Do you want to start an addiction treatment center and need to write a business plan? If YES, here is a sample addiction treatment business plan template.
This is a thriving industry in the United States, but it is important to point out that this is a delicate business; you need to network with legal, medical, as well as criminal professionals so that they will refer patients to your addiction treatment center.
This does not however mean that you cannot source for your clients directly; but your marketing needs to be very sensitive as your potential customers and their families are in a vulnerable place. You should know what licensing and certifications would be needed from you by the state in which you would be operating from, especially as licensing varies depending on the state.
A Sample Addiction Treatment Center Business Plan Template
1. Industry Overview
Addiction treatment center is a business that is grouped under the mental health and substance abuse industry and players in this industry includes establishments that primarily provide residential care and treatment for patients with mental illnesses, drug addiction and alcoholism.
Industry services include lodging, supervision, evaluation and counseling. Medical services may be available, though these are incidental to counseling, mental rehabilitation and support services.
Statistics has it that in the united states of America alone, there are about 8,216 licensed and registered mental health and substance abuse centers (addictive treatment centers) responsible for employing about 231,941 employees and the industry rakes in a whooping sum of $18 billion annually with an annual growth rate projected at 4.6 percent between 2014 and 2019.
It is important to state that the company holding the largest market share in the Drug & Alcohol Rehabilitation Clinics industry is Acadia Healthcare Company Inc.
A recent report released by IBISWorld shows that over the five years to 2019, industry revenue is estimated to grow an annualized 4.6 percent to $17.6 billion. In 2019 alone, revenue is estimated to grow at 3.0 percent. Due to a broad range of focuses and treatment approaches offered by programs, profit margins vary significantly between operators.
Some of the factors that encourage entrepreneurs to open their own addiction treatment centers could be that the business is thriving and most addiction treatment centers get support and grants from government and donor agencies.
In order to become successful as an addiction treatment center operator, you should find it easy to connect with people and constructively discuss their problems and issues. Excellent written and verbal communications skills and an analytical approach will serve you well in this line of business. Plus, you should know how to reach out to your target market and partner with the government and NGOs.
2. Executive Summary
Ray Johnson® Addiction Treatment Center, Inc. is a standard and licensed addiction treatment center that will be located in the heart of Rio Rancho – New Mexico in a neatly renovated and secured housing facility. Our addiction treatment center is specifically designed with the needed gadgets to give comfort and security to all our residents irrespective of the religious affiliations, their race, and health condition.
We are set to treat and take care of people who are addicted to drugs, pornography and other substances. Despite the fact that we are an addiction treatment center, we are going to be health conscious and customer-centric with a service culture that will be deeply rooted in the fabric of our organizational structure.
With that, we know that we will consistently achieve our set business goals, increase our profitability and reinforce our positive long-term relationships with our clients, partners, and all our employees as well. Ray Johnson® Addiction Treatment Center, Inc. will be equipped with everything that will make life comfortable for all the inpatients and outpatients.
We will build a fitness room and library et al. We will also install a free Wi-Fi that will enable our patients and guests surf the internet with their laptops free of charge, and there will be wireless access in all the public areas within the lodging facility.
We will ensure that we enforce our rules, treatment programs, work requirements and curfews while in our addiction treatment center. An inmate who fails to comply with the rules of our center can be discharged and sent home.
Ray Johnson® Addiction Treatment Center, Inc. is owned and managed by Mr. Raymond Johnson. Mr. Johnson is a licensed therapist and psychiatrist with over 25 years’ experience working for leading brands in the industry. He has a Master’s Degree in Public Health and he is truly passionate when it comes to treating people who are fighting addictions.
3. Our Products and Services
Ray Johnson® Addiction Treatment Center, Inc. is set to operate a standard addiction treatment center in Rio Rancho – New Mexico. The fact that we want to become a force to reckon with in the mental health and substance abuse industry means that we will provide our residents a conducive and highly secured accommodation.
In all that we do, we will ensure that our inpatients and outpatients are satisfied and are willing to recommend our facility to their family members and friends. We will offer the following services;
- Providing residential alcoholism rehabilitation
- Providing residential drug addiction rehabilitation
- Providing treatment at convalescent homes or hospitals for psychiatric patients
- Providing treatment at halfway houses for patients with mental health illnesses and substance abuse problems
- Providing treatment at homes and hospitals for emotionally disturbed or psychiatric convalescent adults or children
4. Our Mission and Vision Statement
- Our vision is to become the number one choice when it comes to addiction treatment center in the whole of New Mexico and also to be amongst the top 5 addiction treatment facilities in the United States of America within the next 5 years.
