Comprehensive Guide to Starting an Assisted Living Business in 2024
Sep 03, 2024
Entering the assisted living industry is not just a career choice; it's a commitment to enhancing the quality of life for the elderly and their families. With an aging population and increasing demand for high-quality care, there has never been a better time to start your own assisted living business. Whether you're motivated by a passion for helping others or the potential for financial success, you're embarking on a journey that can be both fulfilling and profitable.
This blog will discuss the essential steps for launching your assisted living business in 2024. From understanding market dynamics to making important professional connections, this blog will give you an idea of all you need to know to succeed in this profitable field. So, let's start by looking at the main factors that will set you up for success in the assisted living industry.
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Step 1: Conduct Thorough Market Research
Geographic Location
The first phase in starting an assisted living business is to conduct extensive market research. You must determine where to locate the business, considering a variety of criteria, such as population trends and local demographics. The political environment is a crucial factor to consider. Regulations differ among states and municipalities. Operating in a politically liberal state like Colorado may have different regulatory implications than in a conservative state like Idaho. Another crucial factor is where individuals retire, as their parents are most likely your target residents. This is critical for locating your facility in high-demand areas.
Taxation and Submarkets
You should also consider income tax rates in probable locales. High taxes may influence your profitability, so select a tax-friendly location. Also, submarkets within bigger metropolitan areas should be considered. A suburb may occasionally provide a better opportunity than the metropolis itself. Check out our Business Plan Checklist for more information, which includes extensive market research tools.
Step 2: Engage with the State Health Department
Licensing and Regulations
After you've decided on a location, the following step is to consult with the state health department to learn about licensing requirements. You must first decide the sort of license you require, then learn about the application procedure, required inspections, and associated fees, and finally, learn how compensation works for the services you will deliver. Establishing a positive relationship with the health department is critical. To ensure clarity and efficiency, initial interactions should take place over the phone.
Step 3: Check Local Zoning and Planning Regulations
Zoning Requirements
When purchasing property, be sure it is designated properly for an assisted care home. Some properties might need rezoning, ranging from simple form submissions to municipal council approval. Each town has its own set of restrictions, so starting these conversations early is critical to avoiding costly mistakes.
Step 4: Consult with Professionals
Legal and Financial Guidance
Building a strong legal and financial foundation is crucial for every business. Consulting with an attorney to establish the proper legal structure protects your business and personal assets. Additionally, working with brokers to identify suitable property and lenders to arrange financing is essential. You may need to contact several lenders before choosing one that meets your demands. Developing partnerships with these professionals will benefit your firm in the long run.
Starting an assisted living business is a complex but rewarding venture. By conducting thorough market research, engaging with regulatory bodies, ensuring proper zoning, and consulting with professionals, you can set a solid foundation for success.
To help you get started, download our Business Plan Checklist. This resource will guide you through the steps of building a solid business plan.
Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
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Transcript
00:00:00
hey friend welcome back to Assisted Living investing in today's video we're going to be talking about the basics of starting an assisted living business in 2024 and Beyond if you're interested in learning about those Basics make sure you stick around for today's [Music] video hey friend I'm Brandon Gustafson and I own and operate two assisted living facilities and I created Assisted Living investing. net to help people like you learn the ins and outs of investing in Assisted Living wel welcome to Assisted
00:00:31
Living investing in today's video we're going to be talking about the basics that you need to know about to start your Assisted Living business into business in 2024 and Beyond before I get started though I want to remind you to get over to the website Assisted Living investing. net you can get access to our free underwriting calculator it's going to help you out and I have a lot of information in there to help you through the process we also have a business plan checklist that I don't typically promote
00:00:58
and things like this but I think you're going to find that list to be super helpful we'll link it down below the the URL for that is Assisted Living investing. net BP checklist and that's going to get you access to this this great checklist is going to help you out through the process got a lot of awesome resources over at the website so make sure you get over there and see what we have we have our accelerator course and uh our business planning guide as well all of those things are going to help
00:01:24
you out in your investment Journey so make sure you get over there now let's jump into it what are the basics for starting your Assisted Living business there are four things that I want to talk to you about as we get into this number one is going to be market research so you need to figure out where it is exactly that you want to be doing but there's a lot more that that goes into this I think when people think market research they are thinking to themselves okay geographic location where do I want to go and what does that
