A group home is a community-based, long-term facility for specific types of residents (juveniles) who cannot live with their families due to behavioral issues. It is important to state that some group homes treat the mentally ill and the disabled.
Available statistics show that there are now about 7,629 group homes (orphanages and foster homes inclusive) in the United States as of 2022, an increase of 1 percent from 2020. The data also shows that California has 754 group homes (orphanages and foster homes inclusive), Florida has 296 group homes (orphanages and foster homes inclusive) and New York has 284 group homes (orphanages and foster homes inclusive). These are the States with the most number of group homes in the United States of America.
Steps on How to Write a Foster Group Home Business Plan
Table of Content
1. Executive Summary
Golden Generation® Group Home Facility, LLC will be based in Espanola, New Mexico. The organization will be committed to serving a small number of teens who will reside in a family-like setting with trained staff and effective programs.
We will house between 4 to 12 children per time in a family setting where they can make full use of community resources, including employment, health care, education, and recreational opportunities. Daniel Young is the founder and CEO of Golden Generation® Group Home Facility, LLC.
a. Our Services
Golden Generation® Group Home Facility, LLC will provide a wide range of services that revolves around providing therapy, 24-hour supervision, and support to troubled teens in a home-like setting. We will also provide psychiatric services to emotionally disturbed children.
b. Nature of the Business
Our Group Home facility will operate as a nonprofit organization. We will source finance from donor organizations, private individuals, and relevant government agencies.
c. The Industry
Golden Generation® Group Home Facility, LLC will operate under the orphanages and group homes industry.
d. Mission Statement
Our mission is to provide safe and secured group home facilities to meet the needs of children subjected to abuse and of course to also cater to children with emotional, intellectual, physical, medical, and/or behavioral issues
e. Vision Statement
Our vision of to become the number one group home facility in the whole of New Mexico.
f. Our Tagline (Slogan)
Golden Generation® Group Home Facility, LLC – The Family That Cares!
g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)
Golden Generation® Group Home Facility, LLC will be formed as a nonprofit corporation at the state level and we will apply for 501(c)(3) tax exemption at the federal level.
h. Our Organizational Structure
- Head of Group Home (President)
- House Manager (Administrator)
- Nurse’s Aides
- Teachers, Caregivers/Rehab Counselors
- Account Officer
- Front Desk Officer
- Security Guards
i. Ownership/Shareholder Structure and Board Members
- Daniel Young (Owner and Chairman/Chief Executive Officer) 51 Percent Shares
- David Young (Board Member) 14 Percent Shares
- Chow Lee (Board Member) 10 Percent Shares
- Pedro Philips (Board Member) 10 Percent Shares
- Monica Tyson (Board Member and Sectary) 10 Percent Shares.
- Ideal Location for group home facility
- Highly Experienced and Qualified Employees and Management
- Access to Pool of Donor Organizations
- Highly Secured and Clean Facility
- Highly structured programs are aimed at helping teens live comfortably as though they are with their families.
- Budget Limitations
- Lack of full-fledged educational structure
- Inability to initially run and manage the organization without donations and grants
- Operating from a leased facility (restriction to fully modify the facility to suit our style and taste)
- Inability to retain our highly experienced and qualified employees longer than we want
- The 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
- Government funding for Medicare and Medicaid and private donations are anticipated to increase.
- The orphanages and group homes industry is projected to reverse its decline trend and increase in the coming years.
- We have a pool of finance from donor organizations, individuals, and relevant government agencies.
i. How Big is the Industry?
The orphanages and group homes industry is worth over $8 billion in the United States and there are about 9,623 licensed and registered correctional facilities and Group Homes with a workforce of about 124,872 scattered all across the United States.
ii. Is the Industry Growing or Declining?
Available statistics point to the fact that the industry is presently not growing and revenue for the industry has been adjusted from an increase to a decline of 8.1 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. Since unemployment and consumer spending is anticipated to decline in 2020, leading to fewer donations, profit is set to decline.
Please note that in the coming year (2022), the revenue for the industry is anticipated to decline slightly, but as the economy recovers and COVID-19 (coronavirus) cases subsequently drop in line with the nationwide vaccination rollout, industry revenue will likely increase.
iii. What are the Future Trends in the Industry
The orphanages and group homes industry is changing, and players in the industry are improvising. No doubt, specialized treatment, technology, and social media will change the landscape of the industry going forward.
iv. Are There Existing Niches in the Industry? If YES, List them
Yes, there are niche ideas in the orphanages and group homes industry, and here are some of them;
- Residential treatment facilities.
- Group Homes and intermediate care facilities.
- Foster care and family support for children.
- Supportive community options for adults with disabilities.
- Group options for seniors with disabilities.
v. Can You Sell a Franchise of your Business in the Future?
Golden Generation® Group Home Facility, LLC has plans to sell franchises in the nearest future and we will target major cities with high children abandonment rates in the United States of America.
- Lack of support from stakeholders and the government
- Unfavorable government policy and regulations.
- Community resistance
- Liability problems
- Reduction in abusive homes and teenage pregnancies
i. Who are the Major Competitors?
