Do you want to start an adoption agency from scratch? If YES, here is a complete guide to starting a adoption agency business with NO money and no experience.
Okay, so we have provided you an in-depth sample adoption agency business plan template. We also took it further by analyzing and drafting a sample adoption agency marketing plan backed up by actionable guerrilla marketing ideas for adoption agencies. In this article, we will be considering all the requirements for starting an adoption agency business. So put on your entrepreneurial hat and let’s proceed.
Why Start an Adoption Agency?
Even though it might sound weird to refer to the adoption agency as a business, it is a business because while helping others to get what they want, money is being made as well. The industry is a thriving one in the United States of America, and according to statistics, 2 percent of all the children in the United States are adopted, which when calculated leads to approximately 1.5 million children and that is quite a lot.
A lot of things will therefore be dependent on you making it in this industry but you need to first understand that the industry is regulated depending on the state where you will be operating the business from.
The fact that there are no easily distinguished authorities in this industry does not mean that you will have no information on how to start and run your adoption agency business especially as agencies such as the Child Welfare League of America (CWLA) always ensure that standards are being published for operators.
So if you intend starting this business, ensure that you review materials from CWLA as this will help you ensure that the adoption agency you intend to start up will not go below the standards set forth by the industry. Regardless of the size of the adoption agency you intend to start up, it is very important that you make it one that is of high quality by combining international best practices in the adoption industry as well as best business practices.
Also, depending on the state where you will be operating your adoption agency from, your licensing requirements might be stringent as you will mostly have to work with the social services division of the state. Even though this is a business that requires your passion and commitment, professionalism is something that you must adhere to if you intend to run a quality adoption agency.
Because you are starting an adoption agency doesn’t mean that you would not take out time to create a business plan. A business plan is very important because it allows you to define how your business will run.
Starting an Adoption Agency – A Complete Guide
- Industry Overview
The adoption agency and child welfare services industry has annual revenue of $14.1 billion and grew at a slow rate of 0.9 percent between the periods of 2010 to 2015. It is expected that the industry will grow at 2.2 percent for the next five years (2015 to 2020).
There are more than 35,800 adoption agencies and child welfare services in the United States of America. Wages in the industry as at 2015 amounted to $6.7 billion and the profit seen in the industry at this time period can be said to be more than $380 million. The industry is one that has no major players holding a dominant share or particularly having an edge over others.
The adoption agency industry in the United States experienced rough times during the recession period as donations from the private sector dwindled while funding from the federal government remained stagnant. The recession also made it impossible for families who wanted to adopt to be able to afford the services which became rather expensive.
However, as the economy has begun to improve and stabilize, the adoption agency industry is also improving as well as it is expected, that not only will federal funding increase but that revenue sources from the downstream, corporate sector and endowment funding will also continue to improve.
According to IBISWorld, the adoption agency industry is fragmented to a high degree as the four largest companies in the industry only make up to 5 percent of the industry’s total revenue, which therefore means that the market share concentration is very low.
It should be noted that while some of the larger adoption agencies have advantages over others especially as regards fundraising, most of the services offered by the adoption agencies are peculiar to the communities in which they are located, which is why smaller adoption agencies have been found to be more effective than the larger ones.
The agencies in the industry as regards funding are largely dependent on charitable contributions and membership fees. This therefore means that the more disposable income increases, the more individuals will be willing to contribute to agencies in this industry.
Also, as per capita disposable income increases, so does demand for adoption services. The major source of charitable donations in this industry is corporations who contribute more to services, which therefore means that the growth in the industry is fueled by how corporate profits grow.
Federal funding has however been declining especially due to an injection stimulus funding. Asides from the federal government; states and local governments also had declined funding as they were strained by tax revenue with deficits in budgets that needed to be balanced. This decline has seen the revenue of the industry contract despite increasing private donations.
Another factor that is responsible for declining federal funding is the fact that the Budget Control Act of 2011 has cut discretionary spending of $1.5 trillion from 2013 to 2022, even though in 2012, funding for social services had already been cut by 5.3 percent causing a further revenue contraction for the industry.
A large percentage of operators in this industry are those that are engaged in nonprofit activities; there are however quite a number of adoption agencies that operate solely for profit. Profit however declined for all operators during and immediately after the recession as there was no increase in funding from the federal and state governments.
The fact is that babies and children in adoption agencies are not able to contribute for their own upkeep and the running of the adoption agency, which is why operators in this industry are largely dependent on funding from the government as well as charitable donations from corporations and individuals.
