Are you interested in starting a homeless shelter? If YES, here is a complete guide to starting a homeless shelter business with government fund and no experience.
Okay, so we have provided you an in-depth sample homeless shelter business plan template. We also took it further by analyzing and drafting a sample homeless shelter marketing plan backed up by actionable guerrilla marketing ideas for homeless shelter companies. In this article, we will be considering all the requirements for starting a homeless shelter business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- 1 What is a Homeless Shelter?
- 2 Why Start a Homeless Shelter?
- 3 Interesting Statistics About the Homeless Shelter Construction Industry
- 4 Market Research and Feasibility Study
- 5 List of Niche ideas Within the Homeless Shelter Business That You Can Specialize in
- 6 List of Well – Known Brands in the Homeless Shelter Industry
- 7 Is a Homeless Shelter Business Worth Starting from Scratch or is Buying a Franchise Better?
- 8 Possible Threats and Challenges You Will Face When Starting a Homeless Shelter Business
- 9 Best Legal Entity to Use for a Homeless Shelter Business
- 10 Catchy Business Name ideas Suitable for a Homeless Shelter Business
- 11 The Best Insurance Needed for a Homeless Shelter Business
- 12 Is Professional Certification Needed to Start a Homeless Shelter Business?
- 13 List of Legal Documents You Need to Run a Homeless Shelter Business
- 14 Writing a Business Plan for your Homeless Shelter Business
- 15 Detailed Cost Analysis for Starting a Homeless Shelter Business
- 16 Financing Your Homeless Shelter Business
- 17 Choosing a Location for Your Homeless Shelter Business
- 18 Technical & Manpower Details
- 19 The Services Process Involved in the Homeless Shelter Industry
- 20 Marketing ideas and Strategies for a Homeless Shelter Business
- 21 Possible Competitive Strategies for Winning your Competitors
- 22 Possible Ways to Increase Customer Retention
- 23 Strategies to Boost your Brand Awareness and Create a Corporate identity
- 24 Creating a Suppliers / Distribution Network
- 25 Tips for Running a Homeless Shelter Business Successfully
What is a Homeless Shelter?
Homeless shelters give momentary habitation to homeless people or families who are not capable of paying their own rent by themselves. These shelters are in existence to give protection to homeless people against harsh weather conditions.
By starting a homeless shelter, you are helping people who are in the need of a home. To start a homeless shelter, you need to have compassion for people in need to be able to run a homeless shelter successfully. You help to provide the needy with a roof over their head and you give them food to eat when you start it.
Why Start a Homeless Shelter?
People come to stay in the homeless shelters for short periods and the homeless shelter offer helps them with how they can get their life back on track and go back to living independently again. Most homeless shelters are associated with municipal governments or churches and they fund their activities by getting funds from government and other donors that support their cause.
Many people in the United States are spending a lot of their income on only rent and this makes them vulnerable to becoming homeless. This has led to a rise in demand for the services of homeless shelters but there are low resources to run these shelters. A lot of shelters have also had to turn people away from their shelters because of this reason.
The concept of homeless shelter began to gain ground in the United States in the seventies because of the high rate of unemployment at the time. The cost of housing was on the rise and the people that had serious cases of serious mental illness were being deinstitutionalized.
When the cases of homeless people was becoming a case of a national epidemic, the professionals who were helping them then created shelters as a form of temporary refuges for the homeless to occupy. Homeless shelters also house asylum seekers from other countries and provide outreach to people who choose not to make use of a shelter or who are unable to use the shelter.
The outreach that is provided includes provision of items of food and provision of clothing for people that are housed. The way most of these shelters operate is that the people that are housed in these shelters are expected to vacate the shelter in the morning and get something with which to keep them busy during the course of the day.
They then return later in the evening for a meal and a roof over their head so they can sleep. There are curfews in these shelters and they are fixed at early hours than is typical for people who return back to their homes. Some shelters run as only daytime alone homeless shelters, where homeless people can stay when they can’t stay at their shelters that are operated as night time shelters.
