Business Overview


An adult foster care business is a cross between independent living and a nursing home. Those who need minor to moderate assistance will move into a residential facility staffed with one or several caregivers. Caregivers are not medically trained but can provide support and emergency assistance to residents on a 24-hour basis.

Who is this business right for?

This business is perfect for those who want to help senior citizens or those with special needs, but who don't have the medical background to open a full-fledged nursing home.

What happens during a typical day at a adult foster care business?

Caregivers will follow a routine based on the needs of the people in their care. They may dispense medicine, help with basic daily hygiene, cook meals, and take charge of any planned activities or outings. Owners will also need to schedule time to manage the home's finances, pay staff, and market their business.

What is the target market?

Adult foster care is the ideal solution for people who don’t have severe enough needs for a nursing home, but who need someone to watch over them and help with daily tasks. The target demographic is stereotypically older people in relatively good health. However, owners can also consider opening up residential facilities for people of any age who have minor physical or mental disabilities.

How does a adult foster care business make money?

Adult foster care businesses typically have anywhere from one to five people in a residential setting. Owners charge rent and utilities plus an extra premium for the caregivers' assistance.

What is the growth potential for a adult foster care business?

As the population ages, the growth potential for this business grows. More and more people want additional full-time care options that don't involve moving into a nursing home. Because it’s not a medical facility, your adult foster care business can also be run for fewer expenses than a nursing home. Residents can share a room or pay a premium for a single.

Getting Started


What are some skills and experiences that will help you build a successful adult foster care business?

Owners should have some experience in caregiving. They should also have a strong enough business background to execute a larger vision, whether you choose to train your own staff or not. Marketing skills will also come in handy if you're not planning to hire an outside team to design the website or create advertising.

What are the costs involved in opening a adult foster care business?

Preparing the space will likely be the most expensive part of the adult foster care business. If the home doesn’t have the necessary safety features (e.g., shower bars, higher toilets, etc.), you may need to retrofit these features. You’ll also need to account for registration fees for the business and the salaries for caregivers. Adult foster care facilities may offer pre-planned activities, transportation, and meals, so you’ll need to budget for gas, car insurance, home insurance, commercial insurance, and food.

What are the steps to start a adult foster care business?

Once you're ready to start your adult foster care business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:

STEP 1: Plan your Business

A clear plan is essential for success as an entrepreneur. A few important topics to consider are:

  • What are the initial costs?
  • Who is your target market?
  • How long it will take you to break even?
  • What will you name your business?

Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

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STEP 2. Form a legal entity

Establishing a legal business entity such as an LLC prevents you from being personally liable if your security guard company is sued. Consider using a registered agent service to help protect your privacy and stay compliant.

STEP 3. Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

STEP 4. Open a business bank account

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 5. Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 6. Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7. Get Business Insurance

Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.

STEP 8. Define your brand.

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

STEP 9. Establish your Web Presence

A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

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Select your state below for an in-depth guide on completing each of these steps in your home state.

Where can I find a business mentor?

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

What are some insider tips for jump starting a adult foster care business?

The levels of assisted living are largely determined by state, so owners need to first find out how much assistance they want to offer their clients, so they can label their foster home correctly. Some states may cover adult foster care through their Medicaid program, so you'll need to understand the parameters that qualify for this perk. This will also help you figure out who to market your business too. Your marketing will look different if you're trying to attract an affluent senior than one who needs financial assistance.

Some people may try to cut down on their start-up expenses by using their own property. Owners may move into a smaller apartment to accommodate the needs of their clients. Owners should start with one property before expanding out to different locations. As they learn more about the challenges of running a facility, owners can determine if it makes sense to open another adult foster care.

The best tips for an adult foster care business is to make the home a place where people will want to live. From group card games to movie nights, caregivers can use different ideas to encourage communal living. Look for other ways that can help your business stand out too. For example, maybe the home relies on green energy or perhaps your staff encourages all-natural solutions for health problems in addition to traditional Western medicine.

Growing Your Business


How to promote & market a adult foster care business

An adult foster care business can be marketed much like a nursing home. Billboards, online advertising, and television or radio ads can all help expand your reach. Or you can consider putting up flyers at medical facilities that might attract the eyes of those who need your services. Because you’ll be trying to attract relatively healthy people, you’ll likely want to market directly to them. However, you may also want to gear at least a few ads toward adult children who are making difficult decisions about their parents’ long-term care. In any case, you'll want to stress that the home is made for active people who still want to better themselves.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

How to keep customers coming back

Providing the best possible care is the best way to retain customers. Nursing homes are notorious for charging a lot of money for relatively mediocre services. Clients should feel at home when they are under your roof and should inherently trust the staff who work with them.

How and when to build a team

You’ll need to build a team immediately as you're providing 24-hour care. You’ll need several alternate staff members who can fill in on off-days or emergency call-offs. Look for people who are personable and natural caregivers. They don’t need to have medical training, but they should be able to read a prescription schedule and learn how to physically handle patients without causing accidents or injuries. Your overnight staff won't need to be as personable, but they should have a relationship with clients and be able to stay calm during major emergencies.

Earning Potential


How much can you charge customers?

The range for adult foster care can range from $1,500 to $3,500 a month, depending on the location and level of services. Check prices in your area for similar facilities before setting your own rents.

What are the ongoing expenses for a adult foster care business?

An adult foster care business will need to budget for the cost of home upkeep, supplies, marketing, salaries, and insurance. Owners also need to budget for vehicle maintenance if they offer transportation and food prep.

How much profit can a adult foster care business make?

Some adult foster care facilities are set up as non-profit facilities. You’ll need to check on your state Medicaid program to learn more about what is covered and what isn’t. However. adult foster care businesses typically set a healthy margin between the cost of expenses and the rent charged to cover the cost of trained workers (whether they're for-profit or not).

How can you make your business more profitable?

Consider offering optional activities (e.g., painting classes, language lessons, etc.) for residents who choose to take advantage of them. You can also open and manage multiple facilities.

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Next Steps

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