3 Things People Skip When Starting Their Assisted Living Business

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Starting an assisted living business can feel overwhelming. You know you want to help people, and you know you can make a difference, but figuring out where to begin is often the hardest part. The good news is that most of the confusion comes from skipping a few important steps.

Want the full breakdown? Watch the video below👇

Build Your Foundation Before You Look for a House

One of the biggest mistakes I see people make is jumping straight into looking for a property or searching for funding. It feels productive, but it often creates more confusion later.

Before you do any of that, you need a solid foundation. Think of it like building a house. If the foundation is weak, everything else becomes harder.

The first step is defining your model. You need to decide what type of assisted living business you want to create.

Will you:

✅ Rent and renovate a home?

✅ Buy and convert a home?

✅ Purchase an existing facility?

✅ Build a facility from the ground up?

You also need to decide who you want to serve. Maybe you want to work with seniors in traditional assisted living. Maybe your passion is memory care, disabled adults, or another specialized population.

The more specific you are, the easier every future decision becomes.

Know Your Market Before You Invest Your Money

Once you know your model, the next step is understanding your market.

Many people assume there is demand everywhere. That can be an expensive mistake.

You need to research whether enough people in your target area actually need the services you plan to offer. Tools like Census.gov and City-Data can help you gather this information.

For example, if you discover there are 10,000 people who fit your ideal resident profile, you can estimate how many may need assisted living services.

Then you need to look at the competition.

Ask yourself:

✅ How many licensed assisted living beds already exist in the area?

✅ Is there room for another facility?

✅ Does demand exceed supply?

I have seen students narrow their focus from several cities down to just a few strong opportunities simply by doing market research. That clarity saves time, money, and frustration.

💡 Good market research helps you avoid trying to force a business into an area where it simply does not fit.

Understand Your Numbers So You Can Move Forward Confidently

The third thing people skip is understanding the money.

I know numbers can feel intimidating. Many healthcare professionals did not get into healthcare because they love spreadsheets. But you do not need to be a financial expert to understand the basics.

At its core, the formula is simple:

💡 Revenue − Expenses = Profit

Start with your revenue.

There are two main levers you can control:

✅ How many residents you serve

✅ How much you charge each resident

If either number increases, your revenue increases.

Then look at your expenses.

A simple way to remember the major expenses is the WIFED Method:

✅ Wages

✅ Insurance

✅ Food

✅ Energy (utilities)

✅ Debt service

These categories often make up 80% to 90% of your expenses. In many assisted living businesses, wages alone can account for 50% to 70% of total expenses.

When you understand these numbers, you can determine whether your business model is realistic and profitable before making major commitments.

The Three M's Give You Clarity and Confidence

The reason so many people feel stuck is because they are trying to skip ahead.

They want to find a property.

They want funding.

They want licensing information.

But without a foundation, those steps often create more confusion.

When you focus on the Three M's, everything becomes clearer:

✅ Model

✅ Market

✅ Money

Once you have those pieces in place, you can confidently move forward with finding a property, talking to lenders, and working through the licensing process.

Think about a rocket sitting on a launch pad. It needs a strong platform underneath it before it can lift off. Your assisted living business works the same way.

A strong foundation creates a successful launch.

Wrap Up

If you are feeling overwhelmed about how to start an assisted living business, focus on building your foundation first. Define your model, research your market, and understand your money. Those three steps will give you the clarity and confidence you need to move forward.

Take the time to build the foundation now, and the rest of the journey becomes much easier.

If you need help creating a business plan for your assisted living business, check out the Free Business Plan Checklist.

And if you’re ready to figure out your next step, join me for the next Roadmap Challenge, where I’ll walk you through how to get started.

