Assisted Living Facility is a residential set-up meant for senior adults who need personal assistance and medical supervision in their daily lives. There are different kinds of Assisted Living Facilities: single rooms, apartments, or shared accommodation. The residents are provided daily needs of food, medication management, and assistance in feeding, bathing, housekeeping, laundry, and round-the-clock supervision of trained medical staff.
Starting an Assisted Living Facility can be a profitable healthcare business opportunity for you. The aged people are often alone and they need the help and support of others for their daily activities. US Census estimates 20% of the total population in 2050 will be more than 65 years old.
As the number of senior adults is growing, this business has good potential. You have to be caring towards the aged and able to organize their daily needs and keep them happy and satisfied.
Independent Assisted Living Facility Business Plan Guide
You need to know certain things to start this healthcare business. Before starting the business, you have to be very particular about these steps.
1. Choose a Proper Location
Decide whether you want to start the Assisted Living Facility on a small scale or a large scale. If it is on a small scale, then the space requirement is less. However, in most cases, it is better to find land in your desired location and build up the facility.
It is not only about accommodation, but you also need some open space for walking, outdoor activities and free air for the senior adults. Therefore select the space accordingly.
2. Know the Market
After selecting the location and space, research the number of aged persons in the area. That will give you an idea about your potential clients. However, if you are operating on a large scale, your publicity will attract clients from other areas also. Build a good relationship with the aged persons and their families to assure them of the best of care.
Collect information by conducting market research about the economic affordability also, as in this type of health-related business you have to charge a high sum for the complete package of services.
3. Make a Business Plan
Make a detailed business plan for your Assisted Living Facility. It should contain the details of the cost involved in different heads like construction, furniture, salaries and wages of staff, provisions like food, medicine, car, taxes, insurance, and other fees, etc.
Calculate the projected income from the business and find out when you can get back your invested money and earn the profits. Also, make a plan on how to get the funds needed for your business.
4. Name Your Business
Find a suitable name for your ALF. It should be appealing, pleasant, and encouraging for the senior adults as well as their families. Look for a domain in the name of your business. If you do not get the domain, change the name so that you get the domain.
5. Register Your Assisted Living Facility
After deciding on the name, legalize your business. In the United States, there are different options like Sole Proprietorship, Partnership, LLC, or Corporation. Mot existing successful assisted living facility provides opt for LLC.
6. Taxes, License, and Permits for Assisted Living Facility
You have to register for the taxes applicable to your ALF. Apply for EIN also. There are certain licenses and permits necessary to run both at the federal and state level. You need to get those for the smooth running of your business.
You have to follow certain building laws if you are planning to. open an assisted living facility in the United States. You need the Certificate of Occupancy which ensures that all the building norms and regulations have been followed. If you take the place on lease or rent, you have to get it from the landlord. If you are building up your set-up, then you have to obtain the Certificate of Occupancy from the Local Authorities.
For example, if you are planning to open an ALF in Florida, taking permission from the department of The Agency For Health Care Administration(AHCA) is mandatory.
7. Open a Bank Account
Open a bank account in the name of your business. Apply for a Business Credit Card also. Keep the banking transactions and accounting very methodically. Hire an efficient accountant for the job.
8. Get the Right Insurance for Your Business
You need to get your company insured for any accident and mishap. Since you will work with assets like buildings, furniture, and others, you need General Liability Insurance. Your business will need to hire several people with different capacities. Therefore you need Workers’’ Compensation Insurance also.
9. Calculate the Cost of Opening Assisted Living Facility
The cost of starting your Assisted Living Facility depends on the size of the business. However, it is more profitable to start the business on a higher scale. According to the estimates, you need a capital of $ 7 to 10 million to start an Assisted Living Facility for 50 to 70 residents.
As per an article in Forbes, the cost of an 80 bed assisted living facility is around $11 Million. You need to add the running expenses of at least three months in addition to it.
However, the cost will be far less if you are planning to start from your home with 6-10 beds.
