Transitional Housing Business Plan Template

Written by Dave Lavinsky
transitional housing business plan template
Table of Contents
Table of Contents

Transitional Housing Business Plan Template

If you want to start a Transitional Housing business or expand your current Transitional Housing business, you need a business plan.

The following Transitional Housing business plan template gives you the key elements to include in a winning Transitional Housing business plan.

You can download our Transitional Housing business plan template (including a full, customizable financial model) to your computer here.

 

Transitional Housing Business Plan Example

I. Executive Summary

Business Overview

[Company Name], located at [insert location here] is a new transitional housing organization specializing in providing housing for low-income individuals and families. The company will operate a mix of single-family and multifamily housing units for rent, conveniently located near the city center, in safe and respectable neighborhoods. [Company Name] is headed by [Founder’s Name], a graduate of XYZ University with 20 years of experience working in the human services sector.

Services

[Company Name] will focus on providing transitional housing and supportive services for its clients. It has a full-time assistant who, among other things, will manage the company website and listings, advertise listings elsewhere, and answer inquiries.

The founder, [Founder’s Name], will also focus on meeting his clientele’s needs. In addition to maintaining a network of human services and healthcare providers, [Founder’s Name] will hold informational meetings for families in need, and seminars on transitional housing concerns for the community.

[Company’s Name] services include listing rentals, assisting tenants in securing rental assistance, and assisting tenants in finding rentals that meet their budgets. It will serve both renters and prospective renters, in the hopes of becoming a partner with each client in accessing available programs and services in a dignified manner.

Customer Focus

[Company Name] will primarily serve the tenants interested in properties within a 5-mile radius of our location. The demographics of residents in this area are as follows:

  • 27,827 residents
  • Average income of $36,500
  • 38.9% married
  • 49.6% in low-wage occupations
  • Median age: 38 years

These residents include 20% renters and 80% homeowners. Furthermore, [Company Name] will seek contacts with landlords of rental properties in order to develop long-term relationships.

Management Team

[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [First name] has been a community organizer for the past 20 years. He has spent much of his career advocating for the underserved population of [city name]. He began his career specializing in connecting people with resources before moving to specialize in homeownership counseling for the next 10 years.

[Company Name] will also employ an experienced assistant to help with various administrative duties around the office. [Assistant’s name] has experience working with C-level executives and has spent significant time as an administrator.

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:

  • [Company Name] will fill a specific market niche in the growing community we are entering. In addition, we have surveyed local residents and received extremely positive feedback saying that they would consider making use of our services when launched.
  • Our location is in an economically diverse area where affordable housing is difficult to find.
  • The management team has a track record of success in connecting people with transitional housing.
  • The local area is currently under served and has few transitional housing options.

Financial Highlights

[Company Name] is seeking a total funding of $78,000 of debt capital to open its office. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, and working capital.

Specifically, these funds will be used as follows:

  • Office design/build: $58,000
  • Working capital: $20,000 to pay for salaries and lease costs until [Company Name] reaches break-even

Top line projections over the next five years are as follows:

Financial SummaryYear 1Year 2Year 3Year 4Year 5
Revenue$965,742 $1,878,611 $2,718,300 $3,477,900 $4,285,228
Total Expenses$390,241 $630,018 $931,935 $1,171,906 $1,429,992
EBITDA$575,501 $1,248,593 $1,786,365 $2,305,994 $2,855,237
Depreciation$8,720 $8,720 $8,720 $8,720 $8,720
EBIT$566,781 $1,239,873 $1,777,645 $2,297,274 $2,846,517
Interest$5,077 $4,442 $3,807 $3,173 $2,538
Pre-Tax Income$561,705 $1,235,431 $1,773,838 $2,294,101 $2,843,978
Income Tax Expense$196,597 $432,401 $620,843 $802,935 $995,392
Net Income$365,108 $803,030 $1,152,995 $1,491,166 $1,848,586
Net Profit Margin38%43%42%43%43%

 

II. Company Overview

Who is [Company Name]?

