Requirements to Start an Adult Day Care Business

An adult day care provides seniors and other adults with a safe place to go while providing their families and caregivers with a break, even if just a few hours. There are two types of adult day care: those that provide therapeutic health services and nursing and those that don't. Both provide clients with supervised activities, socialization, meals and personal-care services.

Before Opening an Adult Day Care

With a quickly aging population, chances are good that there is a need for adult day care services in your area, but this doesn't mean you should leap into business without thoroughly analyzing the local market and developing a strong business plan. Startup elderly day care costs can run you about $100,000 for such things as:

  • Business registration and legal fees
  • Marketing and promotion
  • General liability, workers’ compensation and property and casualty insurance
  • First-year property lease
  • Remodeling
  • Three-month operational costs
  • Supplies, furniture and equipment

A market analysis should be part of your business plan to confirm that there is a need for your day care business, what services are currently available and what may be lacking. Nursing homes and community service groups, for example, may already be offering similar services. There may also be people operating such services from their homes or personal-support agencies that help seniors and adults in their own homes.

Rather than starting a business from scratch, you may want to investigate opportunities for a senior day care franchise in your region, which may offer you marketing and support, especially during the startup phase. Another option is to buy an existing senior day care business that is for sale. Taking over an existing business could make it a lot easier to get started since it should already have clients and staff and should already meet the licensing requirements for your state.

State Licensing Requirements

In addition to the zoning and business-registration requirements of your local government, you will need to research the requirements of your state government, specifically for adult day care services. Some states only license adult day care centers, while others require that you write exams and become certified. Special types of programs, like caring for elders with dementia or offering nursing services, will often require additional licensing.

Maine, for example, licenses two types of services: adult day health services and social day services. To offer night programs to help care for clients with dementia, you would require an additional license. Louisiana law defines adult day care as a service only for people with developmental disabilities and doesn't make a distinction for the elderly or for those with physical or other nondevelopmental disabilities.

Note that if you want to offer services to be billed through Medicaid for your clients, you must check with your state Medicaid agency. Available programs for businesses and the requirements you would have to meet will vary among states.

Grants and Loans for Adult Day Care Services

While working on your market analysis and investigating government requirements, keep an eye out for grants, loans and related programs that may be available for an adult day care center from municipal, state or federal programs.

In 2020, for example, Nevada's Department of Health & Human Services Aging and Disability Services Division offers grants specifically for adult day care services. As another example, the USDA has a reimbursement program to support institutions that offer nutritious meals to seniors, including adult day care centers.

Introduce yourself to local service groups, church groups and elected members of your local government. If they recognize a need for an adult day care in the community, they may be interested in helping you launch your business through grants or loans. These organizations may also offer related services that could help your business, like food programs, volunteers or transportation services.