Sober Living Business Plan Template
If you want to start a sober living business or expand your current sober living business, you need a business plan.
Fortunately, you’re in the right place. Our team has helped develop over 100,000 business plans over the past 20 years, including thousands of sober living business plans.
The following sober living business plan template and example gives you the key elements you must include in your plan. In our experience speaking with lenders and investors, the template is organized in the precise format they want.
Sober Living Business Plan Example
I. Executive Summary
Business Overview
[Organization Name] is a new fully furnished sober living home located in the heart of downtown [Location]. We are dedicated to providing a safe and comfortable home for female residents recovering from recent alcohol or substance addictions. The home is two stories with three bathrooms and four bedrooms. Each bedroom has two beds, which allows us to house up to eight tenants in total. The house offers several amenities including affordable rent, free utilities, recovery resources, an onsite counselor, and a strong community with peer support. Our mission is to create an environment and community that helps each tenant rebuild their life and succeed with a fresh start.
Products Served
[Organization Name] aims to provide a safe and clean home for female residents recovering from alcohol or substance addictions. To make their stay comfortable and enjoyable, we will provide the following amenities:
- Four bedrooms with two beds in each room
- Three bathrooms
- Weekly cleaning service
- Kitchen appliances
- Television, cable, and wifi
- Frequent game/activity nights
- Affordable rent
- Onsite counselor
- Recovery resources
To ensure the environment remains safe for all tenants, we have a list of rules that every tenant must follow. These include, but are not limited to:
- Restrictions on male guests
- No alcohol or drugs permitted on the property
- Required frequent drug/alcohol testing
- Required counseling sessions
Customer Focus
[Organization Name] will market its home to local female residents (ages 18+) who are recovering from alcohol or substance addictions. We expect that many of our tenants will have recently left a recovery center or other form of treatment.
Management Team
[Organization Name] is owned and operated by [Founder’s Name]. [Founder’s Name] has worked at a recovery center for [X] years, primarily working in operational roles. While she has found her career rewarding, she has longed to continue helping patients after they are dismissed from the center. [Founder’s Name] knows that recovering from addiction does not end when a person is finished with their treatment. Therefore, after her children moved out of her house, she was inspired to turn the house into a sober living community. After months of renovations and planning, she is finally ready to open the house up to tenants.
Success Factors
[Organization Name] has several advantages over its competition. Those advantages include:
- A comfortable, safe, and sober living space.
- Affordable rent.
- Numerous amenities including appliances, free utilities, and a weekly cleaning service.
- Knowledgeable and friendly staff that includes a house manager, administrative staff, and an onsite counselor.
- Frequent game and activity nights to foster community and peer support.
- Access to other recovery resources such as medical staff, recovery centers, vocational counselors, and educational resources.
Financial Highlights
[Organization Name] is seeking $100,000 in funding to launch its sober living home. The capital will be used for maintaining the house, staffing, marketing, and working capital. The breakout of the funding may be seen below:
- Home maintenance and renovations: $50,000
- Working capital: $50,000 to pay for marketing, salaries, and overhead costs until [Organization Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Organization Name] is a new fully furnished sober living home located in the heart of downtown [Location]. The home is owned by [Founder’s Name], who has lived in it for several decades. She has worked at a nearby recovery center for [X] years but was inspired recently to open up a sober living home for patients still recovering after leaving the treatment center. After months of renovations, the home is now ready to accept tenants.
The house is a two-story home with three bathrooms and four bedrooms that have two beds in each (housing up to eight tenants total). The house includes several amenities including affordable rent, free utilities, recovery resources, an onsite counselor, and a strong community with peer support.
The house will have several rules that all tenants must follow. These will include rules regarding chores, guests, and what items are/aren’t allowed in the home. Tenants will also be subject to random drug and alcohol testing to ensure the home remains sober. [Organization Name] is a female-only home so we are only accepting female tenants at this time. There will also be restrictions and rules regarding male guests.
[Company Name]’s History
[Founder’s Name] has been consulting with an attorney and CPA over the last few months to understand the regulations and financial obligations that go with owning a sober living home. After ensuring her home met all the obligations, [Founder’s Name] officially incorporated [Organization Name] as a 501(c)(3) nonprofit on [Date of Incorporation].
Since incorporation, [Founder’s Name] has achieved the following milestones:
- Renovated and furnished the home
- Decided on the organization name, and developed the logo and website
- Began recruiting key employees
[Company Name]’s Products/Services
[Organization Name] provides a safe and comfortable home for tenants needing a sober environment. The home contains four bedrooms that have two beds each, housing a total of eight residents. There are three full bathrooms and a fully stocked kitchen with all the necessary appliances (fridge, stove, oven, microwave, etc.).
