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Starting a Nursing Home – How Much Does It Cost?

Do you want to know exactly how much it cost to start a nursing home? If YES, here is a detailed cost analysis for starting a nursing home and raising finance.

When it comes to caring for people who can’t take care of themselves, there are several options and one of them is to take them to a nursing home care facility. Basically, a nursing home care facility is a private residence for the elderly, children or young people who cannot live with their families due to obvious reasons, or people with chronic disabilities who may be adults or seniors and can’t take proper care of themselves if left to live alone.

Having provided you with a:

  1. Industry Overview
  2. Market Research and Feasibility
  3. Nursing Home Business Plan
  4. Nursing Home Name ideas
  5. Licenses and Permits
  6. Nursing Home Marketing Plan
  7. Cost of Starting a Nursing Home
  8. Marketing ideas & Strategies

Industry Overview

The law in the United States and in some countries states that before a nursing home care facility can commence operation, there should be at least six residents and at least one trained nurse/caregiver there 24 hours a day and 7 days a week. So also, a standard nursing home care facility is expected to have a house manager, night manager, weekend activity coordinator, and 2 or more caregivers/nurses depending on the size of the facility.

It is important to state that residents of nursing home care facilities are people who don’t have need for medical care; it is basically designed for elderly people, and people with one form of disability or the other. Nursing home care facilities are not expected to accommodate people with medical conditions such as autism, intellectual disability, chronic or long-term mental/psychiatric disorder, or physical or even multiple disabilities et al.

As a matter of fact, some nursing home care facilities were funded as transitional homes to prepare for independent living (in an apartment or return to family or marriage and employment), and others were viewed as permanent community homes. Society may prevent people with significant needs from living in local communities as social acceptance is key to community development.

The residents of nursing home care facilities sometimes need continual or supported assistance for them to be able to complete daily basic and simple tasks, such as taking medication or bathing, making dinner, having conversations, making appointments, and getting to work or a day service, budget their personal allowance, select photos for their room or album, meet neighbours and carry out civic duties, go grocery shopping, eat in restaurants, make emergency calls or inquiries, and exercise regularly amongst other activities.

How Much Does It Cost to Start a Nursing Home?

The cost analysis as it relates to starting a standard nursing home business in the United States of America, Canada, United Kingdom, and Australia can be said to be almost the same except for few variations.

For example, the basic things needed to be able to operate a nursing home facility could range from getting a license to even getting a certification. Some countries consider these as the basics, while in some other countries you could get a waiver for it if you are able to meet other criteria.

In starting a nursing home facility, you will be expected to have a standard facility with the required rooms to accommodate your residents, and nursing/first aid kits et al and they are same prices in any of the countries listed above, especially when bench–marked against the US Dollars.

Other factors that may be slightly different in terms of costing when it comes to starting a standard nursing home business in any of the countries listed above are cost of labor, cost of transportation and logistics, local tax, insurance policies, branding and promotion, business incorporation fee, permits and license and rent/leasing amongst other factors.

Over and above, when it comes to starting a medium scale nursing home business, you should be prepared to either rent or lease a standard facility designated for such business; this is going to be one of the areas where you are expected to spend the bulk of your start-up capital.

How Much Does It Cost to Start a Nursing Home in the United States?

These are the key expenses you are expected to make when starting a medium scale but standard nursing home business in the United States of America;

  • The total fee for registering the business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the nursing home in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring a business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard facility in a good, centralized and serene location – $350,000
  • The cost for remodeling the facility – $100,000.
  • Other start-up expenses including stationery ($500) and phone and utility(gas, sewer, water and electric) deposits – ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory and equipment (Stocking with a wide range of products such as toiletries, food stuffs and drugs, staff uniform et al) – $150,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost of purchase and installation of CCTVs: $5,500
  • The cost for the purchase of furniture and gadgets (Beds, First Aid Kits, Hand gloves, Telephone, fax machine, printing machines, computers, flat screen TV, sound system/radio, tables and chairs et al) – $25,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $8,000
  • Miscellaneous – $10,000

You will need an estimate of seven hundred and fifty thousand dollars ($750,000) to successfully set up a medium scale but standard nursing home business in the United States of America. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a business with the potential of owning more than one outlet in key locations within same region.

Starting a small scale but standard nursing home business that can only accommodate a handful of people per-time in just one location in the United States of America will cost about two hundred and fifty thousand dollars to five hundred thousand dollars ($250,000 to $500,000).