- Our mission is to build an addiction treatment center that will contribute in reducing addictions and mental health ailments in the whole of Rio Rancho – New Mexico and environs.
- We want to meet and surpass the needs of all our patients and to build a profitable and successful business.
Our Business Structure
Ray Johnson® Addiction Treatment Center, Inc. is built on a solid foundation. From the outset, we have decided to recruit only qualified professionals to man various job positions in our organization. We are quite aware of the rules and regulations governing the industry which is why we decided to recruit only well experienced and qualified employees as foundational staff of the organization.
We hope to leverage on their expertise to build our business brand to be well accepted in New Mexico and the whole of the United States. When hiring, we will look out for applicants that are not just qualified and experienced, but homely, honest, customer centric and are ready to work to help us build a prosperous business.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of five years or more. These are the positions that will be available at Ray Johnson® Addiction Treatment Center, Inc.;
- Chief Executive Officer
- Facility Administrator (Human Resources and Admin Manager)
- Addiction Treatment Specialist/Psychiatrist
- Sales and Marketing Executive
- Accounting Officer
- Security Officer
- Cleaners
5. Job Roles and Responsibilities
Chief Executive Officer:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Reports to the board.
Facility Administrator (Admin and HR Manager)
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Defining job positions for recruitment and managing interviewing process
- Carrying out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversee the smooth running of the daily home activities.
Addiction Treatment Specialist/Psychiatrist
- Providing residential alcoholism rehabilitation
- Providing residential drug addiction rehabilitation
- Providing treatment at convalescent homes or hospitals for psychiatric patients
- Providing treatment at halfway houses for patients with mental health illnesses and substance abuse problems
- Providing treatment at homes and hospitals for emotionally disturbed or psychiatric convalescent adults or children
- Develop a treatment plan in consultation with other professionals, such as doctors, therapists, and psychologists
- Create rehabilitation or treatment plans based on clients’ values, strengths, limitations, and goals
- Assist clients in creating strategies to develop their strengths and adjust to their limitations
- Monitor clients’ progress and adjust the rehabilitation or treatment plan as necessary
- Advocate for the rights of people who are just coming out of drug addictions and alcoholism to live in the community and work in the job of their choice.
Marketing and Sales Executive
- Identify, prioritize, and reach out to new clients, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts
- Writing winning proposal documents, negotiate fees and rates in line with organizations’ policy
- Responsible for handling business research, market surveys and feasibility studies for clients
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Document all customer contact and information
- Represent Ray Johnson® Addiction Treatment Center, Inc. in strategic meetings
- Help increase sales and growth for Ray Johnson® Addiction Treatment Center, Inc.
Accountant/Cashier
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for the organization
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for Ray Johnson® Addiction Treatment Center, Inc.
- Serves as internal auditor for Ray Johnson® Addiction Treatment Center, Inc.
Security Officers
- Ensure that the facility is secured at all time
- Control traffic and organize parking
- Give security tips to staff members from time to time
- Patrols around the building on a 24 hours basis
- Any other duty as assigned by the facility administrator
Cleaners:
- Responsible for cleaning the facility at all times
- Ensure that toiletries and supplies don’t run out of stock
- Assist our inpatients and outpatients when they need to take their bath and carry out other tasks
- Handle any other duty as assigned by the facility manager
6. SWOT Analysis
Ray Johnson® Addiction Treatment Center, Inc. is set to become one of the leading addiction treatment centers in New Mexico which is why we are willing to take our time to cross every ‘Ts’ and dot every ‘Is’ as it relates to our business.
We want our addiction treatment center to be the number one choice of all addiction patients of Rio Rancho and other cities in New Mexico. We know that if we are going to achieve the goals that we have set for our business, then we must build our business on a solid foundation.
Even though our Chief Executive Officer (owner) has a robust experience in treating people with addictions, we still went ahead to hire the services of business consultants that are specialized in setting up new businesses to help our organization conduct detailed SWOT analysis and to also provide professional support in helping us structure our business to become a leader in the mental health and substance abuse industry.
This is the summary of the SWOT analysis that was conducted for Ray Johnson® Addiction Treatment Center, Inc.;
- Strength:
Our strength lies in the fact that we have a team of qualified professionals manning various job positions in our organization. As a matter of fact, they are some of the best hands in the whole of Rio Rancho – New Mexico. Our location, the Business model we will be operating on, well equipped and secured facility and our excellent customer service culture will definitely count as a strong strength for us.
