A foster child or youth is someone under the age of 21 who has been removed from their home due to abuse or neglect by a parent or guardian. In that vein, a group home for foster children and teenagers is a community-based, long-term facility for specific types of residents (juveniles) who cannot live with their families due to behavioral issues.

Available statistics show that there are now about 7,629 group homes (group homes for foster children and teenagers 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, Florida has 296 group homes, and New York has 284 group homes. These are states with the greatest number of group homes in the United States of America.

Steps to Start a Group Home for Foster Children and Teenagers  in 2022

1. Conduct Market Research

If you intend to start a group home for foster children and teenagers, then you must make sure you conduct thorough market research. Your aim of conducting market research for your group home is to get in-depth information, generate new questions and concepts; understand the market space and what you are going to be up against. With successful market research, you will be able to explore the unknown and unlock new possibilities in the industry.

a. Who is the Target Market for Group Home for Foster Children and Teenagers?

The target market for a group home for foster children and teenagers are people under the age of 21 who have been removed from their home due to abuse or neglect by a parent or guardian.

b. Is Group Home for Foster Children a Profitable Business?

Yes, a group home for foster children and teenagers is a profitable business. Statistics show that 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.

c. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to a group home for foster children and teenagers because this line of business is a niche idea in the group homes industry.

d. Who are the Major Competitors?
  • Verywell Mind
  • The Children’s Village
  • Arizona Friends of Foster Children Foundation
  • Epworth Children’s Home
  • 4KIDS, Inc.
  • Child Welfare Monitor.
e. Are There County or State Regulations or Zoning Laws for Group Home for Foster Children And Teenagers?

Yes, and the zoning laws require group homes for foster children and teenagers to follow specific rules regulations, including some that apply only to group homes. These laws are designed to address the unique circumstances of a business operating in a residential area.

Please note that in many communities, zoning laws require group homes to apply for a permit from the city. This application process allows the city’s zoning department to determine whether the group home meets the zoning rules for the community. Permits also ensure that all group homes for foster children and teenagers are properly licensed with county or state agencies.

f. Is There a Franchise for Group Home for Foster Children and Teenagers?

No, there are no franchise opportunities for group homes for foster children and teenagers.

g. What Do You Need to Start a Group Home for Foster Children and Teenagers?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • Employees
  • A Well-Furnished and Equipped Facility
  1. Memorable Business Name ideas for Group Home for Foster Children and Teenagers Business

  • Golden Kids® Group Home for Foster Children and Teenagers, LLC
  • Dallas King® Group Home for Foster Children and Teenagers, LLC
  • True Ways™ Group Home for Foster Children and Teenagers, Inc.
  • Blessed Generation™ Group Home for Foster Children and Teenagers, LLC
  • All Care® Group Home for Foster Children and Teenagers, Inc.
  • Fackler Jones ® Group Home for Foster Children and Teenagers, LLC
  • Destiny Helpers® Group Home for Foster Children and Teenagers, LLC
  • Starlets® Group Home F for Foster Children and Teenagers, Inc.
  • Rays® Group Home for Foster Children and Teenagers, Inc.
  • Love Rules® Group Home for Foster Children and Teenagers, LLC
  • Four Points® Group Home for Foster Children and Teenagers, LLC
  • Oakland Care™ Group Home for Foster Children and Teenagers, Inc.
  • Golden Care™ Group Home for Foster Children and Teenagers, Inc.
  • Inner City® Group Home for Foster Children and Teenagers, LLC
  • Covenant Care® Group Home for Foster Children and Teenagers, Inc.
  • Universal Care® Group Home for Foster Children and Teenagers, Inc.
  • Napoleon Wills© Group Home for Foster Children and Teenagers, Inc.
  • Bright World™ Group Home for Foster Children and Teenagers, LLC
  • Winners® Group Home for Foster Children and Teenagers, Inc.
  • TJ Holmes® Group Home for Foster Children and Teenagers, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Group Home for Foster Children and Teenagers?

In this business, 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 at the state level, you can file a nonprofit LLC for your group home. Technically, you can apply for an exemption with an LLC, but you would need to be an LLC taxed as a corporation. You can ask the federal government to treat your group home as a nonprofit or tax-exempt organization.

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 a Group Home for Foster Children and Teenagers?
  • General Business License
  • Care Giver or County Worker License
  • Health and Safety Permit
  • Zonal Permits
  • Director’s License
d. What Type of Certification is Needed to Open a Group Home for Foster Children and Teenagers?