When it comes to starting a standard and large scale nursing home business with several facilities in key cities in the United States of America, a nursing home that can accommodate over fifteen people per-time and a nursing home with the intention of selling franchise and also offering complimentary services, then you should look towards budgeting well over two million, five hundred thousand dollars ($2.5 million).

How Much Does It Cost to Start a Nursing Home in the UK?

These are the key expenses you are expected to make when starting a medium scale but standard nursing home business in the United Kingdom;

  • In the United Kingdom, Online applications are usually registered within 24 hours and cost £12 (paid by debit or credit card or PayPal). Postal applications take 8 to 10 days and cost £40 (paid by check made out to ‘Companies House’). There’s a same day service costing £100.
  • Legal expenses for obtaining licenses and permits (Health department license and business license)and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – £13,300
  • Marketing promotion expenses for the grand opening of the nursing home in the amount of £3,500 and as well as flyer printing (2,000 flyers at £0.04 per copy) for the total amount of £3,580.
  • The cost for hiring a business consultant (including writing business plan) – £2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – £28,400.
  • The cost for leasing a standard facility in good, centralized and serene location – £345,000.
  • The cost for remodeling the facility – £97,800.
  • Other start-up expenses including stationery (£300) and phone and utility (gas, sewer, water and electric) deposits – (£1,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – £60,000
  • The cost for start-up inventory and equipment (Stocking with a wide range of products such as toiletries, food stuffs and drugs, staff uniform et al)- £148,500
  • The cost for store equipment (cash register, security, ventilation, signage) – £9,500
  • The cost of purchase and installation of CCTVs – £4,500
  • The cost for the purchase of furniture and gadgets (Beds, First Aid Kits, Hand gloves, Telephone, fax machine, printing machines, computers, flat screen TVs, sound system/radio, tables and chairs et al) – £24,200.
  • The cost for building and hosting a website – £600
  • The cost for opening party – £6,300
  • Miscellaneous – £8,000

You will need an estimate of seven hundred and thirty thousand Pounds Sterling (£730,000) to successfully set up a medium scale but standard nursing home business in the United Kingdom. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a business with the potential of owning more than one facility in key locations within same region.

Starting a small scale but standard nursing home business that can only service/accommodate a handful of people per–time in just one location in the United Kingdom will cost about two hundred and forty five thousand to four hundred and eight five thousand Pounds Sterling (£245,000 to £485,000).

When it comes to starting a standard and large scale nursing home business with several facilities in key cities in the United Kingdom, a nursing home that can accommodate over fifteen people per-time and a nursing home with the intention of selling franchise and also offering complimentary services, then you should look towards budgeting well over two million British Pounds Sterling (£2 million).

How Much Does It Cost to Start a Nursing Home in Canada?

These are the key expenses you are expected to make when starting a medium scale but standard nursing home business in Canada;

  • For federal incorporation of business in Canada, the cost to incorporate is $200 if filed online through Corporations Canada’s online Filing Centre ($250 if filed through other means).
  • Legal expenses for obtaining licenses and permits (Health department license and business license)and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the nursing home in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring a business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard facility in good, centralized and serene location – $350,000
  • The cost for remodeling the facility – $100,000.
  • Other start-up expenses including stationery ($500) and phone and utility (gas, sewer, water and electric) deposits – ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory and equipment (Stocking with a wide range of products such as toiletries, food stuffs and drugs, staff uniform et al) – $150,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost of purchase and installation of CCTVs: $5,500
  • The cost for the purchase of furniture and gadgets (Beds, First Aid Kits, Hand gloves, Telephone, fax machine, printing machines, computers, flat screen TV, sound system/radio, tables and chairs et al) – $25,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $8,000
  • Miscellaneous – $10,000

You will need an estimate of seven hundred and fifty thousand Dollars ($750,000CAD) to successfully set up a medium scale but standard nursing home business in Canada. Please note that this amount includes the salaries of all the staff for the first 3 month of operation and a business with the potential of owning more than one outlet in key locations within same region.

Starting a small–scale but standard nursing home business that can only accommodate a handful of people per–time in just one location in Canada will cost about two hundred and fifty thousand dollars to five hundred thousand dollars ($250,000CAD to $500,000CAD).

