How to Open A Rehab

For the last few years I have been consulting with clients on how to open a facility.  I have personally opened 18 centers in the last 2 years and now, I bring that knowledge to you.  Here is how to open a drug and alcohol rehab center

Understand Your Market

It is important that you, as the owner, understand the market forces prior to starting a rehab center.  Things like level of care, competition, insuance rates, and modalities are just a few items to consider prior to opening a substance abuse center.

Funding and Numbers

Numbers are everything.  As an owner, you need to understand the financial commitment involved with opening a rehab.  Build out a pro-forma which outlines all your costs and expenses, plus revenue.  If you don't know how, you can purchase our substance abuse pro-forma. 

If you are seeking funding to open your rehab, you will need a solid business plan to convince investors or banks to give you money.  If you do not know how to write a business or want a proven plan that works, you can purchase our drug rehab business plan. 

Licensing A Rehab Center

Once you have decided to open a facility it's time to get to work.  If you are choosing to do this yourself, you should call your local licensing body (Google - "Behavioral Health Center Licensing (YOUR STATE)"

Most states have a packet and help at the state level when it comes to opening a center.  Here are the basics of what you need

  1. Licensing Applications (Pay Fees To State)

  2. Create Your Policies & Procedures

  3. Local Your Facility

  4. Build Out Curriculum and Program

  5. Hire Staff - Medical Director (MD or DO) first for licensing requirements. 


Building a Policies & Procedures Manual 

Probably the most difficult part of opening an addiction center is completing the Policies and Procedures document (P&P).  This is a document that ranges from 150-400 pages.  Inside the P&P, you outline for the state and organization how you will operate.  Below is a list which includes a few topics covered by the P&P.  For a P&P template, click here

Facility Selection

Not all location are prime for a treatment facility.  Although you can never be denied the right to open a center (ADA at the federal level), you also don't want a ton of hassle.  First, check with your local fire house to get a list of inspections done. Review this in detail and make all needed changes.  

Next, identify how many rooms are able to be used for housing clients.  You want to be sure they are large enough based on statement minimum requirements for occupancy. Check with the state licensing board for this kind of detail.  

Apartment Building
Financial Chart


How are you planning on getting patients? This is extremely important as this one thing will make or break your rehab center.  Here are some basic guidelines when building a marketing plan for an inpatient drug rehab. 

  1. Estimated Budget is $8,000/bed, per month in marketing expenses. 

  2. Start your SEO and Website right away.  SEO in this business is very competitive and takes time.  The sooner you start, the sooner you see a result. 

  3. Think of referral sources.  Attorneys, Doctors, and other centers (who don't offer your levels of care)

  4. Legit Script - This is a required certification for any center wanting to use Google Adwords or Facebook marketing. Get it done before you open. 


Staffing for a drug rehab center is key in not just licensing, but also the long term success of the business.  You need to outline key hires when you go through the licensing process (Medical Director) and much more.  So how much staff do you need? Here is a list of what you MAY need.  Each state is different and it varies based on level of care. 

Digital Work Life

Key Drug Rehab Staff

  1. CEO/Administrator

  2. CFO/HR Director

  3. Medical Director/Psychiatrist

  4. Clinical Director

  5. COO/Asst. Administrator

  6. Executive Assistant

  7. Admissions Director/Marketing

  8. Nurse Practioner Psychiatric

  9. RN On Call

  10. LPN's (4)

  11. Therapists/Counselors (6)

  12. Educator

  13. Program Director

  14. Facilities Manager

  15. Dietician

  16. Kitchen staff (2)

  17. Housekeeping

  18. Admissions/Discharge Reps (2)

  19. Case Manager

  20. Support Technicians (6 FT, 2PT)

  21. Utilization Review #1

  22. HR Generalist #1

  23. Office Manager


Getting Paid

Easilyt the number one question that comes up when I consult with people on opening a drug and alcohol rehab or detox is how they get paid.  It's a solid question and you run a business.  As you start out, you will want to contract with a Revenue Cycle Management (RCM) company.  Their job is to get your credentialed with insurance and bill the insurance you accept.  For this they take a percentage, normally 5-9%.  Whoever you decide to work with will be able to outline actual payer collections by payer so you understand the value of each patient.  You can then plug this into your Pro-Forma