00:01:51
look like so I want to kind of explain to you the process and in our business planning guide and in the accelerator course we actually have a bonus resource in there that is my market research guide and I give you all of the market research that I've done and I update this on an annual basis so it's just an incredible resource but what you're looking at here is yeah geographic location you want to know where you're going but you want to consider a few different things in that area politics
00:02:17
is one you you want to be aware of that as an example I'm going to give you something that we've experienced with our facilities we operate in Colorado and Idaho and from a political standpoint they are quite different I would say Colorado is is much more blue and left leaning Idaho is much more red and right leaning and what we found as we go through that is they just have a different vibe to them in the way the different regulations that they have and I know the pros and cons of each of
00:02:44
those and I don't want to get too deep into a political discussion in this but it is something that you want to be aware of that it will impact your business the politics of a state of a county of a municipality it will have an impact on your ability to run your business and so you want to to be aware of that especially in the healthcare world so that's something you want to take consideration of next is where are people going to retire and why this is important for you to to look at when you
00:03:11
do your market research is because where people go to retire they are the the population you actually want to be targeting right now because their parents are the ones that are going into assisted living so if you can find where retirement Trends are going and put your business there you're going to have a really good population of of people that have your potential residents as their parents that they're really close to and they are aging into assisted living you've heard about the silver tsunami
00:03:43
it's real and this is how you can kind of get in front of it and put yourself in a really good spot to have your beds full at your facility next is going to be taxation that's another thing that I look at so you want to look at income tax and and what does that look like and if you are in a heavily taxed location then you might want to consider looking somewhere else and so in my market research what I will do is I kind of look at these larger Metro areas and and then from there I will start looking at
00:04:11
some of the kind of submarkets to those places Bigger Pockets has some really great resources I was watching a video on that earlier today where they were talking about some of these sub Niche markets and it's a great resource for you if you get my market research and you're like okay cool this is the spot where I think we should be moving forward with our facility and you're like oh man houses are really expensive in this area I've got some things in there that get you down to those sub
00:04:37
niches and those sub markets and help you identify really good spots for you to be in so if you think that would be helpful I think it's worth the buying the business planning guide just for that resource it's really just an awesome resource is going to help you out helping you know where you should be starting your own Assisted Living business you want to do that market research to make sure you're comfortable with where you're at next is going to be getting in contact with the State Health
00:05:02
Department so what you need to do here is you're you're having conversations with them about how do I get my license and what license type do I need to have and what does that process look like what's the application what type of inspections do I need to have what does the reimbursement model look like what are the fees to starting this you want to have those conversations with the state it can be a little bit difficult to find the right person in my experience it has taken me a little bit
00:05:27
of time a couple days to figure out and mostly because I'm sending emails and waiting on people to try to figure out the right person but once you find them super helpful they're more than happy to help you through the process you're just you're dealing with government websites and they can be a little bit clunky and so trying to find the right person especially cuz this is like a a deep dive in into their websites and it's not like the nice new one that they spend a lot of money on this is one that was
00:05:52
built 15 years ago and hasn't been updated since then and so you're going to be navigating an old website so it can take a while to find them once you do though great people are going to help you out through the process and help make sure that you are running a successful business because the reason they're in healthcare is they want to help people I was talking recently with the the City of Colorado Springs about our home and some things that we are considering doing with that home and it
00:06:17
was really interesting to just like bring up some of these plans and and conversations and the amount of just love that they have for the people that we are serving it was good to have that conversation with them and I'm glad I was able to do that with that said I would say getting on a phone call with them is probably going to be your best bet having a conversation on the phone is always better than email especially from an initial conversation standpoint helps really kind of release all of the
00:06:43
the tension that goes into it and all the miscommunication once you establish that relationship I think maintaining that via email is totally fine but I think it's really wise for you to start doing that over the phone the next one's going to be the local city zoning and planning or the local mun municipality and talking to them the reason why this is important is you need to make sure that the home is zoned correctly and each municipality is going to have different rules and regulations that you
