Are you about starting a transitional housing company? If YES, here is a sample transitional housing business plan template & FREE feasibility report.
If you are an investor or an aspiring entrepreneur with a real estate background and you are looking towards starting a business in the United States, you can actually invest in the Community Housing & Homeless Shelters industry.
This industry is made up of businesses that offer temporary and emergency shelters, permanent supportive housing, transitional housing, construction and repairs and others.
If you truly want to partake in this thriving industry, you need to obtain all the necessary licenses and permits before you can legally launch your transitional housing company. The truth is that the market is still pretty much open for new investors to come in.
Although there are competitions at various levels in the industry, but if you are able to come up with a good business strategy, you are sure of getting your own fair share of the available market in the industry. Below is a sample transitional housing business plan template that will help you write yours with little or no stress.
Transitional housing is a temporary housing for certain segments of the homeless population, including working homeless people who are earning too little money to afford long-term housing. Transitional housing is set up to transition residents into permanent, transitional housing.
It is not in an emergency homeless shelter, but usually a room or apartment in a residence with support services. The transitional time can be short, for example one or two years, and in that time the person must file for and get permanent housing and usually have some gainful employment or income, even if Social Security or assistance.
Sometimes, the transitional housing program charges a room and board fee, maybe 30 percent of an individual’s income, which is sometimes partially or fully refunded after the person procures a permanent place to live in. In the USA, federal funding for transitional housing programs was originally allocated in the McKinney–Vento Homeless Assistance Act of 1986.
Transitional housing business is part of the community housing and homeless shelters industry and this industry provides a variety of community housing services including short-term emergency shelter for victims of domestic violence sexual assault or child abuse;
Temporary residential shelter for the homeless runaway youths and parents and families caught in medical crises; transitional housing and assisted living for low-income individuals and families; and volunteer construction or repair of low-cost housing.
The Community Housing & Homeless Shelters Industry is indeed a large industry and pretty much active in most developed countries of the world.
Statistics has it that in the united states of America alone, there are about 12,323 registered and licensed community housing and homeless shelters companies responsible for directly employing about 132,874 people and the industry rakes in about $12 billion annually.
The industry is projected to grow at – 0.7 percent annual growth within 2014 and 2019. It is important to state that no company can boast of having available market share in the industry. According to the 2018 Annual Homeless Assessment Report, in any given night during 2018, there were 549,494 homeless individuals.
This number has been decreasing significantly over the five years to 2019 due to a concerted effort from the US Department of Housing and Urban Development (HUD) and its federal partners. The report also states that the homeless population has increased less than 1.0 percent between 2017 and 2018. The homeless population has grown at this slow pace because of falling unemployment and poverty.
According to the 2018 State of Homelessness in America report, the largest drops in the unemployment and poverty rate have come in 2014 and 2015, suggesting that demand for Community Housing and Homeless Shelters industry services will continue to grow.
Some of the factors that encourage entrepreneurs to start their own transitional housing company could be that the business is profitable business and an aspiring entrepreneur can successfully launch the business if they have a pool of cash.
Golden Castle© Transitional Housing, Inc. is a real estate development company that will be based in Rio Rancho – New Mexico and will major on the construction of transitional housing so as to provide a variety of community housing services, including:
Short-term emergency shelter for victims of domestic violence, sexual assault or child abuse; temporary residential shelter for the homeless, runaway youths and parents and families caught in medical crises; transitional housing and assisted living for low-income individuals and families; and volunteer construction or repair of low-cost housing.
Golden Castle© Transitional Housing, Inc. is going to be a self-administered and a self-managed real estate investment trust (REIT). We will engage in the construction of different appealing designs of transitional housing that will meet the needs of clients.
We will work towards becoming one of the largest transitional housing construction companies in the United States of America with active presence in major cities.
Golden Castle© Transitional Housing, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.
We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Golden Castle© Transitional Housing, Inc. will be owned majorly by Don Albert Johnson and his immediate family members. Don Albert Johnson has a Degree in Civil Engineering. He is a property guru that has worked with top community housing and homeless shelters in the United States of America for many years prior to starting his own business.
Other investors with same investment ideology whose name cannot be mentioned here for obvious reasons, are going to be part of the business.
