Small Business Brief

Medical & Services

Businesses That Make a Difference: How to Start a Private Rehab Center

19.7 million adults faced substance use disorders in 2017.

With this being a growing concern in our country, how can small businesses provide help?

One option is to open a private rehab center.

The main focus of a venture like this is not profitability.  Rather, rehab centers are humanitarian organizations that benefit society as a whole.

Here are a few considerations to consider when starting a rehabilitation center.

Consider a Feasibility Study

To narrow down what type of rehabilitation you want to offer, conduct a feasibility study.

The demographics and issues in your area will determine who needs what assistance.

Substance abuse is prolific and takes many forms.  Read more here about a man’s journey with alcoholism — a leading cause of death internationally.

Depending on what centers already exist in your area, you may choose a niche area of substance abuse.  This may include:

  • Alcohol and drug addiction
  • Internet addiction
  • Sex addiction
  • Nicotine addiction
  • Problem gamblers
  • Eating disorders

Conduct research to determine what needs are unmet rather than deciding yourself.  This will guide you to make business decisions that not only help others but are sustainable and profitable.

One of these decisions involves the size of your operation.

Size of Your Private Rehab Center

You only want to have as much space and occupancy on your property as you can fill.

Additionally, you should only hire as many employees as you need.

Having excess resources in these areas is what leads many rehabilitation centers to fail. It creates an unnecessary financial burden.

Relying on feasibility studies allows you to determine these factors.  Depending on the results, you may need the following staff:

  • Executive staff
  • Administration
  • Managers
  • Intake staff
  • Medical staff
  • Clerical staff
  • Janitorial staff
  • Caseworkers

To fill such positions, you need to understand the legal aspects of running a private rehab clinic.

Look into Legality

Most rehabilitation centers are set up as limited liability companies (LLCs).

As a rehab clinic is a business, it needs a business and marketing plan.  Keep in mind the sensitivity surrounding substance dependency when creating these.

While following business legality you also must consider medical legality.

Insurance is a necessary component when caring for others. Depending on the type of care you offer, you may also need accreditations.

Common accreditations include CARF and The Joint Commission (JCAHO). Many insurance companies require that rehabilitation centers have accreditations through these organizations.

As far as licensure goes, you can inquire from local authorities about what your center will specifically need.

Standard legal documents for creating rehabilitation centers include but are not limited to:

  • Certificate of incorporation
  • Business license and permits
  • Non-disclosure agreement
  • Operating agreement
  • Insurance policy
  • Employee agreements and handbooks

These considerations aside, think about one of the main issues with starting a business: profitability.

Before You Start:  Assess the Outcome

Use the considerations outlined in this article to assess if a private rehab center can be profitable in your area.

While clinics are not founded upon financial success, it’s an important aspect to review to keep the operation afloat.

And clinics are important operations to keep afloat.  Substance abuse costs our country $740 billion annually.

This number can decrease through noble small business pursuits — such as starting a clinic to help fellow humans.

If you want to focus more on addiction and detox centers rather than rehabilitation, read more about what that may look like.