Four Big Mistakes to Avoid When Launching Your Care Home
Sep 24, 2025
Starting your own care home can be exciting. You’re creating a place where seniors can feel safe, cared for, and valued. But here’s the thing—many beginners make costly mistakes that slow down their progress or even cause their business to fail before it gets off the ground.
The good news? You can avoid these mistakes by learning from others who have been there before. Let’s break down the four big mistakes you should avoid so your launch is smoother, faster, and more successful.
Check out this video too:
1️⃣ Not Doing Proper Market Research
Too many new owners jump in without fully understanding their market. This leads to opening in the wrong location, targeting the wrong audience, or charging prices that don’t match the demand.
What to do instead:
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Study your area’s demographics—know the average age, income level, and care needs.
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Research competitors—how many beds do they have, what do they charge, and how are they marketing themselves?
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Talk to referral sources—connect with hospitals, case managers, and social workers to find out what’s really needed in your area.
💡 Tip: The more you know about your local market, the better you can position your care home to stand out from day one.
2️⃣ Underestimating Start-Up and Operating Costs
In addition to buying a home, you'll also need to budget for renovations, licensing fees, staffing, marketing, and ongoing expenses. Many new owners run out of cash before they ever reach full occupancy.
What to do instead:
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Build a detailed budget that covers at least 12 months of expenses.
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Plan for slow growth—assume you won’t be full right away.
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Have a reserve fund to handle unexpected costs like repairs or staff turnover.
💡 Tip: Use the Underwriting Calculator to accurately estimate your costs and avoid being caught off guard.
3️⃣ Skipping Licensing and Compliance Steps
Licensing can feel overwhelming, but skipping steps or trying to “figure it out later” can lead to fines, delays, or even being shut down.
What to do instead:
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Contact your state licensing agency early to understand all requirements.
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Get your paperwork in order—policies, procedures, and safety plans must be ready before inspections.
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Schedule inspections ahead of time so you don’t delay your opening.
💡 Tip: Compliance isn’t a one-time thing—it’s an ongoing process you’ll need to maintain for the life of your business.
4️⃣ Not Building the Right Team
You can’t run a care home alone. Hiring the wrong people—or not enough people—can quickly damage your reputation and overwork you.
What to do instead:
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Hire for both skill and compassion—your staff should be competent and truly care about residents.
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Train your team regularly to keep care standards high.
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Delegate effectively so you can focus on growing your business, not just putting out fires.
💡 Tip: A strong team doesn’t just care for residents—they help market your home through great word-of-mouth.
Final Thoughts
Avoiding these four mistakes can save you time, money, and stress when launching your care home. By doing proper research, budgeting wisely, following compliance rules, and building a great team, you’ll set your business up for long-term success.
📥 Free Resource: Download the Business Plan Checklist to make sure you include all the important sections in your $1 Million Business Plan.
Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
Show full transcript 👇
Transcript
00:00:00 - 00:00:46
Hey friend, I'm Brandon Gustafson. I help beginners like you launch their assisted living business in the next 12 months. In today's video, we're going to be talking about four big mistakes you should avoid if you're trying to launch your care home. If you're interested in learning a little bit about what those are and how to avoid them, make sure you stick around for today's video. Hey Fred, welcome back to Assisted Living Investing. Excited to have you here. Before we get started though, I
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want to remind you to go and grab the free underwriting calculator. It's go to assisted livinginvesting.net. It's a big blue box in the top right corner. You can't miss it. Go grab that free tool. It will help you as you're trying to move things along and launch your assisted living business. Let's get into the topic for today. What we're talking about is four big mistakes that you should be avoiding or things that you need to kind of navigate around if you're trying to launch your care home.
