Do you want to start a drug rehab center and need to write a business plan? If YES, here is a sample drug rehab business plan template & feasibility report. A drug rehab center is a rehabilitation/correction center for drug addicts. This business can be described to be in two-folds, that is engaging in a noble cause (social enterprise) while also bringing profit for the entrepreneur.
The drug rehab center business is a delicate business, you need to network with legal, medical, as well as criminal professionals so that they will refer patients to you; this does not however mean that you cannot source for your clients directly. Your marketing however needs to be very sensitive especially as your potential customers and their families are in a vulnerable place.
A Sample Drug Rehab Center Business Plan Template
Table of Content
- 2. Executive Summary
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 13. Startup Expenditure (Budget)
1. Industry Overview
The Drug and Alcohol Rehabilitation Clinics industry is made up of clinics and facilities with medical staff that primarily provide inpatient and outpatient services related to diagnosing and treating alcohol, drug and other substance abuse. For-profit and nonprofit establishments are also part of this industry.
According to the National Council on Alcoholism and Drug Dependency in the united states, over 23 million Americans from the age of 12 and above are addicted to alcohol and other drugs. Research from the Substance Abuse and Mental Health Services Administration (SAMHSA), has it that 2.5 million Americans received care at an addiction treatment facility as at 2012.
The market for addiction treatment according to SAMSHA is estimated to be about $35 billion per year with more than 14,000 treatment facilities in existence. Since drug rehab centers are social enterprises that are run mostly by Non-Profit Organizations most of them usually get funding from the government and state agencies as insurance coverage for this kind of business is limited.
There are also high end niches that have emerged especially for celebrities and public figures such as internet addiction, sex addiction, nicotine addiction and problem gamblers. Some of these facilities are also diversifying into treating those with eating disorders, anxiety disorders, and post-traumatic stress for war Veterans.
Statistics has it that in the United States of America alone, there are about 3,833 licensed and registered drug and alcohol rehabilitation clinics/center responsible for employing about 79,945 employees and the industry rakes in a whooping sum of $6 billion annually with an annual growth rate projected at 4.6 percent between 2014 and 2019.
It is important to state that the company holding the largest market share in the Drug & Alcohol Rehabilitation Clinics industry is Acadia Healthcare Company Inc. A recent report shows that the drug and alcohol rehabilitation clinics industry owns, manages and leases prisons, community correctional facilities and juvenile detention centers on behalf of government agencies.
Decreasing crime and incarceration rates, coupled with increased scrutiny in the wake of several high-profile scandals at privately operated facilities, have resulted in marginal growth rates in recent years. Over the five years to 2019, industry revenue is expected to grow at an annualized rate of 2.8 percent to $5.9 billion, including projected growth of 1.4 percent in 2019 alone.
Over the five years to 2019, the crime rate is projected to fall an annualized 3.1 percent, while the incarceration rate is expected to fall an annualized 2.2 percent. Though the ultimate cause of crime decline is unknown. The Drug and Alcohol Rehabilitation Clinics industry treats substance use disorders, a mental health condition in which the daily lives of patients are impaired by the often habitual use of psychoactive drugs.
Treatments provided by industry operators range from counseling to medication-assisted interventions in severe cases of chemical dependence. These treatments can be provided on either an inpatient or outpatient basis, and the industry includes commercial clinics and nonprofit organizations.
Increased instances of substance use disorder over the five years to 2019, including an epidemic of opioid addiction, has raised demand for industry services. Meanwhile, access to rehabilitation programs has expanded with increased enrollment in health insurance.
Some of the factors that encourage entrepreneurs to start their own drug rehab center could be that the business is a thriving business and most rehab centers get support from government and donor agencies. The drug and alcohol rehab center business 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 and partner with the government.
2. Executive Summary
Good Citizens® Drug and Alcohol Rehab Center, Inc. is a licensed drug and alcohol rehab center that will be located in the heart of Sterling Heights – Michigan in a neatly renovated and secured housing facility. Our drug and alcohol rehab center is specifically designed and equipped with the needed facilities/gadgets to give comfort and security to all our residents irrespective of religious affiliations, race, and health conditions.