▶️ Watch on YouTube

🎙️ Listen to the podcast

Show full transcript 👇

Transcript

00:00:00 - 00:00:50
Are you feeling overwhelmed as you're trying to get started on your assisted living journey? You are confused. You don't know how to get started and you're just like, "I know I want to do this and I can do it better than anybody else, but I just I don't know how to get started and that's exhausting." In this video, three things people skip when starting their own assisted living business, I'm going to help break down a little bit of the things that you need to do as you're

00:00:24 - 00:01:19
trying to get started so that you have clarity on the process and that will give you confidence so you know how to move forward and start taking real action towards launching your own assisted living business. Hey friend, my name is Brandon Gustafson. I help health care workers start their own assisted living business so they're not stuck trying to figure it out and know exactly what they should do next. So, if you're interested in learning the three things people skip when starting their own

00:00:52 - 00:01:47
assisted living business, this video is going to be gold for you and help you out along the process. So, let's just hop into it. The first thing that you need to do as you are getting started and and really the big thing that you need to do as you are getting started is you got to build a foundation. Okay? Now, you may be thinking to yourself, "Cool, foundation. Got it." And then you go off and you start looking at trying to figure out the funding and trying to figure out what house you're going to

00:01:20 - 00:02:11
get and you're not going to listen to me. That's up to you, okay? I can't stop you. But, I'm here to tell you that if you build your foundation first, you're going to be a lot more successful. So, if you're like, "Okay, whoa, what do I need to do to build a foundation?" Let's talk about that now. So, you need a foundation. The things you're going to do when you build your foundation are I call them the three M's. One, the the first M is model. And with a model, what you're

00:01:45 - 00:02:28
going to find is you need to identify two things. One, what type of house am I going to get with this? Am I going to rent and renovate a home? Am I going to buy and convert a home? Am I going to buy an existing facility or am I going to build something from the ground up? Which of those four models do you want to go through? And this is something actually I I teach people in my roadmap challenge. So, if you're interested in learning more about that, just type in roadmap down below. We'll get you a link

00:02:07 - 00:02:49
to the roadmap challenge so you can check it out and see if it's a good fit for you, but I talk you through that process in the roadmap challenge. So, would love to help you figure that out. The other thing for the model is you need to figure out what population you want to serve. Is it elderly individuals and you want to do a traditional assisted living? Do you want to serve memory care? Do you want to do something around mental health or disabled adults or autistic individuals? Who do you want

00:02:28 - 00:03:35
to serve? You need to figure these things out. And once you have honed in on that, then you're going to be able to take that information and start building a business plan. This is the thing that is absolutely crucial for you to have in place as you're building your foundation. Start off with that model. Start thinking through that. Start turning that information into a business plan. I want to serve elderly individuals in this location. And specifically, we want to help people, you know, elderly women

00:03:01 - 00:03:53
that have suffered from abuse. I have students that have done that exact type of a niche. Okay. So, figure out the the niche that you want to serve. And how you're going to get there. And in order for me to do this, I need to get a $100,000 down payment or I need a million dollars to buy a home so I can convert it into assisted living. I need a million dollars so I can buy this existing assisted living facility. Your business plan is basically a sales pitch. It is a plan for how you're going

00:03:27 - 00:04:21
to run things. But at the end of the day, you're giving it to a lender to say, "I am going to run a business. This is how I'm going to run it. Please give me money." It's a sales pitch. Basically, is what you're doing in there. You don't want to beg for it, but it does need to be solid. Okay. Business plan is absolutely crucial. It's going to start with defining your model. So, that's the first thing you need to do. That's the first M. The second M is your market. You need to then

00:03:54 - 00:04:50
do market research. Once you have said, "Okay, I want to work with this elderly population, you know, elderly females, and I want to do it in this specific geographic location." Then you need to go start figuring out if there's enough people there that are going to support you and your assisted living business. So, you're going to get on tools like census.gov and city-data.com, and you're going to go and grab that data. It's out there. It's free. You can go grab it. You can see how many people

