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How to Start an Orphanage

If you have always liked to help destitute and are usually pulled towards the needy then you may agree that some of the folks who need all the love and encouragement are orphans. It is one thing to be pulled towards those who need love and care, it is yet another to be able to take action towards giving them a better life.

It is for this reason that orphanages are springing up here and there. Every day children are being abandoned by their guardians for reasons best known to them and these orphanages do well to admit the kids. It is worthy to note that orphanages all over the globe rely on grants and freewill giving to survive.

If you have been looking for a philanthropic job to start, then you may consider starting an orphanage. This is one venture that requires loads of hard work, patience and funding if you want to see it work. 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 country or state you reside in to know what is expected of you.

You also need to pay a visit to the regulatory bodies in your country to get all the information you need before you can legally open an orphanage home in your city. You can start your orphanage home from a small town in the United States and if you are good at what you do when it comes to taking care of children, it won’t be too long before your brand becomes nationally recognized.

Steps on How to Start an Orphanage

  1. Understand The Industry

The Orphanages and Group Homes industry includes foster homes, group homes, halfway homes, orphanages and boot camps.

It is important to state that the industry does not include substance abuse facilities, retirement homes, correctional institutions or temporary shelters. Even though the industry provides some services to adults, these facilities are basically for children and youth.

Statistics has it that in the United States of America alone, there are about 8,931 licensed and registered orphanages and group homes facilities handling drugs, alcohol and substances addicts responsible for employing about 112,353 employees and the industry rakes in a whooping sum of $9 billion annually with an annual growth rate projected at 2.6 percent between 2020 and 2022. Boys Town can boast of having a lion share of the available market in the industry.

A recent report published by IBISWORLD shows that the distribution of industry facilities trends closely with the distribution of the US population. The report further shows that disbursement is also based on each state’s respective poverty and crime rates.

The report also shows that majority of industry establishments are located in the Southeast, the West, the Mid-Atlantic and the Great Lakes regions of the United States. These four regions account for about 73.1 percent of industry establishments.

This is mostly because these four regions hold 73.0 percent of total population; industry operators are typically located close to the communities they serve. The report further stated that the revenue for the Orphanages and Group Homes industry has been adjusted from an increase to a decline of 12.2 percent in 2020 due to declining federal funding and donations.

Since many operators are nonprofit, orphanages and group homes rely on federal funding and private donations. Because unemployment and consumer spending are anticipated to decline in 2020, leading to fewer donations, profit is set to decline.

Demand from individuals aged 15 and under is expected to remain high because the majority of orphanages and group homes cater to children in this age bracket regardless of external circumstances.

Over and above, the orphanage line of 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; orphans, abandoned children and children whose parents can’t carter for them.

  1. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographics composition of those who need the services of an orphanage home is restricted to orphans, abandoned children and children whose parents can’t take care of them.

So, if you are looking towards defining the demographics for your orphanage home facility business, then you should make it far reaching to orphans, abandoned children and children whose parents and NGOs, religious organizations et al who work with orphans, abandoned children and children whose parents can’t take care of them.

  1. Decide Which Niche to Concentrate On

Most orphanage homes tend to operate general services that a standard orphanage home is expected to offer. That is why it seems that there are no niche areas in the industry. But on the other hand, some orphanage home facilities may decide to major in some key or niche areas such as;

  • Boys’ and girls’ residential facilities (e.g., foster homes, ranches and villages)
  • Residential facilities with counseling
  • Residential facilities without counseling
  • Camps, boot or disciplinary (except correctional) for delinquent youth
  • Delinquent youth halfway group houses and boot camps
  • Disciplinary camps for delinquent youth
  • Group foster homes for children and orphanages
  • Group homes for the mentally disabled without nursing care
  • Group homes for the visual and hearing impaired
  • Halfway group homes for delinquents and ex-offenders
The Level of Competition in the Industry

No matter the line of business you decide to pitch your tent, you are still going to compete with others who are into same area of business and the orphanage home facility business is not an exemption. The level of competition in the group home industry to some extent depends largely on the location of the business, your niche area of operation and of course the capacity of your facility.

If you can successfully create a unique niche for your orphanage home, you are likely going to experience little or no competition.

For instance, if you are the only orphanage home in your location that is into group homes for the mentally disabled without nursing care, or group homes for the visual and hearing impaired or halfway group homes for delinquents and ex-offenders, you can successfully monopolize the market for a long time before you start having competitions.

