So you want to start a rehab center? First of all, congratulations on taking the brave first step. However, there are a number of crucial things you must understand before moving forward with this process. After all, this is a delicate business you are venturing into, though it can be very rewarding. One mistake could have dire consequences for your clients and their families.
Now, mistakes are OK, and it’s only natural for you to stumble along the way of opening a rehab center. But with so much on the line, you will want to long and hard about how to start a rehab center from the ground up. The number one issue that we see when people start a rehab center without a drug rehab advisor is that they don’t have a solid marketing plan in place.
Also, licensure and regulation are important if you want to stay profitable through the opening months and beyond. Welcome to the rehab industry. We’ve got a lot of work to do.
According to the National Council on Alcoholism and Drug Dependency in the United States, more than 23 million Americans aged 12 and older are addicted to alcohol and other drugs. Research from the Substance Abuse and Mental Health Services Administration (SAMHSA), states that 2.6 million Americans received care at an addiction treatment facility in 2020. The market for addiction treatment is estimated at about $42 billion per year, with more than 14,000 treatment facilities in existence.
This demand for treatment is largely driven by the availability of various factors. These factors include new drugs and treatment approaches, funding policies, and insurance programs. Thus, profitability for individual facilities depends on controlling costs as well as referrals.
Large scale rehab centers tend to have an advantage in purchasing along with marketing sources that can provide referrals. Small-scale facilities tend to earn their leverage by providing superior service, integrating their treatments, and offering specialized treatments.
Think about what your approach should be. Do you plan to open a small boutique facility with specialized treatments? What is your niche and what special services can you offer to those in need? Do you plan to expand? These are questions to keep in mind when thinking on how to start a rehab center.
Get Licensing for Your Facility
Obtaining a license is the crucial first step in opening your facility. After all, your patients will be attending your facility to receive help for dire mental health and medical conditions, whatever they may be. Therefore, like any medical facility, you must acquire a license to conduct business.
Licensing can be acquired through local authorities. It is possible your state has a “Department of Mental Health and Addiction Services Committee” that you may be required to work with in obtaining your license. Anytime someone is planning to open their own recovery center or rehab, they must have the location of their facilities properly zoned. Moreover, zoning processes can vary from state to state. If you are planning on opening a residential facility, your residences must be zoned for commercial purposes.
Some states require a “Certificate of Need” (CON) to start a rehab center. This is a two-step process. First, a letter of intent must be created. Second, an application must be filed. In most cases, applicants need to pay a CON filing fee. This can be equal to 0.05% of any proposed capital expenditures. After the CON is filed, the applicant must meet certain additional requirements to receive their license.
Find a Property for Your Drug Rehab
While searching for a property for your facility, it would be wise to pick a location that is convenient for both your staff and your patients to reach. Of course, this may be a double-sided question, depending on what type of treatment program you plan to open. Do you intend to open a residential facility? In that case, you will need to research and find properties to properly house your clients as well as office space where specialists can confidentially consult with them.
Are you wanting to open an outpatient program? In that case, your offices should not be too far for those patients who commute. How many clients do you plan on treating? Will you need a reception area? In any event, the facility you choose should have your patients in mind.
Knowing how to start a rehab center means knowing that the money being spent will be worth it. Keep in mind, entering rehab for the first time can be frightening to a patient. However, the more comfortable and welcoming the facility, the more the patient will feel at ease. In some cases, you may be able to find a “campus-like” property in which the housing and the treatment buildings are either under the same roof or within close proximity to each other.
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Why Does Accreditation Matter?
Your consumers will need a way to identify quality care. In addition to providing benefits to your facility or service provider, consumers will gain a level of confidence that your organization adheres to the highest quality standards.
In seeking accreditation, your program will undergo an evaluation by an industry-respected third-party accrediting body. By undergoing this rigorous process, family members and clients will find assurance in knowing your facility has been assessed by a respected organization.
Accreditation takes time, money, and an examination of the program’s operations, client care, staff, safety programs, and policies. However, this will no doubt place your facility above the rest as an indicator that your facility strives to provide the best practices in addiction therapy.
