How to Plan Financially for Your Assisted Living Startup

assisted living expenses assisted living financial planning assisted living funding grants for assisted living profit first assisted living sba loans for assisted living start an assisted living business underwriting calculator Aug 06, 2025

Getting your assisted living business off the ground takes a lot of financial planning. You don’t need an MBA, but you do need to know where your money’s going, how to get funding, and how to understand your numbers.

Let’s break down the key things you need to know before you open your doors.

Check out this video, too:

Why This Matters 🧠

If you want to open an assisted living business, you’ve got to make sure the numbers work. Most beginners get overwhelmed by funding, expenses, and whether their deal is profitable.

That’s why financial planning is part of your foundation for launching your assisted living business. When you know your numbers, you can move forward with confidence.

Step 1: Understand Traditional Funding Options 💼

There are a few main ways to get funding for your assisted living business:

SBA Loans – Great for small business startups. They’ll look at your personal credit, tax returns, and bank statements.
Conventional Loans – Similar to SBA but may have different terms or less paperwork.
Hard Money Loans – These are based more on the property than your credit. But, you are still on the hook to repay the loan.
Unsecured Lines of Credit – Based on your creditworthiness, not backed by property.

👉 Tip: Lenders will evaluate you. So if your credit score isn’t great, start working on it now..

Step 2: Consider Partnerships 🤝

If you have a low credit score or don't have the funds yourself for a down payment, don't let that stop you. You can team up with a partner who has better credit, available funds, or more experience in the industry that a lender might be looking for.

This is how many beginners get started—with a strong partner to help with funding and credibility.

Step 3: Know the Reality About Grants 🏛️

Grants can be amazing, but they’re not a quick fix for new startups.

Here’s the truth:

Most grants go to businesses that are already established (3+ years in many cases).
You need to be consistent at looking for grant opportunities—new grants are released almost daily.
Grants work best for upgrades like technology, renovations, or expanding services, not necessarily for getting started
They’re not a magic wand, but they can help offset costs later.

✅ Real example: I have secured over $1.2M in grants, but those grants came after establishing my business.

Step 4: Know Your Top 5 Expenses 📊

Once you're funded, you need to know where your money is going. These are the 5 biggest expenses in assisted living:

Wages – This eats up 50–80% of your budget. Pay your caregivers well!
Food – Groceries, meals, snacks.
Utilities – Water, electricity, gas, internet, and TV.
Insurance – Liability, property, and workers’ comp.
Debt Service – Loan payments.

These five expenses will make up 80–90% of your total expenses. If your income covers these plus a little extra, you’re likely looking at a profitable opportunity.

📌 Pro tip: Use our free Underwriting Calculator to run the numbers and make sure your deal works.

Step 5: Choose the Right Size Facility 🏠

Your margins will depend a lot on your facility size.

I suggest looking at opportunities with 10+ beds because:

It allows you to be more hands-off.
Larger homes support more staff and have better margins.

But each opportunity should be analyzed on it's own! Smaller facilities (like 6 beds) can still work if you’re more hands-on or in a high-income area.

💡 Evaluate deals based on your market and your lifestyle goals.

Step 6: Get a Financial Management System 📚

Don’t just wing it. Get organized with your money from day one.

I recommend the book Profit First by Mike Michalowicz. It’s a fun, simple system that helps you:

Pay yourself first
Budget for expenses
Create a sustainable business

We use a modified version of Profit First and even work with a certified Profit First professional for our facilities.

What to Do Next ✅

Ready to take control of your numbers? Start with these simple steps:

1. Download the Underwriting Calculator – It’s free and helps you evaluate your deal.

2. Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.

Comment below – What type of funding option are you considering?

Final Thoughts 💬

Financial planning isn’t scary—it’s smart. The more you know your numbers, the faster you can launch and grow your assisted living business.

▶️ Watch on YouTube

🎙️ Listen to the podcast

Show full transcript 👇

Transcript

Hey friend, it's Brandon Gustafson with Assisted Living Investing. I help beginners like you launch their assisted living business in the next 12 months. In today's video, we're going to be getting into financial planning for your assisted living startup. The things that you need to know as you are trying to get things started. So, if you are interested in that and need some help with it, make sure you stick around for today's [Music] video. Hey friend, it's Brandon Gustoson. Welcome back to Assisted

Living Investing. Before we get into the topic for today, I want to remind you to go and grab your free underwriting calculator. Go to assisted livinginvesting.net and it's a big blue box in the top right corner. Can really help you determine if you have a profitable opportunity, which is exactly what we're going to be talking about today. We're talking about, you know, that financial planning and that underwriting calculator is going to be key to helping you determine, hey, is this good financial decision or not? And

help you make that decision. So again, assisted livinginvesting.net. Now, let's get into the topic for today's video. We're talking about financial planning for assisted living startups. Let's start off with traditional funding. So traditional funding is, you know, commercial loans, SBA loans, hard money, unsecured lines of credit. These are all different things that are really important and ways to really help you make some good progress. Those traditional types of loans have pretty

