Halfway houses, often known as residential treatment centers, are community-based establishments designed to give people who are striving to reintegrate back into society access to community resources and provide transitional possibilities.
Midway Houses are so-called because they sit halfway between fully independent living and inpatient or penitentiary facilities, where residents have very few liberties. Currently in Texas, five halfway homes are run by the Texas Juvenile Justice Department to provide low- to medium-security treatment facilities.
According to statistics, there are currently over 400 halfway houses in the United States, which serve an estimated 10,000 offenders and employ about 34,369 people. The industry generates a staggering $6 billion yearly, with an annual growth rate forecast at 2.8 percent between 2016 and 2021.
Steps to Start a Halfway House in Texas
Table of Content
Conduct Market Research
It is key to remember that conducting thorough market research before opening a halfway house in Texas is essential for maximizing revenues. Please note that creating market-based research questions that are consistent with your overall business aim and purpose should be the first stage in the market research process for your halfway house business in Texas.
In this regard, you should look for information that will provide you with trustworthy data, information that will give you an idea of what your potential market will be seeking from a halfway house business in Texas, and information that will also enable you to run your halfway house business in Texas with less stress and, of course, grow the business to profitability.
a. Who is the Target Market for Halfway House?
The target market for halfway houses in Texas includes former prisoners and psychiatric patients, or others who are unused to non-institutional life.
b. Is Halfway House a Profitable Business?
The Halfway House is not a profitable business since it is run as a non-profit organization, which forbids the owners or board of directors from keeping any of the revenues. Any revenues made must be put back into the business.
Please be aware that the management of these facilities is frequently contracted out to nonprofit organizations and for-profit businesses by state correctional departments, probation/parole offices, and the Federal Bureau of Prisons (BOP). These agreements are the main source of revenue for halfway houses.
c. Are There Existing Niches in the Industry?
It is safe to say that there is no niche area in the halfway house business. This is so because halfway house is a niche idea in the correctional facilities industry.
d. Who are the Major Competitors?
- Austin Transitional Center
- Dallas Transitional Center
- Eudaimonia Recovery Home
- Refugio House Sober Living
- Patton Sober Living Homes
- Oxford House Middle Way
- Courage To Change, Inc.
- TDCJ Halfway House
- The Horton House
- Ayres Halfway House
- Legacy House Sober Living
- United House
- Stonegate Center: Trevor’s House Sober Living
- Seacrest Sober Living Texas
- Oxford House Fielder
- Hope4hope Sober Living
- Elevated Sober Living
- Westlake Recovery Sober Living and Halfway House of Austin, TX
- Ascension House – Sober Living Austin.
e. Are There County or State Regulations or Zoning Laws for Halfway houses in Texas?
Yes, there are county or state regulations or zoning laws for halfway houses in Texas. The Texas Department of State Health Services Department requires a license from any facility that offers such services. The designations to halfway homes are only valid for the final 10 percent of a prisoner’s sentence, a maximum of six months.
Prisoners who successfully complete the Residential Drug Abuse Program (RDAP) may surpass the 10 percent cap, but they are still only eligible for placement in halfway houses for a maximum of six months.
f. Is There a Franchise for Halfway House?
No, there are no known franchise opportunities for Halfway House in Texas.
g. What Do You Need to Start a Halfway House?
- A Feasibility Report
- Business and Marketing Plans
- Supplies and Inventory.
- Licenses and Permits
- Well-equipped Facility
- EIN (Employer Identification Number)/Federal Tax ID Number
- A Corporate Bank Account
- Employees
- Startup Capital and Community Support
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a halfway house are;
Creative Halfway House Business Name ideas
- Hoary Heavens© Halfway Housing Facility
- Tsar of Boys® Halfway Housing Facility
- All Gatehouse© Halfway Housing Facility
- Slit Center® Halfway Housing Facility
- The Bond™ Halfway Housing Facility.
- Lisa George Memorial™ Halfway Housing Facility.
- Stan Farrow© Halfway Housing Facility
- Job Naz® Halfway Housing Facility.
- Lutheran Cabin© Halfway Housing Facility.
- Hyden Habitat© Halfway Housing Facility
- Camp David© Halfway Housing Programs
- Care Nest® Halfway Housing Programs
- Royal Purple© Halfway Housing Programs.
- Regan Wills® Halfway Housing Programs
- Jade Tower™ Halfway Housing Programs
- Hero Today™ Halfway Housing Programs
- Boys Concealment© Halfway Housing Programs
- The Preserve® Halfway Housing Programs.
- McKenzie Shelter© Halfway Housing Programs.
- Fort Worth© Halfway Housing Programs
Register Your Business
a. What Type of Business Structure is Best for Halfway House in Texas?
In general, the best option for a legal structure when opening a halfway home in Texas is to set up a nonprofit company at the state level and apply for a 501(c)(3) tax exemption at the federal level.
Please be aware that you can register a nonprofit LLC for your halfway house with the state. Although technically possible, doing so would require you to be an LLC taxable as a company. After that, you would request that the federal government treat your halfway house as a nonprofit or tax-exempt organization.