  1. Know Your Major Competitors in the Industry

Here are some of the most popular orphanage and group home facilities in the United States of America;

  • Boys Town
  • St Joseph Children’s Home
  • Happy Acres – Children’s Home
  • US Christian Foster Care
  • iCareAboutOrphans
  • AdoptUSKids
  • DePelchin Children’s Center
  • ChildNet Home
  • Childhelp USA
  • VQ National Ltd.
  • BrightSpring Health Services
Economic Analysis

When starting an orphanage home, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profits, grow the business and perhaps expand the business and start competing at national level.

When conducting costing and economic analysis for your orphanage home, you just have to critically examine these key factors; funding (grants), finance and facility. As a matter of fact, you would have to continue to review these key factors at regular interval while running your orphanage home facility business.

It is important to note that renting, overhead, feeding and medication cost are some of the most important factors contributing to the overall cost of running an orphanage home facility business and should be considered as a major factor when carrying out your costing and economic analysis.

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

Basically, there is nothing cast in stone when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.

If you are looking towards starting an orphanage home, you would have to start from the very scratch because you can hardly get the franchise of orphanage home to buy. Besides starting an orphanage home from the scratch is less stressful when compared to other similar businesses which usually requires detailed groundwork before launching the business.

With orphanage homes, you should just try as much as possible to secure a good residential facility and then leverage on every marketing tool within your disposal especially the internet when it comes to marketing your facility. Please note that most of the big and successful orphanage facilities around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.

  1. Know the Possible Threats and Challenges You Will Face

If you decide to open your own orphanage home facility today, one of the major challenges you are likely going to face is the presence of well – established and well – funded orphanage facilities and of course other players in the Group Home Care Providers industry in your target market location.

The only way to avoid this challenge is to create your own market; concentrate on orphans, abandoned children and children whose parents can’t take care of them in your immediate community. Some other threats and challenges that you are likely going to face when you start your orphanage home facility are mature markets, bad economy (economy downturn), stiff competition, volatile costs, and rising medical care prices.

Interestingly, most programs are funded by the US Department of Health & Human Services (HHS) and state and local government agencies. Government funding is expected to account for more than 65.0 percent of industry revenue, with the remainder garnered through private donations and fees.

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

Generally, when starting an orphanage (a nonprofit organization), 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 orphanage.

Technically, you can apply for an exemption with an LLC, but you would need to be an LLC taxed as a corporation; then, you ask the federal government to treat your orphanage 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. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.

If you are considering starting your own orphanage home facility business, here are some catchy names you can choose from;

  • Golden Generation® Orphanage Home Facilities, LLC
  • Lucky Starlets™ Orphanage Home Facility, Inc.
  • Eagles Nest® Orphanage Home Facility, Inc
  • Prince and Princess Orphanage Home Center
  • Rising Star® Orphanage Home Center
  • Future Assured© Orphanage Home Facility
  • American Dream® Orphanage Home Facility
  • Warm Embrace Orphanage Home Facility Services, Inc.
  • Chosen Saints® Orphanage Home Facility Company
  • Biden Brighton Children Care Foundation.
  1. Discuss With an Agent to Know the Best Insurance Policies for You

In the United States and in most countries of the world, 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 orphanage.

Here are some of the basic insurance policies that you should consider purchasing if you want to start your own orphanage 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 orphanage home;

  • 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 orphanage home, 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 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

If you intend starting an orphanage home facility in the United States of America, you are encouraged to pursue professional certifications; it will go a long way to show your commitment towards the business.

Besides it is almost impossible to run an orphanage home facility business in the United States without the proper professional certification. In most countries of the world, practicing any medical related practice without a license is typically illegal.

In most jurisdictions, individuals found to be providing medical, nursing or other professional services without the appropriate certification or license may face sanctions including even criminal charges leading to prison. These are some of the certifications you can work towards achieving if you want to run your own orphanage home facility company;

  • Certified Breakthrough Parenting Instructor™
  • Childminder Certifications
  • Registered nurse and Licensed practical nurse Certificate
  • Caregiver Certification
  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 without the proper documentations. 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
  • 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 standard orphanage home is capital intensive especially even if you choose to launch the business on a small scale and you only have a handful of full – time employees on your payroll.

Leasing of a standard facility that can accommodate your residents and staff members and of course the purchase of medical equipment are part of what will consume a large chunk of your startup capital, so if you choose to start the business on a small scale, you will still have to source for fund to finance the business.