- Boys Town
- BrightSpring Health Service
- VQ National Ltd.
- Childhelp USA.
- Assurant Care Homes – Minnesota Group Homes
- Karen’s Board & Care
- Dean’s Group Home
- Los Angeles Ronald McDonald House
- The Brambles (Group Home for Adults with Disabilities)
- Verywell Mind (Group Homes for Troubled Teens)
ii. Is There a Franchise for Group Home? If YES, List at least 20 of them and their cost
No, there is no known group home franchise currently.
iii. Are There Policies, Regulations, or Zoning Laws Affecting Group Homes?
Yes, there are county or state regulations or zoning laws for Group Homes. The law in the United States states that before a non-medical home care facility such as a group home can commence operation, 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 group home is expected to have a house manager, night manager, weekend activity coordinator, and 2 or more caregivers depending on the size of the facility.
a. Who is Your Target Audience?
i. Age Range
Our target market is for children and adolescents between the ages of 10 and 15 years
ii. Level of Educational
We don’t have any restriction on the level of education of those we will accommodate in our group home.
iii. Income Level
We don’t have any cap on the income level of those who we will accommodate in our group home. Besides, most people who are admitted to group homes have no source of income.
There is no restriction when it comes to the ethnicity of the people we will welcome into our group home.
There is no restriction when it comes to the language spoken by the people we will welcome into our group home, but we will prefer people that speak English and Spanish.
vi. Geographical Location
Anybody from any geographical location will be welcomed in our group home.
Golden Generation® Group Home Facility, LLC will not restrict any child from accessing our facility and services based on their lifestyle, culture, or race.
b. Advertising and Promotion Strategies
- Host Themed Events That Catch Attention.
- Tap Into Text Marketing.
- Use FOMO to Run Photo Promotions.
- Share Your Events in Local Groups and Pages.
- Turn Your Social Media Channels Into a Resource
- Develop Your Business Directory Profiles
- Build Relationships With Other Nonprofits and related organizations in our Area
i. Traditional Marketing Strategies
- Marketing through Direct Mail.
- Print Media Marketing – Newspapers & Magazines.
- Broadcast Marketing -Television & Radio Channels.
- OOH Marketing – Public Transits like Buses and Trains, Billboards, Street shows, and Cabs.
- Leverage direct sales, direct mail (postcards, brochures, letters, fliers), tradeshows, print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.
ii. Digital Marketing Strategies
- Social Media Marketing Platforms.
- Influencer Marketing.
- Email Marketing.
- Content Marketing.
- Search Engine Optimization (SEO) Marketing.
- Affiliate Marketing
- Mobile Marketing.
iii. Social Media Marketing Plan
- Start using chatbots.
- Create a personalized experience for our teens (housemates).
- Create an efficient content marketing strategy.
- Create a community for our donors and volunteers.
- Gear up our profiles with a diverse content strategy.
- Use brand advocates.
- Create profiles on the relevant social media channels.
- Run cross-channel campaigns.
c. Pricing Strategy
When working out our pricing strategy, Golden Generation® Group Home Facility, LLC will make sure it covers upkeep, medications, premium, economy or value, and full rehab package for each child.
Our pricing strategy will reflect;
- Cost-Based Pricing
- Value-Based Pricing
- Competition-Based Pricing.
Sales and Distribution Plan
a. Sales Channels
Our channel sales strategy will involve using partners and third parties—such as referral partners, affiliate partners, religious organizations, nonprofit organizations, and charity to help refer abusive and abandoned children to us.
Golden Generation® Group Home Facility, LLC will also leverage the 4 Ps of marketing which are place, price, product, and promotion. By carefully integrating these marketing strategies into a marketing mix, we can have a visible, in-demand service that is competitively priced.
b. Inventory Strategy
The fact that we will need educational materials, toiletries, medications, and foodstuffs means that Golden Generation® Group Home Facility, LLC will operate an inventory strategy that is based on a day-to-day methodology for ordering, maintaining, and processing items in our warehouse. We will develop our strategy with the same thoroughness and attention to detail as we would if we were creating an overall strategy for the business.
c. Payment Options for Customers
Here are the payment options that Golden Generation® Group Home Facility, LLC will make available to her donors and contributors;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Return Policy, Incentives, and Guarantees
At Golden Generation® Group Home Facility, LLC, we offer services, and the nature of services we offer does not accommodate return policy, but we will guarantee our housemates that great transformation will occur in their lives if they follow our program.
e. Customer Support Strategy
Our customer support strategy will involve seeking customer feedback. This will help us provide excellent customer service to our housemates and donors, it will help us to first understand their needs, experiences, and pain points.
We will work with an effective CRM software to be able to achieve this. We will work towards strengthening our Customer Service Team and also Leverage Multi-Channel Servicing as part of our customer support strategy.
Our operational plan will cover capacity planning, location planning, layout planning, quality planning, and methods planning.
