You would need a $287,380 to establish a medium–scale but standard hospice business in the United States of America. A hospice agency is a public agency or private organization or a subdivision of either that is engaged in providing care to terminally ill individuals.
Even though the business is not considered a green business in the United States of America, one can comfortably say that the business is booming and open to potential entrepreneurs who are interested in the business. Starting a hospice business is indeed relatively capital intensive, but at the same time, it is a lucrative business.
You can make good returns on your investment because there will always be a need for your services since people grow old daily or become terminally ill.
The Estimated Cost of Opening a Hospice Business
When it comes to starting a hospice business, the major areas you look towards spending the bulk of your cash is renting or leasing a standard facility and converting it into a hospice facility, equipping the facility, and also purchasing all the needed supplies such as medications, toiletries, food, etc. Aside from that, you also need to pay your employees and utility bills.
These are the key areas where you will spend your start-up capital;
- The total fee for registering the business in the United States of America – is $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services – $3,300.
- Marketing expenses – $3,500 as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The total cost for hiring a business consultant including writing a business plan – $2,500.
- The total cost for insurance coverage – $2,400.
- The cost of renting or leasing a facility that can accommodate the number of residents you want (Reconstruction of the facility inclusive) – $100,000.
- Other start-up expenses including phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $70,000
- The cost for the purchase of supplies (medications, toiletries, food and water et al) – $50,000
- The cost for store equipment (cash register, security, ventilation, signage) – $4,750
- The cost of purchase and installation of CCTVs: $2,000
- Equipping the hospice business (sound system, DVD players, beddings, Flat Screen TVs, computers, printers, projectors, markers, pens and pencils, furniture, telephones, filing cabinets, and electronics) will cost – $40,000
- The cost of launching a website: $600
- Miscellaneous: $2,000
From the rough estimate above, you can see that we would need a minimum of two hundred and eighty – seven thousand seven hundred and eighty USD ($287,380) to establish a medium–scale but standard hospice business in the United States of America.
Please note that this amount includes the salaries of all staff for the first three months of operation. Having said that, here are some of the general factors that will influence the cost of opening a hospice business in the United States of America.
Factors That Will Influence The Cost Of Opening a Hospice Business
Table of Content
- The Type of Hospice Business
- The Choice of Location
- The Required Licenses and Permits
- The Type of Facility
- The Number of Residents You Want to Admit
- 6. Cost of Recruiting and Training Your Staff
- 7. The Cost for Branding, Promotion, and Marketing
- The Cost for Furnishing and Equipping the Hospice Business
- The Cost for Insurance
- The Cost of Registering the Business
- Supplies and Ongoing Expenses
The Type of Hospice Business
A major factor that will determine the overall cost of opening a hospice business in the United States of America is the type of hospice business the owner of the business wants to start. There are different types of hospice businesses including; hospice care at home, continuous hospice care, inpatient hospice care, and respite care. These different types of hospice businesses come with different cost implications when starting the business.
The Choice of Location
Another major factor that will determine the cost of opening a hospice business in the United States of America is the location. There are business consultants cum realtors who are specialized in helping people choose the ideal location for their type of business.
Renting or leasing a hospice facility in a location that is off the city center or residential estate will be less expensive when compared to renting or leasing a hospice facility in a growing residential estate; a location in a cozy and serene environment, a location in a metropolitan city with the right demographic composition of families who can afford to pay for your services.
The Required Licenses and Permits
In the United States of America, you cannot open a hospice business without first applying for the mandatory licenses and permits. You would need an accreditation certificate, building license, zonal permits, signage permits amongst others. As expected, these licenses and permits cost money and it will influence the overall cost of opening a hospice business in the United States of America.
Please note that your business will have to go through several inspections and this will also cost you money. To get the overall cost of licensing and permits associated with opening a new hospice business in the United States, we will advise that you reach out to your city government. You also need to consider state and federal requirements.