Golden Castle© Transitional Housing, Inc. is going to offer varieties of services within the scope of the community housing and homeless shelters industry in the United States of America. We are prepared to make profits from the industry and we will do all that is permitted by the law in the United States to achieve our business goals. We will be involved in providing;
Our Business Structure
We have decided to create a structure that will allow for easy growth for all our employees and also, we have created platforms that will enable us attract some of the best hands in the industry.
We are quite aware that the success of any business lies in the foundation on which the business is built on, which is why we have decided to build our transitional housing construction company on the right business foundation. We will ensure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all our stakeholders.
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target.
Golden Castle© Transitional Housing, Inc. is fully aware of the modus operandi in the community housing and homeless shelters industry, hence adequate provision and competitive packages has been prepared for independent real estate brokers.
Our marketing department will be responsible for managing this aspect of our business structure. Below is the business structure we will build Golden Castle© Transitional Housing, Inc. on;
Chief Executive Officer – CEO (President):
Company Lawyer/Secretary/Legal Counsel
Project Manager
Civil Engineer
Architect
Land Surveyor
Admin and HR Manager
Transitional Housing Officer
Marketing and Sales Executive/Business Developer
Accountant
Front Desk/Customer’s Service Officer
The fact that transitional housing construction business is very rewarding does not mean that there are no challenges in the industry. Starting a transitional housing construction business in the United States of America comes with its own fair share of challenges, you would have to abide by the law and also compete with loads of other investors in the real estate business.
In order to compete favorably in the community housing and homeless shelters industry as a transitional housing construction company we have been able to hire the services of tested and trusted business and HR consultants to help us conduct critical SWOT analysis for us.
Here is a summary from the result of the SWOT analysis that was conducted on behalf of Golden Castle© Transitional Housing, Inc.;
Some of the strength that we will be bringing to the table is our robust relations with property investment moguls in the whole of the United States of America.
Our access to pool of low income earning family and the homeless who are willing to own their own transitional housing and also, we have a team of experts who have cut their teeth in the community housing and homeless shelters industry cum transitional housing line of business.
Our commission structure and relationship with freelance real estate agents in Rio Rancho – New Mexico will also count towards our advantage.
As a newbie in the industry, we might have some challenges competing with big time realtors and other transitional housing construction companies that have been in the industry for many years; that perhaps is part of our weakness.
Unemployment usually leads to a decline in income, which makes housing less affordable. A rise in the national unemployment rate will increase demand for community housing services. Conversely, a decrease in the unemployment rate will reduce the number of individuals seeking the services provided by the industry.
The national unemployment rate is expected to decrease in 2019. However, potential economic uncertainty in the near future could contribute to higher unemployment, presenting an opportunity for the industry.
The majority of industry revenue comes from the federal, state and local government-funded homeless and housing assistance programs. Any changes in funding or government policy will drastically affect industry revenue. Federal funding for social services is expected to decrease in 2019, posing a potential threat to the industry.
Housing choice is a response to an extremely complex set of economic, social, and psychological impulses. For example, some households may choose to spend more on housing because they feel they can afford to, while others may not have a choice but to stick to transitional housing as a way of escaping being homeless.
Market forces, policy decisions, and demographic changes have converged, making it more difficult to increase transitional housing for renters.
Another obvious trend that is common with transitional housing construction companies in the United States of America is that most of them are improvising on more means of making money in the industry and as matter of fact, they are also acting as property developers and home staging agents, etc.
Lastly, one thing is certain for every transitional housing construction company; if they are hardworking, creative and proactive, they will always generate enough income to meet all their overhead and operational cost, keep their business going without struggle and make reasonable profits from all business deals that they are involved in.
As a transitional housing construction company, our target market cuts across homeless and vulnerable families who are classified as low income earners. We are coming into the industry with a business concept that will enable us work with a wide range of clients at an affordable price.
As a matter of fact, our target market is vulnerable and low – income families in the whole of the United States of America and we have put plans in place to recruit freelance agents (brokers) nationally to represent our business interest wherever they are located in the United States of America. Below is a list of the people and organizations that we have specifically designed our services for;
Our competitive advantage
The availability of competent and reliable real estate professionals under our payroll, our business process and of course our pricing model are is part of our competitive advantage.
Another possible competitive strategy for winning our competitors in this particular industry is to build a robust clientele base and ensure that our transitional homes designs are trendy. Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry.
It will enable them to be more than willing to build the business with us and help deliver our set goals and objectives. We will also engage freelance real estate brokers on a commission level to help us market our services.