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The first one I want to talk to you about is marketing. like waiting too long to start your marketing efforts. And with this, there's a few things here. One is website, website, Facebook, you know, getting yourself out there, putting yourself online. And and a lot of people don't do that because they feel like it's jumping the gun and they worry about its ability to, you know, people are going to think I'm weird. I got to be honest with you, most people are not going to be looking at it off
00:01:20 - 00:02:11
the jump. They're they just won't find it. You're not going to have honed in SEO. you're not going to have a lot of people going to the website. Most people aren't going to know about your Facebook group. And so, you need to build those things. Learn a little bit about it to see where it goes and start getting some traction with it. One mistake that I see with marketing all the time is you wait too long. I was just in a podcast with with somebody that now owns an EHR company. Before that, he had owned
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facilities for 15 years or so. And what he said in his experience owning facilities and also now doing EHRs and talking with a lot of facility owners is a lot of them will wait until they open their doors or even a couple months after before they start any marketing efforts. And what we had talked about is you've got to start like six to nine months in advance, especially your website because nobody's going to see it. You need to start building some traction, start building a profile for
00:02:13 - 00:03:08
the internet to want to bring that up. And so that's a big one for you to do. In addition to the kind of internet marketing and building that out, uh what you're going to want to do is start doing some network marketing. Get out, start talking to people. Start building relationships with the discharge nurse at the local hospital. Go build relationships with case managers. Go talk to a bunch of other people and start building relationships there so that you can have some success as you're
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trying to get people to know that that you're coming. you're you're going to be opening up your business and that they can start keeping an eye out for it and looking for how you guys can work together. That's something that's really important. And related to that, like some people are going to wait until they have their facility license before they start doing any of that networking because it feels awkward, right, to be like, I am I'm thinking about doing this. And there there's kind of a fine
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line between the person like I don't know if you've seen the commercial that's kind of relevant right now. Uh it's like a renovation one. And I can't remember who the company is, but it's this guy. I'm we're going to renovate our kitchen. We're going to do it. Yeah. Have you seen this type of thing with the kitchen? And he keeps talking about it and finally goes and talks to a financial adviser who's like, yeah, let's figure out a savings plan so that
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you can actually renovate. And he's like, you know, eyes are wide open. You don't want to be that guy that's just like consistently, hey, I'm going to renovate my kitchen. I'm going to start my care home. You want to be a little bit more than that and and be dedicated to it, but you do want to be talking about it and get people excited about it and get people thinking about who you are and and what you're going to do. So, the way that you can avoid this, the the whole marketing piece here is to start
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marketing at least 3 months before you open your doors, if not more. 6 to nine months is really what I would tell you to do. Um, once you have committed and you're ready to go, start talking to people, start building your website, start getting yourself out there. We did that. We had built our website probably four months before we launched our assisted living business when we bought our first one. So, the earlier you can do this, the better off you're going to be. Start building relationships with
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those key players, with the discharge nurse, with case managers, with home health agencies. Get out there, start canvasing the group. Don't just get a a business card or build a a little pamphlet and go hand it out to everybody. Like really build relationships with them. Spend some time with them. Get to know them. Get to understand how they work, what their needs are. See how you can serve them. And then also drop, hey, I'm starting this assisted living facility, this care home. Is this something that we can work
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on together? And how can we create a reciprocal relationship there? And the other one is to get your website up. Get create a Google business profile. Start getting on Facebook. Start posting a bunch of things. Start putting yourself out there and getting people excited so they know where to go. Share it on your personal profile where you already have a following with your friends and family members. And doing those things is really going to help you make some really good progress as you're trying to
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get the word out about what you're trying to do. So, the next one that I want to talk to you about is hiring the wrong staff. Some common mistakes that I see here is when it comes to hiring the wrong staff. If you are in a hurry, so you hire cheap staff or unqualified staff. Sometimes you're going to fail to do background checks or do a follow-up with the references that that people are sending you or you're forgetting to train your staff. These things can really throw a wrench in your ability to
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get really good highquality staff that are going to stay with you for a longer period of time. So ways that you can really kind of navigate that and avoid that pitfall is going to be doing background checks on your staff, making sure you understand who they are, like do they have a history of drug use or violence or those types of things. You want to be looking at it. It does not mean, by the way, that you cannot or should not hire those people. It's just you want to be a little more cautious
00:05:59 - 00:06:51
with them and understand their story. And you know, maybe it was something that was 10 to 15 years ago and they've made a lot of corrections since then. very possible or maybe they were wrongly accused. Like there there's so many different dynamics that go into that and so you want to make sure that you understand what that is. Next is having a solid training and onboarding process. I cannot stress how important this is. It it's so important for you to bring your staff in to get them trained up in
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the way that you want them to do things. Make sure they understand the policies and procedures, how things work, how to interact. if you're using like an EHR system or time tracking system or whatever it is that you are training your staff on how to use those things so those tools actually get used. Super important. Also just like general education and training and things that may be required in your state or that people should be doing from a continuing education credit standpoint. Really important. And then I would also highly
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encourage you to use experienced staff that have good re references. Now, experienced staff, it's good if they already have that experience in in health care and caregiving, but I would say it's not absolutely necessary. It's okay to take a risk on certain people from time to time. But in that instance, I would want to get a feel for who they are. Ask their references, see if they have references, chat with those references, see what the impression has been. And if you can get former
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employers, it's even better for you because then you can see what type of worker they are, how reliable they are, those types of things. Those are a few ways that you can really avoid that pitfall of just having really bad staff. Because if you have bad staff, you're going to have a ton of turnover and that can lead to a lot of burnout for you if you're the administrator or for your administrator and can just make life a whole lot more difficult. And so you want to be aware of what that's going to
00:07:45 - 00:08:38