[Company Name], located at [insert location here] is a new transitional housing organization specializing in providing or assisting with finding housing for low-income individuals and families. The company will operate a mix of single-family and multi-family housing units for rent, conveniently located near the city center, in safe and respectable neighborhoods. [Company Name] is headed by [Founder’s Name], a graduate of XYZ University with 20 years of experience working in the human services sector.

While [Founder’s Name] has been advocating for affordable housing for some time, it was in [month, year] that he decided to launch [Company Name] in [City]. Specifically, during this time, [Founder] met with a former friend who has had tremendous success operating a transitional housing organization in Fort Lauderdale, FL. After discussing the business at length, [Founder’s Name] clearly understood that a similar business would enjoy significant success in his hometown.

Specifically, the housing market, customer demographics, and competitive situations in the Fort Lauderdale location and in his hometown were so similar that he knew the business would work. After surveying the local population, [Founder’s name] went ahead and founded [Company Name].

[Company Name]’s History

Upon returning from Fort Lauderdale, surveying the local customer base, and finding a potential office, [Founder’s Name] incorporated [Company Name] as Nonprofit on [date of incorporation].

The business is currently being run out of [Founder’s Name] home office, but once the lease on [Company Name]’s office location is finalized, all operations will be run from there.

Since incorporation, the Company has achieved the following milestones:

  • Found office space and signed Letter of Intent to lease it
  • Developed the company’s name, logo and website located at [website]
  • Determined equipment and fixture requirements
  • Began recruiting key employees

[Company Name]’s Products & Services

[Founder’s Name] will offer the following services:

  • Website: By listing rental and for sale condominiums, apartments, and homes on its own website – including both its own properties and other affordable housing, [Company Name] will develop a resource which is known in the local area as a go-to site for the most comprehensive transitional housing listings.
  • Acquiring and/or Building Affordable Housing: [Company Name] will create affordable housing in the community by either purchasing and rehabbing existing homes and properties, or by building affordable housing.
  • Finding Rentals: [Company Name] will match clients seeking rental apartments with apartments meeting their specifications as closely as possible.
  • Homeowner Information Sessions: Seminars at the transitional housing office or at larger venues when appropriate will be offered to present topics such as how to save toward a home purchase, how to find affordable housing, and what to look for during a showing, etc

As [Founder’s Name] understands, the key to a successful transitional housing business is building referrals and a long-term reputation as a trustworthy agency in the community. [Founder’s Name] will continue to reach out to past clients in future years to answer questions and to continue to develop a relationship.
 

III. Industry Analysis

Last year, according to IBISworld.com, U.S. transitional housing businesses brought in revenues of $1.8 billion. Many industry employees work part-time, leading to an average wage per employee in the industry of only $13,000. This wage per employee is further lowered by the market situation at the time of this report.

As the American housing industry and its health is considered a driver for the American economy, key statistics such as new home sales, homes on the market, and average home prices are tracked constantly by news and reporting agencies. This housing industry data is the basis for determining the need for Transitional Housing.

Major revenue streams of the industry include: funding from federal, state, and local government grants, and private donations.

A recent study by the US Department of Housing and Urban Development (HUD) found:
Participants in smaller transitional housing assistance programs were more likely to have their own place when they moved out of transitional housing.
Longer stays in transitional housing are associated with higher levels of educational attainment and employment at move out, and greater likelihood of continued employment.

This bodes well for a small firm starting out with experienced leadership.

 

IV. Customer Analysis

Demographic Profile of Target Market

[Company Name] will serve the residents of [company location].

The area we serve is economically diverse and has a significant population of low-wage workers who would benefit from transitional housing services.