We quite mindful of the fact that there are stiff competitions in the transitional housing market in the United States of America, hence we have been able to hire some of the best business developers to handle our sales and marketing.
Our sales and marketing team will be recruited based on their vast experience in the industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall goal of the organization.
Our goal is to become one of the leading transitional housing construction companies in the United States of America which is why we have mapped out strategies that will help us take advantage of the available market and grow to become a major force in the community housing and homeless shelters industry. Golden Castle© Transitional Housing, Inc. is set to make use of the following marketing and sales strategies;
Sources of Income
Golden Castle© Transitional Housing, Inc. is established with the aim of maximizing profits in the transitional housing cum real estate industry. Although we are a transitional housing construction company, but part of our work force are also licensed real estate agents hence we intend generating additional income from diverse means in the real estate agency.
We have successfully built a vibrant real estate network that covers the whole of the United States of America so as to help us build a profitable business. Below are the sources we intend exploring to generate income for Golden Castle© Transitional Housing, Inc.;
It is a known fact that as long as there are vulnerable people and low – income earners in the United States of America, there will always be need to for transitional housing construction companies.
We are well positioned to take on the challenges that are synonymous to transitional housing construction businesses in the United States, and we are quite optimistic that we will meet out set target of generating enough income/profits from the first month of operation and grow the business beyond Rio Rancho – New Mexico to other states in the United States of America within record time.
We have been able to examine the real estate market cum transitional housing line of business, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Golden Castle© Transitional Housing, Inc. it is based on the location of our business and the transitional housing that we will be offering;
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and any major competitor offering same additional services as we do within the locations where we have a strong business presence.
Please note that the above projection might be lower and at the same time it might be higher since some factors are beyond our control.
We have been able to work with our consultants to help us map out publicity and advertising strategies that will help us walk our way into the hearts of our target market. We are set to take the transitional housing cum real estate industry by storm which is why we have made provisions for effective publicity and advertisement of our company.
Below are the platforms we intend to leverage on to promote and advertise our transitional housing construction business;
Part of our business strategy is to ensure that we work within the budget of our clients to help them meet their expectations. It is the practice in most parts of the world for properties to be valued by professionals based on the area the facility is located, the type of facility and other factors.
Since we are not directly in control of the pricing system in the community housing and homeless shelters industry, we can only abide by what is obtainable when it comes to fixing a price for transitional housing. But one thing is certain, we will ensure that we deliver excellent jobs when have we are contracted to do so.
Lastly, as regard renting and leasing, we will ensure that we keep our fees below the average market rate for all of our clients by keeping our overhead low and by collecting payment in advance.
At Golden Castle© Transitional Housing, Inc. our payment policy is all inclusive because we are quite aware that different people prefer different payment options as it suits them but at the same time, we will not accept payment by cash because of the volume of cash that will be involved in most of our transactions.
Real estate deals usually involve huge amount of money. Here are the payment options that Golden Castle© Transitional Housing, Inc. will make available to her clients;
In view of the above, we have chosen banking platforms that will help us achieve our plans without any hitches and we will also pay our freelance sales agents (real estate brokers) with same platforms.
From our market survey and feasibility studies, we have been able to come up with a detailed budget for establishing a standard and highly competitive transitional housing construction company in Greenville – New Mexico and here are the key areas where we will spend our startup capital;
Going by the report from the market research and feasibility studies conducted, we will need approximately 2.5 million dollars to successfully set up a small scale but standard transitional housing construction company in the United States of America.
Please note that the salaries of all our staff members for the first month is included in the expenditure, but the pool cash needed for the construction of the first set of affordable houses is not part of this financial projection. We will contact our partners to pool cash together when the time comes.
Generating Funds/Startup Capital for Golden Castle© Transitional Housing, Inc.
Golden Castle© Transitional Housing, Inc. is owned and managed by Don Albert Johnson, his immediate family members and other business partners. They decided to restrict the sourcing of the startup capital for the business to just three major sources.
N.B: We have been able to generate about $1 million (Personal savings $800,000 and soft loan from family members $200,000) and we are at the final stages of obtaining a loan facility of $1.5 million from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.
One of our major goals of starting Golden Castle© Transitional Housing, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to rent/lease/sell our transitional housing services a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Golden Castle© Transitional Housing, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List/Milestone