look like. The the third one that I want to talk to you about is underestimating your startup costs. Some of those common budget mistakes that I see is you haven't budgeted enough for renovations or licensing fees or emergency funds even cuz those will happen. So you you've not budgeted for those. You're going to a lot of people make an assumption that you're going to be full right off the bat. Often times it's going to take you a few months, several months for you to get your facility up
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to capacity. And so you can't just assume, oh man, I I did my underwriting and it looked great um because you know at eight beds everything's fine when everything's full when in reality you might start off with two people in there for the first month or two and then you're up to four and then five and then six and then seven and then back down to six and then you're at seven and then you get to eight for a couple months you come back down. So you cannot make assumptions that everything's going to
00:08:38 - 00:09:38
be perfect and you're going to be fully occupied. you need to make the assumption that that will not happen and plan accordingly um because that will make or break your ability to own and and launch your assisted living business. Another one is undercutting some of those major expenses specifically staffing. Like you think that staffing is only going to cost, you know, 15,000 when in reality it's 25 30,000. So you need to understand what those expenses are so and and not undercut them. If anything, you want to
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budget a little bit more so that you have a little bit more wiggle room as you are actually starting the operations. So, ways that you can avoid this is planning for like a 3 to six month operating capital budget when you're trying to get your funding, when you're working with lenders or with partners that you are having that conversation with them and you've budgeted in that 3 to six month buffer for it. We did not do that on my first facility. We did do it on our second facility. We only did like a month and a
00:09:34 - 00:10:28
half, but man, it made a huge difference in our ability to be profitable and the breathing room that it gave us. And it's not uncommon for lenders to be able to give you that type of a buffer for it. So, that's something that I highly highly encourage you to do as you're trying to figure things out. Next is like use the free underwriting calculator that I have available for you. Again, it's assisted livinginvesting.net. You can go and grab that. It's the big blue box in the top right corner. But
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doing that, understanding your underwriting, and getting really comfortable with it is going to help you avoid a bad mistake. What I do not want you to do is just be like, "I watched a YouTube video. Somebody said I could make $10,000 a month for every single house, and it's super easy, right?" I I don't want you to do that and then to just jump into it. Do not do that. spend time, build your foundation, and understand what those expenses are going to look like so that you can have more
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success from a profitability standpoint in the way that you're operating the business as well. Uh, very very important for you to do that. And in that vein, check out my my Launchpad bundle. Go to assisted livinginvesting.net/launchpad. In there, it's a course has all of the resources you need to help you build the foundation that you're going to need to launch an assisted living business. So in there we have an underwrite with me session where you can underwrite a deal, build your business foundation in a
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workshop style, understand exactly how to use the calculator, market research, how to do that, setting up your entity, all of the things that you need to build a foundation is inside of that launchpad bundle. So make sure you go check that out. Again, assisted livinginvesting.net/launchpad. The the fourth one that I want to talk to you about and what can really make it so you're not successful. Some of these pitfalls that you want to avoid is not having a business plan. And we just talked about that a second ago in the
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Launchpad bundle. But you know, some of those common mistakes that I see with this is you don't have a plan. You just are like, I watched that video. They said it was good. I'm jumping in. And so you don't have this plan on how you're going to operate or how you're going to get the funding, how you're going to grow. You don't have any real direction. And these are things that can like lenders will tell you no. Lenders will say now like we're not going to work with you. You you don't know what you're
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doing and not so many words but that it will be the gist of what they are telling you because you don't have a plan. Banks, investors, they're not going to take you seriously if you don't have a plan on what you're going to be doing. It can be hard to build a business plan. Like I I totally get it, but you need to have that in place. And you're also going to struggle with some of the unexpected costs and and probably make poor decisions as you're trying to do this if you don't have a vision for
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where you want to go. A lot of what I do when I coach people is we spend a ton of time building that foundation because it is so important. We have a lot of back and forth on that business plan because it leads to success. And through that process, I've secured over $1.5 million in SBA funding. I've used a lot of what I learned there to do 1.2 and 2 million in grant funding. I've worked with my clients and have helped secure hundreds of thousands of dollars in funding as well. All based off of largely that
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business plan and helping go through things, anticipate questions, see how you're going to get there. And so, if that's something that you need help with, again, I'm going to encourage you to go and grab the launchpad bundle. Uh it's it's a really useful tool. Go grab the business plan checklist as well. We're going to link all this stuff down below so you don't have to like remember it. But the business plan checklist is a list of all of the things that you need to have in your business plan. All of
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the sections and why they're important and how to write for those so you can be successful. So that and that one's at assisted living.net/bp checklist. Also, I have a new group and it's called ALI basics. And in there we give you weekly tips. you have the ability to ask questions and help you navigate a lot of what you're experiencing as you're trying to get things off the ground and launch and you know start your assisted living business. I would love to have you join that. If you go to assisted
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livinginvesting.net/basics, you're going to see what that looks like. It's a very lowcost membership for you, but you get a lot of access to me, a bunch of resources, and I can help you along the path as you're trying to launch your assisted living business. So, this video, we've we've packed a ton in here about the things that you're going to try to avoid as you're trying to launch your care home. If you like this video, if you found it helpful, make sure you like the video, subscribe,
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and ring the bell as well, so you get notified every time we put out content like this. We go live on Tuesdays, we put out this content on Thursdays, plus we have a bunch of other stuff. And so, if you're not subscribed, then you're going to miss out on all of the useful information to help you launch your assisted living business. To recap, we talked about four big reasons that people fail as they're trying to launch their care home and their assisted living business. One is marketing.
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They're not doing marketing. They're not starting fast enough. Two is staff. They're they're not putting the time and effort to get good, high quality staff in. Number three is all about funding and understanding the funds and if it's going to be profitable or not and making good financial decisions. And number four is building out that business plan and make sure you have that for direction and where you're going to go and how it impacts your ability to work with lenders. Does residential assisted
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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. I would love to do that for you as well. 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
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a great day. [Music]
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