The homeless shelter industry provides several community housing services which includes short-term emergency shelter for victims of child abuse or sexual assault and domestic violence; temporary residential shelter for runaway youths, families that are caught up in medical crises and the homeless; transitional housing and assisted living for people with low level of income and other volunteer repair and construction work needed by low-cost housing.
Starting a Homeless Shelter Business With Government Fund – A Complete Guide
- Industry Overview
There are about 3.5 million people that are homeless in the United States. The number is expected to keep rising and there are not enough homeless shelters to help house these people.
The population of the homeless shelter has remained the same over the past five years despite the fact that there is a decrease in population of the homeless people. As a result of this, the demand for the services in this industry is still high. The United States still has a lot of need for the services of homeless shelter therefore this will lead to further growth of the revenue in the industry.
Interesting Statistics About the Homeless Shelter Construction Industry
The recession in the United States economy caused a boom in the funding of the Homeless Shelter industry as the high rate of unemployment and the credit freeze left a lot of people homeless or in need of temporary accommodation. This made the government to increase the funding of the projects for homeless shelters.
As a result of this, there was a strong growth rate witnessed in the industry during the worst period of recession. The revenue for homeless shelter increased from 8.1% in 2008 and another 11.2% in 2009. The demand for the services of the industry also grew subsequently in 2007. In the five years to 2012, the industry revenue grew as a result of funding by the government.
In this industry, there is heavy reliance on voluntary help, as a result of this; the pay rates are often low. There are about 120,000 workers in this industry. The revenue in the industry is about $10 billion but the industry is highly fragmented and no single player can account for the significant share of the revenue in the industry.
Distribution of federal funding among the different shelters and organizations that exist is carried out by the Department of Housing and Urban Development (HUD).
The continuous recovery of the United States economy will slow down the funding of this industry as more Americans find jobs and are able to get permanent housing. The industry revenue is expected to increase at a marginal average annual rate through 2017.
The factors and incentives that make people want to start a homeless shelter arise from the desire to help other people and the community at large. You need to be kind and have a compassionate spirit to help other people. As an individual, you will then be able to live with purpose, do your job with passion and it will also be a way of giving back to the society.
Market Research and Feasibility Study
- Demographics and Psychographics
The demographic and psychographic composition of those who need the services of homeless shelters cuts across a lot of sectors such as the public sector, families, communities and different kinds of people from all walks of life.The following is a list of the people that need the services of Homeless Shelters:
- Child abuse victims
- Victims of sexual assault
- Domestic violence victims
- Runaway youths
- Families caught up in medical crises
- People with low income
List of Niche ideas Within the Homeless Shelter Business That You Can Specialize in
In setting up a homeless shelter business, there are some niche ideas in the industry that an entrepreneur can choose from. The following are the list of niche ideas that a homeless shelter business can be specialized in:
- Youth homeless shelter
- Women only homeless shelter
- Men only homeless shelter
- Family with income homeless shelter
- Homeless shelters for couples
- Homeless shelter for single women and men
- Low income people homeless shelter
- Sexual assault homeless shelter
- Domestic violence homeless shelter
- Disaster and emergency relief shelter
- Pregnant women shelter
The Level of Competition in the Homeless Shelter Industry
Surviving in the homeless shelter is more than having the requisite expertise as there is increased competition and homeless shelter businesses need to confront mounting pressures to show how effective they are. These days, there is a need for home shelters to be accountable for all the funds they are given as opposed to the days when they were left to do what they wanted with the funds they were given.
There is also a need for the performances of these shelters to be evaluated. As a result of this, there have been great efforts made to see to it that there are ways that the performances of these organizations can be measured. This way the funding agencies can take more active roles in the way the shelters are run and also insist on getting results that can be measured.
