Avoid These 3 Big Mistakes When Launching Your Assisted Living Business
Oct 01, 2025
Starting an assisted living business can feel exciting—but also overwhelming. Where do you start? What pitfalls should you avoid? Many beginners jump in without fully understanding the challenges, and that can cost a lot of time and money.
Good news—you don’t have to figure it out alone! Today, we’re breaking down the 3 biggest mistakes beginners make when launching an assisted living business—and how to avoid them. Let’s dive in! ๐
Check out this video, too:
Mistake #1: Skipping Market Research
One of the biggest mistakes is assuming a location is good just because someone else set up their facility there. Each market is different, and your success depends on understanding your specific area.
Here’s what to do:
โ
Check the senior population in your area – Publicly available data can tell you how many seniors live nearby, what their needs are, and where they are moving for retirement.
โ
Look for oversaturation – Just because a large facility exists doesn’t mean the market isn't crowded. Make sure there’s room for your business to grow.
โ
Know your audience – You aren’t marketing directly to the residents; you’re marketing to their families, children, or grandchildren who make decisions about their loved ones’ care.
Think about families relocating to retirement hotspots—they want their loved ones nearby. Doing this type of research will help you choose the right location and reduce the risk of overspending or starting in a market that won’t support your business.
Mistake #2: Underestimating Startup & Operating Costs
Another major mistake is not fully understanding the costs involved in starting and running your assisted living business. Expenses add up fast, and beginners often underestimate what it will take to operate successfully.
To avoid surprises:
โ
Use an underwriting calculator – This free tool helps you see if your assisted living business will be profitable before you commit.
โ
Understand the main expenses – Staffing, food, utilities, licensing, insurance, and property costs can easily exceed your initial expectations.
โ
Have 3–6 months of operating capital – Early income may be inconsistent. Even if you’re buying an existing business, it can take time to get full occupancy or handle billing delays.
Being conservative with your projections protects your cash flow and ensures you have a safety net. This approach allows your business to survive the first months, which can be the hardest.
Mistake #3: Hiring the Wrong Team
Finally, hiring the wrong people is a mistake that can make or break your assisted living business. Staff quality directly impacts resident satisfaction, family trust, and your reputation.
Here’s how to hire the right team:
โ
Hire slow, fire fast – Take time to find the right people who fit your culture. Don’t keep employees who disrupt your operations or negatively affect residents.
โ
Offer competitive pay – You don’t need to be the highest paying facility, but fair and competitive pay helps retain high-quality staff.
โ
Provide proper training and onboarding – Support your staff with clear policies, education, and guidance so they can succeed.
Strong policies, supportive culture, and consistent training not only keep your staff happy—they improve resident care and satisfaction. Happy staff equals happy residents, which equals long-term business success.
Avoid These Mistakes With Assisted Living Investing
Assisted Living Investing offers tools to help beginners avoid common pitfalls:
๐ Free Underwriting Calculator – Understand if your business will be profitable.
๐ Launchpad Bundle – Learn market research, business planning, and how to underwrite effectively.
๐ 3–6 Months Operating Capital Guidance – Stay prepared for early cash flow gaps.
๐ Staffing and Policy Tips – Build a strong, happy team that supports your facility.
๐ก Step by step, consistent effort will lead to a successful assisted living business. You don’t need to rush—small, steady progress adds up.
Next Steps: Take Action Today! ๐
โ
Step 1: Download the FREE Business Plan Checklist to start planning your assisted living business foundation.
โ
Step 2: Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
Take action, avoid these mistakes, and build a strong foundation for your assisted living business!
Show full transcript ๐
Transcript
00:00:01 - 00:00:47
Hey friend, my name is Brandon Gustafson and I help beginners like you launch their assisted living business in the next 12 months. Today we're going to be talking about some of the common mistakes that you need to avoid as you're trying to launch your assisted living business. If you need some help with that, make sure you stick around for today's video. Hey friend, welcome back to Assisted Living Investing. Before we jump into the topic for today, want to remind you to get over to assistedlivinginvesting.net.
