Your Ultimate Guide to Starting an Assisted Living Business
Jun 01, 2026
Starting an assisted living business can feel big when you do not know what to do first. You may feel lost, but the next step is not funding, licensing, or finding the perfect home yet.
Want the full breakdown? Watch the video below👇
You need a strong foundation before you start looking for a property
A lot of people start by chasing a house, a license, or funding. I’ve seen this create stress because they do not know if the numbers work yet.
You want to slow down and build the right foundation first. That foundation helps you make better choices later.
âś… Start with a plan before you start shopping for homes.
Your business plan shows what you want to build
Your assisted living business plan is your roadmap. It helps you explain your vision to a lender, partner, or investor.
You’ll want to write down your why, your model, your target residents, and the type of home you want. This could be elderly care, mental health, disabled adults, or another group you feel called to serve.
đź’ˇ The more clear you are, the easier it is for others to understand and support you.
âś… Put your ideas on paper so your business feels real and clear.
Your numbers tell you if the business can work
The basic math is simple. Revenue minus expenses equals profit.
Your revenue comes from two main things. How many residents do you serve, and how much do you charge each month?
Your big expenses are wages, insurance, food, utilities, and debt service. I call these the WIFED expenses. Wages are usually the biggest cost, so you need to understand them early.
âś… Run the numbers before you buy, rent, or convert a home.
Your market research helps you pick the right area
You need to know if enough people in your area need assisted living services. This helps you avoid choosing a location just because you like it.
Look at your city, county, or zip code. Then compare the number of people who may need care with the number of licensed beds already in that area.
If there is demand and not enough supply, that may be a good sign. If there are too many beds already, you may need to look at another area.
âś… Research demand before you commit to a location.
Wrap Up
You do not need to figure out everything at once. Start with your foundation; your business plan, your numbers, and your market research.
When you do those three things first, you can move forward with more confidence and less confusion.
If you need help creating a business plan for your assisted living business, check out the Free Business Plan Checklist.
And if you’re ready to figure out your next step, join me for the next Roadmap Challenge, where I’ll walk you through how to get started.
Show full transcript 👇
Transcript
00:00:00 - 00:00:53
Are you struggling to figure out how to launch your assisted living business? Like you don't even know how to get started, you feel overwhelmed, you feel confused, and you're just like, "Ah, I don't know what to do. I feel lost." Well, in today's video, your ultimate guide to starting an assisted living business, even if you're lost, I'm going to answer that question for you. Help you get some clarity around the process, the things that you should be focused on
00:00:26 - 00:01:15
first, so that you know what you should be doing, those foundational blocks, so you can successfully launch your assisted living business. So, if that's something you need help with, that's what we're going to be talking about today. Hey friend, I'm Brandon Gustafson. I help healthcare workers start their own assisted living business, so they're not stuck trying to figure it out and know exactly what they should do next. So, in today's video, again, this is your ultimate guide to
00:00:51 - 00:01:45
helping you start your own assisted living business, even if you're feeling lost, you're feeling overwhelmed, you don't know how to get started, um and you're confused and you're lost. And I really want to help you understand that the process for getting started is not going to be uh doing things like jumping in and trying to figure out your license or, you know, figuring out the funding or finding the perfect property. Those things come with time. They're not the things that you need to be focused on in
00:01:19 - 00:02:11
the beginning, and that's what a lot of people get wrong. They tell you, uh you know, you watch videos and you're like, "Okay, I got to get funding." And it feels so big, and that's the thing that you focus on because it is, it's big, it's heavy, it's really hard to to try to get those things done. When in reality, the things that you need to do is take a step back, and you need to take some time and figure out exactly what you need to be doing, so that when you are ready to get funding and ready
00:01:44 - 00:02:41
to find a property, you have built a foundation that you can move forward with. In the book of Matthew in the Bible, in the New Testament, Christ gives a parable. This is in I think it's in chapter 24. It's the wise and the foolish man. So, if you think back to this, you're going to hopefully remember this as was a song that I used to sing when I was in church when I was younger. Um the wise man builds his house upon a rock. And by that, you know, this is the rock of Christ, right? The Bible's