List of Well – Known Brands in the Homeless Shelter Industry
There are several homeless shelters in the United States that give housing solution to people that are in need. The following is a list of homeless shelter in the United States:
- Back On My Feet
- Carrfour Supportive Housing
- Coalition on Homelessness
- Interagency Council on Homelessness
- National Alliance to End Homelessness
- Operation Sacred Trust
- Pathways to Housing
- Rosies Place
- Saint Francis House
Setting up a homeless shelter is a very serious business and as such ought to be treated as such. There is a need to carry out serious economic analysis to find out the threats and other risks that are associated with starting a homeless shelter.
As a homeless shelter business owner, you should be concerned about how to get funding for the shelter apart from getting the location for the business. Other things that you need to concern yourself with when setting up a homeless shelter is how to get volunteers to work at the shelter and how to get the needed resources for the shelter.
Even though running a homeless shelter can be a cost effective venture because you do not need to hire a lot of workers because of the voluntary workers that come out to help do work there, you still need to get some staff that you need to pay salaries, though the salary is low when compared to other organizations that are run for profit.
An important factor is to have the people working in these shelters well trained so that when their performances are appraised, companies that fund the shelters will be impressed and help to continue with the upkeep of the people that needs the services of the homeless shelters.
Is a Homeless Shelter Business Worth Starting from Scratch or is Buying a Franchise Better?
If you are concerned about the plight of the homeless people in your community, then you should consider setting up a homeless shelter. This you can do in with the support and help of your family and friends. One thing that motivates people to start this kind of business is largely as a result of a passion for helping other people that are homeless in the society.
You can also get the franchise of an already established homeless shelter so that you do not go through all the problems associated with starting the homeless shelter from scratch. If you don’t know how to run a shelter, they can give you training on how to run it.
Another thing that can be done in this business is to partner with other institutions such as charity groups, religious institutions and other non-profit organizations in setting up your own homeless shelter.
Possible Threats and Challenges You Will Face When Starting a Homeless Shelter Business
In the homeless shelter industry, there are threats and challenges that these organizations are subjected to and some of these include the problem of overcrowding in the facilities that are used to house homeless individuals as there are a large number of people that require shelter.
Another problem that a homeless shelter can face is the problem of hygiene and the problem of some of the inhabitants engaging in the use of hard drugs in these shelters. At times, homeless shelters are faced with the challenges of security in a case where the homeless shelter is used to house victims of domestic violence; it could be faced with the threat of being attacked by the men that the ladies have been rescued from.
Best Legal Entity to Use for a Homeless Shelter Business
You need to incorporate your homeless shelter business so that it can have a legal entity. This way the business can have its personal bank account and property. The business will also be able to go on when you are not there and it will separate you from any liability of the business. With the incorporated non-profit business, you will need a board of directors for your homeless shelter business.
Catchy Business Name ideas Suitable for a Homeless Shelter Business
If you have to name your homeless shelter business, there are really no rules for you to follow to do this. You might just want to ensure that the name you choose takes into consideration what the business is about. The following are catchy name ideas that you can choose for your homeless shelter clients:
- House the Nation
- House Support for All
- Candy’s Housing
- Road to End Homelessness
- Homeless Eradication
- Give Me A Place
- Coalition for Support
- Support the Shelter
- Sheltered Abode
The Best Insurance Needed for a Homeless Shelter Business
In order to set up a business in the United States of America, you need to put some insurance in place according to the requirements of the industry you want to set up your business in:
You cannot run a business if you do not possess most of the required insurance as dictated by the industry you want to set up your business in. In order to get your insurance, make an allowance for it in your budget and get the services of an insurance broker to help you in choosing the right insurance policies that are suited to the kind of business you are running. They will guide you in evaluating the risks associated with your business and give you the appropriate advice.
The following insurance covers are necessary if you are considering setting up a homeless shelter business in the United States of America:
- General liability insurance
- Workers compensations insurance
- Commercial property insurance
- Umbrella insurance
- Unemployment insurance
- Business owner’s policy
- Sexual abuse liability
- Social work, foster care and counselling liability
Intellectual Property Protection and Trademark
To set up a homeless shelter, you should think of filing for intellectual property protection so as to protect the documents of the business and your business logo. It will also enable you to protect your business name and any software application that you might own.
