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1.0 Executive Summary
The purpose of this business plan is to raise $1,000,000 for the development of a group home while showcasing the expected financials and operations over the next three years. Group Home, Inc. (“the Company”) is a New York based corporation that will provide long term and halfway house services through its home-like facility to customers in its targeted market. The Company was founded by John Doe.
1.1 The Services
As stated above, Group Home is in the business of providing compassionate round the clock group home services that will allow people with chronic disorders to have round the clock medical assistance and access to social services. The Company will have a number of mental healthcare professionals and licensed social workers that will help residents as they progress through the course of treatment.
The Company will generate income from both payments paid by residents as well as through contractual relationships with municipalities and state-based government agencies. Once the location reaches maximum capacity, the risks related to the business are substantially reduced. It is expected that many residents will live within the facilities on a long-term basis.
The third section of the business plan will further describe the services offered by Group Home, Inc.
1.2 Financing
Mr. Doe is seeking to raise $1,000,000 as a bank loan. This business plan assumes that the business will receive a 30 year loan with a 7% fixed interest rate. The financing will be used for the following:
• Development of the Company’s Group Home location.
• Financing for the first six months of operation.
• Capital to purchase FF&E for the facility.
• Capital for licensure and professional fees associated with the establishment of the group home location.
The Founder will contribute $100,000 to the venture. Moving forward, Group Home Inc. could easily obtain additional capital in order to acquire additional facilities or to finance expansion of the initial property. This document assumes that no further capital will be acquired during the first three years of operation.
1.3 Mission Statement
The Group Home’s mission is to provide compassionate care in a secure living environment for residents.
1.4 Management Team
The Founder, John Doe, will be able to quickly bring the operations of this group home to profitability. He is committed to providing ongoing care for residents while ensuring that the business remains as an economically viable enterprise.
1.5 Sales Forecasts
1.6 Expansion Plan
By the third year of operation, Management expects that the business will have reached maximum capacity. At this time, Management may acquire additional large-scale residents. The Company will continually develop referral relationships among mental healthcare professionals and government agencies for placement of tenants.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Group Home, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, Group Home, Inc. requires $1,000,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Management is not seeking an equity capital investment at this time.
2.4 Management Equity
John Doe owns 100% of Group Home, Inc. In the future, this ownership structure may change if private investment capital is acquired.
2.5 Exit Strategy
In the event of a business sale, Group Home Inc. will hire a qualified real estate agent and business broker in order to divest the business to a third party. Given the large tangible asset base and highly recurring income, the Company could be sold for up to six times earnings including the value of real estate.
3.0 Group Home Services
As stated in the executive summary, Group Home will provide a wide range of services specific for the needs of people that need transitional housing or have developmental disabilities. The Company will provide housing for up to 20 people at the onset of operations. The monthly fees will range from $2,000 to $4,000 per month depending on the needs of the client. It is expected that many of these fees will be paid by state-based agencies.
In order to provide an immense degree of care for residents, the Company will retain a number of mental healthcare and medical professionals. A medical director will be hired in order to address any potential medical emergencies that could occur. The business will also employ social workers and therapists in order to render services to clients. This will be a major differentiating factor for Group Home Inc.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the group home industry, the customer profile, and the competition that the business will face as it progresses through its business operations.
Currently, the economic climate in the United States is relatively strong. While interest rates have remained high, the economy has remained resilient. Inflation is abating, and it is expected that interest rate hikes will occur less frequently.
However, any issues with the economy will not impact the Company’s ability to generate revenue. The demand for group home services does not wane during times of economic recession. Additionally, many residents are expected to pay for their housing through government payments/subsidies. As such, the Group Home will be able to remain profitable and cash flow positive at all times.
4.2 Industry Analysis
Within the United States, there are 30,000 locations that provide ongoing care in a residential settings. Each year, these entities generate more than $62 billion of revenue. The demand for these types of services is expected to grow over the next ten years. There are currently no pieces of legislation that would impact the revenues of the Group Home or its ability to do business.
4.3 Customer Profile
Any person that has a developmental disability or requires ongoing care is a potential client for the Group Home. The ages and socioeconomic attributes of the Company’s clients will vary significantly. As discussed earlier, it is expected that many residents will be placed by government agencies (especially among agencies that focus on health and human services).
4.4 Competition
Once 100% occupancy is achieved, the ongoing competitive issues that the business will face will be minimal. Given the substantial demand for these services in the target market, is it expected that substantial occupancy will be quickly achieved. During the course of operations, the Company will frequently conduct competitive analyses.
The Company will maintain a differentiating factor given the home like nature of the Group Home’s facilities.
5.0 Marketing Plan
The Company will use a number of marketing strategies that will drive substantial enrollment among people that need group home services.
5.1 Marketing Objectives
• Develop ongoing relationships with numerous social workers within the market so that referrals can be made to Group Home Inc.
• Maintain an expansive online presence via a proprietary website that will be search engine optimized for the target market.
• Develop contractual relationships with government agencies that will place residents with the Group Home.
5.2 Marketing Strategies
Foremost, the Company intends to create numerous ongoing relationships with government agencies. As these entities can place residents within the facilities, Management sees a substantial opportunity to foster these relationships. Throughout the life of the business, the Company will work with entities that specifically deal in health and human services. This is expected to make up the bulk of the Company’s business from the onset of operations.
The Company will also maintain a proprietary website that showcases the Group Home, its rooms, and information about fees pertaining to room and board. The Company will have video tours of the facilities created, which will be uploaded to the business’ website. The website will be mobile device friendly and specifically search engine optimized for the target market.
The business will also maintain extensive referral relationships with physicians, psychologists, psychiatrists, and social workers. As these individuals often work with people that need living assistance, Management sees a substantial opportunity to receive referrals from these medical and mental healthcare professionals.
To a more moderate extent, Group Home will maintain a presence among all major social media platforms. Given that most clients/residents will come from referral – the need for this market is primarily geared towards improving the Company’s standing among major search engines.
5.3 Pricing
The Group Home will charge $2,000 to $5,000 per month for the Company’s services. Additional services will be billed separately.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
6.3 Management Biographies
Here, you should indicate your experience operating group homes, educational background, and other qualifications/licensure specific for this industry.
7.0 Financial Plan
7.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
• Group Home, Inc. will have an annual revenue growth rate of 7% per year.
• The Owner will acquire $1,000,000 of debt funds to develop the business.
• The loan will have a 30-year term with a 7% interest rate.
7.2 Sensitivity Analysis
People with developmental disabilities often require round the clock support. The Group Home will produce highly recurring streams of revenue from its operations, which will ensure that the business is able to pay all underlying financial obligations. The risks related to this business are relatively low given the ongoing demand and economic stability. A substantial portion of the Company’s revenues will come from publicly funded sources.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.7 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
