An adult daycare center is a non-residential daycare facility that provides support in the areas of health, nutrition, social, and daily living needs of adults in a professionally staffed, group setting. Adult daycare is designed to provide adults with transitional care and short-term rehabilitation especially when they are discharged from the hospital or when their family members are not around to take care of them.
Available data shows that currently, there are over 7,500 adult day care programs operating in the United States, up from 4,601 in 2010, and they provide care for more than 282,000 elderly Americans. Of this 4,800 registered daycare, 78 percent operate as not-for-profit while 22 percent of centers operate as for-profit corporations.
Steps on How to Start an Adult Day Care Business in 2022
Table of Content
1. Conduct Market Research
If you intend to start an adult daycare business, then you must make sure you conduct thorough market research. It is important to conduct research because it will help you carry out a careful and detailed study of the problem you intend to solve with your adult daycare, using scientific methods. With successful market research, you will be able to explore the unknown and unlock new possibilities in the industry in which you want to start your business.
a. Who is the Target Market for Adult Day Care?
The target market for an adult day care are adults who are suffering from;
- Cerebral palsy
- Down syndrome
- Emotional disturbance
- Reading and learning disabilities
- Intellectual disabilities
- Demographics should be included
- Pervasive developmental disorder
- Speech and language impairments
- Spina bifida
- Traumatic brain injury
- Visual impairments
b. Is Adult Day Care a Profitable Business?
Yes, the adult daycare business is profitable. Statistics show that the market size, measured by revenue of the adult daycares industry sits at $5 billion in 2022. Demand for adult day care centers is increasing with the need for assistance in old age.
c. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to adult day care services and they are;
- Social services adult day care model
- Medical services adult day care model
- Social and medical services adult day care model
d. Who are the Major Competitors?
- Senior Care Inc.
e. Are There County or State Regulations or Zoning Laws for Adult Day Care Business?
Yes, and zoning laws require adult daycare operators to follow specific rules and regulations. These laws are designed to address the unique circumstances of a business operating in a residential area. Many laws seek to minimize the negative impact on the community, which can be affected by increased vehicle traffic and neighborhood noise.
Please note that in many communities, zoning laws require adult day care providers to apply for a permit from the city. This application process allows the city’s zoning department to determine whether the home day care meets the zoning rules for the community. Permits also ensure that all adult day cares are properly licensed with the county or state agencies.
f. Is There a Franchise for Adult Day Care Business?
Yes, there are franchise opportunities for adult day care. Here are some of them;
- Right at Home (Total startup costs – $75,000 to $100,000)
- SarahCare Adult Day Care Center Services (Investment $212,427 – $513,427)
- Elder-Well® Franchisee
- Greenacres Adult Day Care Franchise
- Interim HealthCare (Initial Investment – $125,500 to $198,500)
- Home Care Assistance ($77,775 to $245,250)
- HomeWell Senior Care (Investment $75,000 – $120,000)
- BrightStar ($95,000 to $163,000)
g. What Do You Need to Start an Adult Day Care Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- A Well-Equipped Day-Care Facility
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Supplies (Detergents, Toiletries, Disinfectant, Hand Gloves and more)
- Startup and Working Capital
Memorable Business Name ideas for Adult Day Care
- Arit Tim® Adult Day Care, LLC
- Martins® Adult Day Care, LLC
- We Care® Adult Day Care, LLC
- Princess Diana™ Adult Day Care, LLC
- Esther Lane® Adult Day Care.
- Baroness Elizabeth® Adult Day Care, LLC
- Lady Annie® Adult Day Care, LLC
- Peter Nelson® Adult Day Care
- Comfort Care® Adult Day Care
- Ronald Magdalene® Adult Day Care, LLC
- Maria De La Rosa® Adult Day Care, LLC
- Anne George™ Adult Day Care
- Bridget Decoster™ Adult Day Care
- Inner City® Adult Day Care, LLC
- Well Palm® Adult Day Care
- Jacinta Borrow® Adult Day Care
- Green Bay© Adult Day Care
- Georgina Paulson™ Adult Day Care, LLC
- Jill Noel™ Adult Day Care.
- Madonna Whyte® Adult Day Care
Register Your Business
a. What Type of Business Structure is Best for Adult Day Care?
Even though there are several options when it comes to the business structure of an adult day care, most players in this line of business consider an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.
Please note that an LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open an Adult Day Care?
- General Business License
- Group Family Child Care License
- Health and Safety Permit
- Zonal Permits
- Director’s License
- State Facility Inspections
- Operational State Facility Inspections (Building Permits)
d. What Type of Certification is Needed to Open an Adult Day Care?