To go about the process of filing for intellectual property protection and doing the registration of the trademark for your homeless shelter business. You have to begin the procedure at the USPTO where you are expected to file an application. You will then get the final approval for the trademark of your homeless shelter once it has been subjected to the evaluation of attorneys which is a requirement by the USPTO.
Is Professional Certification Needed to Start a Homeless Shelter Business?
If you are starting a homeless shelter, then you and your staff can consider getting some certifications to give your business an edge over your competitors in the same business. Once you and your staff have relevant certifications, people will take you seriously as an outfit that knows a lot about improving the lives of other people.
The following professional certifications will be relevant for you and your members of staff if you intend setting up a homeless shelter and they are as follows:
- The Certified Social Work Case Manager
- Case Manager Certification
- Certified Advanced Practise Social Worker
- Certified Independent Practise Social Worker
- Commission for Case Manager Certification
List of Legal Documents You Need to Run a Homeless Shelter Business
If you want to set up a homeless shelter business, you need to get all the necessary paperwork in place in order to be able to carry out your operations legally. The following legal documents are some of the legal documents that you should have in place if you intend starting a homeless shelter in the United States:
- Certificate of Incorporation
- Business License
- Business Plan
- Insurance Policy
- Tax exemption
- DBA Business Name
- Seller Permit
- Federal EIN
- State EIN
Writing a Business Plan for your Homeless Shelter Business
Even though you are starting a non-profit business, you still need to write a business plan for your homeless shelter business. The business plan will help your homeless shelter describe how it plans to go about implementing the mission of the business and also how it will achieve the goals and objectives that it has set for the business. In order to do these successfully, contact an expert to help you in writing a business plan that you can work with.
To be successful in the management of the homeless shelter business you want to set up, the business plan is the blue print you need to achieve this. It will help you conduct the business properly. At any given period of time, you will know what to do in the course of running this business both in terms of handling the challenges that comes with growth and expansion.
In the business plan, the process that will be used in conducting researches for the service that the business intends to do will be written there. How to investigate the resources that you will need to render the service, devising how to implement the marketing strategies to be used, how to assess the risk involved and the ways you will evaluate the success of the business.
The business plan for a homeless shelter takes account of other factors like the vision statement, the role of the board members and environmental factors. Potential changes in revenue should also be put into consideration. Plans on how to prepare for risks in the future are also included in the plan.
The essence of putting down a business plan is to have a detailed guide to help you in running your business effectively. Try to be realistic in your projections when putting figures on your profits and income. Do not underestimate so that you do not get disappointed when your business operation starts.
Detailed Cost Analysis for Starting a Homeless Shelter Business
There are some expenses that you have to incur in the event of launching your homeless shelter business. Do your feasibility studies properly prior to making a budget and getting funding for the business. The following are some of the cost that you will incur in the process of starting a homeless shelter in the United States:
- Fee for incorporating a Business in the United States of America – $750
- Money to pay for permits, insurance and license – $5,000
- The Amount needed to get a place to be used as the shelter – $0 – $50,000.
- The Cost for equipping the shelter with beddings$0 – $15,000
- The Cost of owning a website $0 – $700
- Other Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
- Miscellaneous- $1,000
According to the report from the research and feasibility studies carried out, starting a homeless shelter does not cost much because most of the things needed is likely to come from donations. The location needed might be donated by churches, hotel and other well-meaning people.
A small scale homeless shelter will cost from $0 – $500 to set up. To set up a medium scale homeless shelter, you will need $0 – 20,000,000 to set it up To set up a large scale homeless shelter, you will need $0 – $1,000,000 million to do so.
Financing Your Homeless Shelter Business
When you want to start a homeless shelter, you do not need much resource to set it up as majority or almost all of your needs will be provided through donations, grants and so on. Once you are able to secure the location for the business, you are on your way to starting the business. Most of the staff that will be working at the shelter will also be working on a voluntary basis so you might just need to hire a few people that you will need to pay salaries to.
