In order to have an idea of the profit a Group Home owner is expected to make daily, weekly, monthly or yearly, you should clearly define the services that a Group Home business offer. A group home is a private residence for the elderly or young people who cannot live with their families due to certain 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 term group home refers to homes of from 8 to 16 individuals, which was a state-mandated size during deinstitutionalization. So, with that in mind, we can estimate what a group home owner that offers the services listed above is expected to make as profit yearly.
But it is important to point that there is no one mold-fits-all when it comes to how much profit a group home owner is expected to make. There are some factors that we are going to look into before giving an estimate of how much profit a group home owner makes yearly and these factors are;
7 Factors That Determine How Much Money Do Group Home Owners Make Yearly?
Table of Content
- 1. The Size of the Facility and the Number of Staff
- 2. The Location of the Group Home Facility
- 3. Complimentary Services that is Available in the Group Home
- 4. The Management Style of the Business
- 5. The Business Approach of the Group Home
- 6. The Advertising and Marketing Strategies Adopted by the Group Home
- 7. The Number of Years the Group Home is in Existence
1. The Size of the Facility and the Number of Staff
No one can conveniently state the profit a Group Home owner is expected to make yearly if you do not know the size of the facility and the number of staff and residents the facility can accommodate per time. A Group Home business that operates from a small facility is expected to make far less than a Group Home that operates from a standard and well – equipped facility. If your Group Home facility is large enough, it can accommodate more people and that will mean increased revenue.
We must not rule out the fact that where a Group Home facility is located is a major factor that will determine the profit the facility owner is expected to earn monthly. A key factor that can greatly influence the profit a Group Home facility owner is expected to make is the location of the Group Home.
3. Complimentary Services that is Available in the Group Home
Another important factor that will determine how much profit a Group Home facility owner is expected to make yearly is the type of facility and other complimentary services offered by the Group Home. It is important to state that residents of group homes usually have one form of disability or the other. It could be autism, intellectual disability, chronic or long-term mental/psychiatric disorder, or physical or even multiple disabilities.
Some group homes were funded as transitional homes to prepare for independent living (in an apartment or return to family or marriage and employment), and others were viewed as permanent community homes. Society may prevent people with significant needs from living in local communities with social acceptance key to community development.
The residents of group homes sometimes need continual or supported assistance in order for them to be able to complete daily basic and simple tasks, such as taking medication or bathing, making dinners, having conversations, making appointments, getting to work or a day service, go grocery shopping, eat in restaurants, make emergency calls or inquiries, and exercise regularly, etc.
4. The Management Style of the Business
Another key factor that will determine the profit a Group Home facility owner is expected to make yearly is the management style of the Group Home. Trust me, the results you will get when you are a good manager will definitely be different from a facility with poor management style. The idea is that a good Group Home manager will not just retain their old customers (residents), they will also keep getting new customers (residents).
5. The Business Approach of the Group Home
There are different business approaches that a Group Home facility owner can choose from and no doubt it will greatly influence the amount of profit they are expected to make monthly and yearly. Of course, we know that a Group Home facility owner may decide that they want to operate only from one location and do their marketing alone and they can also decide to go into franchising and also partner with hospitals, charity organizations and even the government that can help them with grants.
In essence, a well – organized Group Home owner that works with others will surely make more money cum profits than a Group Home owner that only operates from one location.
6. The Advertising and Marketing Strategies Adopted by the Group Home
Another key factor that will determine the profit a Group Home owner can make yearly is the advertising and marketing strategies adopted by the Group Home. Trust me, there are several advertising and marketing strategies that can help a business increase their earnings and profits, but you may be expected to spend more.
But the results you will make will far outweigh the amount you spent on advertising and marketing. Of course, you don’t expect a Group Home owner that is engaging in aggressive advertising and marketing to make same profit yearly with a Group Home owner that is passive with its advertising and marketing.
7. The Number of Years the Group Home is in Existence
In business, the number of years you are in existence will go a long way to determine the amount and profit you will make especially if the business is well – managed. This is so because over the years, you would have been able to gain the trust of your customers and it will be easier for you to always have them coming back and also recommending clients to you.
For example, in your first fiscal year (FY1) you might make a profit of one hundred thousand dollars ($100,000), in your second fiscal year (FY2) you might make a profit of one hundred twenty thousand dollars ($120,000) and in your third fiscal year (FY3) you might make a profit of one hundred and fifty thousand dollars ($150,000).
Please note that Group Homes are usually calculate their profits based on the number of patients, average billable hour rate for services provided and average number of hours provided each month per patient. Please note that as a home health care business, your labor cost of goods sold will be (by far) your largest expense. You will first have to determine what types of services you are providing.
If you are providing medical services you will need higher cost workers, if you are non – medical, your staff hourly rate will be much lower, but so will the rate you can charge your end customers. Based on a report by USA Today, the average gross margins for home health care businesses is between 30 and 40 percent.