You don’t need any certification to open a group home for foster children and teenagers.

e. What Documents are Needed to Open a Group Home for Foster Children and Teenagers?

These are some of the basic legal documents you need to legally open a group home for foster children and teenagers in the United States of America;

  • DBA
  • EIN
  • Business and Liability Insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval (for your facility)
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLC
  • Insurance Policy
  • Online Terms of Use (if you have a website)
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a group home for foster children and teenagers, usually you may not have any 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 it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Group Home for Foster Children and Teenagers?

When it comes to starting a group home for foster children and teenagers, the startup costs vary and it could range from $150,000  to over $500,000.

b. What are the Costs Involved in Starting a Group Home for Foster Children and Teenagers
  • Business Registration Fees – $750.
  • Legal expenses for obtaining licenses and permits – $7,300.
  • Marketing, Branding and Promotions – $3,000.
  • Business Consultant Fee – $2,500.
  • Insurance – $2,400.
  • Rent/Lease – $150,000.
  • 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) – $30,000
  • start-up inventory – $5,000
  • Store Equipment (cash register, security, ventilation, signage) – $4,750
  • Furnishing and Equipping – $10,000
  • Website: $600
  • Miscellaneous: $5,000
c. What Factors Determine the Cost of Opening a Group Home for Foster Children and Teenagers?
  • The choice of the location you intend covering
  • The required licenses and permits
  • The type of facility
  • Additional service offerings
  • The cost of hiring and paying a business consultant and attorney
  • The cost for branding, promotion, and marketing the group home
  • The cost for furnishing and equipping the group home
  • The cost for insurance policy covers
  • The cost for registering the business
  • 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?

You don’t need to build a facility for your group home for foster children and teenagers because you can rent a decent facility to get the business started. When you have gained ground in the industry by attracting grants and donations, then you can consider building your own facility and that will cost you nothing less than $250,000.

e. What are the Ongoing Expenses of a Group Home for Foster Children and Teenagers?
  • Cost of stocking up supplies such as educational and learning materials, medications, toiletries, and beddings et al
  • Cost of food supplies
  • Utility bills (gas, internet, phone bills, signage and sewage et al)
  • Salaries of employees
f. What is the Average Salary of your Staff?
  • Head of Group home for foster children and teenagers (President) – $45,000 Per Annum
  • House Manager (Administrator) – $36,034 Per Annum
  • Home Caregivers – $32,878 Per Annum
  • Account Officer – $35,000 Per Annum
  • Front Desk Officer – $28,000 Per Annum
  • Cleaners – $22,000 Per Annum
  • Security Guards – $21,600 Per Annum
g. How Do You Get Funding to Start a Group Home for Foster Children and Teenagers?
  • 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
  • Apply for business grants and seed funding from the government and donor organizations
  • Source for soft loans from your family members and your friends.
  1. Write a Business Plan

a. Executive Summary

Bright World™ Group Home for Foster Children and Teenagers, LLC is a registered group home for foster children and teenagers that will be based in Oak Park, Illinois, USA. Our group home has been able to secure a neatly furnished facility on a long-term lease agreement with a clause to buy the facility in the nearest future.

b. Our Services

We will provide a facility and a wide range of services that revolve around providing therapy, 24-hour supervision, and support to troubled teens in a home-like setting and we will also provide psychiatric services to emotionally disturbed children.

c. Mission Statement

Our mission is to build a highly successful group home for foster children and teenagers that will provide multiple opportunities for ongoing family interaction and involvement for foster children and teenagers.

Vision Statement

Our vision is to rid our city of abandoned and abused children and teens.

d. Goals and Objectives

The goals and objectives for group homes for foster children and teenagers are for them to be protected, cared for, and then successfully place them in a family or establish them in a career path that can make them self-sufficient when they are old enough to live independently.

e. Organizational Structure
  • Head of Group Home for Foster Children and Teenagers (President)
  • House Manager (Administrator)
  • Home Caregivers
  • Account Officer
  • Front Desk Officer
  • Cleaners
  • Security Guards

Marketing Plan

a. SWOT Analysis
Strength:
  • Ideal Location for Group Home Facility
  • Highly Experienced and Qualified Employees and Management
  • Access to Pool of Donor Organizations
  • Highly Secured and Clean Facility
  • Well structured programs
Weakness:
  • Budget Limitations
  • Lack of full-fledged educational structure
  • Inability to initially run and manage the organization without the support of donations and grants
  • Operating from a leased facility
  • Inability to retain our highly experienced employees longer than we want
Opportunities:
  • Government funding 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.
  • A pool of finance from donor organizations, individuals, and relevant government agencies et al.
Threat:
  • Lack of support from stakeholders and the government
  • Unfavorable government policies and regulations.
  • Community resistance
  • Liability problems
  • Reduction in abusive homes and teenage pregnancies
b. How Does Group Home for Foster Children and Teenagers Make Money?