When it comes to starting a standard and large scale nursing home business with several facilities in key cities in Canada, a nursing home that can accommodate over fifteen people per time and a nursing home with the intention of selling franchise and also offering complimentary services, then you should look towards budgeting well over two million, five hundred thousand dollars ($2.5 millionCAD).

How Much Does It Cost to Start a Nursing Home in Australia?

These are the key expenses you are expected to make when starting a medium scale but standard nursing home business in Australia;

  • In Australia, the fees to register your business name with ASIC include: $34 for 1 year. $80 for 3 years.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the nursing home in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring a business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard facility in a good, centralized and serene location – $350,000
  • The cost for remodeling the facility – $100,000.
  • Other start-up expenses including stationery ($500) and phone and utility (gas, sewer, water and electric) deposits – ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000.
  • The cost for start-up inventory and equipment (Stocking with a wide range of products such as toiletries, food stuffs and drugs, staff uniform et al) – $150,000.
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750.
  • The cost of purchase and installation of CCTVs: $5,500.
  • The cost for the purchase of furniture and gadgets (Beds, First Aid Kits, Hand gloves, Telephone, fax machine, printing machines, computers, flat screen TVs, sound system/radio, tables and chairs et al) – $25,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $8,000
  • Miscellaneous – $10,000

You will need an estimate of seven hundred and fifty thousand Dollars (AUD$750,000) to successfully set up a medium scale but standard nursing home business in Australia. Please note that this amount includes the salaries of all the staff for the first 3 months of operation. It is a business with the potential of owning more than one outlet in key locations within same region.

Starting a small scale but standard nursing home business that can only accommodate a handful of people per–time in just one location in Australia will cost about two hundred and fifty thousand dollars to five hundred thousand dollars (AUD$250,000 to AUD$500,000).

When it comes to starting a standard and large scale nursing home business with several facilities in key cities in Australia, a nursing home that can accommodate over fifteen people per-time and a nursing home with the intention of selling franchise and also offering complimentary services, then you should look towards budgeting well over two million, five hundred thousand dollars (AUD$2.5 million).

Estimated Start-Up Cost for Nursing Home Business was Based on the following factors;

  • Staff/Manpower

When it comes to starting a standard nursing home business on a large scale, you would need the services of the following professionals;

  • Chief Executive Officer
  • Non–Medical Facility Administrator (Human Resources and Admin Manager)
  • House Manager (Double as Night Manager and Weekend Activity Coordinator)
  • Nurse’s Aides
  • Home Caregivers/County Aging Workers
  • Sales and Marketing Executive
  • Accounting Officer
  • Cleaners/Washer men (Full–Time Employees)
  • Drivers
  • Security Officer

Can a Nursing Home be Bootstrapped on a Lean Budget Right from Home?

Although it is almost impossible to bootstrap a nursing home business on a lean budget, but the business can indeed be run from your home. This is possible if you have the required facility that conforms to the expected standard by the regulating authority in your city.

The fact that you have to employ key professionals such as nursing aides and caregivers and other essential staff members, means that you cannot successfully run a business such as nursing home on a lean budget. 

How Much Does It Cost to Buy a Nursing Home Franchise?

In the United States of America, the Average Cost of Purchasing a Nursing Home Franchise is $20,000. Examples of 3 Well – Known Nursing Home Franchising Companies in the United States of America are;

  • BeeHive Homes/Nursing Home Franchise
  • Home Instead Senior Care Franchise
  • Home Helpers Franchise

In the United Kingdom, the Average Cost of Purchasing a Nursing Home Franchise is £20,000. Examples of 3 Well – Known Nursing Home Franchising Companies in the United Kingdom are;

  • The Everycare Home Care Franchise – UK
  • Lastminute Nursing Franchise -UK
  • Bluebird Care Franchise- UK

In Canada, the Average Cost of Purchasing a Nursing Home Franchise is $25,000 (Canadian Dollar). Examples of 3 Well – Known Nursing Home Franchising Companies in Canada are;

  • Startup® Home Care – Canada
  • ComForCare™ Home Care – Canada
  • Caring Transitions™ – Canada

In Australia, the Average Cost of Purchasing a Nursing Home Franchise is AUD$26,000. Examples of 3 Well – Known Nursing Home Franchising Companies in Australia are;

  • Home Instead Senior Care – Australia
  • ComForCare™ Home Care – Australia
  • Smartcare Nursing Australia
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