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Startup Cost to Open a Group Home for Mentally Challenged People

You need a minimum of $487,380 to open a medium-scale group home for people who are mentally challenged. This amount includes the salaries of all the staff for the first three months of operation.

A group home for people who are mentally challenged essentially provides accommodation and personal care services for people with one form of mental disability or the other.

Businesses in the Nursing Home Care industry provide a 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. It is important to state that group homes for mentally challenged people is indeed a growing business.

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Estimated Cost of Starting a Group Home for the Mentally Challenged

When it comes to starting a group home for people who are mentally challenged, the major areas that you look towards spending the bulk of your cash is in renting or leasing a standard facility and converting it into a group home, equipping the facility and also purchasing supplies such as medications, toiletries, food et al.

You will also pay your employees, renew your licenses and pay utility bills. These are the key areas where you will spend your startup capital;

  1. The total fee for registering the business in the United States of America – $750.
  2. Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
  3. Marketing promotion expenses for the grand opening of the group 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.
  4. The total cost for hiring a business consultant including writing a business plan – $2,500.
  5. The total cost for the purchase of insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
  6. The cost for renting or leasing a facility that will be converted into the nursing home and that can accommodate the number of residents that will be accommodated per time (Re – construction of the facility inclusive) will cost – $300,000.
  7. Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
  8. Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $70,000
  9. The cost for the purchase of supplies (medications, toiletries, food and water et al) – $50,000
  10. The cost for store equipment (cash register, security, ventilation, signage) – $4,750
  11. The cost of purchase and installation of CCTVs: $2,000
  12. Equipping the nursing home (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
  13. The cost of launching a website: $600
  14. Miscellaneous: $2,000
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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 group home for people who are mentally challenged.

This amount includes the salaries of all the staff for the first three months of. Note that this is a rough estimate and we usually advise our readers to go to the market or directly contact wholesalers and suppliers of the types of furniture, beddings and electronics et al they want to have in their group home in order to get the real time prices of these items.

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The truth is that, if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.

Having said that, here are some of the general factors that will influence the cost of opening a group home for the mentally challenged in the United States of America;

Factors That Determine the Cost to Starting a Group Home for Mentally Challenged People

1. The Choice of Location

Location is key part of what determines 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 within the shortest time frame.

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For example, renting or leasing a 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 growing residential estate; a location in an ideal cozy and serene environment, a location with the right demographic who can afford to pay for your services.

2. The Required Licenses and Permits

In the United States of America, you cannot open a business without first applying for the mandatory licenses and permits. Of course, you would need accreditation certificate, building license, zonal permits, and signage permits amongst others.

As expected, these license and permits cost money and it will influence the overall cost of opening a nursing home in the United States of America.

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Note that there may be several inspections you must pass before you can be issued your licenses and permits and they will also cost you money.

In order to get the overall cost of licensing and permits associated with opening a group home for people who are mentally challenged in the United States, we will advise that you reach out to your city government.

You also need to consider state and federal requirements, so do your homework long before you set a date for your opening.

3. The Type of Facility

As regards the facility, you have the options of renting, leasing or designing and constructing your own group home from the scratch.

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With renting and leasing a facility, you may spend extra to modify the facility to fit into the picture of what you have in mind and the number of rooms, waiting room, assembly hall, playing space and dining halls and library or gym you want to have in your facility, but there is a limit to how far you can go. Let us assume that you want to construct your group home from the scratch.

It means that you will buy the land or a property, then construct and equip the group home to fit into the ideal picture 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.

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4. The Number of Residents They Want to Admit Per Time

No doubt, there are standard group homes that have the capacity to accommodate less than 50 residents per time and there are group homes that can accommodate up to 100 residents per time.

Aside from the cost of renting or leasing the facility, it will also cost you more to furnish and equip the group home, and the more the number of residents the nursing home can accommodate, the more the money that you are expected to spend to setup and run the facility.

5. Cost of Hiring a Business Consultant and Attorney

If you want to get your business started on the right foundation, it is wise to hire the services of a competent business consultant and perhaps an attorney.

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A business consultant will help with drafting a workable business plan document, a marketing plan and strategy, comprehensive SWOT analysis, and other advisory or things that will help you with opening the business.

An attorney on the other hand 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.

6. The Cost of Branding, Promotion and Marketing

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 group home for people who are mentally challenged.

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As a matter of fact, it is not cheap to hire an expert in branding, promotion and marketing that will help you compete with brands in your city.

7. The Cost for Furnishing and Equipping the Facility

You will quite agree that aside from the basic facilities that are expected to be found in a group home for people who are mentally challenged, an investor that wants to open a group home may decide to spend more than expected to furnish and equip the facility to look unique.

Before you can open a group home for people who are mentally challenged, you should buy chairs and tables, beds, projectors, flat screen TVs, sound system, DVD players, Satellite dish and decoder,

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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.

8. The Cost of 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 such as liability insurance and general insurance et al 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 group home.

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9. The Cost for Registering the Business

Although, the cost of registering a business is affordable, but it will no doubt add to the overall cost of opening your business.

10. Source of Your Supplies

For example, if you have access to manufacturers of the type of medications, toiletries and food supplies that you would need, it will sure cut down the cost of running the group home as against buying your medications, toiletries and food supplies from retailers. So also, if you have an in-house cook that prepares food for the residents, it will reduce the cost on food.

11. Cost of Recruiting and Training Your Staff

The fact that you are opening a group home for people who are mentally challenged means that you are expected to recruit and train your staff to conform to the kind of group home you want to operate.

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The training will help you sell the corporate culture of your organization to your new employees. As expected, it will cost you money to hire trainers that will help you train and bring your new hires up to speed and that will add to the overall cost of opening the business.

12. The Cost of Purchasing and Customizing Uniforms for Your Employees

Your staff and residents need uniforms and they are expected to put on these uniforms when they are admitted in the facility or on duty. All these uniforms will cost you money which is why it must be part of your budget.