We are set to rehabilitate people who are drug addicts and alcoholics. Despite the fact that we are a drug and alcohol rehab center, we are going to be health conscious and customer-centric with a service culture that will be deeply rooted in the fabric of our organizational structure and indeed at all levels of the organization.
Our accommodation facility will be decorated in an exquisite and elegant facade, so much so that it will be a conspicuous edifice in the city where it is located. Good Citizens® Drug and Alcohol Rehab Center, Inc. will provide inpatient and outpatient services related to diagnosing and treating alcohol, drug and other substance abuse.
Good Citizens® Drug and Alcohol Rehab Center, Inc. will be equipped with everything that will make life comfortable for all residents. We will build a fitness room and library et al. We will also install a free Wi-Fi that will enable our residents and guests surf the internet with their laptops free of charge, and there will be wireless access in all public areas within the lodging facility.
We will ensure that we enforce our rules, treatment programs, work requirements and curfews. While in our drug and alcohol rehab center, inmates will not be allowed to use drugs or drink alcohol. An inmate who fails to comply with the rules can be discharged and sent back to their family.
Good Citizens® Drug and Alcohol Rehab Center, Inc. is owned and managed by Mrs. Dora Nelson. Mrs. Dora Nelson is a licensed therapist, and psychiatrist with over 25 years’ experience working for leading brands in the industry. She has a Master’s Degree in Public Health and she is truly passionate when it comes to rehabilitating drug addicts and alcoholics.
3. Our Products and Services
Good Citizens® Drug and Alcohol Rehab Center, Inc. is set to operate a standard drug and alcohol rehab center in Sterling Heights – Michigan. The fact that we want to become a force to reckon with in the Drug and alcohol rehabilitation clinics industry means that we will provide our residents a conducive and highly secured accommodation.
In all that we do, we will ensure that our residents are satisfied and are willing to recommend our facility to their family members and friends. We will offer the following services;
- Providing outpatient services
- Providing detoxification services
- Providing intensive outpatient services
- Providing medication-assisted opioid therapy services
4. Our Mission and Vision Statement
- Our vision is to become the number one choice when it comes to drug and alcohol rehab in the whole of Michigan and also to be amongst the top 20 drug and alcohol rehab facilities in the United States of America within the next 10 years.
- Our mission is to build a drug and alcohol rehab center that will meet and surpass the needs of all the residents of our facility; we want to build a profitable and successful business where all our ex inmates will become good citizens in the society.
Our Business Structure
Good Citizens® Drug and Alcohol Rehab Center, Inc. will be built on a solid foundation. From the outset, we have decided to recruit only qualified professionals to man various job positions in our organization. We are quite aware of the rules and regulations governing the drug and alcohol rehabilitation clinics industry which is why we decided to recruit only well experienced and qualified employees.
We hope to leverage on their expertise to build our business brand to be well accepted in Michigan and the whole of the United States. When hiring, we will look out for applicants that are not just qualified and experienced, but homely, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all our stake holders.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of five years or more. This are the positions that will be available at Good Citizens® Drug and Alcohol Rehab Center, Inc.;
- Chief Executive Officer
- Facility Administrator (Human Resources and Admin Manager)
- Rehabilitation Specialist
- Sales and Marketing Executive
- Accounting Officer
- Security Officer
5. Job Roles and Responsibilities
Chief Executive Officer:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Reports to the board.
Facility Administrator (Admin and HR Manager)
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Design job descriptions with KPI to drive performance management for clients
- Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Defining job positions for recruitment and managing interviewing process
- Carrying out staff induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversee the smooth running of the daily home activities.
