Do you want to start a residential assisted living facility? If YES, here is a complete guide to starting an assisted living facility business with NO money and no experience.
Okay, so we have provided you an in-depth sample assisted living facility business plan template. We also took it further by analyzing and drafting a sample assisted living facility marketing plan backed up by actionable guerrilla marketing ideas for assisted living facilities. In this article, we will be considering all the requirements for starting a assisted living facility business. So put on your entrepreneurial hat and let’s proceed.
Why Start an Assisted Living Facility Business?
There are business opportunities all around us that can guarantee us steady flow of income. For instance, if you love the elderly and you enjoy working with them, you can consider opening your own assisted living facility. An assisted living facility is different from a hospital or healthcare facility; it can be likened to an old people’s home.
Assisting individuals with daily living activities can be an overwhelming task. It can be physically tasking and the equivalent of a full-time job. An assisted living facility provides assistance to individuals by administering medications, preparing meals, taking care of household tasks and assisting with physical exercise. Assisted living facilities are a viable option for families seeking quality care for their aging loved ones.
Setting up an assisted living facility requires hard work and serious planning. You are expected to apply and obtain permit and license to run such facility from the government and your facility must meet the required health and safety standards before you can be allowed to operate it. Asides from well-trained domestic employees that will be on your payroll, you will also need to hire nurses.
Starting an assisted living facility business is indeed capital intensive, but at the same time it is lucrative. You are rest assured to make good returns on your investment because there will always be need for your service since people grow old daily.
Running an assisted living facility can gulp quite a lot. This is because of the various things that are involved in it. They include renting a facility, paying the workers, furnishing the facility to suit the elderly ones, the feeding, as well as some other very essential things that cannot be neglected. It is for this reason that you may need to source for funds. If you have a great saving culture and have been able to save up the amount involved, then that is fine, but if not, you may have to turn to banks for a loan.
If indeed you want to start open your own assisted living facility, then you should read through this article, it will help you establish your own assisted living facility from the scratch and build it to profitability within the shortest time possible.
Starting an Assisted Living Facility Business – A Complete Guide
- Industry Overview
An Assisted living facility is a conducive facility designed basically for the elderly who need care and assistance. The facility is usually in a secure and less noisy area. It is a facility that is well furnished with beddings, furniture, fittings and other things that can add to the comfort and ambience of the facility; a place that can be conducive for elderly people.
The essence of an assisted living facility is to provide accommodation strictly for rent to only elderly people who would need people to help them carry out some domestic tasks that they can no longer do on their own. As a matter of fact, nurses are assigned to these facilities to help take proper care of the elderly people in the assisted living facility because some of them may be battling one sickness or the other.
The Assisted Living Facility industry essentially provides accommodation and personal care services for elderly people and of course other individuals who are unable to fully care for themselves due to ailment or disability. Basically, businesses in the Assisted Living Facility industry provide a significant range of services such as independent living, assisted living, skilled nursing and a combination of these, which are usually referred to as continuing care retirement communities. Any business that mainly provide skilled nursing are not included in this industry.
The US Census Bureau categorizes this type of facility as homes for the elderly and continuing care retirement communities. According to the U.S. Census Bureau, the population of individuals in the United States of America between the ages of 65 and 84 is estimated to increase by 38.8 percent between 2010 and 2020, while the population above the age of 85 is also projected to increase by 18.7 percent. The increase in the aging population will definitely create a large business opportunities/market for the Assisted Living Facility industry.
From the demographic composition of the target market for Assisted Living Facility, it clearly shows that in 2006, 69 percent of those who reside in Assisted Facilities are female, while 31 percent are male and a large number of residents in Assisted Living Facilities are 85 years and above. In the United States of America, the biggest market (23 percent) for this industry is in the South – East region.
The Assisted Living Facility industry is indeed a very large industry and pretty much thriving in developed countries such as United States of America, Canada, United Kingdom, Germany, Australia, Italy et al. Statistics has it that in the United States of America alone, there are about 18,076 licensed and registered Assisted Living Facility businesses responsible for employing about 909,415 employees and the industry rakes in a whooping sum of $62bn annually with an annual growth rate projected at 3.7 percent.
It is important to state that the assisted living facility business is indeed a growing business. Even though the business is not considered a green business in the United States of America, one can comfortably say that the business is booming and open to potential entrepreneurs who are interested in the business.
Starting an Assisted Living Facility Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographics composition of those who need the services of an assisted living facility is not restricted to the elderly/aging population. It has a wide range of clientele ranging from kids with special needs to people who cannot take care of themselves or do the basic things that are expected from them due to accident or one form of disability or the other.