00:02:13 - 00:03:12
talking about. But in our story, the foundation that you're trying to build on is going to allow you to then build your assisted living business. And when you build on the solid foundation, what we're told in the Bible in the story, is that when the the rains come down, the floods come up, there's winds and everything, that house is firm. It's on a solid foundation. It doesn't go anywhere. And you don't have to worry about it. But the foolish man in the story builds his house on sand because he thinks to
00:02:42 - 00:03:30
himself, I want to just move forward. I want to go and just start building something. I don't need a solid foundation. We're just going to build it up here and build it. And when the rains come down and the floods come up and the winds blow on the house, it just goes away. It falls down, and great is the fall of that house. It's just like when you're building a sandcastle in the sand. I don't know how many of you have ever done this on the beach. You build a sandcastle. It's It's
00:03:06 - 00:03:55
really cool. And then all of a sudden the tide comes in, and it washes it away, and you didn't even know that there was something there. That's how a lot of you are trying to go about building your assisted living business. You're trying to build something on a sandy foundation. You're trying to figure out funding, but you don't even know, you know, are the numbers going to work? You don't have your why defined with your business plan. You don't have those things all
00:03:31 - 00:04:32
figured out. You haven't done the research on your market to see if this is even going to work for assisted living or not. And you're just moving forward, and you're just hoping against hope that it's going to work out, and you're going to be fine. And I'm here to tell you that that is not the way for you to be starting your assisted living business. You need to come back to the beginning and you need to define a few things and work on a few things and when you do that it makes everything go so much more
00:04:00 - 00:05:01
smoothly and so much more quickly. So, the three things that you need to focus on as you're trying to start your own assisted living business is number one, your business plan. Included in the business plan is like getting really clear and solid on your why. Why do you want to be looking at assisted living? You want to be talking about the model that you want to be working on. Um, that model is, you know, how many residents do you want to serve? What type of population do you want to serve? Like
00:04:31 - 00:05:27
I've served mental health in the past. I've had students that have done disabled adults. I have served elderly care. There's so many different areas that you can serve here. Um, and I even have a student that's looking at doing this with specifically elderly women and working on that and focusing it on that niche. And I think the more that you niche down inside of working with a specific type of group, the better off you're going to be. But you define these things, the model that you're going to follow. What
00:04:59 - 00:05:46
type of home are you going to get into? And you take all of that information, you're building it into a business plan. This business plan is going to be your road map for how you're going to get started. And if you're interested in learning more about how to write a solid business plan, like a business plan that's going to help you get a million dollars in funding, just type in BP down below. We'll send you a link to my free business plan checklist. So, you can get that. You can also will have it in the
00:05:23 - 00:06:19
links down below as well. But just type in BP, we'll make sure we get you the link for that. But when you build a solid business plan, you're going to have the ability to go to a partner, go to a lender and you're going to say, "This is my vision. This is what I want to create and I need some help moving this along in whatever capacity that is. Do you want to come along with me so that can work together on this thing? You might say it a little bit differently when you're talking to a
00:05:51 - 00:06:40
lender, but that's essentially what you're doing. You're saying this is what I want to do. I need you to help me so I can get to that spot. And the business plan is the thing that you do. It also helps solidify everything that you want to do in this home that model. You know, are you going to rent and rehab a home? Are you going to buy and convert a home? Buy an existing home? You're going to build something from the ground up? That population you want to serve? Is it elderly care? Do you want to work with
00:06:16 - 00:07:12
