Steps to Opening a Group Home

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Group homes are important to communities because they provide a safe place for those with medical or emotional issues to live, socialize and feel accepted. There are many types of group homes, including homes for the elderly, children and teens, those with disabilities, and those who need supervision and care during the day. If you want to start a group home, consider the needs of your community and how a group home would improve the quality of life of those who live or stay there.

Woman being comforted
Woman being comforted (Image: Design Pics/Design Pics/Getty Images)

Types of Group Homes

Consider the type of people you want to help. Elder care, teen, child, adult daycare, and hospice care are some of the many examples of group homes. Contact charitable organizations in your area and ask which groups in your community need your services. Attend town meetings, hospital charity functions and ask community medical professionals for their opinions.

Focusing on groups that have few resources to rely on in your community allows you to start profitable business while satisfying a community need. Contact the local small business administration office, charitable organizations division (if starting a non-profit group home), or state attorney's office to learn more about owning and maintaining a group home in your area.

Woman holding elderly woman's hand
Woman holding elderly woman's hand (Image: Melpomenem/iStock/Getty Images)

Licensing and Certification Information

Depending on the state in which you live, you may need only a business permit or license to start a group home. Other licenses and certifications needed can include home care license, CPR certification, food handler's license or nursing certification. Contact your local small business administration or health and human services office for more information.

Yearly home inspections by the fire marshal and insurance providers may be necessary, especially if you decide to use your residence as the location of the group home. Inspections of spaces you lease for your group home also may be subject to inspection.

General liability insurance and business insurance covers damage to the home, equipment within the home, vehicles used for business purposes and the cost of lawsuits.

Charitable or nonprofit organizations register businesses under "nonprofit status." These organizations qualify for additional tax exemptions. If you're operating a group home for profit, register the business as a sole proprietorship, S corporation, limited liability corporation or partnership.

Man inspecting home
Man inspecting home (Image: byryo/iStock/Getty Images)

Group Home Business Plan

Create a business plan that outlines your vision of the group home. Include a mission statement that highlights your business goals as well as the care you want to provide to those living in the home. Include all start-up costs, insurance premiums and marketing expenses in the business plan. Knowing how much you will need to start a group home is essential so you can purchase equipment, hire employees and bring your home up to code so it passes state inspections.

The last section of the business plan should include how much you expect to earn in the first year of operation. This is important information to include if you plan to take out a business loan or apply for a state or federal grant.

To run a successful group home, focus on maintaining steady revenue while providing quality care to residents. A clear and focused business plan that outlines all the steps necessary to meet these two goals increases your chances for success.

Couple working on business plan
Couple working on business plan (Image: Jacob Wackerhausen/iStock/Getty Images)

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