Group homes for foster children and teenagers make money via grants and donations from donor agencies and individuals if they operate as nonprofits.

c. Payment Options
  • Payment via bank transfer
  • 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 related magazines) and electronic media platforms
  • Sponsor relevant community-based events/programs for abusive teens
  • Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your group home for foster children and teenagers
  • Install your Bill Boards in strategic locations all around your city or state
  • Distribute your fliers and handbills in target areas
  • List your group home for foster children and teenagers in local directories/yellow pages
  • Advertise your group home for foster children and teenagers on your official website and employ strategies that will help you pull traffic to the site.
  • Position your Flexi Banners at strategic positions
  • Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo.

Financial Projection

a. How Much Should You Charge for your Service?

Our average cost will be between $35,000-$65,000 annually; this covers the entire cost of the individual living in the facility, including food, education and learning materials, utilities, and the payment to the caregivers who help the residents daily.

b. How Much Profit Do Group Home for Foster Children and Teenagers Make a Year?

Group homes for foster children and teenagers are not designed to make profits.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the group home for foster children and teenagers (number of teens accommodated per time)
  • The location the group home is covering
  • The management style of the group home for foster children and teenagers
  • The business approach and model of the group home
  • The advertising and marketing strategies adopted by the group home for foster children and teenagers.
  • The number of years the group home is in business
d. What is the Profit Margin of a Group Home for Foster Children and Teenagers?

Group homes for foster children and teenagers are not designed to make profits.

e. What is the Sales Forecast?
  • First Fiscal Year (FY1): $140,000
  • Second Fiscal Year (FY2): $280,000
  • Third Fiscal Year (FY3): $320,000
  1. Set Up your Office

a. How Do You Choose a Perfect Location for Group Home for Foster Children and Teenagers?
  • The demography of the location
  • The demand for services offered by a group home for foster children and teenagers in the location
  • The purchasing power of residents of the location
  • Accessibility of the location
  • The number of group homes for foster children and teenagers and other facilities like orphanages 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 a Group Home for Foster Children and Teenagers?
  • 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 a Group Home for Foster Children and Teenagers?

When starting opening a Group home for foster children and teenagers, 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, among other things. In setting up a small office, you will need a computer, printer, software apps, telephones, pager, photocopier, scanner, etc. These machines, tools, and instruments can be purchased as fairly used especially if you have limited finance to meet your budget.

  1. Hire Employees

When it comes to starting a standard group home for foster children and teenagers, you would need the services of the following professionals; the head of business (you can occupy this position), house manager (administrator), caregivers, front desk officer, cleaners and security guard.

  1. Launch the Business Proper

Today, many group homes usually start their business by first organizing an opening party where light refreshments are served. You can do a soft opening if you are operating on a low budget, or you can go for a grand opening party.

With a proper launching of the business, you will officially inform people in your city that your group home for foster children and teenagers is open for business.

a. What Makes a Group Home for Foster Children and Teenagers Business Successful?
  • Ability to attract grants and donations
  • Disciplined and dedicated workforce
  • The heart to serve and care for children and teens
  • Good relationship with stakeholders
  • Good care techniques and programs.
b. What Happens During a Typical Day at a Group Home for Foster Children and Teenagers?
  • The home is open for the day
  • Caregivers are briefed in the office (in some cases though)
  • Caregivers provide all the needed support and care to foster children and teenagers
  • Marketing/website upkeep
  • Administrative duties are carried out
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Group Home for Foster Children and Teenagers Business?
  • Good managerial and human development skills
  • An interest in helping and caring for other children, regardless of their condition.
  • The ability to communicate clearly and sensitively when talking to people
  • Good listening skills
  • Great problem-solving skills and the ability to adapt and act accordingly to situations
  • Organizational skills
  • Experience working as a caregiver or social worker
  • Experience in working for a group home for foster children and teenagers.