- Providing outpatient services
- Providing detoxification services
- Providing intensive outpatient services
- Providing medication-assisted opioid therapy services
- Develop a treatment plan in consultation with other professionals, such as doctors, therapists, and psychologists
- Create rehabilitation or treatment plans based on clients’ values, strengths, limitations, and goals
- Arrange for clients to obtain services, such as medical care or career training
- Assist clients in creating strategies to develop their strengths and adjust to their limitations
- Monitor clients’ progress and adjust the rehabilitation or treatment plan as necessary
- Advocate for the rights of people who are just coming out of drug addictions and alcoholism
Marketing and Sales Executive
- Identify, prioritize, and reach out to new clients, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts
- Writing winning proposal documents, negotiate fees and rates in line with organizations’ policy
- Responsible for handling business research, market surveys and feasibility studies for clients
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Document all customer contact and information
- Represent Good Citizens® Drug and Alcohol Rehab Center, Inc. in strategic meetings
- Help increase sales and growth for Good Citizens® Drug and Alcohol Rehab Center, Inc.
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for the organization
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for Good Citizens® Drug and Alcohol Rehab Center, Inc.
- Serves as internal auditor for Good Citizens® Drug and Alcohol Rehab Center, Inc.
- Ensure that the facility is secured at all time
- Control traffic and organize parking
- Patrols around the building on a 24 hours basis
- Submit security reports weekly
- Any other duty as assigned by the facility administrator
- Responsible for cleaning the facility at all times
- Ensure that toiletries and supplies don’t run out of stock
- Assist our residents when they need to take their bath and carry out other household tasks
- Handle any other duty as assigned by the facility manager
6. SWOT Analysis
We want our drug and alcohol rehab center to be the number one choice of all residents of Sterling Heights and other cities in Michigan. We know that if we are going to achieve the goals that we have set for our business, then we must ensure that we build our business on a solid foundation. We must ensure that we follow due process in setting up the business.
Even though our Chief Executive Officer (owner) has a robust experience in social work and helping drug addicts and alcoholics, we still went ahead to hire the services of business consultants that are specialized in setting up new businesses to help our organization conduct detailed SWOT analysis and to also provide professional support in helping us structure our business to indeed become a leader in the drug and alcohol rehabilitation industry.
This is the summary of the SWOT analysis that was conducted for Good Citizens® Drug and Alcohol Rehab Center, Inc.;
Our strength lies in the fact that we have a team of well qualified professionals manning various job positions in our organization. As a matter of fact, they are some of the best hands in the whole of Sterling Heights – Michigan. Our location, the Business model we will be operating on, well equipped and secured facility and our excellent customer service culture will definitely count as a strong strength for us.
Good Citizens® Drug and Alcohol Rehab Center, Inc. is a new business which is owned by an individual (family), and we may not have the financial muscle to sustain the kind of publicity we want to give our business and also to attract some of the highly experienced hands in the drug and alcohol rehabilitation industry.
People covered by private health insurance are likely to use healthcare services more frequently. Government initiatives toward mental health parity, through which insurance covers mental health-related services such as clinical rehab, also affect the potential for people to seek treatment. The number of people with private health insurance is expected to increase in 2019, representing a potential opportunity for the industry.
Medicare and Medicaid are programs that provide free or subsidized medical and health-related services. Federal funding and reimbursement levels affect the affordability and subsequent demand for rehab clinics. Federal funding for Medicare and Medicaid is expected to increase in 2019, but the surrounding political uncertainty remains a threat to the industry.
7. MARKET ANALYSIS
- Market Trends
A notable trend shows that the revenue and wages for rehabilitation centers have largely been affected due to the recession and also a slight fund drop in 2012 from federal funding of Medicaid and Medicare as a result of a rise in premiums, but the effect is wearing off as the industry has largely recovered.
Also, the economy which is constantly improving is expected to boost revenue for the rehab center business industry from 2015 to 2022. More companies entering into this industry are doing so due to the fact that there is an increasing focus on outpatient services, which are considered less costly than inpatient care, and which is also more desirable for insurance providers.