The precise demographics of the town in which our business is based are as follows:

WilmetteWinnetka
Total Population26,09710,725
Square Miles6.893.96
Population Density3,789.202,710.80
Population Male48.04%48.84%
Population Female51.96%51.16%
Target Population by Age Group
Age 18-243.68%3.52%
Age 25-345.22%4.50%
Age 35-4413.80%13.91%
Age 45-5418.09%18.22%
Target Population by Income
Income $50,000 to $74,99911.16%6.00%
Income $75,000 to $99,99910.91%4.41%
Income $100,000 to $124,9999.07%6.40%
Income $125,000 to $149,9999.95%8.02%
Income $150,000 to $199,99912.20%11.11%
Income $200,000 and Over32.48%54.99%

Customer Segmentation

The Company will primarily target the following four customer segments:

  1. Low-income individuals and families: Low-income individuals account for about one-third of the market for transitional housing services. Most transitional housing assistance programs are only available to applicants that have incomes substantially lower than the median income of the local area.
  1. Homeless individuals and families: Most homeless are only temporarily homeless, and soon find housing and a way to stabilize their income. The most common reason for an individual or a family to experience an episode of homelessness is loss of income and inability to pay for housing, and thus the size of demand is dictated largely by unemployment and poverty rates.
  1. Landlords: Owners of apartment buildings, multi-unit homes, condominium complexes, and small homes are included in this group when they seek to rent out a portion or all of their space. This group includes both professional landlords who earn their primary income from residential rentals and landlords who are capitalizing on excess space to earn extra money. Landlords value a transitional housing agency that finds tenants quickly and efficiently.

 

V. Competitive Analysis

Direct & Indirect Competitors

The following residential transitional housing brokerage firms are located within a 20-mile radius of [Company Name], thus providing either direct or indirect competition for customers:

Aid for Families

Established in 1984, Aid For Families is a volunteer organization on a mission to find or provide housing for the homeless in [City]. Since its inception, the agency has expanded its service area to include the surrounding counties. It continues to work toward ending homelessness, providing services and opportunities to overcome or prevent homelessness. It provides Emergency Shelter, case management services, a transitional housing program, among other community services.

Community Transitional Housing

Established in 1988, Community Transitional Housing is a nonprofit agency providing housing and services to [City] and the surrounding area. It offers rental properties for low-income households, as well as other critical housing services necessary for homelessness prevention.
The services offered by CTH include permanent housing, rental services for its sixteen Section 8 rental properties and four low-income rental properties, as well as socialization opportunities and free lunch three times weekly.

[City] Rescue Mission

Established in 1964, the [City] Rescue Mission provides assistance for economically challenged, abused, and/or addicted individuals struggling with personal, physical or emotional issues or just trying to make ends meet. The nonprofit organization is on a mission to end homelessness by providing services such as counseling, medical care, housing assistance, food, clothing, and vocational training.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

  • Grant-writing expertise: Since Transitional Housing agencies are all vying for the same government grants, it is important to employ a skilled grant writer. [Founder], having worked as a community organizer, has many years’ experience in writing and winning grants.
  • Client-oriented service: [Company Name] will have a full-time assistant to keep in contact with clients and answer their everyday questions. [Founder’s Name] realizes the importance of accessibility to his clients, and will further keep in touch with his clients through monthly seminars on topics of interest.
  • Management: [Founder’s Name] has been extremely successful working in the social assistance sector and will be able to use his previous experience to grant his clients detailed insight into the transitional housing world. His unique qualifications will serve customers in much more sophisticated a manner than many of [Company Name’s] competitors.
  • Relationships: Having lived in the community for 25 years, [Founder’s Name] knows many of the local leaders, newspapers and other influencers.

 

VI. Marketing Plan

You can download our Transitional Housing business plan template (including a full, customizable financial model) to your computer here.

[Company name] will use several strategies to promote its name and develop its brand. By using an integrated marketing strategy, [Company Name] will win clients’ trust, and through this strong reputation, develop consistent revenue streams.