mental health population, autistic individuals? Who do you want to serve? You're going to have that in there. You're going to have your why behind it. Like, is there a story that you have that it's a loved one that has had that experience or it's a friend who had a horrible experience in the health care industry. What is it for you? Is it a big struggle? Why do you want to get into this? That foundation that you're building through your business plan is taking the things that are in your
00:06:43 - 00:07:34
mind, putting it on paper, and letting other people see it. And that is what's going to allow you to move forward. It also is where you solidify how much money you're going to need to get started. And is this going to work? And you're doing your marketing plan and your market research, just analysis, and and all of these things you're you're building all of that into your business plan. It is the absolute key and the the base foundation, the thing that you have to work on first before you get anything
00:07:09 - 00:07:58
else done because it makes everything else go so much more smoothly. And some of this you probably already have in your head. This is the cool part about it is you already think about it. You know what you want to do. You just haven't put it on paper. And you have to. You have to put it on paper because if you don't do that, then a bank partner or lender, whoever it is, they're just going to be like, "Yeah, it's a cool idea. You I can see you're very excited about it, but
00:07:34 - 00:08:26
good for you." Like, we have no idea if it's actually going to work. And so you have to put in the work to build a business plan. It's the most important thing for you to do. Okay? After that, you need to understand the numbers. And numbers are they're overwhelming, right? Uh if you need some help with that, by the way, type in calculator will get you access to my underwriting calculator. We'll send you a link for a links will be down below as well for that. But, when you're trying to figure
00:08:00 - 00:09:00
out the numbers, there's a few things you need to understand. The numbers, at their core, are actually pretty simple. It is revenue minus expenses equals your profit. Okay? That's what you're trying to do. You want to have a profit goal in mind, and I have some strategies around what you should be how you should be factoring in how you're going to reach that profit goal. Uh you can see that in my book, The Profitable Assisted Living Facility. Looks like this. You can get it on Amazon or go to the alibook.com.
00:08:30 - 00:09:27
Type in book down below, we'll get you a link for it. Anyways, inside of that book, I'm going to teach you a little bit about what I call the 80% rule. And that 80% rule is do you reach your profit goal when you're at 80% occupancy? But, in order for you to understand what that looks like, you need to understand that revenue minus expenses equals profit. And you need to understand that revenue there's two factors. There's two levers you can pull on this thing, right? One is how many
00:08:58 - 00:09:51
residents you have in the facility, and two is how much money you are charging those people. And when you pull one or both of those levers at the same time or individually, that's where your revenue is going to go up. So, if I have five residents and I'm charging $5,000 per month, that's $25,000 in income. But, what if I have 10 residents at $5,000 a month? $50,000 in income right there. Boom. Revenue problem solved right there, right? You doubled your income just by doubling your amount of
00:09:24 - 00:10:20
residents. Or, you have five residents, but now you're going to charge 10,000 because you're going to identify ways to do premium things for your residents. We'll link up a video up above where I talk about how to set premium rates for your residents. But, in that, what you're going to find is five residents at 10,000, that's also $50,000, right? You doubled it right there. Now, what if you went crazy and you went 10 residents at at $10,000? Now, you are at $100,000 in revenue potential. You have What is
00:09:52 - 00:10:57
that? Quadrupled in your total income just by pulling two little levers. So, when you understand that those things are possible, it changes everything. So, that's your revenue. And then, you have to look at your expenses. And I teach there are five big expenses. The I call it the W I F T expenses. They're the W I F T expense model. They're wages, insurance, food, uh your energy, which is your utilities, and your debt service. Those five expenses are going to equal 80 to 90% of all of your operational expenses in your
00:10:25 - 00:11:17
business. The biggest one is wages. So, if you can hone in on what your wages are going to cost, that's 50 to 70% of your total expenses, it makes a huge difference. And so, when you understand that these things These are the levers. These are the things that you need to understand. Revenue minus expenses equals profit. Revenue, I have two levers. How many residents? How much I'm charging them? And then, my expenses, if I hone in on figure out my W I F T expenses, then I'm like 80% of the way
00:10:51 - 00:11:40