10. Estimate the Expenses of Assisted Living Facility
There are different heads of expense for your Assisted Living Facility. To start with, you have expenditure on land and building. You can start with a rented building, but it is better if you find land and construct your building. Then there are the expenses on the bed, bedding, furniture, kitchen equipment and utensils, computer, internet, camera, security arrangements, etc.
Your ongoing expenses include regular purchases like food, medicine, etc., and the wages and salaries of workers. An Assisted Living Facility needs different kinds of manpower with different pay scales. The average salary of a manager is between $ 30,000-70,000 per year.
For a Marketing Professional, the annual salary is between $ 35,000-70,000. You have to pay the nursing staff annual salary between $ 25,000-50,000. The administrative staff will cost you $10-20 per hour. The cook and caregivers need to be paid $ 12-17 per hour. The expense of buying regular provisions may be approximately $ 750-1000 per month.
In addition to that, you have expenses on taxes, license fees, and insurance premiums.
11. Fix the Charges for Services
Depending on the location of your building and the amenities you provide, you can charge your clients between $3000-5500 per month. You can also charge them annually.
As an example, The average cost of assisted living in Florida according to Genworth’s 2019 Cost of Care Survey in 2020 is $3,500 per month. However, the setting service charges will largely depend on the location of your setup. It can be as low as $2,500 or $5,500 per month as per the demand and affordability of customers of the respective state
12. How to Get Clients for Assisted Living Facility
You can get clients from your local contacts. You can also get clients through advertisements, publicity, websites, etc. Getting clients is also easy because the Government Social Securities also provide financial assistance to the people residing at Assisted Living Facilities.
One must remember while advertising the ALF must include the facility’s license number provided by AHCA. It is a must to include the term “Assisted Living Facility” before the license number on any advertising materials.
13. Set The Profit Margin
The profit margin depends on the scale of your Assisted Living Facilities and the facilities you provide. Still, it is a very profitable business, since the residents pay quite a high charge. As the owner of an established Assisted Living Facility you can expect a profit margin of more than 20%. The investment and expenses are high, but the profit is also comfortable for you.
14. Fix the Working Hours
You have to remember that your Assisted Living Facility has to be active and alert round the clock. Since it involves the daily lives of senior adults, they need assistance at any time of the day. There can be medical emergencies also.
15. How to Earn More Revenue
Your web presence will spread your name far and beyond. Use your website for publicity. Equip your website with live chat facilities and virtual tour, so that interested people can have an idea of your services.
Keep good public relations locally and give regular advertisements in newspapers, television and use flyers, pamphlets, hoardings, and banners in the name of your Assisted Living Facility.
Offer more facilities for the residents like delicious cuisine, comfortable living, outdoor and indoor games, and entertainment and physical activities so that they feel happy and comfortable there.
Hire trained medical staff like nurses and attendants so that best care is given to the residents.
Arrange different cultural events and outdoor travel for residents to make them feel good.
Get attached to eminent doctors and medical facilities for regular checkups as well as any medical emergencies of the residents.
Sponsor different events and arrange certain workshops and discussions to build your name and get more publicity.
Frequently Asked Questions
How much profit can be made by owning an assisted living facility?
If you have an Assisted Living Facility of 70-80 residents, you can earn approximately $ 2.60-2.80 Million annually.
What facilities are provided by an independent living facility provide?
Independent Living Facilities provide many luxuries including a swimming pool, beauty services, gym, tennis court, or golf course but with minimal medical facilities.
Do independent living facilities have regulations?
Independent Living facilities are strictly regulated by state laws.
Can I start an assisted living facility from my home?
Yes, you start an assisted living facility from home with 6-10 beds. However, you must consult with the local government and understand the requirements of the state laws.
Assisted Living Facilities are much in demand because of the assistance they provide to the aged persons. You need to take the advantage of this demand. However, you need to be compassionate and caring about the needs of the aged and make them feel good and confident.
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