It is interesting to note that some states in the United States, including California, Ohio, Michigan, Minnesota, and Tennessee, permit nonprofit LLCs. Texas permits the creation of an LLC with a charitable goal. The LLC Act in Delaware allows for the formation of an LLC with charitable objectives.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Halfway House in Texas?
- General Business License
- Health and Safety Permit
- Zonal Permits (Applicable in some cities)
- Signage Permit
- Operational State Facility Inspections
d. What Type of Certification is Needed to Open a Halfway House in Texas?
These are some of the certifications you can work towards achieving if you want to run your own Halfway House in Texas;
- Community and Social Worker Certifications
- Certified Psychiatric Rehabilitation Practitioner (CPRP)
- Certified Rehabilitation Counselor (CRC)
e. What Documents are Needed to Open a Halfway House in Texas?
- DBA
- EIN
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Online Terms of Use
- Online Privacy Policy Document
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
In Texas, if you are thinking about opening your own Halfway House, you might not need to register a trademark or for intellectual property protection. This is because the nature of the business allows you to operate it successfully without needing to file a lawsuit against anyone for unauthorized use of your company’s intellectual property.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Halfway House in Texas?
In order to successfully open a halfway home in Texas, you would require about $450,000.
b. What are the Costs Involved in Starting a Halfway House in Texas?
- The Total Fee for Registering the Business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits – $1,500.
- Marketing promotion expenses for the grand opening of the halfway house in Texas 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 of hiring a Consultant – $2,500.
- Insurance (general liability, workers’ compensation, and property casualty) coverage at a total premium – $3,400.
- The cost of leasing a standard and secured facility for 3 years – $200,000
- The cost for facility remodeling – $20,000.
- 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 (toiletries, foodstuffs, 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
c. What Factors Determine the Cost of Opening a Halfway House in Texas?
- The size of Halfway House
- The choice of location
- The required licenses and permits
- The type of facility
- The additional services offerings
- The cost of hiring and paying a business consultant and attorney
- The cost for branding, promotion, and marketing of the Halfway House
- The cost of furnishing and equipping the Halfway House facility
- The cost of insurance policy covers
- The cost of registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms, shoes, and caps for your employees and also housemates
- The cost for the grand opening of the Halfway House
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
If you have the finances, you might need to build a facility, but you are not required to do so because you have the option of long leasing a property. Building a halfway house facility will typically set you back more than nine hundred and fifty thousand dollars ($950,000).
e. What are the Ongoing Expenses of a Halfway House in Texas?
- Cost of toiletries
- Cost of stationery and education supplies
- Cost of food supplies and medications
- Utility bills (internet, phone bills, signage and sewage et al)
f. What is the Average Salary of your Staff?
- Head of Halfway House (President) – $45,000 Per Annum
- House Manager (Administrator) – $36,034 Per Annum
- Nurse’s Aides – $29,660 Per Annum
- Caregivers/Rehab Counselors – $32,878 Per Annum
- Fundraiser – $36,500 Per Annum and based on the target
- Account Officer – $35,000 Per Annum
- Cleaners – $18,000 Per Annum
g. How Do You Get Funding to Start a Halfway House in Texas
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Applying for a loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from, the government, donor organizations, and angel investors
- Source for soft loans from your family members and your friends.
Write a Business Plan
a. Executive Summary
Stan Farrow© Halfway Housing Facility is an authorized halfway house facility that will be situated in the center of the city in a tastefully renovated and secure housing facility; a facility that is outfitted with the necessary lodging facilities/gadgets to give comfort and security to ex-offenders.
Stan Farrow© Halfway Housing Facility is a family-run company that upholds the idea of halfway homes as a crucial component of the criminal justice system and a means of gradually reintegrating inmates into society.
b. Products and Service
- Provide a halfway house facility
- Provide transitional chances for people striving to rejoin society as law-abiding, healthy, and useful contributors.
c. Mission Statement
Our mission is to establish a top-notch halfway house in Texas that will offer possibilities for a transition to people striving to rejoin society as law-abiding members. We intend to establish ourselves as industry leaders in the halfway home sector in the United States.
Vision Statement
Our vision is to become the number one choice when it comes to halfway houses in the whole of Texas.
d. Goals and Objectives
The goals and objectives of the Halfway House are to aid in treating persons with mental illnesses and assisting repentant criminals in becoming self-sufficient. Additionally, it is typical for folks who have already undergone addiction treatment to be welcomed into a halfway house. Many halfway houses provide drug or alcohol addiction treatment.
e. Organizational Structure
- Head of Halfway House (President)
- House Manager (Administrator)
- Nurse’s Aides
- Caregivers/Rehab Counselors
- Fundraiser
- Account Officer
- Cleaners
Marketing Plan
a. SWOT Analysis
Strength:
- Well-secured and spacious facility
- Well-experienced and certified caregivers and rehab counselors
- Robust partnership with key stakeholders in our city
- Capacity to attract funding and reliable volunteers.
Weakness:
- Starting as a new business (stakeholders may still be reluctant to donate their monies to us).
