Opening a sober living home is a great way to help others, with around 95,000 deaths occurring as a result of alcohol abuse every year in the US.
Still, it can be daunting to open up a recovery home: often it is a costly thing to run, and many would-be administrators are unsure how to find investors. If you’re in that position, there’s no need to worry – this article will tell you everything you need to know.
Calculate Your Costs
This is the most important step you can take when it comes to finding investors for your sober living home. Before you even start searching for funding, you need to know your outgoings.
Putting together a strong business plan is vital if you want the best investors.
There are several things to consider when calculating costs. These include:
- Rental Costs
- Water Bills
- Electricity Bills
- Licensing Costs
Once you know how much you’re likely to spend on each of the above, you know how much money you need. You can build up your business idea by setting your fees. Knowing your overheads will allow you to be straight with potential investors, and tell them how your sober living home is a good investment opportunity.
What Else Do Investors Look For?
When it comes to deciding whether or not to go ahead, a potential investor will consider more than just your costs. You should prepare a case that outlines:
- Your Unique Idea
- Analysis of Demand
- How You’ll Meet Demand
- Why You’re a Capable Manager
- Projections for Growth
- Social Impact
These factors will all help your potential partner decide whether or not to invest, and encourage you to streamline your ideas. If your investor decides to go ahead, prepare to negotiate their share of the business: always bear in mind that their share has to be enough to make the investment worthwhile.
Consider a Small Business Administration Loan
In 1953, the US government set up a program to help small start-ups get going. It’s known as the Small Business Administration.
Rather, the SBA helps small businesses who are seeking investment to find and partner with established lenders. Their matching tool is the ideal way for you to find investors who have already been approved by the administration.
Alongside their handy tool, the SBA has been known to guarantee certain awards and loans. This has often resulted in generous amounts of funding with reduced payback costs.
As the potential owner of a sober living home, it’s important to get to grips with the business side of things as well as the emotional aspect of helping others recover.
The SBA can be an incredibly useful resource, providing online courses for free. They also offer tools that will help you plan for your opening and, eventually, grow your business into something bigger and better. They might unlock the door that allows you to help even more people with their recovery.
Ask for Support
Whilst it might not be guaranteed, it’s always worth asking those around you if they’re interested in supporting your business venture. Friends and family may be more than willing to help you get your sober living home off the ground.
If you’re going to ask loved ones for help, it’s worth deciding whether you’re just looking for a loan, or whether you’d like them to invest.
A key part of asking for funding from your loved ones is making sure you don’t assume their willingness to help. Instead, treat them like you would any potential investor: prepare a detailed business plan that will show them exactly where funding will go to.
By affording your loved ones respect, you can make them feel confident in your plans and, perhaps, more willing to invest. But be aware: if your business venture doesn’t work out, it can strain personal relationships. That’s why a solid business plan is so vital to preparation.
If your loved ones won’t, or can’t, invest in your sober living home, there’s no need to worry. Other options are available when it comes to seeking funding.
Private Investors Can Help
Though the thought might seem daunting, plenty of successful projects have gotten themselves off the ground thanks to help from a private investor. There’s no need to be scared about talking to professionals.
No matter which type of private investor you go with, it’s important to be aware that they will want shares in your business, which means they will want returns on their investment. Though this can feel like added pressure, it can be a great motivator: you will want to make your business work, and they will want to invest more to make sure it is a success.
Angel investors can be an entrepreneur’s saving grace.
They can provide everything needed to ensure a start-up gets on its feet – but they are discerning investors, and expect solid returns on their projects. Great for the beginning of the process, angel investors use their own funds – meaning they have a personal stake in the success of their investments.
This means that if you can find an angel investor who is on board with your cause, you’re onto a winner.
Angels often seek to have a say in the day-to-day running of their projects, which means that an investor who supports your desire to help others recover might be able to offer help and insight as well as financial assistance. If this sounds appealing, you can seek out angel investors who might want to help your cause.
The second common type of investor, venture capitalists, can help you grow.
Typically coming onto the scene when a business is more established, they use other investors’ money to propel an expansion forward. This is good to know for when you’re into running your business: venture capitalists deal in big money, but their involvement will be based on their confidence in your venture.
Fundraising Works Wonders!
Opening a sober living facility can require a lot of emotional strength. Many people will have been touched by the help of such a resource, and support for your starting a home may well be high.
This means that crowdfunding might help you reach your goals.
Setting up fundraising events is a great way to let members of the public show their approval and appreciation for what you’re doing. There are countless things you can do to raise money, especially when your goal is to help others.
Another benefit of fundraising is that it can involve people from the local area in which you plan to run your home.
This means you can make better personal connections with others, who might be able to offer support, stories, or help with your venture. You can also communicate with them about what they need from your facility, which will build you a good reputation from the get-go.
If you’re stuck on fundraising ideas, don’t worry. Here are a few that might help:
- Yard Sales
- Bake Sales
- Family Fun Day
- Online Crowdfunding
However it is that you choose to engage with fundraising, remember that community is a key part of your journey when running a sober living home. Getting to know the people you can help can only do you good.
Businesses Can Sponsor Your Home
A partnership with another business might help. Maybe a local CEO has sympathy for your cause, or perhaps a sober living charity will want to work with you in setting up your home.
There are all sorts of grants and funding sources available if you talk to the right people.
Your goal of setting up a sober living home will have supporters not only in the public but in business positions that allow them to sponsor or invest in the project. Organizations dedicated to combatting substance abuse may well be willing to invest in your sober living home.
When it comes to finding investors, check out charities and talk to local business owners. You never know who will want to help fund your home.
Now You Can Find Investors!
The tips provided in this article give you a solid grounding from which you can start looking for investors. Remember this: always regard your project as an investment opportunity for potential partners as much as a goal of your own. This will ensure that you find investors who care as much about the project as you do.
Once your sober living home is up and running, you’ll need somewhere to market yourself. Make sure you get in touch with us at Taste Recovery, so we can raise awareness of your facility and help you help others.