The [Company name] Brand

The [Company name] brand will focus on the Company’s unique value proposition:

  • Client-focused transitional housing services, where the Company’s interests are aligned with the customer
  • Service built on long-term relationships and personal attention

Promotions Strategy

Targeted Cold Calls

[Company name] will initially invest significant time and energy into contacting potential donors and partners via telephone. In order to improve the effectiveness of this phase of the marketing strategy, a highly-focused call list will be used, targeting philanthropists and landlords. As this is a very time-consuming process, it will primarily be used during the startup phase to build an initial client base.

Referrals

[Company name] will aggressively network with sources such as social services agencies, and religious organizations. This network will generate qualified referral leads.

Publications

[Company name] will advertise its services in key local publications, including newspapers, area magazines, and its own newsletter. Additionally, the Company will print brochures and place them in specific locations frequented by target individuals, such as free clinics and social services organizations.

Seminars

By offering seminars on topics of interest in the office or other locations, [Founder’s Name] will encourage residents in the community to become comfortable with the expertise and character of [Company Name]. These seminars will generally be offered free of charge as general promotion and for direct networking.

 

VII. Operations

[Company Name] will carry out its day-to-day operations primarily on an appointment basis. Clients will make appointments to view available properties and to discuss their needs. Selling clients and landlords will make appointments to discuss the needs of their sales and properties when needed. These will primarily occur on-site at the properties, although some discussions may be held in the office’s meeting room. When necessary, discussions can be conducted over the telephone.

[Founder’s Name] will work on an as-needed basis, including weekends which are a prime showing time, and will generally take days off on weekdays. The company will also employ an administrative assistant who will also support marketing and client relationship development efforts and will be present on weekdays on a regular 9 AM – 5 PM schedule.

Milestones

[Company name]’s long term goal is to become the number-one name in transitional housing in terms of the right balance of ancillary services and customer service quality. We seek to do this by ensuring customer satisfaction and developing a loyal and trusting clientele.

The following are a series of steps that will lead to this long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:

DateMilestone
[Date 1]Finalize lease agreement
[Date 2]Design and build out [Company Name] office
[Date 3]Hire and train initial staff
[Date 4]Kickoff of promotional campaign
[Date 5]Reach break-even
[Date 6]Reach XXX ongoing clients

 

VIII. Management Team

[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [First name] has been a community organizer for the past 20 years. He has spent much of his career advocating for the underserved population of [city name]. He began his career specializing in connecting people with resources before moving to specialize in homeownership counseling for the next 10 years.

[Founder’s Name] maintains his real estate broker license in the state of [state] as well as the states of [other states]. He is a member of the National Association of Realtors. [First name] has spoken at regional conferences and taken part in transitional housing panel discussions at the Chamber of Commerce and local schools and universities.

[Company Name] will also employ an experienced assistant to help with various administrative duties around the office. [Assistant’s name] has experience working with C-level executives and has spent significant time as an administrator.

Hiring Plan

[Founder’s Name] will serve as the company CEO and president. In order to launch the business we do not need additional personnel beyond the assistant who has already been recruited, but will hire the following in the future:

  • CaseWorkers: Hire one additional employee to assist in finding housing and placing individuals and families every other year starting with year 2, assuming demand exists in the market
  • Grant Writers: Hire a second grant writer in year 3

 

IX. Financial Plan

Revenue & Cost Drivers

[Company Name]’s revenues will come primarily from government grants and private donations.

As with most services, labor expenses will be key cost drivers. [Founder’s Name] and future staff will earn a competitive base salary. Furthermore, the costs of doing business will vary depending upon the service provided by the organization but are expected to include food and medical supplies.

Moreover, ongoing marketing expenditures for sourcing private contributions are also notable cost drivers for [Company Name].

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $78,000 of debt capital to open its office. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.

Specifically, these funds will be used as follows:

  • Store design/build: $58,000
  • Working capital: $20,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Key Assumptions & Forecasts

The following table reflects the key revenue and cost assumptions made in the financial model.