there in figuring out my numbers. And yeah, I I have an underwriting calculator for you. Just type in calculator down below, we'll get that over to you. But, if you can figure that out, this is back of the napkin stuff. You can figure it out and see if it's going to be profitable at least enough that you can say, "Okay, I thought I wanted to do five, six residents. But, what I really need to do is I need to have 10, 12, 20 residents in my home." Or I thought, because everybody says
00:11:16 - 00:12:08
that I can only charge 3,000 a month, I thought that's what I had to do, but I I should actually be looking at charging 6, 7,000 dollars a month for the services that I'm providing. Okay? So, these are the things that are going to help you build the foundation, so that when you go start looking for a property, you know what to look for. You're not wasting your time looking for three-bedroom homes, four-bedroom homes, because you know it doesn't allow you to hit your profitability goal. So you need
00:11:42 - 00:12:24
to figure these things out from a foundational perspective and not just chase stuff that doesn't mean anything and it doesn't it's not going to help you progress to where you want to get to or you don't get it yourself in a horrible situation where now you own real estate, you started and gone through the process to get licensed and you did all that and then you're like, "Crap, I'm actually losing tens of thousands of dollars per month because I don't have enough residents and I can't
00:12:03 - 00:12:50
charge people enough." You have to figure out what those numbers are going to look like before you jump into this. I hope that's making sense for you. Again, type in calculator if you need access to that underwriting calculator and just understanding of how to move forward with it. If you need some help with that and like understanding the underwriting process, type in foundation. I have a new program that I've just started, it's the foundation builder program. Just type in foundation, we'll send you a link to it
00:12:27 - 00:13:22
and you can see if it's a good fit for you. It is all designed to help people like you figure out how to get started when you're overwhelmed and confused and lost and don't know how to get started. Okay, the third thing that you need to do as you're building your foundation is your market research. Okay? You have to do your market research to determine if there's enough people in the area that you're going to be able to serve. So this is where in the beginning we talked about defining what your model
00:12:53 - 00:13:47
is, right? And the person that you want to be serving. And once you have figured that out, let's say it's an elderly population and you know you want to serve people that are between the ages of 60 and 80 years old, then you can go and find that data online. It's free. You go to census.gov, city-data.com. You can go and get the information there for free and then you can analyze it and you can say, "How many people in this geographic area, zip code, county, city, whatever it is, how many people in that
00:13:20 - 00:14:18
age band are there in this group?" And in the book, again, type in book down below, we'll get you the link to the profitable assisted living facility. I talk about the 5% rule. And that 5% rule says, of all the population that I want to serve, you know, if there's 10,000 people there uh that I want to serve in a given group, 5% of them are going to need assisted living services. Okay? So, what that means is 500 of those 10,000 people would need assisted living services. Now, what I want to do
00:13:49 - 00:14:36
is make sure I've got at least 500 people in that geographic area, right? That's step one. Step two is I want to see what the competition is in that area so I can get on my state's website. I can see where the licensed facilities are. I can see how many beds they're licensed for, uh what level of care they do. Often times that's going to be on there as well. And so, what I can see on there is how many licensed beds are there. Now, if there's already 800 licensed beds in a population that I
00:14:13 - 00:15:02
think there's only 500 people that need assisted living, might not be worth it. But, if I look at it and there's only 200 licensed beds in a population where I think there's 500 people, then boom, I'm in I'm in a good spot. Also want to compare, if I'm doing a residential model, of those licensed facilities, how many of them are residential model? How many of them are big box? Because if a lot of them are big box, I might actually be able to carve a spot out for me in the market as
00:14:38 - 00:15:23
being this residential home family-centered little business that feels like home for people, and I can differentiate myself in the market. This is how you do market research. You have to go do the work. You have to go do the research. You have to go figure these things out. But, I'm also here to tell you you can find those things out. It's not that hard. It the information's out there. It's free. You might have to ask some people. You might get uncomfortable. It's going to be numbers.
