Are Assisted Living Deals Really Killed by Staffing Costs?

assisted living business plan assisted living payroll assisted living profit margins assisted living staffing costs care home expenses caregiver wages assisted living caregiving staff cost how to start assisted living business staffing assisted living homes May 15, 2026

If you’ve been looking at assisted living, you’ve probably thought, “This sounds great… but staffing feels expensive.” I hear this all the time. The truth is, staffing is the biggest piece—but it doesn’t have to stop you.

Want the full breakdown? Watch the video below👇

Staffing is the hardest part—but it’s also the most important

Let’s be honest. Getting residents into beds is not the hardest part. Staffing is. It’s the one thing that will make or break your assisted living business.

I’ve seen people get excited about a home, only to freeze when they think about hiring and paying staff. But once you understand the numbers, it becomes much clearer.

💡 Staffing usually makes up 50–70% of your total expenses. That’s why you need to get this right from the start.

Start simple by understanding your weekly shift coverage

You don’t need complicated math to figure this out. Start simple.

Most homes run on 3 shifts per day, each 8 hours long. That gives you:

3 shifts per day
7 days per week
21 total shifts per week

If you only need 1 caregiver per shift, that’s your baseline.

From there, think about how many shifts one person can work. A full-time employee usually works about 5 shifts per week.

So:

21 total shifts ÷ 5 shifts per person = about 4.2 people

You round up. That means you need 5 staff members.

✅ Keep it simple: count shifts first, then divide by what one person can handle.

Turn your staffing plan into a real monthly cost

Now let’s turn that into dollars so you know what you’re actually dealing with.

Here’s a simple example:

$20 per hour
40 hours per week
That’s $800 per week per staff

Now multiply:

$800 × 5 staff = $4,000 per week
$4,000 × 4 weeks = $16,000 per month

That’s your caregiving payroll.

But don’t stop there. You also need an administrator.

Let’s say:

$60,000 per year salary
That’s $5,000 per month

Now your total staffing cost becomes:

$16,000 (care staff)
$5,000 (admin)
= $21,000 per month

That’s a real number you can work with.

✅ Formula to remember: hourly rate × hours × staff × 4 weeks

Small mistakes in staffing can destroy your profits

This is where most people get into trouble.

If your staffing is off—even a little—it can crush your margins.

I’ve seen payroll jump fast when:

Overtime kicks in
Staff call out
You need extra help for higher care residents

💡 Even a small increase in payroll can wipe out your profit.

That’s why you need to:

Know your local pay rates
Plan for backup coverage
Build in a cushion

You can even check sites like job boards to see what caregivers are earning in your area before you run your numbers.

Paying staff well can actually save you money

This might sound backward, but it’s true.

If you underpay, people leave. Then you:

Hire again
Train again
Pay overtime

That gets expensive fast.

I’ve seen better results by paying a little more and keeping good staff longer. Stability matters.

💡 Turnover costs more than higher wages in the long run.

You must build your foundation before jumping in

This is the part most people skip—and it’s why deals fail.

They think:
“I have a house. I’ll turn it into assisted living.”

But they don’t:

Then they lose money and don’t know why.

You don’t want that.

Take time to:

Understand your staffing needs
Know your monthly costs
Build your plan before you start

If you’re working toward funding, this is the best time to do it.

Wrap Up

Staffing is not the thing that should stop you—it’s the thing you need to understand. Once you know how to calculate your shifts, staff, and monthly costs, you can move forward with confidence. This is how you quickly tell if a deal works or not.