When it comes to financing an orphanage home, 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 orphanage home facility 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
  • Pitching your business idea and applying for business grants and seed funding from, government, donor organizations and angel investors
  • Source for soft loans from your family members and your friends.
  1. Choose a Suitable Location for your Business

Starting an orphanage home 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 your local council and other regulating authorities in the city you intend opening your business.

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 consist 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 orphanage home, then you should feel free to talk to a business consultant or a realtor.

Most importantly, before choosing a location for your orphanage home, 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 own orphanage home facility business. Having said that, these are some of the cities in the United States of America where you can locate your orphanage home facility;

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

When it comes to starting a standard orphanage home, you will need first aid kits and other related 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 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 orphanage home business, 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 serene environment, a facility that is big enough to accommodate the number of staff member working for you. As regards the number of employees that you are expected to kick start the orphanage home with, you would need to consider your finance before making the decision.

Averagely, when it comes to starting a standard orphanage home business on a large scale, you would need the services of the following professionals; Chief Operating Officer (you can occupy this position), Fund Raisers, Accountant, Nurse Aide, Childminders and Counselors, Home Administrator (Human Resources and Admin Manager), Front Desk Officer, Cooks, Security Guards and Cleaners.

Over and above, you would need a minimum of 10 to 15 key staff members to effectively run a medium scale but standard orphanage home facility and these key roles can be occupied by volunteers.

The Service Delivery Process of the Business

The service delivery as it relates to orphanage home facility to a large extent depends on the organization and what they stand to achieve. An orphanage home takes care of abandoned children, orphans and children whose parents don’t have the capacity to take care of them.

Once these children are legally brought into the home, they are groomed just like children with their parents. In order to generate money to take care of the children under their care, they apply for grants and donations in cash and kind from donor agencies, government agencies, NGOs, religious organizations and philanthropists et al.

  1. Write a Marketing Plan Packed With ideas & Strategies

The fact that the entry barrier for starting a small – scale orphanage home is low means that there is bound to be more players in the industry no matter the location you choose to start yours. In essence, you must come up with creativity and innovations if you must carve out a market for yourself within the available market in your community, city, state or country.

So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience, 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 place when marketing your business. Here are some of the platforms you can utilize to market your orphanage home facility;

  • Introduce your business by sending introductory letters alongside your brochure to households, hospitals, religious organizations, clubs/organizations, campuses and NGOs et al who work with abandoned children, and orphans around the location where your orphanage home facility is located
  • Advertise your services in community based newspapers, local TV and radio stations
  • List your orphanage home on yellow pages ads (local directories)
  • Leverage on the internet to promote your orphanage home facility
  • Engage in direct marketing and sales
  • Encourage the use of word of mouth marketing (referrals)
  • Leverage on the internet to promote your business (when you blog regularly on key issues as it relates to your business, people who consider you an expert in the field)
  • Join local chambers of communities of NGOs around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
  • Engage the services of professional fundraisers to help you raise funds.
  1. Work Out a Reasonable Pricing for your Services & Products

If you are able to secure business partnership with hospitals, and relevant organizations as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your orphanage home facility business.

As regards medications, toiletries, cooking ingredients and other supplies that you need to effectively run your orphanage home 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 quantity of items 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 referrals, 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 orphanage home and group home industry is a competitive industry, and you must come up with a unique and highly creative strategies to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to continue to create easier and cheaper ways of taking care and grooming children under your care and also make your facility highly secured and conducive.

In other to stay competitive in this industry, you must ensure that your residences are always comfortable and always ensure that you pay attention to details when carrying out your job. The truth is that if there are fluctuations in the services you provide, donors and volunteers can choose to shift allegiance and settle for other options available.

  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 facility 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 donors and contributors retaining their donations to your orphanage. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated donations from them and also to attract new donors and contributors.

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 you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be.

One of the secrets of larger corporations is that they are willing to spend fortunes 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 orphanage home facility;

  • Place adverts on both print (newspapers and magazines) and electronic media platforms
  • Sponsor relevant community – based events
  • Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your orphanage home facility
  • Install your billboards in strategic locations all around your city or state
  • Distribute your fliers and handbills in target areas where you can easily attract orphans and donors
  • List your orphanage home facility business in local directories/yellow pages
  • Advertise your orphanage home facility 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 location where your orphanage home facility is located.
  • Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo.