How to Operate a Profitable Assisted Living Facility: 6 Keys to Success
Aug 01, 2025
There's a lot that goes into running a successful assisted living business. In this blog, we’ll break down exactly how to operate a profitable assisted living facility from the ground up.
Let’s dive in.๐
Check out this video, too:
Why This Matters
Many beginners think running a facility is all about having a home and hiring staff.
But if you don’t know how to:
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Plan meals ๐ฝ๏ธ
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Control your top 5 expenses ๐ธ
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Lead your team effectively ๐ฌ
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Set up strong financial systems ๐
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Build key vendor relationships ๐ค
…you’re setting yourself up for burnout (and a failing business).
Let’s fix that.
๐ฅฆ 1. Feed Residents the Right Way
Feeding your residents is important, but you can make your life a lot easier if you:
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Plan for the groceries you need to buy – Don't just guess, get organized.
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Plan meals in advance – Use a tool like Grove Menus. This type of tool can help you:
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Meet state nutrition requirements
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Get automated grocery lists
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Save money and time
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๐กPro Tip: Meal planning software is one of the easiest ways to stay compliant and control costs.
๐ฐ 2. Manage the 5 Biggest Expenses
These five categories make up 80–90% of your total expenses:
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Wages – Your biggest expense by far (often 50%+)
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Insurance – Shop around! Use an insurance broker to get better rates and the correct coverage.
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Food – Use software like Grove Menus to control this cost, and services like Walmart+ to get your groceries delivered
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Utilities – Set up balanced pay plans or negotiate better rates for savings.
- Debt service – The amount you pay for your mortgage or loan
๐ If you want to be profitable, get a handle on these five first.
๐ฅ 3. Lead Your Team (Even If You’re Out of State)
You don’t have to live near your facility to be a strong leader.
Here’s how I do it:
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Hire well – Build trust with your on-site team.
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Be present (remotely) – Set up regular calls or check-ins.
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Visit when you can – Physical presence still matters.
Leadership = Presence + Process
Even if you’re managing from a different state, consistency builds culture.
๐ณ 4. Use a Financial Management System
Most beginners skip this step.
Try one of these systems:
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Profit First by Mike Michalowicz – Teaches how to allocate money across accounts.
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How to Grow Your Small Business by Donald Miller – Focuses on strategy and scaling.
You need to know:
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Where your money comes from
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Where it’s going
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How to track and improve it
Then you can operate profitably.
๐งพ 5. Collect Payments with a System
Money is the lifeblood of your business. Here’s how to set up collection:
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Choose a method: ACH, check, etc.
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Tell residents and families during intake what they will owe and how you will collect from them
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Collect banking info upfront
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Be consistent every month
If you don’t have a system, you’ll lose money.
๐กReminder: You're running a business. Collecting money isn’t optional.
๐ 6. Build a Relationship with a Pharmacy
You’ll need a pharmacy that:
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Understands assisted living
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Interfaces with your EHR system
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Helps you stay compliant with med management
Most residents will be on medications, so this is essential.
๐ฅ๏ธ Bonus: Use an EHR System
If you want to:
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Track medication
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Document care
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Stay organized with resident records
...you need an EHR (Electronic Health Record) system.
It’s how you scale without chaos.
Ready to Launch Your Facility?
If you're serious about launching your assisted living business in the next 12 months, start with the right tools and training.
๐ Grab our FREE Business Plan Checklist
See if your facility will be profitable before you invest.
Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
Got questions? Comment below or DM us anytime. We love hearing from you and helping you move forward.
Show full transcript ๐
Transcript
00:00:00 - 00:00:41
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 how to effectively operate a profitable Assisted Living business so if you need help with that and you're wondering how to do it make sure you stick around for today's video I also want to remind you to go grab our free underwriting calculator at Assisted Living investing. net big blue box in the top right corner it's going to give
00:00:20 - 00:01:09
you the ability to see if this is a profitable opportunity for you so make sure you go grab that free resource welcome to Assisted Living investing hey friend welcome back to the channel again we are going to be talking today about how to effectively operate a successful and profitable Assisted Living business so if you need some help with that we're going to dive into that today there there's a few things that you've got to do as you're trying to figure out how to operate this Assisted
00:00:50 - 00:01:37
Living business how are you going to be doing it and specific operational things you need to have in place as you're getting started number one you're going to have to feed the residents number two there's going to be expenses you got to learn how to manage those expenses number three is just kind of being a leader and number four is managing your F finances and we're going to talk about all four of those things in our video today so let's start off with feeding residents when it comes to feeding
00:01:14 - 00:02:04
residents you're going to number one have to buy groceries and figure out what that's going to look like you're going to have to do some meal planning as well there's some great software out there um one that we use and I love is called Grove menu so I I'll put a link down below I it's not an affiliate because I don't do that but they are an incredible company they have saved us a ton of money and heartache and also it allows you to plan your meals gets you a a grocery list so it makes it easy to
00:01:38 - 00:02:29
order your groceries and also plan those meals in a way that you're meeting nutritional values that are required for the state for you to feed your residents but also how to make them giving you recipes incredible tool cannot recommend it highly enough so as you're getting started with this Grove menus is an incredible tool to help you with the meal planning and also help you out with you know getting the groceries themselves and knowing exactly what you need to order and how much you need to
00:02:04 - 00:02:46
order now the next thing that I want you to be aware of is you're going to have to manage your expenses you're going to have a lot of big expenses there's the top five expenses that are a part of Assisted Living number one is your debt service and there's only so much you can do about that because it it's kind of set you could potentially refinance or something like that but that that's a big one but you're going to need to be aware of that wages is number two you're
00:02:25 - 00:03:14
going to need to figure out how much you're paying people and make sure that you are appropriately staffed so you can that wages is going to be your biggest expense by far and it's it's not even close to it it is often at least 50% of your total expenses sometimes even more than that so that's something I want you to be aware of as well not a lot you can do there either but it is a lever that you can pull and make sure that you are paying people appropriately and that you have the correct amount of staff for
00:02:49 - 00:03:37
your facility so that's number two number three is insurance and this is something that you're going to need to get property liability workers comp you're going to need those types of insurances but you can go out to Market you can find better Insurance you can work with a broker to really help you maximize the the covers that you have and minimize the amount that you are paying for that coverage so highly encourage you to do that there's also going to be food we talked about food
00:03:13 - 00:04:06
before using a tool like Grove menus is going to allow you to make sure that you are honing in on exactly what that food expense is going to be and then number five is your utilities and there's probably more room here than anywhere else to look at and negotiate you know you could work with your insurance provider and find a few hundred bucks you could go and find cheaper waste opportunities or put your things on a balance pay and and reduce your overall monthly fluctuation and get a feel for
00:03:40 - 00:04:30
what that's going to look like and see if there's any way for you to negotiate those are the five top ones and if you can pull those levers those five are going to make up 80 to 90% of your total expenses you can really dive into those get a hold on those expenses understand what they are you will have a greater ability for you to know which ones you should be pulling and and making adjustments on to increase your profitability the third thing I want to talk to you about is being an effective
00:04:04 - 00:04:59
leader and kind of comes down to being present and and having a good presence there now me being out of state I I live in Utah I operate out of state one in Colorado one in Idaho what I found is I can't be there all the time in person and that's okay I have to make sure I hire people that I'm comfortable with working in in this space so that they are meeting the needs of the residents and and doing all the requirements that we need to meet from the state to make make sure that we're in compliance but I
00:04:32 - 00:05:19
also want to make sure that I have a consistent touch point with them whether that's a meeting or a call or whatever it is making sure that they know they can reach out if they have something but number two I also want to make sure that they are at the facility on a regular basis and they are meeting the needs of the residents and the staff and that everything is kind of going as planned so that's a big part of being an effective leader and something that is a little more difficult for me being out
00:04:56 - 00:05:42
of state but it's something that's possible and the more you can kind of get in on that the better off you're going to be the next one I want to talk about is managing your finances and I highly encourage you to find some kind of a financial management system we use profit first by Mike mallwitz we will um link that down below so you can go grab that book Incredible Book kind of a financial management system can really help you out there's another one called how to grow your small business by
