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How to Open a Group Home for Developmentally Disabled People

Do you want to start a special group home? If YES, here is a 12-step guide on how to open a group home for developmentally disabled people. A group home can mean a lot of things depending on context, but generally it is used to refer to a site, building or location that provides twenty-four hour non-medical care in a structured environment.

One of the main objectives of group houses is to accommodate the elderly, people with mental or physical disabilities, or those dealing with substance abuse and need some level of help. Occupants of group homes have access to rehabilitation as well as social integration.

Sometimes families of victims cannot provide all these needs, and sometimes the disabled may not have family to give them some level of care and support. If you own a group home, you can supply potential residents with a support system and give them the opportunity to live in a safe, accessible home.

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The Fair Housing Act and the Americans with Disabilities Act have made it possible for entrepreneurs to create group homes in America without legal challenges from the existing community or homeowners’ associations. To open a group home, you will need some help.

You may have to contact a Social Service agency such as the Department of Human Services (DHS) or a private charity such as Catholic Social Services or Lutheran Social Services. You need a license to open a group home, so ask for an application packet, rules and regulations handbook, and any other paperwork or information you need.

You also need to find a building that meets licensing and inspection requirements. Contact the zoning department in your city to find out if you can open a group home in that area. Your group home must pass inspection to ensure it is safe and suitable to serve the disabled.

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An inspector would be assigned to your group home to evaluate the home on accessibility, safety, sanitation, space, equipment, furnishings, provision of care among others. If your home passes muster, you will be given the license to kick off. If you want to open a group home in the United States, here is a step by step process on how to go about it.

How to Open a Group Home for Developmentally Disabled People in 12 Steps

1. Decide on the Type of Group Home You Want

Before you can start a group home, you have to first of all decide on the kind of home you want to open. Decide if you want to set up an elderly group home or a group home for individuals suffering from autism, Down syndrome and other severe developmental conditions

A group home that is an assisted living facility might offer elderly residents meals and cleaning services whereas residential care homes do this plus assist with daily activities such as bathing and dressing. Group homes for developmentally disabled residents require trained staff to deal with potential outbursts or the challenges of living with a disability. Consider your area of expertise and interest before opening a group home.

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2. Find Out What is Obtainable in the local market

The next thing you have to do when you want to open a group home in your community is to check out what is obtainable in the local market. You probably wouldn’t open a pizza shop in a town that already has a half-dozen of them, unless perhaps you have something unique with which to differentiate yours from the rest. The same principle holds true for group homes — you need to be aware of what the market needs.

Conduct a “needs assessment” of the local area in which you hope to start your group home. How many similar homes exist in the area? What is their average occupancy level? Is there a need for more? Can you provide a group home setting that will distinguish you from the pack?

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Here, you should contact the government agencies that oversee group homes in your area (this will vary by jurisdiction). Ask if there is a need for another group home, and if so, what type is most in demand. You can also contact local social service organizations, hospitals, probation offices, and such for insights into group home needs in the area.

3. Find Out and Meet the Requirements

To be successful in setting up your group home, you need to find out the requirements, and meet them all. Every state is different, and group home requirements vary depending on the group you plan to serve. For elderly group homes, seek licensing specifics from your state’s department of aging and disability services.

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A group home for individuals suffering from autism, down syndrome and other severe developmental conditions is licensed through the state department of developmental services. Visit the correct state entity to obtain the proper licensing requirements. This is very important so you don’t make any mistakes.

4. Create a business plan

Whether you’re starting a group home, a Grocery store, or a gardening service, it is always a good idea to draw up a detailed business plan that outlines the goals, needs, opportunities, and obstacles for your new enterprise. A well-constructed business plan will serve as your group home’s guidebook as it gets off the ground — or may even convince you to change your plans.

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A business plan is often viewed as a sales pitch for potential investors, but serves a useful purpose even if you aren’t seeking financial support. If you want to write your own group home business plan, these are the most common things to include in the plan;

  • Title Page and Table of Contents.
  • Executive Summary, in which you summarize your vision for the company.
  • General Company Description, in which you provide an overview of your company and the service it provides to its market.
  • Products and Services, in which you describe, in detail, your unique product or service.
  • Marketing Plan, in which you describe how you’ll bring your product to its consumers.
  • Operational Plan, in which you describe how the business will be operated on a day-to-day basis.
  • Management and Organization, in which you describe the structure of your organization and the philosophy that governs it.
  • Financial Plan, in which you illustrate your working model for finances and your need from investors.
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The U.S. Small Business Administration ( and similar small business support entities can also offer guidance on developing your business plan.

5. Consider What You Can Afford

As with any other small business, it takes a significant investment to get a new group home off the ground, and you probably don’t have enough money just lying around to fund the enterprise yourself. Use your business plan and a realistic assessment of your personal finances as a starting point for determining your financing needs.