similar application type processes. They're going to want to look at your historical financials, you know, your personal bank statement. They'll want to pull credit for SBA and commercial loans. They're going to want to look at tax returns. They are vetting you. They want to know who you are as a creditor. So, I know there are some of you on here that have bad credit and and you're working to fix that. And that's totally okay. So, what I want you to do is continue working on that and building

relationships with people and starting to work. And just because you know you have a bad credit store score today doesn't mean you can't have a great one in a year, 18 months, 24 months from now. You can work on that and you can get it to a spot where it's really good. It's it is something that is key. Another thing that you can leverage as you're getting started is partners. So you can find a partner that has really good credit and and that person can help you along the path. This isn't to say

that you have to have absolutely flawless credit and you have to have a 900 score or whatever, but the better credit you have, the the more success you're going to have as you are trying to get the funding that you need to really launch your assisted living business. So, it does help because they look at you specifically as a creditor. So, that's something you want to keep in mind. That traditional funding route is something that you're going to want to look at. Hard money, not so much. hard

money is something that they they're looking a lot more specifically at the asset that is going to be used as collateral. So that could be the house, but that's something to keep in mind that they're still relying on you to be paying that money back. And so they want to look at you and see who you are. The better credit that you have, the better off you're going to be. Another one that you could be looking at is grants or subsidies. And I've talked about grants a ton on this on this channel. We're

going to link a video up above so you can go and grab that. go and grab our free grant template, assisted livinginvesting.net/grants. Uh go watch the grant video. All those things are going to really help you along your path of understanding what grants are and how they work. So, make sure you go and grab those resources. Often times, a grant is going to be better utilized for a business that is already established. It's it is possible. So, I don't want to completely just like disregard this from the

beginning. It is possible to start something from the ground up with a grant, but it is not very likely. So, just want to be very transparent with you. Grants are much better suited for existing businesses that have a history. Oftent times, they want to see something that's been in business for at least 3 years. Now, that business does not necessarily need to have been doing assisted living. I'm actually working with somebody in the mastermind program right now on obtaining a grant, and it's

because they've owned this building for a period of time. Now, they want to shift the use of that building. they want to turn it into assisted living. So now we're going out and finding grants that are specific to the renovation process to turn that house into what it is today to serving a a different population. You have to be consistent when you look at grants. They are cyclical. They churn out um on almost a daily basis. There are new opportunities. So you have to keep a very close eye on what's coming out and

understand exactly what the grants are and understand the grant process. But the longer you've been in business, the more success you're going to have in finding a good opportunity. So that's something I want you to keep in mind as you're starting to look at grants. Grants are not the end all beall. They are not the answer to all of your questions. They they're just not. But they can be a great way to supplement what you're doing. And if you've already created that business and you need to

upgrade things in the house or you need to upgrade technology, there will be grants out there that you could use for that. So, you don't have to use your hard-earned income from your facility to buy those things. You can use grants to help upgrade those things. I've done this as a for-profit organization for my businesses, secured over 1.2 million in in grant funding, 1.5 in SBA funding. So, I've done a lot of funding type activities and understand that process. My professional career, I've worked for

nonprofit organizations and have secured hundreds of millions of dollars in in grant funding. So, grants are are out there. You can get them. You just have to be consistent with it and be patient and understand that it is probably in like 99.9% of the cases not your answer especially as you're trying to get started. It could work and that could be private grants or or government grants there. The chances of them doing it from the beginning very slim but they are opportunities that are out there and

things that I want you to keep in mind for how you can really leverage them down the line. The next thing that you need to understand as you're trying to figure out financial management for your assisted living facility, not only do you need to figure out the finances and know who's going to fund you and all those things, which path you're going to go down, I have a ton of videos, a ton of content on the channel that help you out in each of those spaces, but if you have questions that are specific to one

of those funding options, type in SBA down below or grants or hard money, put in the thing that you think is going to help you out the most. But beyond that, there's another key that you need to know about, and that key is understanding the finances. You have to understand exactly how those finances work, what you're getting into, and how it's going to work. In order for you to understand the finances, and and exactly what that is, how they work. You need to look at existing opportunities. You need

to understand that there are five major expenses when it comes to assisted living. Those five major expenses that you need to be aware of for your assisted living business are going to be wages. You've got to pay your staff to work and care for the residents. You're going to have to buy food for the residents. You have your utilities. You have your insurance. And you're going to have your debt service. Those five things, those five expenses are going to make up 80 to 90% of all of your

expenses. So, if you can hone in on those, then you're going to have some a really good idea of if this is going to be profitable, if it's going to work or not. And the big one, the one that takes about 50 to 60% of your budget is wages. You got to figure that out. So, make sure that you're aware of those things so that you have an understanding of what you're getting into as you start your assisted living journey. Now, if you understand those five things and and you are comfortable with those numbers

and you can see that, you know, you're going to generate enough income to cover that plus a little bit extra plus some on top of that so you can take home some money, then you can feel confident about moving forward. This is why I like larger residential facilities, why I personally steer clear of facilities that are less than 10. Those ones, the the margins for me are more risk than I want to take on. But that's because I want to be an absentee owner. I don't want to be the one that that's there

doing the day-to-day. I want to hire people to do the work for me. I want to just kind of manage them from afar and give them the resources that they need. And I'm okay not taking home as much money as I could if I were more actively involved. And for me in my situation, I can't do that with something that is less than 10 beds. But your situation is going to be different. I was talking with somebody earlier than they were thinking of doing like a six bed facility and you know charging 15 to