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 - 00:00:54
Hey friend, uh, have you been looking at assisted living and you are just like thinking to yourself, it sounds really interesting, but um, you know, there's it costs a lot. I'm going to have to staff people. This is going to be really hard. It's going to be really expensive. And that is a thing that is just like holding you back from getting started. And you're just like you're just not sure that this is the right thing for you because you don't that that level of staffing you're going to have to to

00:00:27 - 00:01:19
handle. um the amount of money you're going to have to pay for staffing, that all seems a bit much to you and and you're just like, h I don't know, maybe it's just not the right fit for me. Well, in today's video, I'm going to help answer that question for you. I'm going to make sure you have an understanding of what it costs to fund your uh to to to pay your staff, what that looks like, why it is actually the hardest part of assisted living. You know, actually getting people in the

00:00:53 - 00:01:45
beds is not that hard. Uh it's actually the staffing. Staffing is the thing that is going to make or break you. And so I want to break that down for you here in today's video and help you understand what you're getting into and how you can uh leverage this knowledge and help you kind of level up and make some progress as you're trying to launch your assisted living business. Hey friend, my name is Brandon Gustafson. I help I help healthcare workers who are just trying to figure out how to get started on

00:01:19 - 00:02:08
their assisted living journey figure out how to get unstuck and stop feeling overwhelmed and help them move forward. So, if that's you, make sure you uh are paying attention here because I'm going to help you out and and give you some guidance here. Get over to assisted livinginvesting.net. I can give you some guidance on how to get started, including the number one mistake people like you are making and not getting started. So, head over to the website assisted livinginvesting.net, grab that

00:01:43 - 00:02:41
that training, and uh let's get started today. So today, what I'm going to talk to you about is uh we're going to go over the understanding the weekly shift requirements. And there's a lot of confusion online about this out there. So, I want to make sure you have a really solid understanding of how you can calculate that information, calculating those staff needs, what that's going to what what you're going to need to pay on a monthly basis, how to account for your administrator as

00:02:12 - 00:03:03
well, and how staffing really is going to drive your success or failure as you are trying to get started on your assisted living journey and making this make sense for you so you know if if you're going to be profitable or not. Uh, that's what I really want to to help you out with today. So, this is there's a little it's going to be a little bit technical. We're going to do a little bit of math here. So, hopefully you can follow along. I know math is is sometimes a little bit scary, especially

00:02:38 - 00:03:37
for me when I'm doing this live and trying to help you understand how to uh how to do the math. Uh, so uh yeah, grab a pen, grab some paper. Uh, it might help you out as you're trying to figure this out and and doing some of the exercises that I'm going to give you as you're moving along through this. So let's talk first about understanding weekly shift coverage requirements. So each state is actually going to be different. You need to also decide um what type of shifts you want to do. Do

00:03:08 - 00:04:03
you want to do three 8 hour shifts? Do you want to do 212s? How do you want to structure this? And those of you who are my nurses, you know that this is actually pretty common in this world where you've got shift work, right? 38s, 212s. um you're working maybe you're working uh chunks of time where you work like 40 hours in in a 4-day period and then you get four days off uh you know four on four off whatever it is that that works for you. You you get to set this up for your facility. So whatever

00:03:35 - 00:04:37
you feel comfortable with is what you can do. Now I'm going to use in my example three shifts of eight. So we do eight hour shifts. Uh there's three of those per day, right? 8 * 3 24 hours. That's how many we have. There are seven days in a week, right? So there are in this example, there are 21 total shifts that I need to have um covered in in my facility. This is actually how we do ours. If I have and and your state's going to have different rules and regulations, a lot of staffing requirements are

00:04:06 - 00:05:06
actually based now off of care needs. There used to be certain uh state requirements that that you had to hit certain levels per how many uh residents you had in the facility. I'm seeing a lot of actually a really big trend away from that and it's just focused on meeting the care needs of the resident. So in this example, we're going to say that you need one shift per um what one staff per shift and that's your baseline coverage model that you're going to need in your uh in your facility. You may

00:04:36 - 00:05:31
want to have multiple multiple staff. You may need to have multiple staff depending on the care needs of your resident or depending on your state. if there's a requirement that you have, you know, one resident per one staff per five residents. Understand what that looks like for you. But if you can start really simple and understanding, hey, I'm doing three 8 hour shifts, there's seven days in a week, that's 21 total shifts. I need one staff member per shift. Now I can really start to see how