In essence, the demographic composition cum target market for an assisted living facility is all encompassing; it is not restricted to any age group, race, tribe or group of people.
List of Niche ideas Within the Assisted Living Facility Business That You Can Specialize in
Most assisted living facility businesses tend to operate general services that a standard assisted living facility provider is expected to offer. That is why it seems that there are no niche areas in the industry. But on the other hand, some assisted living facilities may decide to major in some key or niche areas such as;
- Continuing care retirement communities
- Assisted living facilities and homes for the elderly
- Independent-living facilities
- Providing room and board
- Nursing and other supervision
- Assistance in daily living
- Housekeeping services
- Social Work
- Home Medication Management
- Personal Assistance Services
The Level of Competition in the Assisted Living Facility Industry
The level of competition in the Assisted Living Facility industry to some extent depends on the location of the business, your niche area of operation and of course the capacity of your assisted living facility. If you can successfully create a unique niche for your assisted living facility business, you are likely going to experience little or no competition.
For instance, if you are the only assisted living facility business in your location that is into administering in-home occupational and vocational therapy or administering speech therapy, you can successfully monopolize the market for a long time before you start having competitions.
It is important to also state that the competition in the assisted home facility business is not restricted to that line of business, you will also be competing against all players in the Home Care Providers industry.
List of Well – Known Brands in the Assisted Living Facility Industry
In every industry, there are always brands who perform better or are better regarded by customers and the general public than others. Some of these brands are those that have been in the industry for a long time and so are known for that.
These are some of the leading assisted living facilities in the United States of America and in the globe;
- HCR ManorCare
- Golden Living Assisting Hands
- Brookdale Senior Living, Inc
- Brotoloc Health Care Systems Inc
- Tutera Senior Living & Health Care
- Keystone Senior Management Services
- Volunteers of America National Services
- Evangelical Lutheran Good Samaritan Society
- Life Care Centers of America
- Capitol Senior Living
- National Healthcare Corp.
- Assisted Living Concepts Inc
- 5 Star Quality Care
- Benedictine Health System
- Harbor House Assisted Living
- Hospice care
- Genesis HealthCare Corp
- Senior Lifestyle Corporation
- Sunrise Senior Living, Inc.
When starting an assisted living facility business, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profits, grow the business and perhaps expand the business and start competing at national level.
When conducting costing and economic analysis for your assisted living facility business, you just have to critically examine these key factors; place, pricing, and promotion. As a matter of fact, you would have to continue to review these key factors at regular intervals while running your assisted living facility business. As an assisted living facility business owner, you just have to have a proper grasp of your competitive landscape if indeed you want to maximize profits and be in the frontline of the industry.
It is important to note that renting and medication cost is one of the most important factors contributing to the overall cost of an assisted living facility business and should be considered as a major factor when carrying out your costing and economic analysis.
Starting Your Assisted Living Facility from Scratch vs Buying a Franchise
There is no hard and fast rule when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.
If you are looking towards starting an assisted living facility business, you would have to start from the very scratch because you can hardly get a franchise of assisted living facility business to buy. It is a business that is open to all and sundry.
Besides starting an assisted living facility business from the scratch is less stressful when compared to other similar businesses which usually requires detailed groundwork before launching the business. With an assisted living facility business, you should just try as much as possible to secure a good residential facility that inside a residential estate and then leverage on every marketing tools within your disposal especially the internet when it comes to marketing your assisted living facility.
Please note that most of the big and successful assisted living facilities around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success and of course you can build your own assisted living facility business brand to become a successful brand with corporate and individual customers in your city and from all across the length and breadth of the United States of America if you choose to open chains of assisted living facilities all across the United States of America.
Possible Threats and Challenges You Will Face When Starting an Assisted Living Facility Business
If you decide to start your own assisted living facility today, one of the major challenges you are likely going to face is the presence of well-established assisted living facilities and of course other players in the Home Care Providers industry in your target market location. The only way to avoid this challenge is to create your own market; concentrate on the aging population and individuals in your immediate community.
Some other threats and challenges that you are likely going to face are; mature markets, bad economy (economy downturn), stiff competition, volatile costs, and rising medical care prices. So also, unfavorable government policies, seasonal fluctuations, demographic/social factors, downturn in the economy which is likely going to affect consumers spending and of course emergence of new competitors within the same location where yours is located. There is hardly anything you can do as regards these threats and challenges other than to be optimistic that things will continue to work for your good.
Starting an Assisted Living Facility Business – Legal Matters
- Best Legal Entity to use for this Type of Business
When considering starting an assisted living facility business, the legal entity you choose will go a long way to determine how big the business can grow.