The Commission on Accreditation of Rehabilitation Facilities (CARF)
CARF is a nonprofit accreditation body that evaluates substance abuse and dual-diagnosis programs. In fact, CARF is the largest U.S. accrediting organization for addiction facilities. Facilities that have met CARF-defined standards of care have attained the industry benchmark for quality programming.
How Do I Get CARF-accredited?
- Speak with a designated CARF specialist.
- Conduct a self-evaluation with current CARF standards.
- Submit a survey application.
- CARF invoices for a survey fee.
- CARF selects the survey team.
- The team conducts the survey.
- CARF renders the accreditation decision for one of the following:
- Three-year accreditation
- One-year accreditation
- Provisional accreditation
The Joint Commission (JCAHO)
The other major player in the addiction program accreditation field is the Joint Commission, the nation’s largest accrediting body for hospitals and medical facilities. Formerly known as JCAHO, the Joint Commission is the second-largest accrediting organization for addiction rehabilitation programs in the U.S., having accredited more than 22,000 healthcare programs and providers.
How Do I Get JCAHO Accredited?
- Review requirements
- Conduct a self-assessment
- Implement actions needed to make any changes
- Apply for accreditation
- Prepare for your on-site survey
- The JCAHO team conducts the survey
- Complete requirements for improvement
- Publicize your achievement
- Stay in compliance
These days, more insurance companies are requiring one of these two accreditations for a patient to enter a facility. This means if you allow a patient to enter your facility and are not accredited, the insurance company will not pay out.
When opening a new facility, the task of becoming CARF and JCAHO-accredited can feel overwhelming. In many cases, people who know how to start a rehab center know to look to marketing and advising agencies to earn these accreditations.
Creating a Business Plan
Every business, especially one of this nature, will require a detailed and sustainable business plan. To succeed, you will need to create a sustainable and accurate plan. Business plans can be lengthy, but the ideas behind them are usually quite simple.
Questions to ask when creating your business plan should include:
- What is my expected billable income?
- What is my marketing budget and how will I use my marketing efforts to bring in new clients?
- What is my expected revenue?
- What are my projected expenses?
- What is my prudent reserve?
When creating a formal business plan, you should think about separating your plan into six different sections.
While your executive summary represents the start of your formal plan, it is recommended that you write it last. An executive summary is an overview of what your facility is all about and what you intend to achieve. This includes your vision statement, your goals and objectives, services, and how you intend to beat the competition. Ideally, the summary will be between one and two pages.
Opportunity in the Market
In order for any business to succeed, it needs to be fulfilling a service or solving a problem of a given market. Try and spend some time answering these questions:
- First, what service are we providing?
- Next, how are we solving a need in our market?
- Finally, who are our target market and competition?
Be specific with your opportunity section. After all, the better you understand your service, target market, and competition, the better off you will be.
Now comes the action. How will you execute your plans? This section answers the exact steps you plan to take in turning your plan into a sustainable, thriving business. Most importantly, your measurements of success should be accompanied with a timeline.
And so, some questions to ask yourself can include:
- What is your addiction marketing plan?
- What are your operations and guidelines?
- How are you going to measure success in your earnings?
Team and Company
Investors look for great talent just as much as they look for solid market opportunities. After all, without the right people in place, your plan could fall apart. Who is currently on your team? What positions are you going to need to hire for when you launch your rehab center?
Be sure to provide any specifications with legal structure or operating agreements. Also, make sure to include any location and team history if the business is currently in place.
The best way to devise a financial plan is to create an Excel spreadsheet. List each expense you will have. Create a realistic revenue forecast. How many clients can you admit per month? What is the projected earning from each client? Keep in mind, the more detail the better.
No business or business idea can thrive without finances, no matter how noble or fantastic the business is. If you do not have capital, financing your facility is very important. Where will you be getting your investments from? What is the financial forecast for the first year? No investor will listen to your business idea if they do not see a concrete plan for how you intend to grow your business.