Residents per MonthAverage
FY 115
FY 221
FY 330
FY 436
FY 545
Annual Lease/rent (per location)$50,000

5 Year Annual Income Statement

Year 1Year 2Year 3Year 4Year 5
Revenues
Product/Service A$151,200 $333,396 $367,569 $405,245 $446,783
Product/Service B$100,800 $222,264 $245,046 $270,163 $297,855
Total Revenues$252,000 $555,660 $612,615 $675,408 $744,638
Expenses & Costs
Cost of goods sold$57,960 $122,245 $122,523 $128,328 $134,035
Lease$60,000 $61,500 $63,038 $64,613 $66,229
Marketing$20,000 $25,000 $25,000 $25,000 $25,000
Salaries$133,890 $204,030 $224,943 $236,190 $248,000
Other Expenses$3,500 $4,000 $4,500 $5,000 $5,500
Total Expenses & Costs$271,850 $412,775 $435,504 $454,131 $473,263
EBITDA($19,850)$142,885 $177,112 $221,277 $271,374
Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
EBIT($56,810)$105,925 $140,152 $184,317 $234,414
Interest$23,621 $20,668 $17,716 $14,763 $11,810
PRE-TAX INCOME($80,431)$85,257 $122,436 $169,554 $222,604
Net Operating Loss($80,431)($80,431)$0$0$0
Income Tax Expense$0$1,689 $42,853 $59,344 $77,911
NET INCOME($80,431)$83,568 $79,583 $110,210 $144,693
Net Profit Margin (%)-15.00%13.00%16.30%19.40%

5 Year Annual Balance Sheet

Year 1Year 2Year 3Year 4Year 5
ASSETS
Cash$16,710 $90,188 $158,957 $258,570 $392,389
Accounts receivable$0$0$0$0$0
Inventory$21,000 $23,153 $25,526 $28,142 $31,027
Total Current Assets$37,710 $113,340 $184,482 $286,712 $423,416
Fixed assets$246,450 $246,450 $246,450 $246,450 $246,450
Depreciation$36,960 $73,920 $110,880 $147,840 $184,800
Net fixed assets$209,490 $172,530 $135,570 $98,610 $61,650
TOTAL ASSETS$247,200 $285,870 $320,052 $385,322 $485,066
LIABILITIES & EQUITY
Debt$317,971 $272,546 $227,122 $181,698 $136,273
Accounts payable$9,660 $10,187 $10,210 $10,694 $11,170
Total Liabilities$327,631 $282,733 $237,332 $192,391 $147,443
Share Capital$0$0$0$0$0
Retained earnings($80,431)$3,137 $82,720 $192,930 $337,623
Total Equity($80,431)$3,137 $82,720 $192,930 $337,623
TOTAL LIABILITIES & EQUITY$247,200 $285,870 $320,052 $385,322 $485,066

5 Year Annual Cash Flow Statement

Year 1Year 2Year 3Year 4Year 5
CASH FLOW FROM OPERATIONS
Net Income (Loss)($80,431)$83,568 $79,583 $110,210 $144,693
Change in working capital($11,340)($1,625)($2,350)($2,133)($2,409)
Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
Net Cash Flow from Operations($54,811)$118,902 $114,193 $145,037 $179,244
CASH FLOW FROM INVESTMENTS
Investment($246,450)$0$0$0$0
Net Cash Flow from Investments($246,450)$0$0$0$0
CASH FLOW FROM FINANCING
Cash from equity$0$0$0$0$0
Cash from debt$317,971 ($45,424)($45,424)($45,424)($45,424)
Net Cash Flow from Financing$317,971 ($45,424)($45,424)($45,424)($45,424)
SUMMARY
Net Cash Flow$16,710 $73,478 $68,769 $99,613 $133,819
Cash at Beginning of Period$0$16,710 $90,188 $158,957 $258,570
Cash at End of Period$16,710 $90,188 $158,957 $258,570 $392,389

 

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