The demand for rehab centers is largely driven by the availability of various factors such as new drugs and treatments, funding policies as well as insurance programs. Profitability for individual facilities depends on controlling costs as well as referrals.
Large scale rehab centers usually have more advantage when purchasing as well as marketing to sources that would provide these referrals. However, small scale companies have more leverage in competition by providing superior service to patients, integration of treatments with follow-up procedures, and specialist treatment.
No doubt the drug and alcohol rehabilitation clinics industry will continue to grow and become more profitable because the aging baby-boomer generation in United States are expected to drive demand.
8. Our Target Market
The fact that we are going to open our doors to a wide range of customers does not in any way stop us from abiding by the rules and regulations governing the drug and alcohol rehabilitation industry in the United States. Our customers can be categorized into the following;
- Drug addicts
Our Competitive Advantage
To be highly competitive in this industry means that you should be able to secure a conducive and secured facility, deliver consistent quality service and should be able to record good testimonial of changed lives; of former drug addicts and alcoholics becoming good citizens of the United States.
Good Citizens® Drug and Alcohol Rehab Center, Inc. is coming into the market well prepared to favorably compete in the industry. Our facility is well positioned (centrally positioned) and visible, we have good security and the right ambience for people who are addicted to drugs or alcohol.
Our staff are well groomed in all aspect of correctional services and all our employees are trained to provide customized customer service to all our residents. Our services will be carried out by highly trained professionals.
Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Good Citizens® Drug and Alcohol Rehab Center, Inc. will ensure that we do all we can to maximize the business by generating income from every legal means within the scope of our industry. We will generate income by offering the following services;
- Providing outpatient services
- Providing detoxification services
- Providing medication-assisted opioid therapy services
- Getting financial support in form of grants from government and philanthropists
10. Sales Forecast
One thing is certain, there would always be people who are addicted to drugs, alcohol and substances who would need the services of a drug and alcohol rehab center.
We are well positioned to take on the available market in Sterling Heights – Michigan and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six months of operation and grow our drug and alcohol rehab center business and our residents’ base.
We have been able to examine the drug and alcohol rehab center services market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below is the sales projection for Good Citizens® Drug and Alcohol Rehab Center, Inc., it is based on the location of our business and of course the wide range of related services that we will be offering;
- First Fiscal Year (FY1): $250,000
- Second Fiscal Year (FY2): $500,000
- Third Fiscal Year (FY3): $$1.2 million
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
The marketing and sales strategy of Good Citizens® Drug and Alcohol Rehab Center, Inc. will be based on generating long-term personalized relationships with our residents. In order to achieve that, we will ensure that we offer all – round drug and alcohol rehab services at affordable prices compared to what is obtainable in Michigan and other state in the US.
All our employees will be well trained and equipped to provide excellent services as it relates to our business. We know that if we are consistent with offering high quality service, we will increase the number of our residents by more than 25 percent for the first year and then more than 40 percent subsequently.
Before choosing a location for Good Citizens® Drug and Alcohol Rehab Center, Inc., we conducted a thorough market survey and feasibility studies. We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.
We hired experts who have good understanding of the drug and alcohol rehabilitation industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Michigan.
In summary, Good Citizens® Drug and Alcohol Rehab Center, Inc. will adopt the following sales and marketing approach to win customers over;
- Introduce our business by sending introductory letters to residents, prisons, psychiatric facilities and other stake holders in and around Sterling Heights – Michigan
- Advertise our business in community based newspapers, local TV and local radio stations
- List our business on yellow pages ads (local directories)
- Leverage on the internet to promote our business
- Engage in direct marketing
- Leverage on word of mouth marketing (referrals)
- Enter into business partnership with prisons, government agencies and NGOs that work with drug addicts, and alcoholics.
- Attend drug and substance abuse related seminars / expos.
11. Publicity and Advertising Strategy
We are in the drug and alcohol rehab business to become one of the market leaders and also to maximize profits hence we are going to explore all available means to promote Good Citizens® Drug and Alcohol Rehab Center, Inc.