We plan to expand our revenue by 25 percent in the second year and the plan will include a marketing, sales, and operations component. The operations component of the plan would include attracting grants that will enable us boost our service offering.
a. What Happens During a Typical Day at a Group Home?
- The facility is open for the day
- The facility is cleaned and prepared for the day’s activities
- Housemates are welcomed and prepped for the day
- Housemates are provided with educational programs that will help them to properly integrate back into society, learn new skills and morals.
- House chores are carried out at different intervals during the day
- The facility is closed for the day and housemates go back to their rooms to get it arranged and then go to bed.
b. Production Process (If Any)
There is no production process when it comes to a group home.
c. Service Procedure (If Any)
There is no service procedure when it comes to a group home.
d. The Supply Chain
Golden Generation® Group Home Facility, LLC will rely on social workers, counselors, religious organizations, and government agencies to refer children to us. Also, we have been able to establish business relationships with wholesale supplies of educational materials, toiletries, medications, foodstuffs et al.
e. Sources of Income
Golden Generation® Group Home Facility, LLC will make money from;
- Contributions ffrom partners and donors
- Grants from government agencies and charity organizations
- Community support.
The cost to operate a group home varies and it will range from about $65,000 to over $100,000 annually.
a. Amount Needed to Start your Group Home?
Golden Generation® Group Home Facility, LLC would need an estimate of $550,000 to successfully set up our group home in the United States of America. Please note that this amount includes the salaries of all staff for the first month of operation.
b. What are the Cost Involved?
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $7,300.
- Marketing, Branding and Promotions – $5,000.
- Business Consultant Fee – $2,500.
- Insurance – $5,400.
- Rent/Lease – $200,000.
- Other start-up expenses including, satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
- Operational Cost (salaries of employees, payments of bills et al) – $40,000
- start-up inventory – $15,000
- Store Equipment (cash register, security, ventilation, signage) – $4,750
- Furnishing and Equipping – $80,000
- Website: $600
- Miscellaneous: $2,000
c. Do You Need to Build a Facility? If YES, How Much Will It Cost?
Golden Generation® Group Home Facility, LLC will not build a new facility for our group home; we intend to start with a long-term lease and after 5 years, we will start the process of acquiring our own facility.
d. What are the Ongoing Expenses for Running a Group Home?
- Cost of stocking up supplies such as educational materials, medications, toiletries, beddings et al
- Cost of food supplies and ingredients
- Utility bills (gas, internet, phone bills, signage and sewage et al)
- Salaries of employees
e. What is the Average Salary of your Staff? List the Job Position and their proposed salary based on industry rate and your startup capital
- Head of Group Home (President) – $45,000 Per Annum
- House Manager (Administrator) – $36,034 Per Annum
- Nurse’s Aides – $29,660 Per Annum
- Teachers, Caregivers/Rehab Counselors – $32,878 Per Annum
- Fundraiser – $36,500 Per Annum and based on target
- Account Officer – $35,000 Per Annum
- Front Desk Officer – $28,000 Per Annum
- Cleaners – $22,000 Per Annum
- Security Guard – $22,000 Per Annum
f. How Do You Get Funding to Start a Group Home
- Raising money from personal savings and sale of personal stocks and properties
- Pitching our business idea and applying for business grants and seed funding from, government, and donor organizations
- Source for soft loans from our family members and our friends.
a. How Much Should You Charge for your Service?
At Golden Generation® Group Home Facility, LLC it is important to note that we will make our facility free of charge since we hope to attract enough grants and funds from donors.
b. Sales Forecast?
- First Fiscal Year (FY1): $350,000
- Second Fiscal Year (FY2): $475,000
- Third Fiscal Year (FY3): $550,000
c. Estimated Profit You Will Make a Year?
Golden Generation® Group Home Facility, LLC will operate as a nonprofit organization.
d. Profit Margin of a Group Home
Golden Generation® Group Home Facility, LLC is not designed to make profits hence we don’t have a profit margin for our services.
a. How do you intend to grow and expand?
Golden Generation® Group Home Facility, LLC will grow by first opening other outlets in key cities in the United States of America within the first five years, and then will start selling franchises from the sixth year.
b. Where do you intend to expand to and why? (Geographical locations)
Golden Generation® Group Home Facility, LLC plans to expand first to Chicago, IL, and then to Cleveland, OH, Detroit, MI, Atlanta, GA, and Baltimore, MD. The reason we intend to expand to these geographical locations is that available statistics show that the cities listed above have the highest juvenile delinquencies in the United States.
As a matter of fact, according to the Illinois Criminal Justice Authority’s most recent annual report, almost 300,000 youths live in poverty in Chicago’s Cook County. Over 26,000 crimes against youths have been reported and over 31,000 youths in Cook County have been arrested for criminal offenses.
The founder of Golden Generation® Group Home Facility, LLC plans to exit the business via merger and acquisition. We intend to merge with an international charity organization that has a world spread so that the organization can be placed under a trusted hand when the founder retires.
The goal of combining two or more charitable organizations that are into group homes is to try and achieve synergy – where the whole (the new organization) is greater than the sum of its parts (the former two separate entities).