Don't overlook today's growth potential.

THERE'S PLENTY OF BAD NEWS IN ASSISTED LIVING TODAY: public company stocks are depressed, some major metropolitan markets appear to be saturated, new project fill-up is Slowing, and rate concessions are becoming commonplace. But don't be fooled about the industry's future. The outlook is more favorable than such indicators Seem to imply--if you take the following steps:

* Get out there and market your product. Many professionals are already working hard to achieve fill-up in seemingly overbuilt markets. But ask yourself some tough questions: Have you developed a qualified lead base deep enough for the number of units you need to absorb? Do you have quantitative initiatives to execute daily? Do those daily initiatives lead to defined goals and expected outcomes? Do you have an easy-to-use computerized lead tracking and sales status system? Are all sales professionals appropriately trained and armed with technical sales knowledge, closing techniques, and listening skills? Do they really understand the quantitative and qualitative strengths and weaknesses of all competitors? Have you developed a subtle but strategic response to exploit your community's strengths and mitigate its weaknesses? Do you regularly conduct detailed surveys of your lost prospects?

* Focus on the here and now. When evaluating market potential, we typically look at two sets of demographics--seniors who are currently age 75-plus and income-qualified, and the future growth in that age and income cohort. While the total number of quality assisted living units is difficult to track, there are an estimated 400,000 such units nationally. This represents an implied absorption of about 14 percent of the 2.9 million age 75-plus, $35,000-plus households.

Given numbers like these, it's easy to see substantial untapped potential in achieving a deeper market penetration. The potential over the next five years based on demographic growth projections is approximately 671,000 age 75-plus, $35,000-plus households. And much of that new potential will be absorbed in refilling existing projects experiencing about a 40 percent turnover.

The growth in assisted living could take place if new--and sometimes controversial--assisted living initiatives were implemented. For example, a policy of prudent and practical spend down of assets would result in an added potential of approximately 1.9 million units or approximately 2,400 80-unit communities (see June1999 column). Similarly, if semi-private accommodations could be effectively created and accepted by consumers, an additional 1.3 million units or 1,600 80-unit facilities would be needed to meet demand (see December 1999 column).

* Don't overlook the adult child decision influencer, age 50 to 64. Consumer research indicates that more than half of these members of the "sandwich generation" --a group of about 42 million caught in an economic squeeze between their children and their aging parents--report significant concerns about their parents' current health and ability to continue to live independently. They respond favorably to the assisted living concept when it is objectively presented to them in simple, straightforward terms.

More than 8 million of these households report annual incomes in excess of $70,000. This is significant in light of growing evidence that some adult children are supplementing their parents' income in order to pay privately for assisted living. Have you positioned your product to capture the attention of these buyers? Have you clearly communicated that message?

* Promote assisted living as a new consideration in estate planning. A senior's desire for preservation of assets can represent either a major sales objection or opportunity for assisted living sponsors. It all depends on your willingness and creativity in helping seniors and their families plan for the later stages of life. Keep in mind that many seniors underestimate both the potential health care costs that arise in the later years, their current cost of living, and the value of their home equity.

In response, put together an ethical and credible financial plan as if you were counseling your own mother. Show seniors how they can put their newly liquidated net home equity to work now, and still leave most of it to their estate. Convey that monthly fees are competitive and predictable and will not likely deplete savings.

Seniors and their families have hang-ups and misconceptions--but so do many dedicated industry professionals. With a more detailed game plan, we can substantially improve the performance and acceptance of assisted living.

A contributing writer to Contemporary Long Term Care, Jim Moore is president of Moore Diversified Services, a Fort Worth-based senior housing and health care consulting firm, and author of Assisted Living 2000.