There have been shifts within the industry in recent years which has been due to the regulatory changes at the federal level. The regulatory changes have decreased the foster care population while increasing the need for adoption services.
Also, even though the federal government brought forth financial incentives to states that increase adoptions, the program has however expired, causing a dramatic decline in the demand for adoption services and therefore stunting the growth of the industry. However, this is expected to change between 2015 and 2020 as there is expected to be stable funding from the federal government, which will lead to a projected 2.2 percent growth for the industry.
Starting an Adoption Agency – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require the services of an adoption agency are not restricted to only couples who need a child due to difficulty in child bearing, but also for those who love children and wouldn’t mind adopting more, foster homes or those who are afraid to bear kids for personal and other reasons and would prefer to adopt instead.
The age bracket of those who are likely to adopt children are between the ages of 28 to 45. Those who usually consider these adoptions are those that are in the middle or high class. This is because even though most adoptions do not cost so much, one would need to prove that they are more than capable of taking care of those that they intend to adopt.
List of Niche ideas Within the Starting an Adoption Agency – A Complete Guide That You Can Specialize in
A niche area is a specific area in a general area of interest that either an entrepreneur or a company might decide to focus on in a bid to gain the attention of a particular segment of the market. Before you can choose a niche for your business, it is necessary that you study the business you are about to go into thoroughly as this will allow you understand the business as a whole and also the different areas that are likely to generate more revenue for the business.
Even though an adoption agency’s core functions are to ensure that a safe and conducive environment is created so that it can attract those looking to adopt children, there are other areas that it can go into as well. Below are some of the niche areas that you can consider going into in this industry;
- Adoption Services
- Shelter Services
- Foster and Guardianship Services
- Youth Service Programs
- Youth Counseling and Developmental Services
- Other Social Assistance Services
The Level of Competition in the Adoption Agency Industry
The level of competition in this industry, even though it is one that seeks to provide help for couples that cannot keep their birth child or are looking for a child to adopt is huge. Even though the adoption agency market is highly fragmented, there are several companies that have stood out due to their transparent and quick services regardless of their location.
Though the adoption agency is one that is largely dependent on location, as people looking to adopt always prefer the agencies close to them, several people have had to adopt internationally as well. This therefore means that even though the business is to a large extent location dependent, one can still compete beyond regional and national lines. It should however be noted that adoption agencies do not depend on their international or national clients as they do their regional clients.
Therefore, if you are looking to start your adoption agency business in the United States of America, you would to a large extent meet with intense competition from adoption agencies in your region and you should have strategies in place that will allow you to not only to meet up with this competition but also have an edge over them as well.
List of Well – Known Brands in the Adoption Agency Industry
In every industry, there are brands that stand out due to a variety of reasons and the adoption agency industry is no different. Even though there are no major dominant adoption agencies in this industry, there are agencies that have stood out due to their transparent processes, vetting processes, their length of time in the industry, their customer care relationships, their publicity and marketing strategies.
Below therefore are some of the well-known adoption agencies in the United States of America and even globally as well;
- American Adoptions
- A Act of Love
- Gladney Adoption
- Beacon House Adoption Services
- Hope for Families
- Wasatch International Adoption Agency
- Heart of Adoptions
- Great Wall Adoption Agency
- Nightlight Christian Adoptions
- Bethany Christian Services
The adoption agency industry is merged together with the child welfare services industry in the United States and according to statistics has seen a bit of contraction especially after recession, where funding from government declined and there was little or no growth of disposable income.
Even though funding declined, demand for services in the industry grew dramatically as children living below the poverty line grew to 22 percent in the year 2012. Due to the fall in the industry revenue, operators had to draw on endowments in order to be able to keep up with the growing need for services in the industry.
In spite of several years of declining fund, the industry has benefited from varied revenue streams especially as profit for corporate companies and per capita disposable income has grown tremendously, these two made up heavily for the shortage from public spending. Industry revenue as a result of this grew to nearly 2.8 percent in 2015 especially as the private sector and even the public sector experienced steady growth.
It is predicted that between 2015 and 2020, the industry will experience a steady growth especially as revenue sources for the downstream sector will have begun to recover. Also, during this period, it is expected that corporate profit will grow in a healthy way as well as disposable income. Asides from the growth of corporate profit and disposable income during these periods, it is expected that the budgetary growth of the government will slowly increase to about 1.9 percent.