[Organization Name] aims to keep its rent rates lower than the local average. We continuously look at trends in rent prices and price our rental rates accordingly. Rent costs will cover utilities such as electricity, wifi, and water.
There will be several house rules that tenants must abide by if they wish to stay at [Organization Name]. These rules include chores, curfews, and restrictions on guests and items in the home. There will also be regular random drug and alcohol testing to ensure all tenants remain clean.
[Organization Name] is a home specifically for female tenants who are recovering from addiction. As such, [Organization Name] is not accepting male tenants at this time. There are also restrictions on male guests.
The house manager will be onsite daily. [Organization Name] will also have an onsite counselor to help tenants as they transition back into society. While tenants are expected to keep all areas of the home neat and tidy, a weekly cleaning service will also be provided.
In addition to a counselor, [Organization Name] will provide other recovery resources for tenants to utilize. This can include educational seminars, a vocational counselor, and access to medical staff or recovery centers. We also encourage peer support in our community to ensure everyone stays on track and feels supported on their journey. To create a strong community, we will schedule frequent group dinners and activity nights.
III. Industry Analysis
You can download our Business Plan Template (including a full, customizable financial model) to your computer here.
The Sober Living Housing industry is expected to grow over the next five years. Recent trends show that the pervasive issue of addiction is worsening with no hope of improving anytime soon. According to the Substance Abuse and Mental Health Services Administration, about 46.8 million battled with substance abuse disorder in 2023. In 2018, that figure was 20.3 million people.
With such a sharp increase in substance abuse and dependence, it is clear that the industries that help people struggling with this problem will increase in demand. More people will seek recovery and treatment resources such as addiction recovery centers and sober living communities. As a result, revenue for these industries is forecasted to rise dramatically over the next decade.
The Sober Living Housing industry is fragmented. It consists of both small and large communities that offer a variety of support, amenities, and resources. Some communities are peer-run while others are run by medical professionals. Sober living communities that wish to succeed must abide by local laws and regulations and provide supportive resources to ensure tenants recover and thrive. These communities must also balance being affordable while making enough money to cover their expenses (such as overhead or recovery resources). Other factors that affect the success of these communities are local demand, amenities provided, and satisfaction of the tenants.
IV. Customer Analysis
Demographic Profile of Target Market
[Organization Name] will serve the community residents of [Location] and its surrounding areas. Our clientele will specifically include female residents recovering from alcohol or substance addictions.
Customer Segmentation
[Organization Name] will target individuals who are recovering from alcohol or substance addiction. Addiction affects all demographics, so we will not market to specific customer segments. However, [Organization Name] is an all-female house, so we will only accept female tenants who are 18 years or older. Furthermore, we expect many of our tenants will recently have left addiction recovery centers so we will put much of our marketing efforts into reaching those individuals.
V. Competitive Analysis
Direct & Indirect Competitors
The following sober living communities are located within a 20-mile radius of [Organization Name], thus providing either direct or indirect competition for customers:
West Coast Harmony House
Established in 1998, West Coast Harmony House is a three-story sober living home located in the arts district of [Location]. It is run by Harmony House Inc., which operates sober living communities all across the nation. The home houses up to ten residents and offers numerous amenities, such as parking, appliances, A/C, and free wifi. Furthermore, West Coast Harmony House has partnered with several local addiction recovery centers to ensure the house is recommended to patients when they finish their treatment. Their prime location and strategic partnerships will make them a difficult competitor.
Harbor Manor
Since 2002, Harbor Manor has been a coveted sober living community for men recovering from alcohol addiction. The manor offers a luxurious environment for tenants to live in and find support. Located near the harbor, the manor offers beautiful views and a peaceful environment that supports relaxation and recovery. Though Harbor Manor is popular, [Organization Name] expects little competition since the manor only takes in men who are specifically recovering from alcohol.
Everwell Recovery
Everwell Recovery owns several sober living communities throughout the [Location] metro area. Each house is unique in the communities it fosters and the rules and regulations it imposes. Some buildings are run by professional staff while other communities are peer-run. This provides potential tenants with several options to choose from so they find the perfect community for their recovery. Due to the number of properties they run, we expect that Everwell Recovery will be our biggest competitor.
Competitive Advantage
[Organization Name] has several advantages over its competition. Those advantages include:
- Compassionate Staff: Knowledgeable and friendly staff who are dedicated to providing compassionate treatment and support to each tenant.
