Orphanage homes look out for abandoned children; once they are legally brought into the home, they are groomed and taken care of just like children with their parents. In order to generate money to take care of the children under their care, orphanage homes apply for grants and donations from donor agencies, government agencies, NGOs, religious organizations, philanthropists et al.
Available statistics show that there are about 7,629 group homes (orphanages inclusive) in the United States as of 2021, an increase of 1 percent from 2020.
The data also shows that California has 754 group homes (orphanages inclusive), Florida has 296 group homes (orphanages inclusive) and New York has 284 group homes (orphanages inclusive) and they are the states with the greatest number of group homes in the United States of America.
Steps on How to Start an Orphanage in Texas
Table of Content
Conduct Market Research
If you intend to start an orphanage, you must make sure you conduct thorough market research. Your aim in conducting market research for your orphanage should be to get an in-depth analysis of your target market and create space for generating new questions, concepts, and understanding of the market space and what you are going to be up against.
With successful market research, you will be able to explore the unknown and unlock new possibilities in the industry.
a. Who is the Target Market for an Orphanage in Texas?
There is no standard age limit when it comes to taking children into an orphanage. But note that some orphanages will release their healthy children and children with minor physical conditions into society when they reach the age of 16. Some orphanages wait until the child reaches 18.
b. Is Orphanage in Texas a Profitable Business?
Yes, Orphanage is a profitable business and statistics show that the orphanages and group homes industry are worth over $8 billion in the United States.
c. Are There Existing Niches in the Industry?
No, there are no existing niches when it comes to orphanages because this line of business is a niche idea in the group homes industry.
d. Who are the Major Competitors?
- ALMs for Orphans
- Orphan Outreach
- Buckner Baptist Children’s Home
- Maharjan Orphanage Foundation
- Malaika Orphanage Children Foundation
- Livada Orphan Care
- Texas Baptist Children’s Home
- Central Texas Children’s Home
- Pleasant Hill Children’s Home
- Basin Dream Center for Orphans
- Children’s Village
- The Casa Vallado Project
- Embrace Texas
- Cherokee Children’s Home
- Operation Orphans
- St P J’s Children’s Home
- Texas Pythian Home Inc.
- Presbyterian Children’s Home
- Strategic Angel Care Orphans
- The Settlement Home for Children
e. Are There County or State Regulations or Zoning Laws for Orphanage in Texas?
Yes, and zoning laws require orphanages to follow specific rules and regulations. These laws are designed to address the unique circumstances of a business operating in a residential area. Many laws seek to minimize the negative impact on the community, which can be affected by increased vehicle traffic and neighborhood noise.
Other laws regulate how properties are altered, including the addition of business signage and the construction of fencing and playground equipment.
In many communities, zoning laws require orphanages to apply for a permit from the city. This application process allows the city’s zoning department to determine whether the group home meets the zoning rules of the community. Permits also ensure that all orphanages are properly licensed by county or state agencies.
f. Is There a Franchise for Orphanage Business?
No, there are no franchise opportunities for orphanages.
g. What Do You Need to Start an Orphanage in Texas?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- A Well-Furnished and Equipped Facility
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 orphanage business are;
Creative Orphanage Business Name ideas
- Golden Kids® Orphanage, LLC
- Dallas King® Orphanage, LLC
- True Ways™ Orphanage, Inc.
- Blessed Generation™ Orphanage, LLC
- All Care® Orphanage, Inc.
- Fackler Jones® Orphanage, LLC
- Destiny Helpers® Orphanage, LLC
- Weatherford Community® Orphanage, Inc.
- San Antonio® Orphanage, LLC
- Four Points® Orphanage, LLC
- Oakland Care™ Orphanage, Inc.
- Golden Care™ Orphanage, Inc.
- Inner City® Orphanage, LLC
- Covenant Care® Orphanage, Inc.
- Universal Care® Orphanage, Inc.
- Napoleon Wills© Orphanage, Inc.
- Bright World™ Orphanage, LLC
- Winners® Orphanage, Inc.
- St. Benards® Orphanage, Inc.
Register Your Business
a. What Type of Business Structure is Best for Orphanage in Texas?
When starting an orphanage in Texas, the best choice for legal structure is to form a nonprofit corporation at the state level and apply for a 501(c)(3) tax exemption at the federal level.
On the state level, you can file a nonprofit LLC for your orphanage in Texas. Technically, you can apply for an exemption with an LLC, but you would need to be an LLC taxed as a corporation; then, you ask the federal government to treat your orphanage as a nonprofit or tax-exempt organization.
