Senior citizens are expected to make up 20 percent of the entire American population by 2030, Forbes Magazine reports. The high numbers of aging individuals in the country mean that many business opportunities are available for people who serve this demographic. A group home, also called a senior living home, is a business that allows senior citizens to live together under the supervision of caregivers.
Step 1Create a legal business entity for the group home. Select a sole proprietorship, partnership, limited liability company, or corporation legal structure for the new business. Sole proprietorship and partnerships are simple to set up but do not offer strong legal protections. According to Forbes Magazine, the best structure for an assisted living facility or group home is the limited liability company. Contact the local Secretary of State’s office to obtain the necessary legal forms.
Step 2Write a detailed business plan for the group home business. Provide details on the projected expenses and revenue sources for the company. According to Forbes Magazine, independent living communities should plan on an average yearly income of $26,333 for each resident and a profit margin of around 30 percent. Include annual occupancy targets in the business plan. Group homes that have been in business for two years often require occupancy rates to be higher than 90 percent in order to be profitable, according the the President of the National Investment Center for the Seniors Housing and Care Industry. Consult with an attorney and an accountant to ensure that no legal or financial requirements have been overlooked in the business plan.
Step 3
Obtain a federal tax identification number, which is also known as an Employer Identification Number (EIN). Apply for this number at the Internal Revenue Service website, or a nearby IRS office location. The EIN allows a group home to hire employees and pay company taxes as a business entity.
Step 4Apply for a permit to operate a group home facility. Each state has different requirements for the permit application process. Provide documentation that shows a community need for a new group home location, if required by the state. Follow local zoning regulations carefully during the construction or renovation of a new group home. Determine which permits are required by contacting the state Department of Human Services or similar agency.
Step 5Locate a source of financing for the group home business. Group homes for seniors often require large amounts of start up money. The costs for group homes average around $130,000 or more for each room in the facility, according to “Assisted Living Strategies for Changing Markets” author Jim Moore. Contact family members, friends, and commercial banks to determine which financing options are available. Use the business plan to show potential investors the revenue, expense, and growth details of the group home.
Step 6Select a suitable location for the home. Contact architects, interior designers, and builders who have experience in large group home projects. Consider using national assisted living home construction firms such as Turner Construction or Weitz Construction. Consult with a kitchen designer to ensure that the food service facilities are adequate for the estimated number of group home residents. Ensure that all Americans with Disabilities Act (ADA) guidelines are followed during the planning and construction of the home, in order to accommodate residents with physical challenges.
Step 7Choose vendors for the many goods and supplies that are needed in a group home. Purchase industrial-strength laundry equipment and kitchen appliances to serve the ongoing needs of residents. Locate large food distributors that are able to meet the high demand of three meals per day for each group home member. Consider partnering with a local pharmacy to offer prescription drug refills for residents.
Step 8Determine which staff positions are required and hire the necessary employees. Make sure that enough caregivers, housekeepers, food specialists, and admissions coordinators are on staff to meet the projected needs of residents. Be prepared for the high staff turnover in this industry, which is often around 85 percent according to the director of Benchmark Senior Assisted Living. Implement benefit and retention programs to keep skilled staff members from leaving.
Step 9Plan value-added services and amenities for both group home residents and visitors. Arrange events, outings, and transportation for members. Consider offering programs for children and families, as well as social activities for residents. Find ways to set the group home apart from other competing facilities as a way to increase the competitive advantage and keep occupancy rates high.
Step 10Begin advertising the group home to individuals who require this service. Provide tours of the new facility and begin placing residents into the home. Continue to follow all state and local regulations and zoning rules to ensure that the group home remains safe and successful.
Destination Group Home Consulting Solutions is here to help you with every step of the group home start-up process. We also provide professional consulting and management services designed to help your business become successful f. For more information visit our website at http://www.NDGHC.com or call us at 1.888.451.3330.
grouphomeblog 