20,000 and the market where they're in can handle that. In that case, you're going to be fine. Um you're not going to have a problem doing that. And so each situation is going to be different. Right? You need to take your specific situation, evaluate it for what it is, and determine if you're comfortable with it. So, just because I wouldn't do a certain deal doesn't mean that you shouldn't do it, but you have to evaluate it on your own. And if you go grab the calculator, assisted

living.net, big blue box in the top right corner, you're going to be able to start going down the path to evaluate a deal to see if it makes sense from a financial perspective. So, make sure you go and grab that free resource. The other thing that I really want to point out to you is there are some great financial management systems out there that can really help you out in in running your business. Um, and there's some great books around it. Number one, and I'm going to have links down below

for you. Number one is Profit First by Mike Mallowitz. He's he's a great author, super fun to read, a little bit quirky, but has a great system, Profit First. Uh, we follow Profit First with some variations, uh, but we've actually hired a Profit First professional in the past and work with them. So great great system there. The other one is How to Grow Your Small Business and that's by Donald Miller. Both of those books have great financial management systems in them. And if you use one of those to

help you run your business, you're going to be a lot more successful. You're going to know where your money is and how it's going to really cash flow. And if you can implement that from day one, you're going to be a lot more successful and feel a lot more comfortable with the amount of money that you have coming into the business, the amount of money going out, and how much you're giving to you from a profitability standpoint. So really important for you to look at that. Financial management systems,

Profit First by Mike Mallowitz and How to Grow Your Small Business by Donald Miller. When you look at those things and and you start building in those systems and understanding what those expenses are going to look like and how they're going to impact you and and how that all is going to flow, it gives you a lot more confidence in what those expenses are. And then you get into generating income. Um, so there are a few ways that you can generate income in assisted living. Number one is the one

that everybody knows and and thinks about when they're talking about assisted living. And that reason for that method of generating the income that you need for your assisted living business is the normal cares that you provide. That could be private pay, it could be Medicaid, but it's providing that care to those residents. You're going to have a daily rate or monthly rate, however you are going to to set this up for your residents. If it's Medicaid, it's daily. If it's private,

you're probably going to do something that's monthly plus amenities or cares that you're doing. And you're you're going to have that as as a huge chunk of where your income is coming from. And it allows you to set your prices or really project out, is this going to be financially viable for me or not because you understand what your expenses are. Now, you're shifting into how much income do I need to make and can I make enough to make this make sense. Beyond that, there are a few other options that

you could look at. One is adult daycare. So you could bring in the adults into your facility just for the day. They don't stay there. You're feeding them generally two meals and then you can bill a rate for that. This is oftentimes something you see with Medicaid. This is a Medicaid benefit as well. Go watch one of our videos on Medicaid or if you'd like to learn more about adult daycare, type in daycare down below. Would love to hear from you to see if that's something you're interested in. And

another one is going to be like something like a parallel business like transportation. So you could have a bus or a van or something where you're taking residents out. Your residents don't pay you, but Medicaid will. You don't have to be a Medicaid provider in order to do transportation in the way that you have to be Medicaid for assisted living. It's their Medicaid benefit. You have to become a trans like a certified transportation company. There's processes and methods in each

state that that help you receive that certification, allow you to do the transportation. But when you do that, becomes a secondary business that you're getting reimbursed from Medicaid for driving your residents or even expanding and providing that service to other people in the community that need to get places. So, there's a few different ways and you can get really creative with this and how you're going to be generating that income. But it doesn't have to be, you know, here's this little

tiny section and and you have to carve it out. You have to make everything fit in that. There are so many different opportunities for you to generate income as you are getting into this world of assisted living. So to recap this video, we've been talking about financial management, how to figure all of that from an assisted living standpoint. We talked about the funding options, traditional funding. We talked about grants. We got into understanding the expenses and how important it is for you

to understand those top five expenses. And we talked about how to generate income and see where that is. If you're able to do all of those things and you throw it in a calculator that you can get assisted livinginvesting.net, the big blue box in the top right corner, you're going to be able to determine if this this deal, this opportunity is going to meet your financial needs and should you or should you not move forward with it. That's how it works. It's how you determine, hey, is this

going to work for me or not? That's the process you need to go through. So, if you found this video to be helpful, make sure you like the video, subscribe, and ring the bell as well so you get notified every time we put out content like this. We do lives on Tuesdays. We put out long form content on Thursdays. Social media, go check out all the links down below. Follow me because so I can get you information that is helpful in the moment that you're in to help you really make some progress and reach your

investment goals to help you create that time and financial freedom that you're looking for. 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. 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 are consistent and persistent, you will be successful.

Thanks for watching and have a great day. [Music]

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