- Weakness:
Ray Johnson® Addiction Treatment Center, Inc. is a new business which is owned by an individual, and we may not have the financial muscle to sustain the kind of publicity we want to give our business and also to attract some of the highly experienced hands in the mental health and substance abuse industry.
- Opportunities:
Federal funding for Medicare and Medicaid has increased during the period as states have expanded Medicaid coverage to a greater number of low-income individuals. An increase in coverage enables more individuals struggling with substance use and mental illness to access industry services.
Currently, an estimated 41.9 percent of industry revenue is derived from Medicaid and Medicare reimbursement payments. In 2019, federal funding for Medicare and Medicaid is expected to increase, presenting a potential opportunity for the industry.
- Threat:
Individuals seeking treatment for mental health or substance use disorders have many options as regards providers and treatment models.
As a result, industry operators experience external competition from numerous sources, including from short-term inpatient and outpatient service providers in the Mental Health and Substance Abuse Clinics industry. External competition is anticipated to remain high in 2019, posing a potential threat to operators in the industry.
7. MARKET ANALYSIS
- Market Trends
A notable trend shows that the revenue and wages for addiction treatment centers have largely been affected due to the recession and also a slight fund drop in 2012 from federal funding of Medicaid and Medicare as a result of a rise in premiums but the effect is wearing off as the industry has largely recovered. Also, the economy which is constantly improving is expected to boost revenue for the addiction treatment center industry from 2015 to 2022.
More companies entering into this industry are doing so due to the fact that there is an increasing focus on outpatient services, which are considered less costly than inpatient care, and which is also more desirable for insurance providers.
The demand for addiction treatment centers is largely driven by the availability of various factors such as new drugs and treatments, funding policies as well as insurance programs. Profitability for individual facilities depends on controlling costs as well as referrals.
Large scale addiction treatment centers usually have more advantage when marketing to sources that would provide these referrals. However, small scale companies have more leverage in competition by providing superior service to patients.
8. Our Target Market
The fact that we are going to open our doors to a wide range of customers does not in any way stop us from abiding by the rules and regulations governing the mental health and substance abuse industry in the United States. Our staff are well – trained to effectively service our customers and give them value for their monies.
Our customers can be categorized into the following;
- Drug addicts
- Pornography addicts
- Other substance addicts
Our Competitive Advantage
To be highly competitive in the mental health and substance abuse centers industry means that you should be able to secure a conducive and secured facility, deliver consistent quality service and should be able to record good testimonial of changed lives.
Our facility is well positioned (centrally positioned) and visible, we have good security and the right ambience for people who are addicted to drugs, pornography and other substances. Our staff are well groomed in all aspects of addiction treatment and all our employees are trained to provide customized customer service to all our patients.
Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Ray Johnson® Addiction Treatment Center, Inc. will ensure that we do all we can to maximize the business by generating income from every legal means within the scope of our industry. We will generate income by offering the following services;
- Providing residential alcoholism rehabilitation
- Providing residential drug addiction rehabilitation
- Providing treatment at convalescent homes or hospitals for psychiatric patients
- Providing treatment at halfway houses for patients with mental health illnesses and substance abuse problems
- Providing treatment at homes and hospitals for emotionally disturbed or psychiatric convalescent adults or children
- Getting financial support in form of grants from government and philanthropists
10. Sales Forecast
One thing is certain, there would always be people who are addicted to drugs, alcohol, pornography and other substances that would need the services of addiction treatment centers.
We are well positioned to take on the available market in Rio Rancho – New Mexico and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six months of operation and grow our inpatients and outpatient base.
We have been able to examine the addiction treatment center services market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below is the sales projection for Ray Johnson® Addiction Treatment Center, Inc., it is based on the location of our business and of course the wide range of related services that we will be offering;
- First Fiscal Year (FY1): $250,000
- Second Fiscal Year (FY2): $500,000
- Third Fiscal Year (FY3): $$1.1 million
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown within the period stated above. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
The marketing and sales strategy of Ray Johnson® Addiction Treatment Center, Inc. will be based on generating long-term personalized relationships with our patients. In order to achieve that, we will ensure that we offer all – round addiction treatment services at affordable prices compared to what is obtainable in New Mexico.
We know that if we are consistent with offering high quality service delivery and excellent customer service, we will increase the number of our inpatients and outpatients by more than 25 percent for the first year and then more than 40 percent subsequently.
Before choosing a location for Ray Johnson® Addiction Treatment Center, Inc., we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for people of Rio Rancho and other cities in New Mexico. We have detailed information and data that we were able to utilize to attract the number of customers we want to attract per time.
We hired experts who have good understanding of the mental health and substance abuse industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in New Mexico.