To get the necessary funding for your homeless shelter, a good business plan is important. Once you have it in place, it won’t take you long to convince people to give donations to your homeless shelter.
You should explore the following options as avenues to get funds for your homeless shelter:
- Raising money from churches, mosques and other religious organizations
- Raising money from non-profit organizations
- Raising money from charity groups
- Raising money from big stores
- Raising money from public and private grants
- Funding from federal government
- Funding from state governments
- Funding from city governments
- Funding from county
Choosing a Location for Your Homeless Shelter Business
It is important to choose the right location for a homeless shelter because you have to consider the fact that it is human beings that are going to be staying in these shelters. You have to make sure that the location you are choosing has adequate ventilation so that in summer the people there do not suffer from heat.
Consider getting a place that will be equally easy to keep warm during winter period as well. Put into consideration getting lockers for people so that they can keep their belongings. Hygiene is also another important factor in getting a location; get a place that will be easy to clean so that insects don’t infest the shelters.
The list is endless as there are a lot of factors to be considered to ensure that people are comfortable in the shelters. To choose a location for a homeless shelter, you have to consider the following factors:
- The safety of the location because of people that are victims of domestic violence
- The availability of a location that has space as a place that has too much built-in furniture is not usable
- A place that has a minimum of 10 hours for people to use so that they can get a minimum of 8 hours of sleep.
- Availability of bathroom facilities
- The local laws and regulations in the community or state where your homeless shelter resides
- Availability of security for the shelter members
Technical & Manpower Details
To set up a homeless shelter, you will need to get some software, security camera and other accessories. To get a place to locate your homeless shelter, you can get people to donate the land for the building of the shelter. You can get churches, mosques and other religious institutions to donate their buildings as well. In the case that you cannot get a building for free, you might have to rent or buy a place to locate the homeless shelter.
You need people that will work at the shelter but you can get people who will offer their services voluntarily at your homeless shelters. On the average, you need a shelter director, case manager, group facilitator, counsellor, literacy tutor, social worker and house manager.
As a homeless shelter business, you will also need the services of an accountant, lawyer and some other professionals who you can hire on an as needed basis. You also have to put together a board of directors for the business.
Make sure you hire the right people and get volunteers that are really committed to the business as these individuals are important to the image you want to portray to people about the kind of homeless shelter business you are running.
The Services Process Involved in the Homeless Shelter Industry
The service process that is involved in the running of a homeless shelter depends on the niche the business is into. Once a homeless shelter has got the necessary funding for the business and everything has been put in place. It is then ready to take in homeless people.
If it is a homeless shelter for individuals to sleep in at night, then people start arriving at the time that the shelter opens to accommodate people. They are assessed and given a place where they can spend the night. Blankets, toiletries, coffee and light refreshment or food are served to the inhabitants.
Generally, there is a curfew in homeless shelters that the individuals have to adhere to. Once it is morning, the people in the shelter have to leave the shelter and find something with which to occupy them during the day before they return to the shelter again in the night.
Marketing ideas and Strategies for a Homeless Shelter Business
When you are writing the marketing plan for your homeless shelter, make sure that you write a convincing profile for the company. Include the profile of the board of directors and the members of the management team. These marketing strategies will help you to get donors.
Create the right awareness to capture the interest of your donors. Include the message that makes your homeless shelter different and makes it a worthy enough cause that needs to be supported. If you have well trained and dedicated members on your team, your homeless shelter is off to a good start and it will thrive and flourish.
You can use the following platform to put out the word about your homeless shelter business:
- Spread word about your homeless shelter by informing other homeless shelters to put out the word
- Spread the word at community outreach programs
- Traditional advertising
- Use of the internet through your website
- By direct mail
- Through telemarketing
- Through the use of newsletters and press releases
- Make use of blogs and social media
- Organise events, galas and fundraising gatherings
Possible Competitive Strategies for Winning your Competitors
Competing with other homeless shelters in the industry might be challenging, therefore you need to choose your board members carefully and also build the people that you are going to be working with.
