Assisted living facilities include single rooms, apartments, and/or group accommodations. The patients receive daily care from nursing professionals who ensure their health and safety 24 hours a day, seven days a week.
If you’re interested in starting an assisted living facility, then there are some things you should know before you begin. According to the U.S. Census Bureau, by 2050, approximately 20 percent of the country’s population will be older than 65.
With the increasing number of seniors, this business has good prospects. You need to care for the elderly and be able to arrange their daily lives and keep them happy and contented.
10 Steps to Start Guide
You must know certain things before starting this healthcare company. Before starting the company, you must be very specific about these steps.
1. Choose a Proper Location
You need to decide if you want to start the assisted living community on a small scale or on a larger scale. If you choose to go for a smaller scale, then you would require less space. However, in most instances, it is best to look for land in your preferred locations and build up the facilities.
You don’t just want an apartment; you also need some open spaces for walking, outdoor activities, and free oxygen for the seniors. So choose the location wisely.
2. Know the Market
After choosing the place and space, check out the number of elderly people living nearby. That will help you know how much business you can expect.
But if you’re working on a large scale, then your marketing efforts will reach customers from other places too. Make sure you build a good rapport with the old folks and their family members so they feel assured of the best of care!
Conducting market research about the economic feasibility of starting a new medical practice would be one way to determine whether it makes sense financially.
3. Create a Business Plan
Write down a detailed business proposal for your assisted living facility. Include everything from the costs associated with building the facility to the salary of its employees.
Find out how much the project will cost; calculate the projected income from the project, and figure out when you can start earning enough profit to pay off the investment. You may need to borrow some extra cash at first. Then, set up a budget so you know exactly where your money goes.
4. Name Your Assisted Living Facility Business
Find a suitable title for your ALF. Make sure it is catchy enough to encourage people to visit your site. Choose a good keyword phrase for your website. If you can’t find one, make one up. You may also try to buy an existing keyword phrase.
5. Register Your Assisted Living Facility
Once you’ve decided on the right legal structure, get started by filing the necessary paperwork. For example, if you’re opening an existing assisted living facility, choose to form an LLC instead of a sole proprietorship.
6. Taxes, License, and Permits for Assisted Living Facility
You must register for the tax rates applicable to your business. Also, apply for an Employer Identification Number (EIN). There are various licensing requirements and permits needed to operate both at the federal and local levels. These include obtaining a Federal Tax ID number (Form SSN) and registering for state sales tax.
If you want to operate an assisted living community in the US, you need to obtain a certificate of occupancy (CO).
You need to get a rental agreement from the landlord. If your business is growing, then you’ll need to get a certificate of occupancy from the local authorities.
If you’re opening an ALF in Florida then you need to get permission from the Department of AHCA.
7. Open a Business Bank Account
Open a new company checking/savings/CD account in the name of your company. Get a credit card for yourself (and your employees) so you can start building your own credit history. Pay off any personal debt before starting your company.
8. Get the Right Insurance for Your Business
You should insure yourself against accidents and mishaps. Because you’ll be working with things like building materials, furniture, and others; you’ll require general liability insurance. And because you’ll be hiring employees who will do various jobs, you’ll require workers’ compensation insurance.
9. Calculate the Cost of Opening Assisted Living Facility
It costs between $7 and $10 million to start an assisted living facility. However, it is cheaper to start the facility at a larger scale. According to the estimate, you require a minimum investment of $7 to $10 million to start a facility for 50 to 70 residents
According to an article in Forbes, an assisted care facility costs roughly $11 million. Add in the running expenses for at least three months, and you’re looking at a minimum investment of $33 million.
On the other hand, the price will be considerably lower if you plan to start from your home, with six to ten beds.
10. Apply for Grants to Open an Assisted Living Facility Business
There are various ways for governments and private institutions to provide financial assistance to assisted living facilities. These include the provision of funding for equipment, training programs, etc.