00:00:28 - 00:01:08
a big blue box in the top right corner will get you your free underwriting calculator to help you determine if this is going to be profitable for you or not, which is going to be helpful as you're trying to launch your assisted living business. It's kind of what we're talking about today. So, I want to talk with you today about some of the big mistakes that you should be avoiding as you're trying to launch your assisted living business. And as I go through this, I want you to also head over to
00:00:49 - 00:01:48
the website assisted livinginvesting.net/aunchpad because everything I'm going to talk about today is included in that launchpad. So with that, let's get into the topic of those things that you need to avoid. Number one is market research. You have got to do market research. You cannot skip it. It's such an important piece of what you're doing because you need to determine, you know, can you can this actually be successful in the area where you're trying to do your assisted living business. You should never assume
00:01:18 - 00:02:06
anything. Assuming things is going to get you in trouble. You cannot just be like, "Oh, you know what? big box went in around the corner. So, I know that they did the market research and so this is going to be a good opportunity. Don't rely on somebody else. I don't care what anybody else has ever said to you. Do not rely on them. Make sure that you are doing the market research for yourself and make sure that you are confident that you're going to be able to do it. Just because a large location has put
00:01:42 - 00:02:27
their big footprint in an area doesn't mean that it's not oversaturated still. So, you need to be doing that market research and make sure it's a really good fit for you as you're trying to launch your assisted living business. So ways that you're going to avoid that is research the senior population in your area. You can do that. There's publicly available data that can help you and guide you through a lot of that. And again in the launchpad we have our market research guide tells you how to
00:02:05 - 00:02:57
do it. Does a lot of the research for you actually already. But that that's a tool that that you can use to see are there enough seniors in this location? Where are people retiring to? I want you to remember one thing here when it comes to market research. When you are marketing to people, the person that you are marketing to, the person that you want to be attracting to try to convince them that you are the facility for them is not the resident themselves. You're going to be talking to the resident's
00:02:31 - 00:03:26
families, their sons, their daughters, their other loved ones, their grandchildren. That's who you are marketing to. And so you want to see where are they retiring to. And the reason why you want to do that is when you think about this, I'm 60 years old. I'm not, but I'm 60 years old and I have gone over and I I've I've retired and I've moved to a different state and I've uprooted my entire family, my entire life to go there. And then all of a sudden, my mom is 80 years old and she's
00:02:58 - 00:03:47
not, by the way, she needs assisted living and and so we're going to take her, we're going to send her to assisted living, but she's in a different state. Am I really going to do that? Am I really going to feel comfortable letting somebody else in a different state that I have no access to care for my mom? I'm probably not going to do that. I would rather spend a little bit of extra money and bring her to the place that I've already uprooted myself and moved to retire. So, when you are thinking about
00:03:23 - 00:04:10
this, you have to think about who are you really marketing to? What are they doing and how committed are they to the place where they are and how much are they going to want their loved ones to come with them? So, this was actually something I teased out with an expert inside of the assisted living industry. And he's like, "That makes a ton of sense." And so, it's something that just like a little trick for you that I want you to be aware of that you want to be looking for where those places are. And
00:03:47 - 00:04:32
that's where you want to be putting your assisted living facilities. That's actually how we came up with our market in in Idaho for where we wanted to be there was doing that type of of research and it has benefited us a lot. Now, I'm not telling you that Idaho is the perfect place and everybody should go there because, you know, if you're in Florida, I wouldn't do one in Idaho. You know, if I'm in Texas, I'm probably not going to do one in Idaho. What I want you to do is do the market research to
00:04:09 - 00:04:54
see where you're comfortable doing it. That's also going to allow you to be successful. It could be where you live, could be somewhere else. You know, do that market research and see what you can figure out from that standpoint. So, if you are doing those things, looking at oversaturation, looking at the market where people are retiring and seeing where those seniors are, you're going to be able to feel pretty confident in what is out there as you're trying to launch your assisted living business. The next
00:04:32 - 00:05:19
big thing that I really don't want you to underestimate is the cost for starting this up. So, there are a lot of startup and operational costs when it comes to launching your assisted living business, and you really need to understand what those are if you're going to be successful. And specifically what I want you to be aware of are the expenses that are associated with running the business cuz there's a lot of them and it it's really hard to kind of hone in on what those are and how
00:04:55 - 00:05:43
it's going to impact you for your business. I've actually narrowed it down to the top five expenses for assisted living facilities and what it takes you to operate. If you're interested in learning more about that, type in big five down below. Now, there are a few ways for you to avoid the misunderstanding of what those expenses are. Number one is to use our underwriting calculator. Again, go to assistedl livinginvesting.net. Go to the big blue box in the top right corner. You can get that free resource. It's a
00:05:19 - 00:06:10
incredible tool to help you understand if you are going to be profitable or not. I also have my Launchpad bundle that is an incredible resource. It helps you build all of the foundation that you need. You can go check that out at assistedlivinginvesting.net/launchpad. We will link that down below for you. But in there, it's going to teach you how to build a business plan, how to do the market research. It's also going to show you how to underwrite both how to navigate my calculator that I gave away
00:05:44 - 00:06:31
for free and also how to underwrite. There's a a master class in there on like an underwrite with me master class to show you exactly how to do it. You also want to make sure that you have sufficient operating capital. What I like to tell people is you should probably have about 3 to 6 months of operating capital as you are getting started. The reason for that is the first few months, whether you're buying an existing business or you're starting from the ground up, the income is going
00:06:08 - 00:06:55
to be inconsistent. You could be just having billing problems and collecting from residents or from Medicaid or something like that or you just don't have residents in the house. And so, you want to make sure that you are able to, you know, circumvent that. You're still going to have to pay your your staff. You're still going to have to buy food for your residents. You're still going to have a lot of these expenses, pay bills, and and things like that. And so you want to make sure that you have
00:06:31 - 00:07:19
enough operating capital in hand so that you can keep the business running while it catches up. The nice thing is in assisted living, you are going to be able to back bill. And so just because you don't make money during that period of time up front, especially if you're buying an existing business, you're still going to be able to have some success there in bringing in in cash. It just might be a little bit delayed and can help you out. But understanding that having 3 to 6 months of operating
00:06:56 - 00:07:46
capital is going to be really important for you. And the other thing that I want you to be aware of is you cannot lowball the the numbers that you're thinking. I want you to be conservative in the sense that you are thinking that it's going to cost you a whole lot more to operate than it might actually cost you. The reason for that is, you know, if you are saying, "Hey, I I think it's only going to cost us like $15,000 for our staff to pay wages and payroll and all of those things." And then you start operating
00:07:20 - 00:08:12
and it's 25 $30,000 a month. It's double what you thought. That is going to significantly impact your cash flow. also potentially cause you to be losing money. And it's so much more important for you to upfront understand what that's going to look like. And if it doesn't work, then don't pursue it. Don't get these, you know, these blinders on where you're just looking at something so specific that you're like, I've got to do this when you're going to start losing a ton of cash off of it.
