You need an estimate of $750,000 to open a nursing home (medium scale). This amount include the salaries of staff for first 3 months of operation.
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.
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.
Estimated Cost Breakdown to Start a Nursing Home
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).
Having said that, here are some of the factors that will influence the cost of opening a nursing home in the United States of America;
13 Factors That Determine the Cost of Opening a Nursing Home
1. The Type of Nursing Home
There are different types nursing homes and they are;
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Independent Living Community
Independent living communities offer the least healthcare, but the most freedom. They aim to ease the burden on their residents without intruding in their lives.
Many offer different types of living arrangements, from small apartments to houses.
Assisted Living Facilities are a step up from independent living communities with regard to care provided.
In other words, they assist with a greater degree of your daily tasks. Often, assisted living helps you with bathing, meals, and dressing, or provides supervision.
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Skilled Nursing Facility
If you feel you need more help for your medical and daily needs, a skilled nursing facility is probably your best option.
Often called “nursing homes,” these facilities provide 24-hour healthcare from licensed nurses, as well as access to registered nurses (RNs) and certified nursing assistants (CNAs).
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Continuous Care Retirement Community
If you’re not sure which type of facility you need, or suspect your needs will change, a Continuous Care Retirement Community (CCRC) may be a good option. CCRCs are campuses that combine the services of all the other care facilities.
These different types of nursing home comes with different cost implications when starting the business.
2. The Choice of Location
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.
For example, renting or leasing a nursing home 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 nursing home facility in a well – populated growing residential estate; a location in an ideal cozy and serene environment, a location in a metropolitan city with the right demographic composition of families and old people who can afford to pay for your services.
3. The Required Licenses and Permits
In the United States of America, you cannot open a nursing home without first applying for the mandatory licenses and permits.
Of course, you would need accreditation certificate, building license, zonal permits, signage permits amongst others.
Please note that there may be several inspections you must pass before you can be issued your licenses and permits – this will also cost you money.
In order to get the overall cost of licensing and permits associated with opening a new nursing home in the United States, we will advise that you reach out to your city government to find out what you need for your nursing home. You also need to consider state and federal requirements.
4. The Type of Facility
As regards the facility, you have the options of renting, leasing or designing and constructing your own nursing home facility from the scratch.
With renting and leasing, you might just have to spend extra 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, but there is a limit to how far you can go and it will be dependent on what the landlord of the facility wants.
Let us assume that you want to construct your nursing home facility from the scratch.
It means that you will buy the land or a property, construct and equip the nursing home facility.
With that, you will agree that you are going to spend way more when compared to people that rent or lease a facility.
5. The Number of Residents They Want to Admit
No doubt, there are nursing homes that can accommodate over 50 residents per time and there are others that can only accommodate less than 100 residents.
Aside from renting or leasing a facility to accommodate the number of residents and staff members you want, it will also cost you more to furnish and equip the nursing home and the more the number of residents the nursing home can accommodate, the more the money that you are expected to spend to set up and run the home.
6. 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.
For example, a business consultant will help with drafting a workable business plan document, a marketing plan and strategy, comprehensive SWOT analysis and other advisory services.
So also, 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. Of course, you will agree that these services will cost you money.
7. The Cost for Branding, Promotion and Marketing of the Nursing Home
Trust me, 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 of your new nursing home.
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 nursing homes 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 nursing home.
8. The Cost for Furnishing and Equipping the Nursing Home
You will quite agree that aside from the basic facilities that are expected to be found in a nursing home, an investor that wants to open a nursing home may decide to spend more to equip the facility to look unique.
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.
9. The Cost of Insurance
In the United States and in most countries of the world, you can’t operate a business without at least liability insurance and general insurance.
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 nursing home business.
10. The Cost for Registering the Business
Although, the cost of registering a business and obtaining all the needed document that will give you the leeway to operate without any obstacle is affordable.
11. Source of Your Supplies and Ongoing Expenses
For example, if you have access to manufacturers of the type of medications, office supplies, toiletries and food supplies that you would need, it will sure cut down the cost of running the nursing home as against buying your supplies from retailers.
12. Cost of Recruiting and Training Your Staff
The fact that you are opening your nursing home 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 and bring your new hires up to speed.
13. The Cost of Purchase and Customizing of Uniforms
As expected, your staff and security personnel are expected to have uniforms and they are expected to put on these uniforms when on duty.
All these uniforms will cost you money which is why it must be part of your budget if you are looking towards opening a nursing home in the United States of America.
14. The Cost for Grand Opening of the Nursing home
In recent times, no nursing home opens its door for business without first organizing an opening party to officially launch the business.
You can choose to do a soft opening if you operating on a low budget or you can choose to go for grand opening party.
The bottom line is that it is a cost that must be part of your budget and this cost will influence the overall cost of opening the nursing home.
Can a Nursing Home be Bootstrapped on a Lean Budget?
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