00:05:03 - 00:05:59
many staff do I need to fill this. That that that's as simple as it gets. Okay. So from there, let's kind of calculate a little bit how this works. So if I have one employee that is working roughly five hours per shift, right? That's 40 hours per week. Then um I'm going to take the total number of shifts that I have that I've got to I've got to fill. So there's 21 in this example. I'm going to divide that by five. That's how many shifts a typical person is going to to

00:05:31 - 00:06:29
be working. So 21 divided by five is going to be just over four staff members. Okay? So, I always round this number up just to make sure I have plenty of coverage on there. So, we're just going to say I need five staff members. Um, you could do four and a half if you wanted to. You maybe have four full-time, one part-time person. Um, or or some variation of that, but I'm I'm just going to say we we need five people here in in this because it makes math a lot easier when I'm trying

00:05:59 - 00:07:06
to do this for you. Okay. So, the next thing you need to do once you figured out how many staff you need to to make sure this is going to work is to convert your staff number into a monthly dollar amount so you can see exactly how much this is going to to cost you. So, let's use this example. We're going to we're going to say that we're paying them $20 an hour. Again, we're making that math really really easy. You can adjust this to to your needs. Now, $20 per hour. We have a person that's working 40 hours

00:06:33 - 00:07:40
per week. So, we're going to do 20 $20 per hour times 40 40 hours per week. That's $800 per week for this one staff member. Now, I'm going to multiply that by the number of staff that I have, which is five, right? So, $800 per week times five for that many staff is $4,000 per week. Did I do that math right? Yes, I did. Okay. math for whatever reason was like off a little bit in my head. Okay, so that's I'm going to know it's $4,000 per week and then there's four weeks in a month.

00:07:07 - 00:08:21
So $16,000 per month is what it's going to cost me for my staff in this very simple, really nicely uh organized way of doing math for for my facilities. I can see it's going to cost me about $16,000 per month. Um, if I want to have one staff member per shift and I need um I'm working 38 and I'm paying them $20 an hour. Okay, you can adjust this very very easily. Your formula is going to be your dollar per hour you're paying them, how many hours per week they're going to work, times that by the number of staff

00:07:44 - 00:08:34
that you're going to have, and then that gives you your weekly amount. They times that by four, that gives you your monthly amount. It's really actually pretty simple math uh when it comes down to it. Now, you do need to that those are just going to be your your caregiving staff. It's not going to take into account your administrator. So, you need to take into account that you're going to have to also pay a facility administrator on top of that $16,000 per month that we're paying for the

00:08:09 - 00:09:05
caregiving staff. Also, I want to just make make sure this is clear. the that payroll number that we just got to is not going to take into account like your workers comp, which could be built into your uh into your payments there. It's not going to take into account taxes and and your payroll um system, which by the way, use Gusto for that. I'll put a link down below in the comment section or in the bio, the the video description. That's the word I'm looking for. Um go use Gusto. Gusto is great. I I've used

00:08:37 - 00:09:44
it for years. Um, and if you use the my referral code, then it'll give you a $100 gift card the first time you run payroll. So, go check it out or just type in gusto down below. We'll get you the link. Anyways, with your administrator, you're going to be paying somebody between $50,000 and $150,000 per year probably. Okay, I'm going to use simple math to make my life easier. We're going to pay our administrator $60,000 per year. That's $5,000 per month. 60 divided by 12, $5,000 per

00:09:11 - 00:10:12
month. I'm going to add that to my caregiving labor cost. So now I have 16,000 for for the caregiver staff. I have 5,000 for my administrator. Now I'm up to $21,000 per month for staffing. Okay. So is that a a realistic number? Sure. Yeah, I think it is. In a small home, I think that's a number that that is real. You could adjust that based off of your hourly hourly rate. You know, maybe in your state you're only you you can justify paying people $15 an hour. It's going to adjust it down. Maybe in