Social Adult Day Care Certification.
e. What Documents are Needed to Open an Adult Day Care?
These are some of the basic legal documents you need to legally run an adult daycare in the United States of America;
- Business and Liability Insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLC
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting an adult day care, usually you may not need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start an Adult Day Care?
When it comes to starting an adult daycare business, the startup costs vary. It could range from $80,000 (if you are opting for a franchise) to over $500,000. This is because the startup inventory is on the high side.
b. What are the Costs Involved in Starting an Adult Day Care
- 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 – $250,000.
- Other start-up expenses including, commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
- Operational Cost (salaries of employees, payments of bills et al) – $60,000
- start-up inventory – $15,000
- Store Equipment (cash register, security, ventilation, signage) – $4,750
- Furnishing and Equipping – $80,000
- Website: $600
- Miscellaneous: $5,000
c. What Factors Determine the Cost of Opening an Adult Day Care?
- The type of adult day care business
- The choice of location
- The required licenses and permits
- The type of facility
- Additional services offerings
- The number of residents they want to admit
- The cost of hiring and paying a business consultant and attorney
- The cost for branding, promotion, and marketing the adult daycare business
- The cost for furnishing and equipping the adult daycare
- The cost for insurance policy covers
- The cost for registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
It is not compulsory to build a new facility for your adult day care, but if you have the finance, it will pay you to build your facility. The truth is that building a facility for your adult day care will help you come up with a facility that will perfectly fit into your overall business goals and vision.
e. What are the Ongoing Expenses of an Adult Day Care?
- Rent and lease
- Cost of stocking up supplies such as medications, toiletries, disinfectants, hand gloves, beddings et al
- Utility bills (phone bills, signage and software renewal fees et al)
- Salaries of employees
f. What is the Average Salary of your Staff?
- Head of Adult Day Care (President) – $45,000 Per Annum
- Day Care Administrator – $36,034 Per Annum
- Medication Management Counselors – $35,600 Per Annum
- Nurse’s Aides – $30,660 Per Annum
- Home Health Caregivers/Home Caregivers/County Aging Workers – $32,878 Per Annum
- Account Officer – $35,000 Per Annum
- Front Desk Officer – $28,000 Per Annum
- Cleaners – $22,000 Per Annum
- Security Guard – $22,000 Per Annum
g. How Do You Get Funding to Start an Adult Day Care
- Raise money from personal savings and sale of personal stocks and properties
- Raise money from investors and business partners
- Sell shares to interested investors
- Apply for a loan from your bank/banks
- Pitch your business idea and apply for business grants and seed funding from, government, donor organizations, and angel investors
- Source for soft loans from your family members and your friends.
a. Executive Summary
We Care® Adult Day Care, LLC is a registered for-profit adult day care that will be based in Tallahassee – Florida, USA. Our adult daycare center is designed to provide care and companionship for older adults who need assistance or supervision during the day. Our programs are designed to offer relief to family members and caregivers, allowing them to go to work, handle personal business, or just relax while knowing their relatives are well cared for and safe.
b. Products and Service
- Care-planning services
- Daily living assistance (day only)
- Nursing and health services
- Therapeutic services
- Meal services
- Transportation services
- Social activities.
c. Mission Statement
Our mission is to build a highly successful, adult daycare center that provides community-based day health services for the elderly and disabled. We are going to provide services that include living assistance, nursing, therapy, meals, and social activities. We will also provide quality supervised care at affordable costs.
Our vision is to create an international model for the adult daycare industry.
d. Goals and Objectives
The goals and objectives of an adult day care center are to provide quality care and enriching services where adults who need care can be taken care of during the day.
e. Organizational Structure
- Head of Adult Day Care (President)
- Adult Day Care Administrator
- Medication Management Counselors
- Nurse’s Aides
- Home Health Caregivers/Home Caregivers/County Aging Workers Fundraiser
- Account Officer
- Front Desk Officer
- Security Guards
a. SWOT Analysis
The strength of the adult daycare facility lies in the fact that they have a team of qualified professionals manning various job positions in the organization. Also, the location, the business model they will be operating on, well-equipped facility and their excellent customer service culture will definitely count as a strong strength for the facility.
Our Adult Daycare is a new business that is owned by a family, and they may not have the financial muscle to sustain the kind of publicity that will give the business robust visibility.
The opportunities that are available to adult day care facilities are unlimited because we have loads of adults over 60 who would one day need the services of an adult daycare in the United States.