In the United States of America, several states allow a nonprofit LLC, including California, Ohio, Michigan, Minnesota, and Tennessee. Texas allows the formation of an LLC with a nonprofit purpose.
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 an Orphanage in Texas?
- General Business License
- Care Giver or County Worker License
- Health and Safety Permit
- Zonal Permits
- Director’s License
d. What Type of Certification is Needed to Open an Orphanage in Texas?
You don’t need any certification to open an orphanage.
e. What Documents are Needed to Open an Orphanage in Texas?
- Business and Liability Insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval (for your facility)
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLC
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting an orphanage in Texas, usually you may not have any need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start an Orphanage in Texas?
When it comes to starting an orphanage in Texas, the startup costs could range from $150,000 (if you are opting for a franchise) to over $500,000.
b. What are the Costs Involved in Starting an Orphanage?
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $7,300.
- Marketing, Branding, and Promotions – $3,000.
- Business Consultant Fee – $2,500.
- Insurance – $2,400.
- Rent/Lease – $150,000.
- Other start-up expenses include commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
- Operational Cost (salaries of employees, payments of bills et al) – $30,000
- Start-up inventory – $5,000
- Store Equipment (cash register, security, ventilation, signage) – $4,750
- Furnishing and Equipping – $10,000
- Website: $600
- Opening party: $3,000
- Miscellaneous: $5,000
c. What Factors Determine the Cost of Opening an Orphanage in Texas?
- The choice of the location you intend to cover
- The required licenses and permits
- The type of office facility
- Additional services offerings
- The cost of hiring and paying a business consultant and attorney
- The cost of branding, promotion, and marketing of the orphanage
- The cost of furnishing and equipping the orphanage
- The cost of the 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
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
You don’t need to build a facility for your orphanage because you can rent a decent facility to get the business started. When you have gained ground in the industry by attracting grants and donations, then you can consider building your own facility and that will cost you nothing less than $250,000.
e. What are the Ongoing Expenses of an Orphanage?
- Cost of stocking up supplies such as educational and learning materials, medications, toiletries, and beddings et al
- Cost of food supplies and ingredients
- Utility bills (gas, internet, phone bills, signage and sewage et al)
- Salaries of employees
f. What is the Average Salary of your Staff?
- Head of Orphanage (President) – $45,000 Per Annum
- House Manager (Administrator) – $36,034 Per Annum
- Home Caregivers/County Aging Workers – $32,878 Per Annum
- Account Officer – $35,000 Per Annum
- Front Desk Officer – $28,000 Per Annum
- Cleaners – $22,000 Per Annum
- Security Guards – $21,600 Per Annum
g. How Do You Get Funding to Start an Orphanage in Texas?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- 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 friends.
Write a Business Plan
a. Executive Summary
San Antonio™ Orphanage, Inc. is a registered and standard orphanage that will be based in San Antonio, Texas, USA. Our orphanage has been able to secure a neatly furnished facility on a long-term lease agreement with a clause to buy the facility in the nearest future.
San Antonio™ Orphanage, Inc. has a dedicated team of employees that are passionate about their work and the children at the home.
b. Products and Service
We will provide a facility and a wide range of services that include therapy, 24-hour supervision, and support. We will also provide psychiatric services to emotionally disturbed children.
c. Mission Statement
Our mission is to provide a safe, stable environment for children to grow physically, socially, emotionally, and spiritually to become responsible, independent adults.
Our vision is to become the standard for orphanages in Texas.
d. Goals and Objectives
The goals and objective of the orphanage are to take in children who are abandoned or who don’t have people to care for them, so that they can be protected, and cared for until they are old enough to live independently.
e. Organizational Structure
- Head of Orphanage (President)
- House Manager (Administrator)
- Home Caregivers/County Aging Workers Fundraiser
- Account Officer
- Front Desk Officer
- Security Guards
a. SWOT Analysis
- Ideal Location for an orphanage
- Highly Experienced and Qualified Employees and Management
- Access to Pool of Donor Organizations
- Highly Secured and Clean Facility
- Highly structured programs are aimed at helping orphans live comfortably as though they are with their families.
- Budget Limitations
- Lack of full-fledged educational structure
- Inability to initially run the organization without the support of donations and grants
- Operating from a leased facility (restriction to fully modify the facility to suit our style and taste)
- Inability to retain our highly experienced and qualified employees longer than we want.
- The demand for individuals aged 15 and under is expected to remain high because the majority of orphanages and group homes cater to children in this age bracket regardless of external circumstances
- Government funding and private donations are anticipated to increase support for group homes.
