You need a minimum of $487,380 to open a medium-scale assisted living facility. This amount includes the salaries of all the staff for the first three months of operation.
An assisted living facility is a conducive facility designed basically for the elderly/aging people who need care and assistance. The facility is usually in a secure and less noisy area. It is usually well furnished with beddings, furniture, fittings and other things that can add to the comfort and ambience of the facility.
Businesses in the assisted living facility industry provide a significant range of services such as independent living, assisted living, skilled nursing or a combination of these, which are usually referred to as continuing care. Any business that mainly provides skilled nursing are not included in this industry.
Over and above, the Assisted Living Facility industry in developed countries are still enjoying good patronage particularly if they are well positioned and if they know how to reach out to their target market; the aging population and those who would also want to live in an assisted living community.
Estimated Cost of Opening an Assisted Living Facility
When it comes to starting an assisted living facility, the major areas that you should look towards spending the bulk of your cash is in renting or leasing a standard facility, equipping the facility and also purchasing all the needed supplies such as medications, toiletries, food and water et al.
Aside from that, you are expected to pay your employees and utility bills. This are the key areas where you will spend our startup capital;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
- Marketing promotion expenses for the grand opening of the assisted living facility 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 total cost for hiring a business consultant including writing a business plan – $2,500.
- The total cost for the purchase of insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The cost for renting or leasing a facility that will be converted into the assisted living facility and that can accommodate the number of residents that will be accommodated per time (Re – construction of the facility inclusive) will cost – $300,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $70,000
- The cost for the purchase of supplies (medications, toiletries, food and water et al) – $50,000
- The cost for store equipment (cash register, security, ventilation, signage) – $4,750
- The cost of purchase and installation of CCTVs: $2,000
- Equipping the assisted living facility (sound system, DVD players, beddings, Flat Screen TVs, computers, printers, projectors, markers, pens and pencils, furniture, telephones, filing cabinets, and electronics) will cost – $40,000
- The cost of launching a website: $600
- Miscellaneous: $2,000
From the rough estimate as listed above, you would need a minimum of four hundred and eighty – seven thousand seven hundred and eighty USD ($487,380) to establish a medium-scale but standard assisted living facility business in any city in the United States of America.
Factors That Will Influence the Cost Of Starting an Assisted Living Facility
The Type of Assisted living facility
There are different types assisted living facilities based on the services they offer and they are;
- Continuing care retirement communities
- Assisted living facilities and homes for the elderly
- Independent-living facilities
- Providing room and board for people who need daily assistance
These different services offered by assisted living facilities come with different cost implications when starting the business.
The Choice of Location
In business, location is key part of what determine the success of the business. As a matter of fact, there are business consultants cum realtors who are specialized in helping people choose an ideal location for their type of business; a location that will guarantee them to profitability and to breakeven within the shortest time frame.
For example, renting or leasing an assisted living facility in a location that is off the city center or off residential estate will be less expensive when compared to renting or leasing a facility in a well-populated residential estate.
The Required Licenses and Permits
In the United States of America, you cannot open an assisted living facility without first applying for the mandatory license and permits. You will need accreditation certificate, building license, zonal permits, and signage permits amongst others that may be unique to different cities and states.
These license and permits cost money and it will influence the overall cost of opening an assisted living facility in the United States of America. Note you will pass through several inspections before you can be issued your licenses and permits.
In order to get the overall cost of licensing and permits associated with opening a new assisted living facility in the United States, we will advise that you reach out to your city government to find out what you need for your assisted living facility. You also need to consider state and federal requirements.
The Type of Facility
As regards the facility, you have the options of renting, leasing or designing and constructing your own assisted living facility from the scratch.
With renting and leasing a facility, you may need to modify the facility to fit into the number of rooms, waiting room, assembly hall, playing space and dining halls and library or gym you want to have in your assisted living facility.
Let us assume that you want to construct your assisted living facility from the scratch. It means that you will buy the land or a property and of course construct and equip the facility to fit into what you have in mind. With that, you will agree that you are going to spend way more when compared to people that rent or lease a facility.
The Number of Residents You Want to Admit
No doubt, there are standard assisted living facilities that have the capacity to accommodate over 50 residents per time and there are assisted living facilities that can only accommodate less than 100 residents per time.
The more the number of residents the assisted living facility can accommodate, the more the money that you are expected to spend to set-up and run the facility.
The Cost of Hiring and Paying a Business Consultant and Attorney
As expected, if you want to get your business started on the right foundation, it will be a wise decision to hire the services of a competent business consultant and perhaps an attorney.
A business consultant will help you with drafting a workable business plan document, a marketing plan and strategy, comprehensive SWOT analysis, and other advisory issues that will help you with opening the business. An attorney will help you with registering the business, drafting contract documents and offer you all the legal expertise that will help you start the business on the right foundation.
The Cost for Branding, Promotion and Marketing
If you need massive results as it relates to competing and winning a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion and marketing.
As a matter of fact, it is not cheap to come by an expert in branding, promotion and marketing that will help you compete with brands that are already determining the market direction of the assisted living facilities industry in your city.
So, if you add the cost of paying a branding and marketing expert, it will sure increase the cost of opening your assisted living facility.
The Cost of Furnishing and Equipping the Assisted Living Facility
Before you can open an assisted living facility, you should budget and buy chairs and tables, beds, projectors, flat screen TVs, sound system, DVD players, Satellite dish and decoder, office furniture (table, stools and sofas), drawers and cabinets,
Telephones, filing cabinets, office equipment (cash register, security and fire alarm and protection gadgets, CCTV, ventilation, signage), and sports/gym equipment and wares amongst others.
The Cost for Insurance
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 own assisted living facility business.
The Cost for Registering the Business
Although, the cost of registering a business an obtaining all the needed document that will give you the leeway to operate without any obstacle is affordable, it will no doubt add to the overall cost of opening an assisted living facility in the United States of America.
Source of Your Supplies and Ongoing Expenses
Another major factor that will determine the cost of opening an assisted living facility in the United States of America is the source of your supplies such as medications, office supplies, toiletries and food supplies.
For example, if you have access to manufacturers of the type of office supplies, toiletries and food supplies that you would need, it will sure cut down the cost of running the assisted living facility as against buying from retailers.
Cost of Recruiting and Training Your Staff
The fact that you are opening your assisted living facility as a new business means that you are expected to recruit and train your staff.
The training will help you sell the corporate culture of your organization to the new employees. As expected, it will cost you money to hire expert trainers that will help you train your new hires.
The Cost for the Purchase and Customizing of Uniforms, shoes, and caps
As expected, your personnel are expected to all have uniforms and they are expected to put on these uniforms. All these uniforms will cost you money which is why it must be part of your budget if you are looking towards opening an assisted living facility in the United States of America.