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How to Start a Halfway House for Inmates

Open a Halfway House for Inmates

Do you want to start halfway house for inmates? If YES, here is a 20-step guide on how to start a halfway house for inmates with no money or experience.

Please note that if you intend to start this type of business, it is advisable to first look at the existing laws and zonal regulations in the United States of America or the city you reside in to know what is expected of you.

You also need to pay a visit to the regulatory bodies in your city to get all the information you need before you can legally launch your halfway house in the United States of America.

You can start your halfway house for inmates business from a small town in the United States of America and if you are good at what you do, it won’t be too long before your brand becomes nationally recognized.

Steps on How to Start a Halfway House for Inmates

  1. Understand the Industry

The Correctional Facilities industry consist of operators that own or manage correctional facilities and halfway houses. Services provided by industry enterprises include private janitorial, maintenance, trash disposal, guard and security, mail routing reception, laundry, and other services that support operations in correctional facilities.

The industry does not include facility support services for other types of establishments, such as military bases and other government facilities.

The law in the United States states that before a non-medical home care facility like a halfway house can commence operations, there should be at least six residents and at least one trained caregiver there 24 hours a day and 7 days a week.

So also, a standard correctional facility/halfway house is expected to have a house manager, night manager, weekend activity coordinator, and 2 or more caregivers depending on the size of the facility.

Statistics has it that in the United States of America alone, there are about 2,374 licensed and registered correctional facilities and halfway houses responsible for employing about 34,369 employees and the industry rakes in a whopping sum of $6 billion annually with an annual growth rate projected at 2.8 percent between 2014 and 2019.

It is important to state that the companies holding the largest market share in the correctional facilities industry in the US industry include Corecivic Inc., The GEO Group Inc. and Management & Training Corp.

A recent report shows that the correctional facilities 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 a 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.

Over and above, the halfway house facility 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.

  1. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition of those who patronize halfway houses for inmates are of course former prisoners and psychiatric patients, or others unused to non-institutional life.

  1. Decide Which Niche to Concentrate On

It is safe to say that there is no niche area in the halfway house business. This is because halfway house for inmates is a niche idea in the correctional facilities industry.

The Level of Competition Industry

The competition that exists in this business goes beyond competitions amongst halfway houses in your location; you are expected to compete with other businesses in the correctional facilities industry who are also into accommodating former prisoners and psychiatric patients, or others unused to non-institutional life.

So, it will be right to say the competition in the halfway house business is tough. The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your services or business properly, you will always make headway in the industry.

Just ensure that you partner with the government and key players in the NGO community, you can deliver excellent customer care services and you know how to attract and reach out to your target market – former prisoners and psychiatric patients, or others unused to non-institutional life.

  1. Know Your Major Competitors

Here are some of the most popular halfway house businesses in the United States of America;

  • The Doorway to Recovery – Premier Michigan Sober Living‎
  • Cirque Lodge
  • Caron Foundation
  • Hazelden Treatment Centers
  • Betty Ford Center
  • Halfway House of Los Angeles
  • Co-Ed Recovery Homes | New You Sober Living
  • Sober Living America
  • Oxford House of Shadow Mountain LLC
  • Camelback Recovery – Sober Living Scottsdale AZ
  • TDCJ Halfway House
  • New Jersey Halfway Houses | Riverbend Residence
  • Rebos Halfway House
  • Attic Correctional Services Inc
  • New Friendships Fort Lauderdale | Sober Living Halfway House
  • Arch Halfway House
  • City Houses Inc
  • Talbert House Spring Grove Center
  • Fellowship Living Facilities
  • Ayres Halfway House
Economic Analysis

If you are planning towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt international best practices in the industry you choose to build a business in.

Halfway house for inmates is not a green business, as a matter of fact; you will come across several halfway houses when you search through directories and browse through the internet.

So, if you are mapping out your economic and cost analysis, you should carry out a thorough market survey and cost of the required amount needed in renting or leasing facilities where you are expected to open your halfway house, the working capital that is required to start building and furnishing apartments and also the cost to successfully run the business.

If you are considering starting a halfway house for inmates, then your concern should also be on branding and on how to build a robust support base from the NGO community and the government. The truth is that if you are able to build a robust support base, you are sure going to maximize profits in the business.

Please note that there are three main types of government funding for halfway houses: contract for services, government-guaranteed loans, and government grants. You must come up with winning strategies to be able to outsmart your competitors.

  1. Decide Whether to Buy a Franchise or Start from Scratch

There is no hard and fast rule when it comes to choosing how you intend to start a business. Basically, you should be guided by your overall business vision and mission statement. If you are looking towards starting a halfway house for inmates in the United States of America, then you have to start from the very scratch because you can hardly get the franchise of a halfway house to buy.

Besides starting a halfway house for inmates from the scratch is less stressful when compared to other related businesses.

With a halfway house, you should just try as much as possible to get the required facility, the required license and permits, the right employees, build business relationship with key stakeholders (correctional facilities) and investors, and then leverage on every marketing tool within your disposal especially the internet when it comes to marketing your halfway house for inmates.