Good Citizens® Drug and Alcohol Rehab Center, Inc. has a long term plan of building drug and alcohol rehab facilities in key cities in the United States of America which is why we will deliberately build our brand to be well accepted in Sterling Heights – Michigan before venturing out.
Here are the platforms we intend leveraging on to promote and advertise Good Citizens® Drug and Alcohol Rehab Center, Inc.;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community programs that appeals to the former prisoners
- Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our brand
- Install our Bill Boards on strategic locations all around Sterling Heights – Michigan
- Engage in roadshow from time to time in location with growing population of people prone to drug and substance abuse
- Distribute our fliers and handbills in target areas with high concentration of drug addicts and alcoholics
- Ensure that all our workers wear our branded shirts and our facility and all our vehicles are well branded with our company’s logo et al.
12. Our Pricing Strategy
Prices vary for staying in a drug and alcohol rehab center, but most of the time it costs about the same as it would cost to live in a hospital and other medical facilities. Drug and alcohol rehab center residents must pay rent each month. The rent usually amounts to between $450 and $750 per month, depending on where the home is located.
Good Citizens® Drug and Alcohol Rehab Center, Inc. will work towards ensuring that all our services are offered at highly competitive prices compared to what is obtainable in The United States of America. Be that as it may, we have put plans in place to offer discount services once in a while and also to reward our loyal residents especially when they refer clients to us.
- Payment Options
The payment policy adopted by Good Citizens® Drug and Alcohol Rehab Center, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Good Citizens® Drug and Alcohol Rehab Center, Inc. will make available to her clients;
- Payment via bank transfer
- Payment via online bank transfer
- Payment via check
- Payment via Point of Sale Machines (POS Machine)
- Payment via bank draft
- Payment via mobile money
In view of the above, we have chosen banking platforms that will enable our client make payment for rent and treatment fee in our drug and alcohol rehab center without any stress on their part.
13. Startup Expenditure (Budget)
The truth is that starting this type of business does not come cheap. You would need money to secure a standard residential facility big enough to accommodate the number of people you plan accommodating per time, you need money to acquire supplies and you would need money to pay your workforce and pay bills until the revenue you generate from the business becomes enough to pay them.
The items listed below are the basics that we would need when starting our drug and alcohol rehab center business in the United States;
- The total fee for registering the business in the United States – $750.
- Legal expenses for obtaining licenses and permits – $1,500.
- Marketing promotion expenses for the grand opening of Good Citizens® Drug and Alcohol Rehab Center, Inc. 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 business consultant – $2,500.
- The cost for the purchase of insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $3,400.
- The cost for leasing a standard and secured facility in Sterling Heights – Michigan for 2 years – $250,000
- The cost for facility remodeling – $50,000.
- 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) – $100,000
- The cost for start-up inventory (stocking with a wide range of products such as toiletries, food stuffs and drugs et al) – $50,000
- Storage hardware (bins, rack, shelves,) – $3,720
- The cost for the purchase of furniture and gadgets (Beds, Computers, Printers, Telephone, TVs, tables and chairs et al): $4,000.
- The cost of Launching a Website: $700
- Miscellaneous: $10,000
We would need an estimate of $750,000 to successfully set up our drug and alcohol rehab center in Sterling Heights – Michigan.
Generating Funds/Startup Capital for Good Citizens® Drug and Alcohol Rehab Center, Inc.
Good Citizens® Drug and Alcohol Rehab Center, Inc. is owned and financed by Mrs. Dora Nelson. She has decided to restrict the sourcing of the startup capital to 3 major sources.
- Generate part of the startup capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from my Bank
N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $550,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Good Citizens® Drug and Alcohol Rehab Center, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to offer our rehabilitation and accommodation services a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Good Citizens® Drug and Alcohol Rehab Center, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of facility and remodeling the facility: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of medical equipment and vans et al: In Progress
- Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Establishing business relationship with players in the prisons and community centers and third party services providers: In Progress