Generally, you have the options of either choosing a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for a business such as assisted living facility. Ordinarily, sole proprietorship should have been the ideal business structure for a small scale assisted living facility business especially if you are just starting out with a moderate startup capital. But people prefer limited liability Company for obvious reasons.
As a matter of fact, if your intention is to grow the business and operate all across the United States of America, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
For example, setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your assisted living facility business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
Catchy Business Name Ideas Suitable for an Assisted Living Facility Company
Normally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own mobile assisted living facility business, here are some catchy names that you can choose from;
- Papas & Mamas Assisted Living Facilities, LLC
- Loftus Road Assisted Living Facility, Inc.
- Cross County Home Health Care Company
- Caring Hands Assisted Living Facility Ltd.
- Agape Home Assisted Living Facility Company
- Mill & Bill Assisted Living Facility Company
- Ninety-Nine Home Health Care Company
- Inner City Assisted Living Facility Services, Inc.
- Bridget Brown Assisted Living Facility Company
- Sharon Holmes Assisted Living Facility Services, Inc.
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your assisted living facility business.
Here is some of the basic insurance policy covers that you should consider purchasing if you want to start your own assisted living facility business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Risk Insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
Intellectual Property Protection/Trademark
If you are considering starting your own assisted living facility business, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
On the other hand, if you just want to protect your company’s logo and other documents or software that are unique to you or even operational concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
Is Professional Certification Needed to Run an Assisted Living Facility Business?
If you intend starting an assisted living facility in the United States of America, you are encouraged to pursue professional certifications; it will go a long way to show your commitment towards the business. Certification validates your competency and shows that you are highly skilled, committed to your career and up-to-date in this competitive market.
Besides it is almost impossible to run an assisted living facility business in the United States without the proper professional certification. In most countries of the world, practicing any medical related practice without a license is typically illegal. In most jurisdictions, individuals found to be providing medical, nursing or other professional services without the appropriate certification or license may face sanctions including even criminal charges leading to prison.
These are some of the certifications you can work towards achieving if you want to run your own assisted living facility company;
- Registered nurse and Licensed practical nurse Certificate
- AADNS Certification
- Caregiver Certification
- Assisted Living Administrators License/Assisted Living Administrator Certification
- Director of Nursing Services–Certified (DNS-CT)
- QAPI Certified Professional (QCP)
List of Legal Documents You Need to Run an Assisted Living Facility Company
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own assisted living facility company in the United States of America;
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit
- Certificate of Incorporation
- Business License
- Business Plan
- Health inspection Certificate
- Copy of license for the service support facility and/or a recent inspection report
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
Financing Your Assisted Living Facility Business
Starting a standard assisted living facility business is capital intensive even if you choose to launch the business on a small scale and you only have a handful of full-time employees on your payroll. Leasing of a standard facility that can accommodate your residents and staff and of course the purchase of medical equipment is part of what will consume a large chunk of your startup capital, in essence, if you choose to start the business on a small scale, you will still have the need to go source for fund to finance the business.
No doubt when it comes to financing a business, one of the major factors that you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your assisted living facility business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from government, donor organizations and angel investors
- Source for soft loans from your family members and your friends.
Choosing a Suitable Location for your Assisted Living Facility
Generally, it cannot be overemphasized that the location you chose to start your business is key to the success of the business; hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people and businesses with the required purchasing power and lifestyle.
If you make the mistake of renting or leasing a facility for your assisted living facility business in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business.
It is important to note that a business facility in a good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget. If you are new to the dynamics of choosing a location for a business such as assisted living facility business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your assisted living facility business.
These are some of the key factors that you should consider before choosing a location for your assisted living facility business;
- The demography of the location
- The demand for the services of assisted living facilities and other homecare related businesses in the location
- The purchasing power of the residence of the location
- Accessibility of the location
- The number of assisted living facilities and homecare related services businesses in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
Starting an Assisted Living Facility Business – Technical & Manpower Details
When it comes to starting a standard assisted living facility business, you will need stethoscopes, blood pressure cuffs, oxygen tanks, first aid kits and other related equipment that will aid you in carrying out your job. It is important to state that this equipment can be purchased as fairly used if you are operating on a low budget. In setting up a small office for your assisted living facility, you will also need computers, printer, home healthcare software, telephones, pager, photocopier, scanner, fax machine, first aid kit, gloves and uniform.