00:15:01 - 00:15:54
You might not be comfortable with numbers. But, also it's actually pretty basic in how you're going to do that. But, if you can figure out your market, the demand, what's out there, how many people need the services, you can move forward now with confidence, and that's going to be something that a lender is going to ask for. Are you sure there's enough people that you can fill the beds here? Yes, this is why. I figure, you know, there's 10,000 people in this area that reach my age band group. Of those
00:15:27 - 00:16:13
people, 5% of them are going to need assisted living services. That's 500 people. There's only 100 licensed beds in the area. We're going to be great. Like, there's huge demand here and not enough supply. We need to have a facility here. And if it's the inverse of that, you might have a hard time convincing a lender, but that at least gives you peace of mind that, "Hey, maybe I shouldn't do it in this area, but what if I go two towns over?" One of my students was actually
00:15:50 - 00:16:43
doing this. She had narrowed it down to five different cities where she was going to be looking at. And I told her, "Let's run the 5% rule. Let's do some research. Let's figure this out a little bit deeper." So, she did. What we found, two of those little cities didn't make sense for assisted living. Didn't meet the 5% rule. Like, it wasn't even close. So, why would we waste our time looking at homes in those areas if the demand is not there or there's already too much supply. Why would I
00:16:16 - 00:17:16
waste my time doing that? It doesn't matter how much I think it would be cool to have a home in that area. That doesn't matter. What matters is can I be successful? Okay. So, when you build your foundation this way, going back to what we talked about at the start of the video, when you build a foundation on a solid, firm, rock foundation, that is what's going to allow you to then move forward and feel confident that you are making the right decision. It's going to help you narrow down so
00:16:46 - 00:17:32
you can figure out exactly what house you want to be looking at. It's going to help you talk to a partner or a lender and get the funding that you need to start your assisted living business. It's going to give you the foundation so that when you're working through the process of getting your license, you've actually done a bunch of the research, you've talked through a bunch of things with people already, and you know what that licensing process looks like, and it becomes that much easier to get
00:17:09 - 00:18:00
that. And because you built the foundation, when you launch your assisted living business and you're actually running the business, you can fall back a little bit on that assisted living business plan that you've created that tells you how many staff you need and the population you're going to serve and how you're going to operate the business and those types of things. You can fall back on it and start implementing those things so you can successfully run a profitable business that also is meeting the needs of your
00:17:34 - 00:18:30
residents and having an incredible impact in your community. That is how you get started when you're trying to start an assisted living business and you feel lost. You come back to the beginning. You start building your foundation and when you build your foundation the right way, you're going to be a lot more successful. I promise you you will. Now, if you need help building that foundation and you're like I got it. I I got to build those three things. I got to do the business plan. I
00:18:02 - 00:18:51
got to do the underwriting. I got to do the market research. But that is still three things and I am overwhelmed and I'm confused and I don't know how to get started with that and you're saying big words and numbers and and things and I don't know how to get it. Type in foundation below. I have a program, it's called the foundation builder program. It is designed to be a it's a cohort style type of a program where you're in there and I'm helping you I'm giving you the tools that you
00:18:26 - 00:19:15
need to to actually do these things the right way. Tools that have they're proven by me and by dozens of my students on how to get started in assisted living and build the foundation that helps them get funding and find the right house and get licensed and operate their own assisted living business. So it gives you the tools for that. There's also community, there's coaching. And so if you have questions, you can get answers to your questions. I'd love to have you in the program if
00:18:51 - 00:19:35
it's a good fit for you. This is not like a high pressure thing. If it's a good fit for for you, then great. I'd love to have you in there. If not, then that's fine, too. Type in foundation below. We'll get you the link to it and help you start building your foundation so you can start your own assisted living business. Does residential assisted living sound interesting to you, but you don't know how to get started? At Assisted Living Investing, I help healthcare workers
00:19:13 - 00:19:49
start their own assisted living business so they're not stuck trying to figure it out and know exactly what they should do next. 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'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.