The Type of Facility
The type of facility you want to run your hospice business from is also a major factor that will determine the overall cost of opening the business in the United States. As regards the facility, you have the option of renting, leasing or constructing a facility from the scratch.
With renting and leasing a facility, you may need to spend extra to modify the facility to fit into what you have in mind, but there is a limit to how far you can go, as it will be dependent on what the landlord of the facility wants.
If you want to construct your hospice facility from the scratch, you have to buy the land or property, construct and equip the hospice facility. With that, you will agree that you are going to spend way more when compared to people that rent or lease a facility.
The Number of Residents You Want to Admit
Another very important factor that determines the cost of opening a hospice business is the number of residents you intend to accommodate or admit per time. No doubt, some hospice businesses can accommodate over 100 residents per time, while others can only accommodate less than 50 residents per time.
Aside from the cost of renting or leasing the facility, it will also cost you more to furnish and equip the facility, and the more the number of residents the hospice business can accommodate, the more you are expected to spend to set up and run the facility.
6. Cost of Recruiting and Training Your Staff
The fact that you are opening your hospice business as a new business means that you are expected to recruit and train your staff to conform to the kind of hospice business you want to operate. The training will help you sell the corporate culture of your organization to the new employees. As expected, it will cost you money to hire expert trainers for your new staff.
7. The Cost for Branding, Promotion, and Marketing
The cost for branding, promoting, and marketing the hospice business is yet another key factor that will determine the overall cost of opening a hospice business in the United States of America. Trust me, if you want to get a good number of residents from the get-go, then you must be willing to pay for effective branding, promotion, and marketing of your new hospice business.
It is not cheap to come by an expert in branding, promotion, and marketing that will help you compete with brands that are already determining the market direction of the hospice business in your city. So, if you add the cost of paying a branding and marketing expert, it will surely increase the cost of opening your hospice business.
The Cost for Furnishing and Equipping the Hospice Business
Another very important factor that will determine the cost of opening a hospice business is, of course, the cost of furnishing and equipping the facility. Before you can open a hospice business, you should budget and buy chairs and tables, beds, projectors, flat-screen TVs, sound system, DVD players,
Satellite dish and decoder, office furniture (table, stools, and sofas), drawers and cabinets, telephones, filing cabinets, office equipment (cash register, fire alarm and protection gadgets, CCTV, ventilation, signage), and kitchen wares amongst others. All these will cost money and it will influence the overall cost of opening a hospice business in the United States of America.
The Cost for Insurance
The cost of paying for insurance is yet another important factor that will determine the overall cost of opening a hospice business in the United States of America. Interestingly, in the United States and most countries of the world, you can’t operate a business without having some of the basic insurance policy covers required by the industry you want to operate from.
Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your hospice business.
The Cost of Registering the Business
The cost of registering the hospice business is yet another cost that will influence the overall cost of opening a hospice business in the United States of America. Although the cost of registering a business is affordable, it will no doubt add to the overall cost of opening a hospice business in the United States of America.
Supplies and Ongoing Expenses
Another major factor that will determine the cost of opening a hospice business in the United States of America is your supplies such as medications, office supplies, toiletries, and food.
If you have access to manufacturers of the type of medications, office supplies, toiletries, and food supplies that you would need, it will cut down the cost of running the hospice business as against buying your medications, office supplies, toiletries, and food supplies from retailers. So also, if you have in–house cooks for your facility, it will reduce the cost of food.
12. The Cost for the Purchase and Customizing of Uniforms
Another factor that will determine the overall cost of opening a hospice business in the United States is the cost of purchasing and customizing uniforms. Your residents and of course security personnel are expected to all have uniforms and they are expected to put on these uniforms when they are on duty. All these uniforms will cost you money which is why they must be part of your budget.
Please note that there are other factors not listed above that will surely influence the overall cost of opening your hospice business which is why we advise that you work with a result-driven business consultant to give you the needed guide and information as it relates to the unique factors in your location.