The falling revenue experienced in the industry from the recession period saw wages take a huge chunk of the industry revenue in 2015, and within the next five years to 2020, wages are expected to increase annually at an average rate of 1.8 percent. Also the number of operators in the industry is expected to grow at an annual average rate of 2.5 percent for the same time period.
Starting Your Adoption Agency from Scratch vs Buying a Franchise
A franchise offers an entrepreneur not only the chance to understand the business whilst making as little or no mistakes as possible, but it also allows the entrepreneur not have to go through the stress involved in starting a business from the scratch.
Before buying a franchise however, it is necessary that you conduct a thorough survey of the franchise opportunities available so as to know which one will be right for you. There are no franchises opportunities in the adoption agency business as entrepreneurs can only start from scratch or buy off an existing adoption agency.
In starting your business from scratch, it is assumed that you have conducted a thorough market survey of the industry you intend going into so as to be aware of all that you will likely face during the course of starting the business.
You might check out how your competitors especially those that are successful in the business are running the business. There are several things that would be required from you when starting up your own adoption agency and it would be best to involve an attorney knowledgeable in this particular industry to help with all the requirements that you would need in order to run the business successfully.
Possible Threats and Challenges You Will Face When Starting an Adoption Agency
As an entrepreneur, you should know that when starting a business, there are several challenges and threats that you would likely face and you should be prepared on how to manage or overcome these threats and challenges. While some threats and challenges will require you to be proactive, others will require you to not take any action as you might just need to allow the matter run its course.
Therefore, some of the threats and challenges that you are likely to face when starting an adoption agency include funding challenges from donors and government sources, stringent government conditions and regulations, and intense competition from already existing adoption agencies.
Starting an Adoption Agency – Legal Matters
- Best legal entity to use for this type of business
When looking to start your adoption agency, it is important that you choose a legal entity that will help you run your business with as little hitches as possible. The legal structure you choose for your business is very important and you must check what other adoption agencies in your region are using so that you don’t end up choosing what won’t be right for your business. Alternatively, you can engage the services of an attorney to help you choose a legal structure for your adoption agency.
All businesses in the United States are faced with legal entities such as sole proprietorship, partnership, Limited Liability Company (LLC) and corporation. In choosing a legal entity, you would need to consider factors such as taxation, ease of control and set up, liability and flexibility.
In a corporation, owners are regarded as separate entities from the business and this means that should anything go wrong during the process of running the business, the owners cannot be held personally accountable. The corporation kind of legal entity is not so easy to set up and you would require a lawyer to help you set it up.
In an LLC, the owners are also regarded as separate entities from the business and so cannot be held liable for any occurrences. However, while it is much harder to set-up a corporation, it is easier to set up an LLC in comparison. The LLC is also more flexible and the tax structure is simpler as well.
Catchy Business Name Ideas Suitable for an Adoption Agency
When starting a business, it is necessary that you choose a name that is not only suitable for your business but is catchy, memorable and descriptive of the industry you intend running your business in, and the adoption agency industry is no different. You might need to look at names of different adoption agencies in order to find inspiration for the name you intend giving your own agency.
Below therefore are some catchy business names to consider when you are looking to start your own adoption agency;
- Shields Adoption Services
- Florence Nightingale Adoption Home
- BearsHug Adoptions
- Cute Patters Adoption Services
- Little Angels Services
- Reliable Stork Adoption Agencies
When starting any business in the United States of America, it is very important that you have insurance policies. Insurance policies help cover any incidents and unfortunate circumstances that might occur during the course of running your business, thereby saving you a lot of headache and stress. It is important to set aside a budget for your insurance policies but before you can do this, it is important to note which insurance policies will be best for your business.
You might need to approach an insurance agent or broker for advice on which insurance policies will be best for your business. Below are some of the basic insurance policies that you would need to consider should you decide to start an adoption agency in the United States of America;
- General Liability Insurance
- Directors and Officers Insurance
- Errors and Omissions Insurance
- Special Event Insurance
- Property Insurance
- Business Owner’s Policy
- Workers’ Compensation Insurance
- Umbrella Insurance
- Commercial Auto Insurance
- Employment Practices Liability
Intellectual Property Protection/Trademark
The adoption agency is where adults of a certain age look to adopt a child of a certain age after satisfying all the requirements set forth by the agency. Therefore the adoption agency can be described as helping couples or adults be happy through the process of adopting a child. This is merely a services industry and so entrepreneurs going into this business do not need to bother with trademarks and copyrights.