Just like any other business, one of the major threats you are likely going to face is an economic downturn and unfavorable government policies. It is a fact that an economic downturn affects purchasing/spending power. Another threat that may likely confront an adult daycare business is the arrival of a new and bigger adult daycare in the same location where your facility is located.
b. How Do Adult Day Care Centers Make Money?
Adult daycare centers makes money by charging their clients (for-profits) or from support for donor agencies and charities (not-for-profit).
Please note that funding for adult day care comes from a variety of public and private sources. At the Federal and State levels, funds are available from Medicaid, Social Services Block Grants, and Older Americans Act monies.
c. Payment Options
- 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. Sales & Advertising Strategies
- Place adverts on both print (newspapers and health-related magazines) and electronic media platforms
- Sponsor relevant community-based events/programs for the elderly
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your facility
- Install your Bill Boards in strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- Contact households, businesses, and every adult in the neighborhood where your adult daycare will be located informing them about your business
- List your adult day care in local directories / yellow pages
- Advertise your adult daycare on 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 adult daycare is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo.
a. How Much Should You Charge for your Service?
Our average daily cost of adult day services will be $70.
b. How Much Profit Do Adult Day Care Owners Make a Year?
It depends, but available reports show that owners of adult daycare centers profit an average of $37,000 per year. While some owners of special daycare centers report earning over $60,000 profit per year, the other side of the report shows that an adult day care can make well over $50,000.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the adult daycare
- The location the adult daycare is covering
- The management style of the adult daycare
- The business approach of the adult daycare
- The advertising and marketing strategies adopted by the adult daycare
- The number of years the adult daycare is in business
d. What is the Profit Margin of an Adult Day Care?
The profit margin of an adult day care is not fixed; to a large extent, it will depend on some factors that are unique to your location if you are operating as a for-profit organization. Please note that most adult daycares operate as nonprofits hence they are not expected to make profits.
e. What is the Sales Forecast?
Below is the sales forecast of an adult daycare. It is based on the location of the business and other factors as it relates to such startups in the United States;
First Fiscal Year: $240,000
Second Fiscal Year: $350,000
Third Fiscal Year: $480,000
Set Up your Office
a. How Do You Choose a Perfect Location for Adult Day Care?
- The demography of the location especially as it relates to the aging population
- The demand for adult day care services in the location
- The purchasing power of residents of the location
- Accessibility of the location
- The number of adult daycares and other facilities like senior care, nursing homes and sober living et al in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open an Adult Day Care?
- Las Vegas, Nevada
- Los Angeles, California
- Chicago, Illinois
- Boston, Massachusetts
- Silver Spring, Maryland
- Rowland Heights, California
- Portland, Oregon
- New York City, New York
- Atlanta, Georgia
- Dallas, Texas
c. What Equipment is Needed to Operate an Adult Day Care?
When starting an adult daycare, you will not need any technical gadgets except office and nursing equipment, first aid kits, smoke detectors, carbon monoxide detectors, fire extinguishers, an emergency preparedness kit, an emergency plan, among other things.
But in setting up a small office, you will need a computer, printer, software apps, telephones, pager, photocopier, scanner, and fax machine. These machines, equipment, and tools can be purchased as fairly used especially if you have limited finance to meet your budget.
As regards the number of employees you are expected to kick start the business with, you would need to consider your finance before making the decision. When it comes to starting a standard adult daycare business on a large scale, you would need the services of the following professionals; the head of daycare (you can occupy this position), adult daycare administrator, medication management counselors, nursing aides, home health caregivers, front desk officer, security guards, and cleaners.
Launch the Business Proper
You can decide to throw an opening party to officially launch your business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party. The bottom line is that with a proper launching of the adult daycare, you will be able to officially inform people in your city that your adult daycare is open for business.
a. What Makes an Adult Daycare Business Successful?
- Ability to attract grants and funding from the government of your city or state or even the federal government
- Disciplined and dedicated workforce
- The heart to serve
- Good facility and ambiance
- A good relationship with stakeholders
- Good care techniques and programs.
b. What Happens During a Typical Day at an Adult Daycare Business?
- The adult daycare is open for the day
- The facility is cleaned and prepared to welcome students
- Students are welcomed
- Students are provided with special care, nursing and other assistance in daily living and feeding
- The school is closed for the day and family members come in to pick their wards
c. What Skills and Experience Do You Need to Build an Adult Daycare Business?
Here are some of the skills and experiences you would need to build an adult daycare business;
- Good managerial and human development skills
- Visionary Leadership
- Strategy & Development
- Team-building & Interpersonal Skills.
- Excellent communication and negotiation skills.
- Organizational skills.
- Problem-solving ability.
- Experience working as a social worker
- Experience in the adult daycare industry
- Experience in adult daycare administration.