- Lack of capacity to attract government support and funding
- Lack of budgeting for robust publicity
Opportunities:
Enough ex-offenders in the city where we will be opening our halfway house in Texas.
Threat:
- Increased number of law-abiding citizens
- Lack of support from stakeholders and the government
- Unfavorable government policy and legalization.
b. How Do Halfway House in Texas Make Money?
Halfway houses in Texas make money from;
- Fees paid by inmates
- Contributions for partners and donors
- Grants from government agencies and charity organizations
- Community support.
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
d. Sales & Advertising Strategies
- Introduce your halfway house by sending introductory letters alongside your brochure to prisons (correctional facilities) and former prisoners and psychiatric patients, or others unused to non-institutional life in and around your city.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, and LinkedIn to get your message across
- Create a basic website for your halfway house so as to give your halfway house an online presence
- Directly market your halfway house for the purpose of attracting donations
- Join local chambers of commerce and industry with the aim of marketing your halfway house
- Advertise the halfway house in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
Financial Projection
a. How Much Should You Charge for your Product/Service?
While expenses can vary, most of the time they are comparable to what it would cost to rent an affordable apartment or home. Depending on where the halfway house facility is located, the rent typically ranges from $450 to $750 per month.
However, it’s crucial to keep in mind that certain halfway houses are completely free, especially when they are successful in obtaining adequate grants and donations from benefactors.
b. How Much Profit Do Halfway House Owners Make a Year in Texas?
Running the halfway house as a non-profit business necessitates that neither the owners nor the board of directors takes home any money. Any revenues made must be put back into the building or the services that serve the residents.
But a high-quality facility can bring in at least $40,000 per client annually or up to $10,000 per month for the owner.
c. What Factors Determine the Amount to be Generated?
- The capacity of the Halfway House as it relates to attracting funds
- The location of the Halfway House is covering
- The management style of the Halfway House
- The business approach of the Halfway House
- The advertising and marketing strategies adopted by the Halfway House
- The number of years the Halfway House is in business
d. What is the Profit Margin of a Halfway House?
Halfway houses are not designed to make profits.
e. What is the Sales Forecast?
Below is the sales forecast of a Halfway House. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year (FY1): $240,000
- Second Fiscal Year (FY2): $380,000
- Third Fiscal Year (FY3): $420,000
Set Up your Shop/Office
a. How Do You Choose a Perfect Location for Halfway Houses in Texas?
- The demography of the location especially as it relates to crime
- The demand for the services of halfway houses in the location
- The capacity of the residents to donate to the success of the halfway house
- Accessibility of the location
- The number of Halfway House facilities and other facilities and charity organizations that also offer rehabilitation services to ex-offenders in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What City is Best to Open a Halfway House in Texas?
- Del Valle, Texas
- Austin, Texas
- San Marcos, Texas
- San Antonio, Texas
- Arlington, Texas
- Fort Worth, Texas
- McKinney, Texas
- Houston, Texas
- DeSoto, Texas
- Round Rock, Texas
- Weatherford, Texas
- Dallas, Texas
c. What Equipment is Needed to Operate a Halfway House in Texas?
You won’t need any technological gadgets to start a halfway house in Texas; instead, you’ll need things like office and nursing supplies, instructional materials, first aid kits, smoke and carbon monoxide detectors, fire extinguishers, an emergency readiness kit, and an emergency plan.
You’ll need a computer, printer, software programs, telephone, pager, photocopier, scanner, and fax machine to set up a tiny office. You can buy equipment, tools, and instruments that are fairly used, especially if you have a restricted amount of money to work with.
Hire Employees
When it comes to hiring employees for a standard Halfway House, you should make plans to hire a competent Head of Halfway House (President), House Manager (Administrator), Nurse’s Aides, Caregivers/Rehab Counselors, Fundraiser, Account Officer, and Cleaners.
Launch the Business Proper
No halfway house facility nowadays opens its doors for business without first planning an opening celebration to formally establish the business. If you have a limited budget, you may want to hold a soft opening. If not, you may want to host a great opening party.
In the end, a successful launch of the Halfway House will enable you to formally notify residents of your city that you are now open for business.
a. What Makes a Halfway House Successful in Texas?
- Ability to attract grants and funding from the government of your city or state or even the federal government
- Disciplined and dedicated workforce
- The heart to serve
- Good facility and ambiance
- A good relationship with stakeholders
- Good rehabilitation techniques and programs.
b. What Happens During a Typical Day at a Halfway House in Texas?
- The facility is open for the day
- The facility is cleaned and prepared for the day’s activities
- Inmates are welcomed
- Prisoners are given access to educational opportunities that will help them develop the necessary social skills as they prepare to rejoin society.
- The facility is closed for the day and inmates go back to their rooms.
c. What Skills and Experience Do You Need to Build a Halfway House in Texas?
- Good managerial and human development skills
- Visionary Leadership skills
- Team-building & Interpersonal skills.
- Excellent communication and social skills.
- Organizational skills.
- Good Counseling and problem-solving abilities.
- Experience in rehabilitation
- Experience in the halfway housing industry
- Experience in working with ex-offenders and convicts et al.