However, there are some entrepreneurs who feel that their company logo, name, slogan or certain materials would require to be intellectually protected and so if you feel this way, it is best to seek the services of an attorney who understands this area of the law to help with applying for an intellectual property protection for you with the USPTO.
Is Professional Certification Needed to Run an Adoption Agency?
There are certain licenses and certifications that are required in order to be able to run an adoption agency anywhere in the United States. These licenses are vital because they enable your adoption agency to be qualified. It helps those who intend to adopt to have confidence in the adoption agency and having them shows that you are serious about running the business.
Some of the certifications and licenses that you will be required to get when starting your own adoption agency include;
- Fire Marshal Certification
- First Aid Certification
- Cardiopulmonary Resuscitation (CPR) Certificate
- Child Welfare Information License
- Food Handler Certification
These licenses and certifications are not in any way exhaustive and you will need to make findings in the state where you intend to operate your adoption agency from on what you will need.
List of Legal Documents You Need to Run an Adoption Agency
In any business that is being operated in the United States of America, it is important to have a list of legal documents and the adoption agency is no different. Not having documents while running an adoption agency not only sets you up for punishment when found out by the authorities, it might also lead to you being banned from running that kind of business anywhere in the United States of America.
If you aren’t sure of what legal documents you will need for your business, you may have to consult an attorney who understands the industry you are going into to help you out. Below therefore are some of the legal documents that you would require in order to start or run your adoption agency without hitches in the United States of America;
- Certificate of Incorporation
- Operating Agreement
- Business Plan
- Business License and Certification
- Business Permit
- Insurance Policy
- Employer Identification Number (EIN)
- Food Handler’s License
- Contract Documents
- Surety Bond
- Employment Agreement
- Federal Tax Identification Number
Financing Your Adoption Agency
Starting an adoption agency might be a fantastic idea but without the finance to bring the idea to a reality, your idea would remain that way. Also, while you might not mind starting off with the little finance you have, you should be aware that should this money run out, you might be forced to stop the adoption agency midway and so it is vital that as an entrepreneur, that you set plans in place on how you intend to source for start-up capital for your adoption agency.
Having a business plan is likely to aid you in getting the awareness of your intended investors which is why it is necessary to have a business plan that is very comprehensive. Some of the financing options that you will therefore need to explore in order to source for start-up capital for your adoption agency include;
- Getting part of your start-up capital from personal savings and sale of properties
- Going on crowdfunding sites to raise funds for your adoption agency
- Applying for grants from different tiers of governments
- Getting donations from private and corporate organizations
- Getting funds from endowment funds
Choosing a Suitable Location for your Adoption Agency
Choosing an appropriate location for your adoption agency is very important, therefore it is necessary that you conduct a thorough research on where would be most suitable to run your business. You may first need to look at areas where there are a cluster of adoption agencies and use this to determine if this will be more appropriate or if another location far from your competitors will be more appropriate.
Even though the adoption agency business is one whose core motives are to help families achieve their aim of adopting a child, there are strict regulations regarding the process and one of them is that of zoning. This is because a state will have areas that are suitable for an adoption agency.
To know which areas fall under the zoning requirements, it is best that you engage the services of a real estate agent who will know what area will best suit your adoption agency under the budget that you might have set.
You should know that an adoption agency does not require an area that is too busy with foot and vehicular traffic and you would want to ensure that the children within your facility are not faced with too much noise or have an environment that is not totally safe and conducive for them.
You should consider your budget when choosing a location, because while some locations might be cheaper, it might cost more to set up a facility there. Ensure that you adhere to your budget so as not to cause a strain on your overall budget.
Starting an Adoption Agency – Technical and Manpower Details
In starting your adoption agency, it is best that you understand that while you are helping birth and adoptive families, you are also intended to generate revenue that will help you sustain the business that you are into and also pay the staff that you are likely to recruit.
It is important that you make your findings about what you will need and what the industry is all about especially as there has been reduced federal and state funding for social services. The location where you will run your adoption agency is very important as the size of the land or building will give you an indication of how large or small your intended adoption agency will be.
Building a proficient business structure is very important as you will need staff who understand how sensitive an adoption agency is and yet who know how to go about their tasks as professionals. Therefore those that you will need to hire are; chief executive officer, children educator, accountant, marketing team, human resources and admin manager, medical aids, front desk officer, kitchen employees, security guard, cleaner, and driver.
This shows that you might likely need a minimum of 12 people to be able to run your adoption agency successfully.