00:07:10
need to follow to make sure that you can operate a home there and and have it set if you are doing something like a conversion where you're buying a house and you want to convert it into an assist living this is an absolutely key part of starting your residential Assisted Living business without doing this you could get to the point where you bought the house you started doing some Renovations and then you you find out that it's not zoned correctly and now you got to restart and you don't
00:07:37
want to do that have this conversation upfront it's something that I teach you in in the accelerator course so make sure you're doing that going out and and just reaching out to them and figure out which municipality is more friendly to you and getting started with your Assisted Living business you also might find out that you need to reone and if that's the case it's not a big deal you just need to have a conversation with them and figure out what the that resoning process looks like sometimes
00:08:02
it's just a form that you got to fill out and sometimes it's you've got to go in front of the city council and put your business proposal out there and it's got to be voted on and and things like that so you want to figure out what that process is like as well because if it's a simple rezoning then it's not a big deal but if it's something that's bigger and and much more involved and you got to wait for votes and things like that it just might not be worth it and it's it would be better to go to the
00:08:24
city next door to work with them so it's something else that you want to look at as you're doing that market research you want to be doing all these things really in tandem because they really do work together and help you get into the right spot as you're starting that Assisted Living business and the next one is going to be contacting professionals and so I would highly recommend that you are having conversations with an attorney with lenders with Brokers this is all going to help you out the attorney is
00:08:49
going to help you make sure that you have the correct legal structure in place it's going to protect your business protect your real estate protect your personal assets make sure everything is in place I use kkos lawyers I really like them there's another one Clint Coons who you might find online as well I've never worked with him but I really like what he has online so those are a couple that I am aware of that could help you out through the process there of starting your Assisted Living business so uh worth
00:09:18
kind of looking into but I wouldn't have the conversation with them until you're like really ready to go because there's a cost associated with it but talking with the attorneys is going to help put you in a right spot working with Brokers are going to be able to help you find the right home and help you find the right spot and help you do the negotiations and just help you through the purchasing process and my broker is one of my favorite people I love working with him and he has helped me out a ton
00:09:46
and somebody that I I recommend to a lot of people when I get into one-on-one coaching situations cuz he's just great and he helps out with a lot of different scenarios and the other one is lenders you want to we talked about this in previous videos well we link those up above but you want to work with lenders and start having conversations because you're going to need to talk to 10 20 30 different lenders before you find one that's going to say yes and it's okay that they say no it doesn't mean that
00:10:15
everybody else is going to say no to you but you just need to kind of keep that in mind that you need to consistently have those conversations and build those relationships because yeah they might say no this time but on the next one you've bought another facility you have another home or two run and they're more than happy to work with you cuz you've maintained a good relationship with them and you've shown your creditworthiness and your business AC even those types of things go a long
00:10:40
way and so building relationships with lenders is going to help you out in the long run and also as you're trying to get everything up and running with your Assisted Living business does residential Assisted Living sound interesting to you but you don't know how to get started at Assisted Living investing. net we are here to help you through the process from start to finish I want to thank you for watching thank you for kind of being here with me and and learning about these basics of starting your own residential Assisted
00:11:03
Living business you can do it I promise and assisted living investing. net is here to help you out through the process get over to the website download the free underwriting calculator get that b business plan checklist BP checklist is the URL there at the end of Assisted Living investing. net we'll link both of those down below so you can get access to them very easily you can also get the accelerator course or the business planning guide all those things are going to help you out on your investment
00:11:28
Journey it's what I'm here for to go through that process and if you feel like you need some one-on-one coaching sign up for our mentorship and we can have a free Discovery call and have that conversation there as well I want to thank you for watching make sure you like the video subscribe and ring the bell so you get notified next time we go live and next time we put out new content on the channel so that you can stay up toate on the most current information that's going to help you out
00:11:51
on your investment journey and remember it doesn't take a lot just a little bit just keep going step by step by step I promise you that if you do you're going to be successful just be cons consistent and you're going to have success thanks for watching and have a great [Music] day
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