How Can I Open an Assisted Living Home?
As some of the U.S.’s biggest generations continue aging gracefully, there’s become a growing demand for residential care — also commonly called assisted living — facilities that provide accommodation and personal care services primarily to older adults. Taking care of everything from comfortable rooms, meals and housekeeping services to social activities, monitoring for people with cognitive decline and physical fitness opportunities, assisted living facilities provide a homelike environment where people can enjoy friendships and life with some extra help along the way. Seniors can also get personal care assistance with daily activities like sanitation, grooming, eating and bathing.
If you’re thinking about opening your own assisted living facility, it’s natural to have more than a few questions about the process. Opening an assisted living business can be a gratifying thing to do for your community, but running this kind of operation doesn’t look the same as it does for other businesses. There are certain regulations these facilities have to follow, and the things you’ll need to do can vary greatly depending on the area where you’re planning to open up. To get a better idea of the process, here are some of the basic steps you might follow to open a new assisted living facility.
Develop a Clear Business Plan
In the early stages of starting your assisted living company, you’ll start out the same way you would with most other businesses: formulating a business plan. This is a document that outlines the different steps you’ll take to get the company up and running — and how you’ll do so successfully. Your business plan should include details about your anticipated startup costs and where the money will come from, what the projected operating costs and earnings will be, how large the facility will be and what you’ll name the business, among other details.
You’ll also need to decide whether you want to lease an existing building or if you’ll build a new facility for the ground up. While you’re drafting your business plan, it’s helpful to start looking for buildings for lease or land to purchase. Include this information in your business plan, particularly if you’re planning to seek funding from local organizations or you’ll need to obtain a mortgage.
Establish a Legal Entity
Once you have financing and other fundamental details ironed out, you’ll officially start the business — sort of. You’ll need to decide what type of legal entity to establish; this will be the company that runs the assisted living facility. Forming legal business entities like limited liability companies (LLCs) and corporations also helps prevent you from being held legally responsible.
Most small businesses choose to form an LLC due to their ease of registration, but this may not be the best course of action for an assisted living facility. It’s important at this stage to consult a lawyer who’s experienced in this area. They can advise you which business structure is best and may also be able to help you file the right paperwork to establish your business.
You should also consider hiring a registered agent service (responsible third party) in the same state as your assisted living home. This agent is an entity that can protect your privacy and ensure that you stay compliant with state laws. Moreover, you’ll receive official government notifications like tax forms and get business notices through the agent.
Get Other Financial Details Worked Out
Before opening your assisted living home, you need to register your business with the IRS to begin paying different state and federal taxes. Start by applying for your employer identification number (EIN). Through this number, the IRS can identify your tax payments and keep track of your business’s tax reports. In addition to receiving your unique, nine-digit EIN, you’ll be expected to fill out the date you established the business entity you’ll be using to run your assisted living facility. Again, it’s worth speaking with a lawyer about this process if you want the best guidance.
Separating your business’ accounts from your personal accounts is vital for personal asset protection. You don’t want to put yourself at risk, especially if your business is ever in a lawsuit. It’s also much easier to track expenses and earnings when the business has its own separate accounts. Opening dedicated business banking and credit accounts will help make accounting and tax filing much easier and store accurate and detailed reports of your expenditures.
Obtain Mandatory Licenses and Permits
All states around the country have different rules and regulations about operating assisted living facilities, and it’s vital to familiarize yourself with the laws in the state where you’re opening your facility. The American Health Care Association and the National Center for Assisted Living publish a yearly compilation of the difference licenses, certifications and other protocols assisted living facilities are required to obtain, maintain and follow in every state.
You’ll need to follow any applicable regulations very carefully to avoid creating liability at your company. You’ll also need appropriate insurance. Assisted living homes must comply with zoning laws, building safety codes and government regulation as well. As the building owner, it’s also your responsibility to get an occupancy certificate. A new occupancy certificate is required immediately after the completion of major renovations.