Once you have the requisite expertise to run a homeless shelter, then you are in business. Whenever homeless people come to your shelter, endeavour to treat them right so that they can help you spread the word about your shelter so as to get more people off the streets especially during the cold freezing nights of winter.
A lot of people are afraid of shelters because of the bad stories they have heard about them. Make yours exceptional and you will succeed in getting more people off the streets and also have success in convincing the donors that you are doing something worthy that they need to donate their money to.
You can also form partnerships with religious institutions, other non-profit organizations and charity groups that can help you start up the business by being a fiscal sponsor for your business.
Possible Ways to Increase Customer Retention
Customer satisfaction is a very important aspect of any business you are running as it will help you to retain the clients of your business and it will restore investor confidence in your business. When your clients are satisfied, they will stickwith your brand and will not look for your competitor to do business with.
As a homeless shelter business, once you are able to satisfy the people that take refuge in your shelter then you will have good testimonials as these are the proof that you are rendering a service that is of high quality to the people that patronize your business.
Make sure that you are sending the correct message at all times to the right people by giving good customer service always. This way you will be able to get a large percentage of the donor money as you have been able to position yourself properly in the minds of your donors and you will have proved the value of the service that you provide.
Available statistics show that the reason why customers got for alternative services is as a result of poor quality of service delivery. If you keep improving on the quality of your service, then you will keep attracting funds for your homeless shelter.
Strategies to Boost your Brand Awareness and Create a Corporate identity
In order to create a brand identity for your homeless shelter, make sure you do it well so that your constituents can support your cause. Let your strategies include the message that makes your homeless shelter different from other worthy causes that equally needs to be supported.
Make sure it addresses the issue of donor loyalty because it is important for retained supporter. You should therefore map out a publicity plan and the right advertising strategy that will help you in your cause.
Since your donors know that the best way of supporting worthy causes does not necessarily mean that they should also open up their own homeless shelter but to put together the resources they have and make it available for the use of people that have a similar mind set with theirs.
The following are some of the platforms you can use to boost your brand awareness and create the corporate identity for your homeless shelter:
- Spread word about your homeless shelter by informing other homeless shelters to put out the word
- Spread the word about your homeless shelter business at community outreach programs
- Traditional advertising
- Use of the internet to advertise your business through your website
- Make use of direct email marketing
- Through telemarketing
- Through the use of newsletters and press releases
- Make use of blogs and social media to promote your homeless shelter
- Organise events, galas and fundraising gatherings with the aim of creating awareness and to promote your brand.
- Make branded shirts for your employees and volunteers and also brand the official vehicles of your business.
Creating a Suppliers / Distribution Network
Running a homeless shelter business makes it possible for networking in the homeless shelter business industry and with the government since the issue of housing homeless people cannot be carried out alone by only the people running the business.
They need to get help from other well-meaning people such as volunteers, donors and the government to be able to be in business. There is also room for strategic partnership to be formed by the homeless shelter and other institutions like churches, mosques, supermarkets and other charity groups. They can help to support the cause of the homeless shelter by making donations of clothes, food, toys, books, sponsorship and money.
Tips for Running a Homeless Shelter Business Successfully
To run your homeless shelter business successfully, you need to get all the people working with you in your team to be in synch with you at all times. This will help your business to succeed. As the founder of the business, you should endeavour to steer the business in the right direction.
Find time to hold meetings and deliberate on issues and get feedbacks from the meetings. Also make sure that the meetings are held regularly. Give staff appraisals regularly and train your employees and volunteers so that they can help you to run the homeless shelter effectively.
Give them encouragement to get certified in the areas that they have specialization. If possible, offer to sponsor them partially or fully for the certifications they want to take. Listen to your workers when they have suggestions on how to make the business better. Reward excellent performance so as to encourage healthy competition.
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