When it comes to choosing between renting and leasing a facility for your assisted living facility business, the size of the facility you want to own, and your entire budget for the business should influence your choice. Besides, you will need a facility that is in a serene environment, a facility that is big enough to accommodate the number of residence and staff members working for you.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision. Averagely, when it comes to starting a standard Assisted living facility business on a large scale, you would need the services of the following professionals; Chief Operating Officer (you can occupy this position), Marketing and Sales Executive (Business Developer), Accountant, Nurse Aide, Medication Management Counselors, Assisted Living Administrator (Human Resources and Admin Manager), Home Health Caregivers/Home Caregivers/County Aging Workers, Customer Services Executive/Front Desk Officer, Security Guards and Cleaners.
Over and above, you would need a minimum of 10 to 15 key staff members to effectively run a medium scale but standard assisted living facility.
The Service Delivery Process of an Assisted Living Facility Business
The service delivery as it relates to assisted living facility to a large extent depends on the organization and what they stand to achieve.
Basically, an assisted living facility business sources for clients, once they are able to win the client over based on the services they intend offering and the facility available, they will both agree on the terms and conditions as required by the nature of the job they are to execute. For example, if it is to take care of an elderly person for a period of time, they will ensure that they carry out all that is agreed upon.
The services could be providing homemaker and companion services, administering in-home physical therapy, providing in-home hospice care, providing 24-hour home care, administering in-home occupational and vocational therapy, providing in-home dietary and nutritional services, administering speech therapy or providing in-home medical care.
It is important to state that an assisted living facility business may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility.
Starting an Assisted Living Facility Business – The Marketing Plan
- Marketing ideas and strategies
The fact that the entry barrier for starting a small -scale assisted living facility services business is low means that there is bound to be more players in the industry no matter the location you choose to start yours. In essence, you must come up with creativity if you must carve out a market for yourself within the available market in your community, city, state or country.
So, when you are drafting your marketing plans for your assisted living facility services company, make sure that you create a compelling personal and company profile. Asides from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past as it relates to your line of business. This will help boost your chances in the market place when marketing your services.
Here are some of the platforms you can utilize to market your assisted living facility services company;
- Introduce your business by sending introductory letters alongside your brochure to households, elderly homes, hospitals, religious organizations, clubs/organizations for the elderly, the aging population, the aged and every other age categories who fall under the conditions listed by the physician in and around the location where your facility is located
- Open your assisted living facility services company with a party so as to capture the attention of residents who are your first targets
- Engage in roadshows in targeted communities from time to time to market your services
- Advertise your services in community based newspapers, local TV and radio stations
- List your business and products on yellow pages ads (local directories)
- Leverage on the internet to promote your assisted living services company
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
- Leverage on the internet to promote your business
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
- Engage the services of marketing executives and business developers to carry out direct marketing for you.
Factors That Will Help You Get the Right Product Pricing
One key factor that will help you offer your services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; with that, it will help you save cost for paying sales and marketing executives and also purchase.
So also, if you are able to secure a business partnership with hospitals and medical insurance companies as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your assisted living facility business.
As regards medications, toiletries, cooking ingredients and other supplies that you need to effectively run your assisted living facility, you need to ensure that you purchase your items directly from the manufacturers or from wholesale distributors in pretty large quantities. The truth is that the higher the quantity of items that you purchase directly from the manufacturers or wholesale distributors, the cheaper you tend to get them.
Possible competitive strategies for winning your competitors in this particular industry
The Assisted Living Facility industry is a competitive industry, and you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to continue to create easier and cheaper ways of taking care of your patients / clients and also make your facility highly secured and conducive.
In other to stay competitive in this industry, you must ensure that your residents are always comfortable and always ensure that you pay attention to details when carrying out your job. The truth is that if there are fluctuations in the services you provide, customers can choose to shift allegiance and settle for other options available.
Strategies to Boost Your Assisted Living Facility Brand Awareness and Create Your Corporate Identity
If your intention of starting an assisted living facility business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of assisted living facilities and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your assisted living facility business;
- Place adverts on both print (newspapers and health magazines) and electronic media platforms
- Sponsor relevant community based events/programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your services
- Install your Bill Boards in strategic locations all around your city or state
- Engage in roadshow from time to time in targeted neighborhoods to create awareness of your assisted living facility.
- Distribute your fliers and handbills in target areas
- Contact households, elderly homes, hospitals, religious organizations, clubs/organizations for the elderly and the aging population and the aged who might suffer from severe joint pains, and every other age categories who fall under the conditions listed by the physician in and around the location where your facility is located informing them about your business and the services you offer
- List your assisted living facility in local directories/yellow pages
- Advertise your assisted living facility in your official website and employ strategies that will help you pull traffic to the site.
- Position your Flexi Banners at strategic positions in the location where your assisted living facility is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks /vans are well branded with your company logo.