00:05:19 - 00:06:08
Donald Miller we'll link that one down below as well um so go grab one of those two books but financial management systems are really impactful and allowing you to understand how to manage finances cuz I know there's a lot of you that watch these videos and and you're like I'm I'm brand new to business I don't know how to do any of this stuff I need some guidance I need some help and leveraging other people's knowledge through books like profit first or how to grow your small business are really
00:05:43 - 00:06:30
going to allow you to get in there and figure out um how to do some of these things so go watch those they're going to be a lot more comprehensive than I will be in teaching you about those but if you want to know a little bit more about one of those type in profit first down below or small business down below um one of those two and then I can go and do a deep dive into one of those books and their financial management systems to really help you out and make some good progresses as you're trying to
00:06:07 - 00:06:56
figure out how to launch your business but having a good feel for how that money comes in where it's going and where you're putting it is going to allow you to be profitable it really is going to increase your ability to increase your profit and be successful in running your business now associated with that that lever of financial management you're going to need to collect payments so you're going to need to set up some kind of a mechanism there for how you're going to be collecting
00:06:32 - 00:07:17
those payments that could be a it could be checks it could be cash you need to figure out what's going to work for you and then you need to implement that system and you need to be consistent at how you're collecting that money um whether that's through telling a resident when they come in and you're doing the assessment they're filling out the paperwork this is how we do it we capture the bank information then we set them up could be that way it could be any other number of ways but you want to
00:06:54 - 00:07:44
have a system in place you want to have a process in place and then you want to start using that as you're trying to collect money it is the lifeblood of your facility if you don't collect money or you have any deficiencies in that you're not going to get the money and then you won't be able to cover the expenses and then you're losing a ton of money so one of the reasons we do this number one is serve the community and get back and provide a service to them that they're not going to have anywhere
00:07:19 - 00:08:09
else but number two you have to make money you cannot be doing this and be losing thousands or tens of thousands of dollars per month it's just not sustainable so you got to make sure you have the money coming in this is why why I I teach you to do underwriting why I give the underwriting calculator away for free go again to Assisted Living investing. net grab that free underwriting calculator CU I want you to make sure that you are confident in the investment that you're making another
00:07:44 - 00:08:33
one and and this one is one that I actually wasn't aware of when we were getting started but you have to work with pharmacies which makes a ton of sense when you think about it but it's probably not something that's like a top of mind your residents almost all of them will need some kind of medication and so building a relationship with your Pharmacy with a local pharmacy is going to that can interface with an EHR system if you want to learn more about EHR type in that down below as well but they will
00:08:08 - 00:08:54
interface with that system and allow you to kind of understand exactly what that's going to look like how it's going to work make sure you have the meds on time make sure you're meeting the needs how to reorder meds it's a big piece of what you're doing and the pharmacy is going to be huge in helping you be compliant in that area so it's something you really need to get a hold on in developing a relationship with a pharmacy and then I just mentioned EHR systems again if you're interested in
00:08:32 - 00:09:17
that type it down below but that's where you can take a lot of this information and you can put it all in one spot where you're you're tracking your resident cares you're seeing what's going on you're tracking their medication um anything that's going on with your residents other paperwork those types of things you're going to house that there and you need to have a really good and solid system if you're going to be successful with that all right we covered a lot in this video in a short
00:08:54 - 00:09:35
amount of time we taled we talked about getting into how to effectively operate that your facility including including feeding your residents managing your expenses we talked about financial management we talked about pharmacies we talked about being an effective leader we talked about EHR system I think that was everything we covered a ton of stuff here in this video if you liked it make sure you like the video subscribe and ring the bell as well so you get notified every time we put out content
00:09:15 - 00:10:04
like this to help you launch your Assisted Living business and if you need some help doing just that launching your Assisted Living business go apply to The Mastermind program Alim mastermind.com simple application process takes you a few minutes lets me see if I can help you if I can't I will send all the details and you can sign up it's that simple and then we can start working together and can help you out again the website for that is Alim mastermind.com and if you haven't already go grab the
00:09:39 - 00:10:21
free underwriting calculator assisted Liv investing. net big blue box in the top right corner you'll see it and and you can get started does residential Assisted Living sound interesting to you but you don't know how to get started at Assisted Living investing. net I'm here to help beginners like you launch their Assisted Living business in the next 12 months I want to thank you for watching and remind you that it doesn't take a lot just a little bit keep going step by step by step and I promise you if you do
00:10:00 - 00:10:16
and you're consistent and persistent you're going to be successful thanks for watching and have a great day [Music]
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