00:07:46 - 00:08:34
You got to be really, really careful with that. And the third one that I want to share with you is hiring the wrong team. Hiring the wrong people can have a a huge negative impact on your facility. The caregiving and administrative staff are really what makes or breaks your business. If you have really good administrator that has a handle on things, then they're going to allow your business to be successful. If you have good caregivers, it's going to make residents happy. They're going to refer
00:08:10 - 00:09:00
other residents to come to your facility. There's a lot of benefits that come from doing that specifically. So, you need to be really careful about the type of staff that you allow to come into your facility. So, some ways that you can avoid hiring the wrong team is you want to hire slow. Take some time to make sure you're comfortable with the people that you're hiring and fire fast. If you have people that come in and they're just bad apples and they just they're not a great fit for the culture
00:08:35 - 00:09:24
of the facility, they're not doing what they need to do to make it run efficiently, they're not not showing up for work, they're, you know, yelling at staff or other residents or whatever. Those are things that you need to be aware of and make sure that you are documenting it and then let them go because they're not a good fit. That I would say also goes not only for staff but for residents and for their families. It can be really tough. Those are the three big groups that you have
00:09:00 - 00:09:51
to you're dealing with a lot of people in this business. It is a very peoplefacing business and so you are going to be interacting with a lot of people. So that's something I want you to be aware of up front. But you want to make sure that everybody is comfortable, staff, residents, and their families with everything that's going on. And you're going to be interacting with all of them. And so you want to make sure that you bring people in slowly, that you do your due diligence. And if
00:09:25 - 00:10:13
somebody's a bad actor or somebody's a bad apple, let them go. It doesn't matter who they are in that in that continuum of the people you're you're interacting with, you're going to have to just let them go as as hard as that can be because if you don't, people are going to start leaving. You have to protect the culture that you're trying to build at your facility. With staff specifically, you're also going to want to offer competitive pay. Doesn't mean you have to be the absolute highest
00:09:49 - 00:10:38
paid, but you want to be offering pay that is competitive for the industry. You want to make sure that they are getting properly trained, that they have kind of the support that they need so that they can be successful, education, onboarding, everything there is a good experience for them. Because if you do that, it's going to make them want to stay. And the more consistency you have with your staff, uh, it's a lot easier to fill shifts, but it also makes residents feel a lot more comfortable
00:10:14 - 00:11:02
just living in the home. You're also going to want to have really clear policies and procedures that you follow. Don't just write them. Don't go pay somebody to build them. Don't use AI to generate these policies and then never look at them. You have to put them in place. You have to follow them and make sure that staff are also following them so that you can be successful as you're trying to launch that assisted living business and run the the business in a way that's going to keep residents
00:10:38 - 00:11:23
inside of the home. Now, if you found these three common mistakes that people make and how to avoid them helpful, make sure you like the video, subscribe, and ring the bell as well. We put out content like this. On Tuesdays, we do a live. On Thursdays, we do a video like this. And I don't want you to miss any of it. So, make sure you're ringing the bell so you get notified when we put out amazing content like this. And if you need some help as you're trying to navigate this, I mentioned the Launchpad
00:11:00 - 00:11:43
bundle. It's an incredible tool to help you build the foundation that's going to help you navigate all of these things. Go to assistedlivinginvesting.net/aunchpad /aunchpad and it can help you out with that. Does residential assisted living sound interesting to you, but you don't know how to get started? At Assisted Living Investing, I'm here to help beginners like you launch their assisted living business in the next 12 months. I love helping and coaching people. And I'd love to help you along your journey
00:11:22 - 00:11:51
as you're trying to launch your assisted living business. And remember, it doesn't take a lot, just a little bit. Just keep going step by step by step. And I promise you, if you do, and you're consistent and persistent, you're going to be successful. Thanks for watching and have a great day. [Music]
Download Your FREE Calculator
Stay connected with news and updates!
Join our mailing list to receive the latest news and updates from our team.
Don't worry, your information will not be shared.
We hate SPAM. We will never sell your information, for any reason.