00:09:42 - 00:10:44
your state you got to be $25 $30 an hour. You got to adjust it up. Maybe your administrator is going to be double the $60,000. So, you got to pay $10,000 per month. But the formulas and the way that this works and understanding how much you're going to pay that that person, um it it the formula is going to work regardless. Okay? So, just pay attention to that. That's the thing that you need to understand that um your this is how you figure out those monthly staffing costs. Now, why am I focusing

00:10:13 - 00:11:24
so much on telling you about like the nitty-gritty, the very uh technical aspect here of of trying to understand your staffing costs? The reason why is staffing is going to make up 50 to 70% of all of your expenses. It is your biggest expense. It is the thing that will make or break you as a business owner. Small miscalculations are going to potentially destroy your profit margins when you have to have more staff. Like this is something we experienced with our facility. Um if we have overtime or we're we're doing some

00:10:49 - 00:11:54
other projects and we have we have trainings or something like that. Our typical payroll for my Idaho facility, I would say, is between um 17 and $19,000 per pay period. So, um per on a monthly basis, we're up around 34 to $38,000. Okay. So, the example I'm showing you is actually a little bit low, but I have 16 residents. We have a lot more staff than than the example that we're we're using here is like double the staff. So, my payroll is going to be double, right? So, this is that's how it works. We

00:11:22 - 00:12:17
probably pay our our staff a little bit higher cuz we've found that paying them a little bit more uh keeps them around more keeps them around longer. So, uh we've got a really good system. We're able to justify that with the rates that we charge and and still be profitable. Okay. My example is not something that you should take as gospel that oh my gosh, now I have to justify I have to figure out how to pay $40,000 per month in in salary. Not the case. You're take your example. take your situation on an

00:11:49 - 00:12:56
individual uh case by case basis and make sure it works for you. But the reason you need to understand this is um like if I if we have payroll for our facility and this has happened from time to time where payroll creeps up into 23 25 $27,000 on a payroll basis, that's like almost a 50% increase over what we would expect to pay. And that's really hard um when that hits. And so you need to really hone in on what those numbers look like and understand that um this is one of the biggest levers you can pull. But you

00:12:23 - 00:13:28
also have to you have to make sure staff you need to pay your staff well and um turnover and having to train more staff is expensive because it's going to bring in more people um and you've got to train them and so it's more hours for the people that are training them and it's just more expensive. It it it takes more time. It's just you want to try to avoid it. So when you come to understand that your biggest expense and the biggest driver for your profitability apart from the revenue

00:12:55 - 00:13:55
that you're bringing in is your staffing and that big expense, you're going to have a much better handle on exactly what that's going to look like for you as you're trying to run your business. So those small miscalculations that can really destroy those profit margins for you and accurate numbers like doing the research getting on something like indeed.com and looking at how much people are paying their caregiving staff so that when you do your calculation to figure out what the hourly rate is, you

00:13:25 - 00:14:16
know what the going market rate is for a caregiving type of a person for your staff, then that's going to to really help you um hone in these numbers. And when you figure out how many staff you need in your facility, what's the requirement, what type of population do I want to serve? Is it memory care? I probably need more than one staff member per shift. Um, so how is that going to impact things? When you start looking at all of this and you understand, you can hone in on these things. You can move

00:13:51 - 00:14:58
forward with analyzing a deal with confidence that yes, we we feel really good about uh the numbers that we have here. And that is going to, you know, once you have learned how to master that, you're able to very quickly actually evaluate a deal to see if it's going to be profitable because it is one of those biggest drivers um when it comes to your ability to actually make money in this business. So, it's the necessary evil um to uh for for how how much you should how you have to run this

00:14:24 - 00:15:15
business. You have to have staff. And this is something that a lot of those people that are watching me that are like, I have this this great this great home. It's it's it's nice and small and cozy and it would be perfect for assisted living, a nice care home. I can have my my parents, my grandparents in here, a couple of their friends, and you know, we can make money. This is where you have to really pay attention because you're going to have to have staff because I mean you I guess you could do