The Service Delivery Process of an Adoption Agency
Adoption agencies help adoptive families achieve their aim of adopting a newborn or a child and the process usually starts from investigating the parents and creating adoption packages that will be easier for the adoptive families. Such packages might include adopting a newborn baby or an older child, domestically or internationally and such other packages.
You have to define the services that you will be offering adoptive parents because adoption agencies differ and this might therefore affect how much they charge for their adoption processes.
The processes usually involve wait times, disruption fees, hidden fees, financial protection, as well as the amount of support, guidance and education you are likely to get during and after the process of adoption.
Starting an Adoption Agency – The Marketing Plan
- Marketing ideas and strategies
Even though your aim of starting an adoption agency is to bring joy to those looking to adopt and make the process as seamless for them as possible, you will still need to market your agency if you hope to catch the attention of the market in the first place.
Marketing is a way by which you are able to anticipate the needs of your clients and then seek to satisfy their needs by using strategies that will allow you meet these needs. Your aim when marketing should be to penetrate the market in order to get a fair share and also overshadow your competitors in the same industry.
Though you can create the necessary marketing strategies that will allow your adoption agency to stand out and have an edge over others, it is important that you first conduct a thorough market research about the business. This market research is necessary as it will allow you understand the market you are going into, know who your target market are and what they expect from you and also know who your competitors and what their weaknesses are.
Once you have conducted your market survey, you can then create your marketing goals and objectives. It is from these goals and objectives that marketing strategies can be crafted out that will allow you get the intended fair share of the market for your adoption agency. It is important to note that you aren’t the only one in the industry and so your marketing strategies must take into cognizance the marketing strategies of your competitors.
Since you will have to market your adoption agency in the hopes to catch the attention of your target market irrespective of already established and successful adoption agencies, you might wish to engage the services of a marketing consultant or agency with experience in your industry to help craft the right marketing strategies for your adoption agency. Similarly, you might also look to hire in-house marketing executives to help with marketing your adoption agency to your intended target market.
Below are some of the effective ways by which you can market your adoption agency to your intended target market;
- Ensure that you introduce your adoption agency to certain organizations, health institutions, educational institutions and other stakeholders in the industry by sending along introductory letters about your agency, your services and contact information
- Place advertisements in local and national newspapers and popular magazines as well as on radio and television stations
- Ensure that your adoption agency is listed in yellow pages and in online directories
- Empower your marketing executives to carry out direct marketing
- Use your social media platforms such as Facebook, Twitter, Instagram, and Google Plus to promote and advertise your adoption agency
- Install billboards in various strategic locations in order to help advertise your adoption agency
Strategies to Boost Your Adoption Agency Brand Awareness and Create Your Corporate Identity
The fact that you are running an adoption agency does not mean that you will take no steps whatsoever to ensure that your adoption agency is portrayed positively to your intended target market as well as the general public. It only takes one bad word or action about your adoption agency to taint your corporate image and so you must deploy all sorts of means to ensure that you positively boost the awareness of your brand while also creating a corporate identity for your company.
Also, if your intention is to have an adoption agency that is not only well known in the location where it is operating from but also beyond its national and international boundaries, then efforts must be made to promote the adoption agency. One thing that you should note as regards boosting the awareness for your brand is that the more people are aware of your adoption agency, the more revenue you are likely to generate to help with overhead and operating expenses.
If you are just starting up your adoption agency, you might need to engage the services of a publicity consulting company that has the experience as regards your business to help you with strategies that will not only promote your adoption agency to the right market but will be effective enough to keep your agency in a positive light.
It is important that you set aside a budget that you will use to promote your adoption agency and you might also need to explore other means of promoting your agency that will cost you little or next to nothing. You should know that the fact that something costs more doesn’t mean that it will be more effective than those that cost little or nothing at all.
Below therefore are some of the strategies that you can use to boost the awareness for your adoption agency whilst creating a positive corporate identity as well;
- Ensure that your adoption agency participates in community events so as to attract more awareness to itself
- Attend seminars and events in fields related to your adoption agency and network with others to create awareness
- Ensure that you create a website and use Search Engine Optimization (SEO) strategies to enable your website to remain visible to searches in search engines
- Brand all your official cars with your distinct logo and color and also ensure that your staff wear branded tee shirts from time to time
- Use your social media platforms such as Facebook, Twitter, Google Plus, Instagram and Linkedin to create awareness for your adoption agency
- Tell your satisfied clients to help refer your adoption agency to others