00:04:21 - 00:05:10
in a certain geographic are there. So, and then I teach in my book the profitable assisted living facility. It looks like this. You can grab it on Amazon. Um or if you just type in book down below, we'll get you the link to it. Um and you can go grab it. That and the workbook. You can also get the audiobook. But, those tools are going to help you out as you're trying to figure this out. Inside the book, I teach what I call the 5% rule. And that basically says that 5% of any population that I

00:04:46 - 00:05:38
want to serve is going to need assisted living services. So, let's say the population that I want to serve is elderly females, and that it's in a specific geographic location. What I want to look at is narrow it down inside of census.gov, city-data.com. I'm going to grab that, and I'm going to say, "Okay, there's 10,000 people in this geographic area that fit my criteria for who I want to serve." Now, 5% of them are going to need assisted living services. That's 500 people.

00:05:12 - 00:06:08
Okay. Now, I need to go a little bit deeper than that. I need to figure out how many assisted living facilities are licensed in that same geographical area to see if there's already enough people already enough beds there. Cuz if there's already 500 beds, then, you know, if there's 800 beds that are licensed, this is probably not going to work for me very well. But, if there's only like 100, 200, then, hey, this is actually going to work really well. This is what one of my students did and narrowed five to seven

00:05:40 - 00:06:38
cities down to like three that she was looking at as she was trying to get started. It really helped narrow her focus down. This is the second M, market. It's doing your market research and understanding hey, is there enough volume here for me to serve that population? If not, then I should probably go somewhere else. Because I shouldn't be trying to fit something, you know, a round peg into a square hole. This is not going to work for me. So, you need to stop trying to do those things and

00:06:09 - 00:06:59
start focusing on the stuff that's actually going to work. And also, when you're doing your model, you should be defining how many residents you want to be serving. It's another big piece of that with the model, and that's going to help you out as you're trying to figure out what type of house you want to get to. So, if you are looking at it you're like, I think I really want to do 10 residents, then you need to find a house that has more than three bedrooms, simple. That's going to help you as

00:06:34 - 00:07:23
you're trying to figure out exactly how to get started. So, second M was market. Your third M is going to be money. Your money is the underwriting. Now, if you're trying to figure out money and like that piece of it is confusing to you, I do give away a free underwriting calculator. Just type in calculator down below, we'll get you the link to it. But, with underwriting, you need to understand it feels confusing and overwhelming, and I know some of you aren't numbers people, and I'd tell you,

00:06:59 - 00:07:49
"Hey, I've got a calculator. It's an Excel file." Okay? It's very detailed. It has a ton of information in it. I have used it to secure millions of dollars in funding for different businesses. I've helped my students do the same thing with this tool. But, it is complex, and if you're like, "I am not a numbers person." Type in foundation, because I've got a program that's going to help you out with that in helping you understand how to build your foundation, including your numbers.

00:07:24 - 00:08:19
So, just type in foundation, I'll give you the details on that. Okay. But, at its core, what you need to understand is your numbers are actually revenue minus expenses equals your profit. That's it. There's There's more that goes into it, sure, but at its core, that's what you need to figure out. So, even if you're at the beginning stage, you're trying to figure out how to get started, how many residents you should have, can this meet a profitability goal, just start off

00:07:51 - 00:08:47
with that. Revenue minus expenses equals profit. Your revenue, you have two levers. One is how many residents you have in the facility. Two is how much you're charging those residents per month. And you can pull one or both of those levers, and when you do that, you're going to get more income. So, if I have 10 residents at $5,000 per month, that's $50,000 in income. But, if I change it to 20 residents at $5,000 per month, that's you know, double that amount. I'm not going to do the math because I'll mess

00:08:19 - 00:09:12
it up on the fly. But, doubles that amount. Or, if you're adjusting and you have 10 residents and you're paying $10,000 per month, that also is going to significantly increase the amount of money that you're bringing in. You know, it's $100,000. So, when you do those things and you use those levers that are at your disposal, then you're going to have a lot more success. All right? The next is your expenses. I teach the WIFE method for expenses. They're top five expenses. WIFE,