Along with guidance for your business plan, the U.S. Small Business Administration also offers a wealth of information on the process and expectations for securing small business loans from financial institutions. Inquire with the local and state agencies responsible for overseeing group homes in your jurisdiction, to see if there are grants or low-interest loans available.

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Don’t be afraid to get creative in securing start-up funding for your group home. The options can range from crowdfunding to renting out part of your residence. Borrowing from friends and family is often an option as well, although you must balance its benefits with the possible awkwardness that can arise from imposing a business relationship on a personal one.

6. Establish a Business Entity

To be legal, your group home needs to be registered. Register your group home as a legal business in your state of residence via the secretary of state’s website. Pay any registration fees necessary and obtain a federal employer identification number from the IRS. With these, you will then be able to apply for the license as a legitimate business entity.

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Look into commercial insurance policies that include a general liability policy, workers’ compensation and professional liability insurance. These don’t need to be in place until you open your doors, but it is wise to get the process started.

7. Write an Operations Manual

The operations manual should be an addendum to your business plan. It describes daily core processes that include intake of new residents, daily schedules, administration and storage of medication. Safety, first aid and emergency procedures are also included in this manual.

8. Identify relevant federal, state, and local regulations

Do you know the requirements for health and food inspections in Florida? Or fire marshal’s certification in Connecticut? Or first aid/CPR training requirements for your employees, regardless of where you are located? And what kind of business permits do you need? It can seem like an endless maze of bureaucracy.

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Start by contacting your local (such as county) department of health, or human services, or social services, or whatever other unit seems most likely to deal with the operation of group homes in your area. Step up to the state and federal levels as warranted.

Ask lots of questions, and be very patient. Remember why you want to render this valuable service to your community. It can never hurt to solicit guidance from existing group home operators as well. You can never go wrong asking.

9. Research the licensing process in your location

It is now time for you to start considering your licenses. It is difficult to be anything but general here, because every U.S. state (and possibly even county) has its own licensing procedures for starting and operating a group home. You will need to be proactive in ensuring that you complete all the necessary steps.

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In California, group homes for children are licensed by the state Department of Social Services (CDSS).

In Florida, the Department of Health provides information but not licensing for group homes; that responsibility lies (depending on the nature of the facility) with either the Agency for Health Care Administration or the Department of Children and Families (DCF).

In Connecticut, the Department of Developmental Services (formerly the Department of Mental Retardation) handles licensing for group homes for the mentally disabled.

State licensing for your facility is likely only the start of the process. You may need to be personally licensed as a Certified Administrator of Group Homes, for instance. You need to make adequate research regarding this.

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10. Apply for non-profit status and obtain insurance

You now need to list your business as a nonprofit and have it insured. Depending upon your location, one or both of these may not be legally necessary, but they are essential steps nonetheless. Take every opportunity to protect the time, effort, and money you are investing in your group home.

Unfortunately but not surprisingly, establishing non-profit status in the U.S. is not a quick and easy process. You need to create a corporate entity by filing Articles of Incorporation with your state, then begin work on the lengthy Form 1023 provided by the IRS, then, if approved, circle back to the state level to ensure your exemption from state taxation. You may find it beneficial to hire an attorney well-versed in this process.

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Check to determine whether your state requires insurance coverage for your group home, but make sure you obtain sufficient insurance covering liability, fire, and theft, among other areas.

11. Complete the Application Process

Now that you have the legal entity and a comprehensive business plan with an operations manual, complete the appropriate state application process. The application requires background checks, fingerprinting and drug screening for you and your staff. Include pertinent education, experience and credentials that relate to your group home.

As part of the process, on-site inspections are made by the licensing body to ensure the facility meets all health and safety code requirements. Provide any additional documents requested by the licensing board and pay the registration fees. In Texas, the licensing fee for an elderly group home is $1,750 for the initial registration.

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12. Hire your staff

You cannot run a group home without some help, and for that reason, you need to hire qualified staff. Hopefully, you have already prepared yourself for the process of hiring employees, and now you can focus on finding the right people to fill the positions. Hiring good employees is at least as much of an art as it is a science, but there are steps you can take to improve your odds of making strong hires for your group home.

Finding people with experience working in a group home setting is great, of course, but don’t automatically exclude everyone without experience. Consider educational backgrounds and training, as well as temperament and personality traits. Working in a group home setting requires lots of patience, perseverance, and compassion; it takes the right kind of person with the right kind of attitude to succeed.

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At the interview, asking questions like “Can you provide an example of a problem that you successfully solved?”, may offer insights into a potential employee’s ambition, ingenuity, and work ethic. Keep in mind that such questions are common, however, and the interviewee may have prepared stock answers already. In addition, try to think up a few problem-solving hypotheticals that are unique to the business.


With a group home, you will be working with patients from different cultures and backgrounds. Dealing with them in understanding and compassion can help give them the best stability possible.

The application and license requirements included in the resources and references is only a general idea of what the license requirements are. Talk to your state and local governments to find out what specific requirements you need to meet before starting the home.