How to Start a Group Home Business

A group of four elderly people seated at a table while their nurse laughs with them.
A group home offers assisted living to different kinds of people. Maskot / Getty Images

A group home offers assisted living to different kinds of people, from the elderly to children to people with mental or physical disabilities.

If you want to start a group home:


  • Choose a location. Check your city's zoning requirements [source: Home Business Center]. Try to get the neighbors on board so you won't have to deal with the, "not in my backyard," phenomenon [source: Encyclopedia of Mental Disorders].
  • Acquire all the necessary permits and licenses.
  • Find out the regulations pertaining to group homes, including how many residents you can have, how much staff you'll need, what kind of training the staff needs, what your facility must be equipped with, etc. [source: Schiffer].
  • Get first aid and/or CPR certification if necessary.
  • Decide whether or not you want to incorporate your business. Incorporate it or file your business name with the county clerk [source: Home Business Center].
  • Register your business as a nonprofit organization.
  • Create a business plan. Include a mission statement, your strategies of operation, a breakdown of costs (including mortgage or rent, staff salaries and residents' living expenses) and your plans for funding [source: Schiffer].
  • Find sources of financing. You may qualify for funds from the Small Business Administration and other state and federal agencies. You may also want to raise funds from private donors.
  • Set up a bank account.
  • Get advice from an accountant.
  • Get all the necessary insurance for your facility.
  • Get all the furnishings and equipment for your group home.
  • Hire staff members who are compassionate as well as qualified. You may want to do background checks on potential staff members before hiring them.
  • Recruit residents by advertising your facility.

Successful group homes generally have a well-trained staff, a home-like atmosphere and a small staff-to-resident ratio [source: Encyclopedia of Mental Disorders]. Keep all these things in mind when planning your group home.