- Recovery Resources: [Organization Name] will provide access to several recovery resources to help each tenant on their recovery journey. This includes an onsite counselor and access to medical staff and treatment centers.
- Affordable Rent: [Organization Name] will price its rent lower than the market average to ensure each tenant can afford their housing while they recover.
VI. Marketing Plan
The [Company Name] Brand
The [Organization Name] brand will focus on the organization’s unique value proposition:
- Knowledgeable and friendly staff.
- Quality level of service and care.
- Clean and comfortable accommodations.
- A supportive community.
- Affordable rent.
Promotions Strategy
[Organization Name] will target female residents who are recovering from alcohol or substance addictions and who live within a 20-mile radius of the home. The organization’s promotions strategy to reach the most clientele includes:
Local Addiction Recovery Centers
[Organization Name] will work with local addiction recovery centers to ensure they send referrals and highly recommend [Organization Name] to its patients as an additional recovery option.
Website
[Organization Name] will have an informative and attractive website that will feature all its amenities and referrals from other satisfied residents and their families. The website will be highly informative and be designed in a way that is user-friendly and eye-catching.
SEO
[Organization Name] will invest in a strong SEO presence so that the sober living home is listed at the top of the Google or Bing search engine when area individuals research sober living options in [Location].
Billboard
[Organization Name] will have a billboard in an area of town at a busy intersection where thousands of cars and pedestrians pass daily. The location of the billboard will be in an area of town where there are many doctors’ offices, recovery facilities, and a hospital.
Advertising
[Organization Name] will invest in advertisements in featured local publications, such as community newspapers and newsletters.
Local Hospitals
[Organization Name] will work to make sure the hospitals send referrals and highly recommend [Organization Name] to its patients and their families upon releasing them from the hospital and into recovery services.
Pricing Strategy
[Organization Name]’s rent pricing will fluctuate based on changes in the local rental market. However, [Organization Name] will always aim to charge rent that is lower than average and affordable for those recovering from addiction.
VII. Operations Plan
Functional Roles
[Organization Name] will need to fulfill the following functional roles to execute the business plan and ensure the organization’s success:
Administrative Functions
- Bookkeeping
- Marketing and social media management
- Other administrative duties
Home Functions
- Keep up with maintenance and repairs
- Schedule weekly cleaning service
- Manage utility bills and other overhead costs
- Enforce house rules and regulations
- Schedule game and activity nights
- Provide community supplies and necessities
Sober Living Functions
- Schedule randomized drug and alcohol testing
- Provide onsite counseling
- Provide tenants with resources for continued recovery
- Foster a supportive community
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Organization Name] is owned and operated by [Founder’s Name]. [Founder’s Name] has worked at a recovery center for [X] years, primarily working in operational roles. While she has found her career rewarding, she has longed to continue helping patients after they are dismissed from the center. [Founder’s Name] knows that recovering from addiction does not end when a person is finished with their treatment. Therefore, after her children moved out of her house, she was inspired to turn the house into a sober living community. After months of renovations and planning, she is finally ready to open the house up to tenants.
Though she has never run a sober living community herself, [Founder’s Name] has worked in the industry long enough to gain an in-depth knowledge of the business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.). She has also worked in the addiction recovery industry long enough to develop connections with local hospitals, counselors, addiction treatment centers, and other resources that will help her tenants.
Hiring Plan
[Founder’s Name] is the owner of the home and will manage most of the operations. She will hire the following personnel to help her run the home:
- Onsite counselor (1 to start)
- Administrative assistant (1 to start)
[Founder’s Name] will also hire a cleaning service that will come to the house on a weekly basis. She will also bring in vocational counselors and other professionals/resources as needed to help the tenants with their recovery needs.
IX. Financial Plan
Revenue and Cost Drivers
The revenues for [Organization Name] will come from the rent we will charge residents for living in the home.
The cost drivers for the organization will include the payroll of the staff, supplies and equipment, overhead costs, renovations and maintenance, and marketing expenses.
Capital Requirements and Use of Funds
[Organization Name] is seeking $100,000 in funding to launch its sober living home. The capital will be used for maintaining the house, staffing, training, marketing, and working capital. The breakout of the funding may be seen below:
- Home maintenance and renovations: $50,000
- Working capital: $50,000 to pay for marketing, salaries, and overhead costs until [Organization Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 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 | |
| PRETAX 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 1 | Year 2 | Year 3 | Year 4 | Year 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 1 | Year 2 | Year 3 | Year 4 | Year 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 |