00:08:46 - 00:09:39
okay? Wages, insurance, food, energy, which is your utilities, and your debt service. Those five expenses will make up 80 to 90% of your total expenses. And if you can really hone in on your wages, that's 50 to 70% of your expenses all just right there in one big lump sum. That's what you spend time working on. You don't have to worry about all the other, you know, silly, frivolous things uh when it comes to expenses. Figure those things out. Those are the base things you need, and then run that

00:09:12 - 00:10:08
through your revenue minus expenses equals profit to see is this going to be profitable or not? Is the model that I have chosen going to be profitable or not? Does the money make sense? And when you figure out these three Ms, model, market, money, you have built a foundation that is going to let you move forward and be like, "Okay, like this makes sense. I can I can actually start an assisted living business. I've got a business plan. I've created that, I've done the market research, I know that we

00:09:40 - 00:10:28
have enough people here. I understand the numbers at least well enough to know how many people I need to have in the facility and what I think my realistic projections are for my profit. Now I can actually move forward with this and I can start looking for the right house. I can start talking to lenders to get the funding I need. I can start talking to the state and figuring out the licensing process. I can get those things done so that I can ultimately buy the home, get the facility, and start running a

00:10:03 - 00:10:53
business. That's how you do this. You follow the three M's. Again, it's model, market, money. When you do those things, you're building the foundation you need to help you really move forward and launch your assisted living business. Now, if you need some help with that, just type in again foundation down below. Give you some details on a program that I have that's called the foundation builder. It's all designed to help you do those things and just kind of build that foundation so that you

00:10:28 - 00:11:24
know exactly what to do to help you get started. So, we've covered quite a bit today in this video. We talked a lot about those three things, model, market, money. I'm going to keep saying them because they're so important. When you hone in on those things, you're building a solid foundation. When you have that solid foundation, it makes it so much easier for you to launch on. And so, recently, um some of you may have watched this is kind of current event um thing, so maybe it'll date this a little bit, but

00:10:56 - 00:12:01
Artemis 2 was launching recently. Okay? This was in the news, big thing, rocket going up into space, going around the moon, coming back to Earth, right? Pretty cool stuff. But, when you think about a rocket and what it's trying to do, where do they build that stand for the rocket? Think about it for a second. Do they build it on like this really solid, firm platform that's not like it can support a rocket so that it can get enough thrust and lift to get up into the atmosphere and go around the world and

00:11:29 - 00:12:26
then go around the moon and and come back. Um, or are they putting it on a sandy foundation? You know, I know it was in Florida, so I have to be careful here. But, let's say that instead of building it on this really solid platform, they just put it on a beach. Just on a random beach. Um, they're like, "Yeah, let's see what happens with it." It would be uneven, it would be off, it would not have enough momentum to really carry it forward and move things up. It was built on a foundation. Now, if you want to

00:11:58 - 00:12:52
launch your own assisted living business, a word that I often use here on YouTube, then you need to have a firm foundation. You need to have a platform that you can build on so that when you're ready to go, you can launch off of it because you have a firm foundation. Okay? I'm hoping that visual kind of sticks in your mind and helps you understand why it's so important for you to build this foundation, to identify your model, market, and your money. And when you do those things, you're going

00:12:24 - 00:13:13
to be successful. Now, if you found this helpful, make sure you like the video, subscribe, ring the bell, do all those things that YouTube tells you to do. Um, so that more people can see this video. I love helping people and coaching people just like you. But, are you interested in residential assisted living and you're just not sure how to get started? At Assisted Living Investing, I help healthcare workers start their own assisted living business so they're not stuck trying to figure it out and know

00:12:48 - 00:13:13
exactly what they should do next. And I'm here to tell you that if you keep going and keep making progress step by step by step, I promise you, you're going to be successful. Thanks for watching and have a great day.

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