00:14:50 - 00:15:51
this by yourself, but then you're going to get extremely burnt out and I don't want that for you. So you either have to do this by yourself and and not pay yourself very much and and you know kill yourself. Um like caregiving is not easy. Uh so it's it's going to to take a lot out of you for frankly not a lot of money. Um, and so you can do that or you can pay people, but then you need to understand that um either I've got to pay I've got to charge high rates for for the the people that I have coming

00:15:20 - 00:16:14
into my facility, which is okay because you're providing with providing them with an incredible service. U so you either need to do that or uh you got to figure something out uh with your wages. Um and if you can't make this work financially, what I really don't want you to do is think I've got this three fourbedroom home. I could turn this into assisted living and everything's going to be great. And then you get into it and you don't spend time building your foundation. You don't spend time um

00:15:47 - 00:16:37
understanding the numbers and building your business plan. And then you get upside down and you're losing tens of thousands of dollars per month. And you're you're wondering why this didn't work. And it's because you haven't spent time building a foundation, understanding the numbers, and making sure this actually is going to work for you. So, if you need some help with that, type in foundation down below. I have a program that is specifically designed to help you figure out how to

00:16:12 - 00:17:05
get started, stop feeling overwhelmed, um stop feeling stuck, and actually like get started the right way and doing those foundational pieces that are going to help you level up as you're trying to get into your assisted living business. If you are feeling stuck and you're like, I don't even have money. I don't know how to get started on the funding piece of it. The other thing that I'm going to tell you is you can work on your foundation now while you are waiting to get money. While you're

00:16:38 - 00:17:24
waiting to save up money to get started, start working on your foundation. Start building your foundation. Start doing your business plan. Start doing your underwriting. Start doing the market research. Do those things because a lender, a partner, the city where you're trying to get the home, the state when you're trying to get the license, they're all going to ask for these things. So, you might as well do it now. You can get those things knocked out of the park. you can you can do great with

00:17:01 - 00:17:56
them and then when it comes to I need to find funding, I need to talk to a lender, I need to go find a partner, I need to go find a house and make sure it's it's perfect for assisted living, you've done the leg work and it makes that process go so much more quickly. That includes what we've been talking about today when it comes to to staffing, understanding staffing and understanding how it works and understanding what those numbers look like, how to calculate your staffing needs, how to calculate your monthly

00:17:29 - 00:18:23
costs, paying your administrator and understanding how staffing really drives your success or failure in this business. And when you understand that, it opens up a world of possibilities because then you move forward with clarity and confidence that you have the right business model. Okay, so I hope you found this video helpful as you're trying to figure out how to do it. If you need some help building that foundation and moving forward and understanding these numbers, just type in foundation down below. Would love to

00:17:56 - 00:18:50
get you a program uh get you some information or get over to assisted livinginvesting.net. I have a special training that is the number one mistake healthcare workers make when they're trying to start their assisted living business. I know there's so many of you out there that are healthcare workers. You're focused on trying to to figure this out like you have worked in this industry for years. and you've been in these homes and you know that you can do it better and I fully believe in you. I know you

00:18:23 - 00:19:22
can as well, but you are focused on the wrong things as you're trying to get started. So, get over to the website, go grab the free video, the free training, uh, watch that and I think it's going to really open up your eyes as to what you could actually be working on right now to help you get started. Again, that's at assistedlivinginvesting.net. Now, what I do here at Assisted Living Investing, you know, if you're curious about it, is I help healthcare workers who are feeling stuck and overwhelmed

00:18:52 - 00:19:46
and confused about how how to get started. And I help simplify that process so you can move forward with confidence that you have the right business and help you get started the right way. Type in foundation below if you'd like to learn a little bit more about that. And with that, I just want to remind you as well that it doesn't take a lot, just a little bit. Just keep going step by step by step. I promise you when you do that and you are consistent and persistent, you're going to be successful. Thanks for watching

00:19:18 - 00:19:22
and have a great day.

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