Sober-living homes are an important part of the treatment process for addiction. Several independent studies have proven that a combination of sober-living homes and intensive outpatient programs can increase success rates for overcoming addiction.

There were over 70,000 drug-overdose deaths in the United States in 2017, with two-thirds of those due to opioids. The number of overdoses continues to grow every year, so the need for sober-living homes is expected to be urgent in most of the country for some time to come.

Starting a Sober-Living-Home Business

Market research should be one of the first things you do when planning your business. Contact local groups and associations that work with drug and alcohol problems in your community. The California Research Bureau estimates that there are at least 12,000 sober-living beds in the state to serve an eligible population of between 25,000 and 35,000. However, only a fraction of those eligible will choose to live in a sober-living home.

Some of the things you need to figure out include:

  • Number of beds you will offer
  • Cost per bed
  • Municipal codes
  • Insurance costs

Another question you need to investigate is how you will get your funding. Find out if there are grants or loans available from your state or city government as well as if church groups or community associations would be interested in investing in this business.

Government Requirements for Sober-Living Homes

Check with your state and local government to see what requirements they may have for a sober-living home, including licenses and permits. In California, the Department of Alcohol and Drug Programs requires that you get a license if you offer non-medical services for those in recovery, such as:

  • Detox for physical withdrawal from drugs or alcohol
  • Group therapy
  • Personal therapy
  • Educational workshops on addiction-related issues
  • Treatment planning for ongoing recovery

In most states, simply offering rooms or room and board while asking that drugs or alcohol not be consumed by tenants won't require any additional licensing or requirements than those that any landlord faces. Cooperative living, transitional housing or drug- and alcohol-free housing do not generally require special licensing or permits if they don't offer services for those in recovery.

This is not to say, however, that you should not expect issues to arise even if you don't need a license or permit. Some neighborhoods may oppose your business due to problems with sober-living homes, such as increased traffic, noise and other issues associated with having more people moving in and out on a frequent basis as well as having several more people living in a house compared to a typical family.

Profitability of Sober Houses

Profitability is an important factor for any business; however, when you are offering a service to the community, it should not be your only motive. In fact, many sober-living homes operate as nonprofits rather than as profitable businesses and receive donations from the community to help finance their programs and operations. Calculate all of your expenses, including startup costs for new furniture and renovations as well as monthly costs:

  • Rent or mortgage payments
  • Utilities
  • Staff wages
  • Internet service
  • Cable television
  • Groceries
  • Household supplies

Once you have these expenses, you can determine how much you should be charging each person for room and board. Startup costs should be spread out over the first couple of years. If you're only offering basic room and board, you will be unlikely to charge people much, and finding people to fill beds could become a problem, particularly if there is low-cost housing already available in your community.

If you are offering enhanced services, like personal counseling, exceptional meals, spacious rooms and a variety of recreational activities, you may be able to cater to a more affluent clientele. Not only would you be able to charge more and make more profit but you could be able to market your sober-living home to neighboring cities.