- Senior caregiving services
- Senior citizen nutrition and wellness programs
- Setting up old age care facilities
- Nursing care services
- mental health counseling services
If you’re from Florida, reach out to local concerned federal agencies offering financial support. Also, connect with private companies and nonprofit groups for funding opportunities. For instance, if you’re from Florida and want to get government grant funding, visit GrantWatch and apply for one among the numerous available funds for seniors.
11. Estimate the Expenses of Assisted Living Facility
In addition to the cost of the facility itself, there are also costs associated with staffing and maintaining it. These include salaries, utilities (electricity, water), maintenance, repairs, and replacement of items such as beds, chairs, tables, computers, cameras, etc., insurance, taxes, etc.
You need to consider both your ongoing costs (food, medical bills, etc.) and the wages and salaries of staff members. A nursing home requires different types of employees with different rates of compensation. The average annual income for a manager is between $30,000 and $70,000.
For a Marketing Professional who wants to earn a decent income, the annual wage can range from $35,000-$70,000. You must also pay your nurses an annual wage ranging from $25,000-$50,000. Your administrative team costs you around $10-$20 per person per day. Cooks and caretakers need to be paid $12-$17 per person per day. The food expenses range from $750-$1000 per month.
You’re also going to need to pay for things like taxes, licenses, and insurance.
12. Fix the Charges for Services
If you’re renting out space in an office suite, you can expect to charge anywhere from $3,000 to $5,500 per month. You could also charge your clients monthly or yearly.
For example, Assisted Living costs vary depending on where you live. According to Genworth’S 2019 Statewide Costs of Care Survey, the average monthly price for assisted living in Florida is $3,500. However, the actual prices may differ by region. They could range from $2,500 to $5,500 per year.
13. How to Get Clients for Assisted Living Facility
It’s not hard to get clients if you know where to look for them. They can be found online, through referrals, by word of mouth, and even through social media.
You must always remember to include the word “assisted living” before the state agency’s name when using its logo on any marketing material.
14. Set The Profit Margin
The profits depend on the size of your assisted living facility and the services you offer. However, it is a very lucrative business, since the residents are charged a hefty fee.
As the proprietor of an established assisted living facility, you can anticipate a return on investment of more than 20%. Investment and operating costs are high, but the returns are also rewarding.
15. Fix the Working Hours
Your assisted living facility needs to be available 24/7 for residents’ care. Medical emergencies may occur anytime during the day.
16. How to Earn More Revenue
You need to use your website to publicize your business. Equip your website with features like live chat and virtual tours, so potential clients can get a feel for what your company offers before they contact you.
Local publicity is important for any business. You should keep up with local news.
Make sure that the people who live there are provided with enough amenities like delicious cuisines, comfy rooms, outdoor and indoor games, and entertainment and physical activities so that their stay there is enjoyable.
To ensure the best quality of care for the residents, hire trained medical professionals like nurses and attendants.
Organize various cultural events and outdoor trips for residents to make them happy.
Attach yourself to eminent physicians and medical centers for routine checkups and any medical emergencies.
Arrange for different events and organize certain meetings and discussions so that you can increase your visibility.
Frequently Asked Questions
What kind of profits can be expected from owning an assisted care facility?
For a facility with 70-80 residents, if you’re able to get a minimum of 3 clients per month, you could be earning between $ 2.6 million and $ 2.8 million each year.
Independent Living Facility Providers offer these services:
Independent living facilities offer many amenities, from pools to gyms to tennis courts to golf courses, but they don’t always include medical facilities.
What kind of rules do independent-care facilities have?
They’re strictly regulated by local laws.
Can I open an assisted living facility from a house I own?
You can open an Assisted Living Facility (ALF) from your own house with six to ten beds. But you need to check with the local government and comply with their rules.
As an assisted living facility operator, you must understand the market and its demands. You must also know how to treat people who come to you for help.
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