Thus, when it comes to raising money for your treatment center, there are several options available:
- Getting a loan from banks or financial institutions
- Approaching grants and donor organizations
- Raising money from business partners or investors
- Sale of personal property
What are your plans to scale in the future? Is there going to be any new construction needed in the future? What does the inspection of your residence or office look like? In short, try and leave no stone unturned.
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Hiring And Training Your Staff
The first attempt at success for starting a rehab center should be internal. Your objective in this area should be to employ staff who understand the vision and goals of your business so they can project this when working with patients. As you hire a staff, your needs may vary depending on which type of facility you chose to open.
However, no matter what, this requires a few particular and vital staff members:
The Clinical Director oversees the entire clinical staff. This could include your licensed therapists, and any employee that plays a role in treatment of the mental health of your clients.
The Medical Director oversees any medical needs and medical staff. This person is in charge of writing prescriptions and maintaining the physical health and well-being of the clients.
You will need to hire nurses or RNs. If you are also opening a detox center, you will need nurses who have experience in the detox process to assure safety—both that of the patient and their own.
Every business needs staff members who can maintain the organization of the company. This could account for keeping patient files organized, keeping the licenses organized and readily accessible, handling mail, or running errands.
Case workers work directly with clients to track the progress of treatment even after the client completes your program. As a matter of fact, a case worker’s job description should include training for job skills and building good habits to maintain recovery after treatment.
A treatment facility demands a well-kept and clean environment. Treatment is an emotional process, so having a well-kept environment is important.
Intake and Marketing Staff
This department can vary. Some treatment centers chose to build a call center and have their intake representatives work on-site. Other facilities don’t need the capacity to field phone calls, but rather assign their call intake to the clerical staff. What’s more, some facilities choose to hire outside marketing companies to do the work for them.
Boost Your Brand
Strategies to boost your brand can help launch your facility to the next level. That being said, if you intend to start a large-scale business, you may need to find brand experts to help promote your business. Some platforms you can use in promoting your brand while also promoting your business are:
- Advertising your business in health or related magazines
- Making use of direct marketing
- Making sure you attend health seminars and expos
- Listing your facility on local directories
- Utilizing social platforms like Facebook, LinkedIn, Twitter, and Instagram
Marketing Your Rehab
As is the case with any business, marketing is an essential aspect of the health of a business. Without the ability to bring in new clients, your treatment center will be a failure. Therefore, it is extremely important all of your marketing efforts are legal, ethical, and effective. Without meeting this criteria, your treatment center and your business will fail sooner or later.
In the modern marketing era, digital marketing is a must. Like we said before, marketing is where most fall flat in the recovery business. The internet provides the most effective and cost-efficient venue for marketing your facility. However, it is important to understand that even the best marketing agency needs time and an adequate budget.
There are many different forms of digital marketing. Let’s break down each one in order of importance and in the order you should execute on them.
Search marketing is the strategy of getting your website to rank at the top of Google’s results pages for a search query. For example, let’s imagine you open your new rehab in Tempe, Arizona. Now Imagine how valuable it would be to have your rehab ranking at the top of Google for the search phrase “drug rehab in Tempe Arizona.”
Local search is done mostly through Google’s online business directory. When you search for a local business, you are commonly brought to the map of that area with little pins pointing to the address of businesses in that area.
Social Media is a great community-building and branding tool to use when you start a rehab center. Social media marketing platforms like Facebook also provides a great advertising platform in which you can leverage the content you create and put it in front of a large audience. Also, Facebook provides a great platform for you to keep in touch with your alumni.
Get Help in Starting a Rehab Center with Stodzy, Inc.
If you’re reading this and feeling overwhelmed about how to start a rehab center, don’t worry. We can help. Addiction treatment marketing is different from ever before. Facilities are no longer dependent on referrals or word-of-mouth marketing. Now, you can have the opportunity to build your own brand, bring in your own clients independently without outside influence, and successfully launch a rehab center.
From obtaining your accreditation to enacting integrated marketing strategies, Stodzy Internet Marketing has years of experience and expertise in our unified approach and can be with you every step of the way.
Contact us and request a free marketing audit today.