In summary, Ray Johnson® Addiction Treatment Center, Inc. will adopt the following sales and marketing approach to win customers over;
- Introduce our business by sending introductory letters to psychiatric facilities and other stake holders in and around Rio Rancho – New Mexico
- Advertise our business in community based newspapers, local TV and radio stations
- List our business on yellow pages ads (local directories)
- Leverage on the internet to promote our business
- Engage in direct marketing
- Leverage on word of mouth marketing (referrals)
- Enter into business partnership with prisons, government agencies and NGOs that work with drug addicts, pornography addicts and other substance abusers.
- Attend drug and substance abuse related seminars/expos.
11. Publicity and Advertising Strategy
We are in the addiction treatment business to become one of the market leaders and also to maximize profit hence we are going to explore all available means to promote Ray Johnson® Addiction Treatment Center, Inc.
Ray Johnson® Addiction Treatment Center, Inc. has a long – term plan of building addiction treatment facilities in key cities in the United States of America which is why we will deliberately build our brand to be well accepted in Rio Rancho – New Mexico before venturing out.
Here are the platforms we intend leveraging on to promote and advertise Ray Johnson® Addiction Treatment Center, Inc.;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community programs that appeals to people who are addicted to drugs, alcohol, pornography and other substances
- Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our brand
- Install our Bill Boards on strategic locations all around Rio Rancho – New Mexico
- Distribute our fliers and handbills in target areas with high concentration of drug addicts and alcoholics
- Ensure that all our workers wear our branded shirts and our facility and all our vehicles are well branded with our company’s logo et al.
12. Our Pricing Strategy
Prices vary for staying in addiction treatment centers, but most of the time it costs about the same as it would cost to live in hospitals and other medical facilities. Addiction treatment center patients must pay rent each month. The rent usually amounts to between $450 and $750 per month, depending on where the home is located.
Ray Johnson® Addiction Treatment Center, Inc. will work towards ensuring that all our services are offered at highly competitive prices compared to what is obtainable in The United States of America.
- Payment Options
The payment policy adopted by Ray Johnson® Addiction Treatment Center, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Ray Johnson® Addiction Treatment Center, Inc. will make available to her clients;
- Payment via bank transfer
- Payment via online bank transfer
- Payment via check
- Payment via Point of Sale Machines (POS Machine)
- Payment via mobile money
In view of the above, we have chosen banking platforms that will enable our clients make payment for our treatment fee without any stress on their part.
13. Our Startup Expenditure (Budget)
If you are looking towards starting an addiction treatment center business, then you should be ready to raise enough capital to cover some of the basic expenditure that you are going to incur. The truth is that starting this type of business does not come cheap.
You need money to secure a standard residential facility big enough to accommodate the number of people you plan accommodating per time, you need money to acquire supplies and you would need money to pay your workforce and pay bills for a while until the revenue you generate from the business becomes enough to pay them.
The items listed below are the basics that we would need when starting our addiction treatment center business in the United States;
- The total fee for registering the business in the United States – $750.
- Legal expenses for obtaining licenses and permits – $1,500.
- Marketing promotion expenses for the grand opening of Ray Johnson® Addiction Treatment Center, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580.
- The cost for hiring business consultant – $2,500.
- The cost for the purchase of insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $3,400.
- The cost for leasing a standard and secured facility in Rio Rancho – New Mexico for 2 years – $250,000
- The cost for facility remodeling – $50,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
- The cost for start-up inventory (stocking with a wide range of products such as toiletries, food stuffs and drugs et al) – $50,000
- Storage hardware (bins, rack, shelves,) – $3,720
- The cost for the purchase of furniture and gadgets (Beds, Computers, Printers, Telephone, TVs, tables and chairs et al): $4,000.
- The cost of Launching a Website: $700
- Miscellaneous: $10,000
We would need an estimate of $750,000 to successfully set up our addiction treatment center in Rio Rancho – New Mexico.
Generating Funds/Startup Capital for Ray Johnson® Addiction Treatment Center, Inc.
Ray Johnson® Addiction Treatment Center, Inc. is owned and financed by Mr. Raymond Johnson. He has decided to restrict the sourcing of the startup capital to 3 major sources.
- Generate part of the startup capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from the bank
N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $550,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Ray Johnson® Addiction Treatment Center, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to offer our treatment services a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Ray Johnson® Addiction Treatment Center, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List/Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of facility and remodeling the facility: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of medical equipment and vans et al: In Progress
- Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Establishing business relationship with players in key industries, NGOs, government and third – party services providers: In Progress