  1. Know the Possible Threats and Challenges You Will Face

If you decide to start your own halfway house today in the United States of America, one of the major challenges you are likely going to face is the presence of other halfway houses, and of course other players in the correctional facilities industry in your target market location.

The only way to avoid this challenge is to create your own market; concentrate on former prisoners and psychiatric patients, or others unused to non-institutional life within your location.

  1. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

Generally, when starting a halfway house for inmates, the best choice for legal structure is to form a nonprofit corporation at the state level and to apply for 501(c)(3) tax exemption at the federal level. Please note that on the state level, you can file a nonprofit LLC for your halfway house for inmates.

Technically, you can apply for an exemption with an LLC, but you would need to be LLC taxed as a corporation; then ask the federal government to treat your halfway house for inmates as a nonprofit or tax-exempt organization.

Interestingly, in the United States of America, several states allow a nonprofit LLC, including California, Ohio, Michigan, Minnesota, and Tennessee. Texas allows the formation of an LLC with a nonprofit purpose. In Delaware, the LLC Act permits the organization of an LLC with not-for-profit purposes.

  1. Choose a Catchy Business Name from the Ideas Below

When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. If you are considering starting your own halfway house for inmates in the United States of America, here are some catchy names that you can choose from;

  • Golden Castle© Halfway Housing Programs
  • Good Boys® Halfway Housing Programs
  • Excon Abode© Halfway Housing Programs.
  • Royal Courts® Halfway Housing Programs
  • Green Tower™ Halfway Housing Programs
  • Hero Now™ Halfway Housing Programs
  • Excon Cover© Halfway Housing Programs
  • The Sanctuary® Halfway Housing Programs.
  • Chicago Shelter© Halfway Housing Programs.
  • Jeff Johnson© Halfway Housing Programs
  1. Discuss with an Agent to Know the Best Insurance Policies for You

In the United States of America, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.

Here are some of the basic insurance policies that you should consider purchasing if you want to start your own halfway house for inmates business in the United States of America;

You can contact the following leading insurance companies in the United States of America to purchase the needed insurance policies for your halfway house for inmates;

  • Allstate Insurance Group
  • Liberty Mutual
  • Progressive Insurance Group (PGR)
  • Health Care Service Corporation (HCSC)
  • New York Life Insurance Company
  • Lincoln National Life Insurance Company
  • MassMutual (Massachusetts Mutual Life Insurance Company)
  • Northwestern Mutual Life Insurance Company
  1. Protect your Intellectual Property with Trademark, Copyrights, Patents

If you are considering starting your own halfway house for inmates, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

On the other hand, if you want to leverage on the business opportunities within the industry and also to protect your company’s logo and other documents or software that are unique to you or even operation concepts, then you can go ahead to file for intellectual property protection.

If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.

  1. Get the Necessary Professional Certification

Aside from the results you produce as it relates to running a halfway house for inmates, professional certification is one of the main reasons why some halfway houses stand out. If you want to make an impact in the correctional facilities industry, you should work towards acquiring all the needed certifications in your area of specialization.

Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in this competitive market. These are some of the certifications you can work towards achieving if you want to run your own halfway house;

  • Community and Social Worker Certifications
  1. Get the Necessary Legal Documents You Need to Operate

It is a fact that you cannot successfully run any business in the United States of America without the proper documentation.

If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;

  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit
  • Building License
  • Certificate of Incorporation
  • Business License (Accreditation and Licensing to handle drug and alcohol addiction)
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Health inspection Certificate
  • Copy of license for the service support facility and/or a recent inspection report
  • Online Terms of Use (if you have a website)
  • Online Privacy Policy Document (basically for online payment portal)
  • Company Bylaws
  • Memorandum of Understanding (MoU)
  1. Raise the Needed Startup Capital

Starting a halfway house for inmates business is capital intensive even if you choose to start on a small scale. Securing a standard housing facility and raising working capital are part of what will consume a large chunk of your startup capital.

If you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard halfway house business. When it comes to financing a business, one of the first things you should consider is to write a good business plan.

If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for startup capital for your halfway house business;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for loan from your bank/banks
  • Source for soft loans from your family members and your friends.
  1. Choose a Suitable Location for your Business

Starting a halfway house business comes with its own challenges; it is a business that cannot be started in any location. As a matter of fact, you will need approval from local council and other regulating authorities in the city you intend opening your halfway house.

Generally, in business, it cannot be overemphasized that the location you choose to start your business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of the right demography.

It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget.

If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your halfway house business.

Before choosing a location for your halfway house for inmates facility business, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.

