staff will be needed to be found to work at the nursing home. Also a lot of advertising has to be done to make sure people are well aware of the facilities and benefits of living at this nursing home and this well cost a lot of money.
Considering the above facts it can easily been seen that in both cases vast amount profit can be made. The only problem that is there is a factor of time as with the established house profits can be generated from the day it is purchased but if the home is to be established then there might be several delays and thus it might take longer to generate profits.
Lastly, though both options seem feasible, it seems establishing a brand new nursing home is a more desirable decision as it will increase the number of beds available in the community. The biggest benefit would be that the house is built to the exact specifications of the owner.
Bibliography
Mehboob Hussain
AMA Generics Limited
Harrow County Council
A level Business Studies
Letts
The word 'halal' literally means permissible- and in translation it is usually used as lawful according to Islamic Shariah.