- The orphanages and group homes industry is projected to reverse its decline trend and increase in the coming years.
- A pool of finance from donor organizations, individuals, and relevant government agencies.
- Lack of support from stakeholders and the government
- Unfavorable government policy and regulations
- Community resistance
- Liability problems
- Reduction in abusive homes and teenage pregnancies.
b. How Do Orphanages Make Money?
Orphanages make money via grants and donations from donor agencies and individuals if they operate as nonprofits. Orphanages also make money from giving up children for adoption.
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
d. Sales & Advertising Strategies
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community-based events/programs for abused children
- Leverage the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your orphanage
- Install your Bill Boards in strategic locations all around your city or state
- Distribute your fliers and handbills to target areas
- List your orphanage in local directories/yellow pages
- Advertise your orphanage on your official website and employ strategies that will help you pull traffic to the site.
- Position your Flexi Banners at strategic positions in the location where your orphanage is located.
- Ensure that all your staff members wear your branded shirts and that all your vehicles and vans are well branded with your company logo et al.
a. How Much Should You Charge for your Product/Service?
Orphanages do not charge children to stay in their facility because they receive grants and donations from the government and citizens. But orphanages charge people for adoption.
It is important to note that the cost of adopting an infant can range anywhere between $40,000 and $45,000. In some cases that involve complex factors, that cost could be even higher. International adoptions are the costliest option of all, with costs ranging between $25,000 and $50,000.
b. How Much Profit Do Orphanage Owners Make a Year in Texas?
Operating the orphanage as a non-profit organization requires that no profits be pocketed by the owners or board of directors. Any profits must be re-invested into the organization.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the orphanage (number of children accommodated per time)
- The location of the orphanage is covering
- The management style of the orphanage
- The business approach and model of the orphanage
- The advertising and marketing strategies adopted by the orphanage
- The number of years the orphanage is in business
d. What is the Profit Margin of an Orphanage?
Orphanages are not designed to make profits.
e. What is the Sales Forecast?
- First Fiscal Year (FY1): $140,000
- Second Fiscal Year (FY2): $280,000
- Third Fiscal Year (FY3): $320,000
Set Up your Shop/Office
a. How Do You Choose a Perfect Location for Orphanage in Texas?
- The demography of the location especially as it relates to the population of foster children and abused teens
- The demand for services offered by orphanages in the location
- The purchasing power of businesses and residents of the location
- Accessibility of the location
- The number of orphanages 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 an Orphanage in Texas?
- Dallas, Texas
- Houston, Texas
- Plano, Texas
- Denton, Texas
- Arlington, Texas
- Round Rock, Texas
- Bryan, Texas
- Oakwood, Texas
- McKinney, Texas
- San Antonio, Texas
- Weatherford, Texas
- Austin, Texas.
c. What Equipment is Needed to Operate an Orphanage in Texas?
When starting an orphanage, you will not need any technical gadgets except, learning tools, office, and nursing equipment, first aid kits, smoke detectors, carbon monoxide detectors, fire extinguishers, emergency preparedness kit, emergency plan, among other things.
But in setting up a small office, you will need a computer, printer, software apps, telephones, pager, photocopier, scanner, and fax machine. These tools and instruments can be purchased as fairly used especially if you have limited finance to meet your budget.
As regards the number of employees you are expected to kick start the business with, you would need to consider your finance before making such decision.
When it comes to starting a standard orphanage on a large scale, you would need the services of the following professionals; the head of the orphanage (you can occupy this position), house manager (administrator), caregivers, front desk officer, cleaners and security guard.
Launch the Business Proper
In recent times, no orphanage opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening party if you are operating on a low budget or you can go for a grand opening party.
With a proper launching of the orphanage, you will officially inform people in your city that your orphanage is open for business.
a. What Makes an Orphanage Business Successful?
- Ability to attract grants and donations
- Disciplined and dedicated workforce
- The heart to serve and care for children and teens
- A good relationship with stakeholders
- Good care techniques and programs.
b. What Happens During a Typical Day at an Orphanage?
- The orphanage is open for the day
- Caregivers are briefed
- Caregivers provide all the needed support and care to children and teenagers
- Marketing/website upkeep
- Administrative duties are carried out
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build an Orphanage?
- Good managerial and human development skills
- An interest in caring for children regardless of their condition
- The ability to communicate clearly and sensitively when talking to people and their families
- Good listening skills.
- Great problem-solving skills and the ability to adapt
- Organizational skills
- Experience working as a caregiver or social worker
- Experience in working for an orphanage.