Which is why it is very important to gather as much facts and figures before choosing a location to set – up your facility. Having said that, these are some of the cities in the United States of America where you can locate your halfway house for inmates;

  • San Diego, California
  • Albany, New York
  • Nevada, Las Vegas
  • Miami, Florida
  • Chicago, Illinois
  • Dallas, Texas
  • Los Angeles, California
  • Boston, Massachusetts
  1. Hire Employees for your Technical and Manpower Needs

When it comes to starting a halfway house for inmates, you will need public address systems, first aid kits and other related training and therapy equipment that will aid you in carrying out your job. It is important to state that this equipment can be purchased as fairly used if you are operating on a low budget.

In setting up a small office for your halfway house facility, you will also need computer, printer, home healthcare software, telephones, pager, photocopier, scanner, fax machine, first aid kit, gloves and uniform.

When it comes to choosing between renting and leasing a facility for your halfway house, the size of the facility you want to own, and your entire budget for the business should influence your choice. Besides, you will need a facility that is in a serene environment, and one that is big enough to accommodate the number of residents and staff working for you.

As regards the number of employees you are expected to kick start the halfway house with, you would need to consider your finance before making the decision. Averagely, when it comes to starting a standard halfway house for inmates on a large scale, you would need the services;

Chief Operating Officer (you can occupy this position), FundRaisers, Accountant, Program Coordinator, Psychologist and Trainer or Therapist, Home Administrator (Human Resources and Admin Manager), Front Desk Officer, Cooks, Security Guards and Cleaners.

You would need a minimum of 15 to 25 key staff members to effectively run a medium scale but standard halfway house, and these key roles can be occupied by volunteers.

The Service Delivery Process 

The service delivery as it relates to halfway houses to a large extent depends on the organization and what they stand to achieve.

Basically, halfway houses for inmates source for former prisoners and psychiatric patients, or others unused to non-institutional life who are homeless, provide accommodation for them and engage them in an active rehabilitation treatment program, where the residents receive intensive individual and group counseling, while they establish a sober support network, secure new employment, and find new housing.

Residents stay for one to six months. Halfway houses have rules, treatment programs, work requirements, and curfews. While in a halfway house, inmates may not use drugs or drink alcohol. They must get permission before leaving the halfway house, participate in required programs, and look for a job.

In order to generate money to take care and accommodate their residents, they apply for grants and donations in cash and kind from donor agencies, government agencies, NGOs, religious organizations and philanthropists et al.

It is important to state that a halfway house for inmates may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated halfway house for inmates process is not cast on stone.

  1. Write a Marketing Plan Packed with ideas & Strategies

Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a halfway house for inmates, then you must go all out to employ strategies that will help you attract veterans or else you will likely struggle with the business because there are well-known brands that determine the market direction for halfway house line of business.

So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience in the correctional facilities industry, it is important to clearly state what you have been able to achieve in time past.

This will help boost your chances in the market. Here are some of the platforms you can utilize to market your halfway house for inmates;

  • Introduce your halfway house for inmates by sending introductory letters alongside your brochure to prisons (correctional facilities) and psychiatric hospitals in and around your city.
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
  • Create a basic website for your business so as to give your business an online presence
  • Directly market your services
  • Join local chambers of commerce and industry with the aim of marketing your services
  • Advertise our business in community – based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word of mouth marketing (referrals)
  1. Work Out a Reasonable Pricing for your Services 

One key factor that will help you offer your services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.

As regards medications, toiletries, cooking ingredients and other supplies that you need to effectively run your facility, you need to ensure that you purchase your items directly from the manufacturers or from wholesale distributors in pretty large quantities.

The truth is the higher the quantities of items that you purchase directly from the manufacturers or wholesale distributors, the cheaper you tend to get them. So also, if you are able to secure business partnership as it relates to getting robust funding, then you will be able to get the right pricing and of course maximize profits from your business.

  1. Develop Iron-clad Competitive Strategies to Help You Win

The availability of a huge financial support base (grants), your business process and of course your pricing model are part of what you need to stay competitive in the industry. Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base and business network.

Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your facilities can favorably compete with some of the best in the industry.

  1. Brainstorm Possible Ways to Retain Clients & Customers

When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always.

If your customers are satisfied with your products and service delivery, they can hardly source for alternative service providers.

If your services and customer service fluctuate, you are likely going to struggle to get your customers retaining your services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.

Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.

With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized emails and above all, you can easily receive complaints and feedback from them).

  1. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not conscious about boosting your brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be.

One of the secrets of larger corporations is that they are willing to spend good money year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.

No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand and create a corporate identity for your halfway house for inmates;

  • Place adverts on both print (newspapers and real estate related magazines) and electronic media platforms
  • Sponsor relevant community – based events/programs
  • Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your halfway house for inmates
  • Install your Billboards in strategic locations all around the locations where you operate
  • Distribute your fliers and handbills in target areas such as prisons and high crime prone communities
  • List your halfway house for inmates in local directories / yellow pages
  • Advertise your halfway house for inmates in your official website and employ strategies that will help you pull traffic to the site.
  • Position your Flexi Banners at strategic positions in the locations where your halfway house for inmates operates.
  • Ensure that all your staff members wear your branded shirts and all your vehicles and vans are well branded with your company logo et al.