Substance Abuse Program w/30+ Beds – Beachside w/Fantastic Recognition!
Newport Beach, CA
In only a few short years since inception, this customer embraced substance abuse treatment and recovery program has built significant infrastructure and achieved remarkable results together with its client base. The beachside facility boasts 30+ in-patient beds that are licensed in its 5-6 first class beach community residences. At its pre-COVID peak, the program did $1.7 ml per month between its main facility and its small Northern California based Intensive Outpatient Program (IOP). They typically have a 50-60 person in and out-patient census, with a peak of 72. Together with a nationally recognized Founder & CEO, the opportunity boasts a certified American Board of Addiction Medicine Medical Director and a comprehensive team of seasoned treatment providers and licensed clinicians – some with advanced certification in Incidental Medical Services. There are also 2 State licensed and nationally accredited outpatient facilities and several residential/detox treatment homes.
This organization is based in a 7,500 square foot beach adjacent office, a smaller secondary Northern California IOP office, and 5-6 premium residential living facilities in the same beach community. The office leases for $21k/month (varies, based on sublets) on a secure long-term lease with options with an ideal landlord. The business is accredited with the Joint Commission and the California Department of Public Health. They also have the License and Certification with the Department of Health Care Services for Detoxification, Individual Sessions, Group Sessions, Educational Sessions, and Recovery and Treatment Planning. The business was once licensed for 36 beds but currently at 30, with 4 of their 6 sober living houses on long-term leases. They are also permitted / licenses a Residential Treatment Center (RTC), and 3 Intensive Outpatient Programs (IOP). They have 7 Clinical Laboratory Improvement Amendment (CLIA) licenses for diagnostic testing (e.g. urinalysis, etc.).
While Southern California may be the most competitive market in the recovery program space, this firm has not faced challenges attracting new clients due to its founder’s experience and recognition, couple with the program’s strength and resultant formidable referral pipeline. The program, its infrastructure, in-take and residential living locations provide it a compelling value proposition that competitors find difficult to compete with and impossible to replicate. In a perverse twist, the program’s distinctively non-corporate, edgy appeal that have attracted clients and led to their success in recovery, has likely contributed to them not hitting the profits levels their revenues would suggest. Since they have been able to fill beds without developing strict financial management protocols, comprehensive marketing channels or a predictable sales funnel, the company has prioritized serving patrons over maintaining liquidity and at times, profitability.
While the program grew to $50 million in billings after 3 short years since its inception, with just over $20 million in revenues post allowance, the company is not managed by experienced industry veterans with strict financial management protocols. Rather, the enterprise is led by a highly competent and passionate of leaders in the recovery field. Similarly, the client-embraced program has amassed a loyal following that helps ensure a formidable pipeline of new client admissions, but at the expense of achieving an optimal mix of in-patient versus out-patient clients. As a result, beds are filled with lesser services than they are licenses for. Similarly, because they have relied on the referral network that’s kept beds filled they have not developed sales pipeline expertise. Finally, due the program’s reputation and success rate, and its founder’s notoriety and industry recognition, the program may be ideal to become the foundation of a national or international chain once its financial model is perfected.