Residential Assisted Living Business Plan
Starting or expanding an assisted living facility requires a comprehensive business plan to ensure the success and sustainability of your operations.
The following assisted living facility business plan template outlines the key elements to include in a well-rounded plan. This template can be used to create a business plan for any type of assisted living facility, including but not limited to: residential care homes, memory care units, independent living communities, and specialized care facilities.
Sample Business Plan For Assisted Living
I. Executive Summary
Business Overview
[Company Name] is founded by [Founder’s Name], an LVN who has worked for the past twenty years in various assisted living facilities around [company location]. He specializes in providing skilled nursing services and light therapy for elderly and disabled patients. [Company Name] will be a clean, comfortable, and highly capable facility that will be able to provide the highest quality of care for this special segment of the population. It will be moderately priced and will work with all types of insurance.
Services Offered
[Company Name] will provide nursing, physical therapy, occupational therapy, fitness, meals, social activities, and social work services to its residents. In addition, their team of healthcare specialists will also be able to provide specialized services for Alzheimer’s, dementia, arthritis, diabetic patients, Parkinson’s, autistic, and severely disabled residents.
Customer Focus
[Company Name] will serve the aging and disabled community of [company location]. Many of the aging and disabled community has special and severe conditions that prevent them from living independently and require constant oversight and 24-hour care in a comfortable facility.
The demographics of the target customer profile is as follows:
- 900,652 residents
- Average income of $60,000
- 75.4% married
- 45.7% retired and/or over the age of 55
- Median age: 39 years
Management Team
[Company Name] is owned and operated by [Founder’s Name], an LVN who has worked for the past twenty years in various assisted living facilities around [company location]. At each assisted living facility he worked at, he was never satisfied with the level of care, compassion, and cleanliness of each facility. He knew in his heart that this disadvantaged and deserving segment of the population deserved a better quality of care, and he set out to find a building worthy of becoming an esteemed assisted living facility that will provide the best level of nursing, rehab, and assisted living services in the area.
Aside from the nurses, therapists, kitchen staff, janitorial, and social worker he will have on staff, [Founder’s Name] will also employ a receptionist and Office Manager to help with the administration and operation of the assisted living facility.
Success Factors
[Company Name] has several advantages over its competition. Those advantages include:
- Compassionate Staff: Knowledgeable and friendly staff of nurses, therapists, aides, and social workers who are not only knowledgeable in their field, but place a special emphasis on compassion.
- Location: [Company Name] will be able to service the entire metropolitan area of [company location] and its surrounding areas.
- Quality Care: [Company Name] will provide expert services and their patients will receive quality treatment and care so that the resident is as comfortable as they can be.
- Facility: [Company Name]’s facility will be constructed ADA-compliant, spacious, clean, and comfortable to ensure the resident is at their maximum satisfaction.
- Pricing: [Company Name]’s pricing will be more affordable than its competition. The company will also work on payment arrangements with the resident and their family so that the patient won’t have to sacrifice any type of care they might require because the cost is too high. The company will also accept most types of insurance, as well as Medicare and Medicaid.
Financial Highlights
[Company Name] is seeking $250,000 in funding to launch its assisted living facility. The capital will be used for funding capital expenditures, construction build-out, staffing, training, marketing and advertising expenses, and working capital.
The breakout of the funding may be seen below:
- Facility design/build-out: $100,000
- Capital expenditures: $20,000
- Furniture, fixture, and equipment: $35,000
- Marketing and advertising: $10,000
- Staffing costs: $75,000
- Working capital: $10,000
The following graph outlines the pro forma financial projections for [Company Name] over the next five years:
| Financial Summary | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Revenue | $965,742 | $1,878,611 | $2,718,300 | $3,477,900 | $4,285,228 |
| Total Expenses | $390,241 | $630,018 | $931,935 | $1,171,906 | $1,429,992 |
| EBITDA | $575,501 | $1,248,593 | $1,786,365 | $2,305,994 | $2,855,237 |
| Depreciation | $8,720 | $8,720 | $8,720 | $8,720 | $8,720 |
| EBIT | $566,781 | $1,239,873 | $1,777,645 | $2,297,274 | $2,846,517 |
| Interest | $5,077 | $4,442 | $3,807 | $3,173 | $2,538 |
| Pre-Tax Income | $561,705 | $1,235,431 | $1,773,838 | $2,294,101 | $2,843,978 |
| Income Tax Expense | $196,597 | $432,401 | $620,843 | $802,935 | $995,392 |
| Net Income | $365,108 | $803,030 | $1,152,995 | $1,491,166 | $1,848,586 |
| Net Profit Margin | 38% | 43% | 42% | 43% | 43% |
II. Company Overview
Who is [Company Name]?
[Company Name], located at [insert location here] is a new assisted living facility that provides skilled nursing services and personal care services to aging adults or for adults with disabilities.
[Company Name] was founded by [Founder’s Name]. [Founder’s Name] is a nurse that has worked at other assisted living facilities since he graduated from high school. His years of experience have taught him how to care for aging and disabled adults in a safe and supportive manner. [Founder’s Name] realizes the need for quality and affordable assisted living services as his former employers did not keep the facility to the standard of cleanliness and care that [Founder’s Name] is comfortable with. Aside from the facilities, [Founder’s Name] has a high level of expectation of personnel who are employed at the assisted living facility. It takes a lot of patience and focus to provide care and comfort to the elderly and disabled individuals.
[Company Name] is located in the [Company Location]’s metroplex. There is a large population of aging and disabled adults. There are not enough assisted living facilities to support this segment of the population.
[Company Name]’s History
[Founder’s Name] has been consulting with an attorney and CPA over the last few months to understand the business and financial obligations that go with owning their own business. His lawyer has advised [Founder’s Name] that [Company Name] should be incorporated as an S-Corporation on [date of incorporation].
[Founder’s Name] has identified the neighborhood and building [Company Name] will be located. He has begun lease negotiations and pricing out of construction to transform the building into a comfortable and capable home for those who will be residing at the assisted living facility.
Since incorporation, the company has achieved the following milestones:
- Found location and signed Letter of Intent to lease it
- Decided on the company name, and developed the logo and website located at www…
- Finalized list of services the company will be able to provide
- Determined the equipment and inventory requirements
- Began recruiting key employees for the assisted living facility
[Company Name]’s Services
Below is [Company Name]’s list of services. All services will be provided by a trained and licensed staff.
- Three meals a day
- Monitoring of medication
- Personal care, including dressing and bathing
- Housekeeping and laundry
- 24-hour emergency care
- Skilled nursing services and some medical services
- Social and recreational activities
- Light exercise program
[Company Name] will be able to provide daily services for extreme illness and conditions as well as meet with the family and loved ones of the resident as often as the family requests.
III. Industry Analysis
The Assisted Living Facilities industry is expected to grow robustly over the next five years.
The elderly population is expected to continue growing as more of the baby boomer generation reaches retirement age. Thus, the number of adults aged 65 and older is expected to grow at an annualized rate of 3.0%, further supporting demand for industry services. As a result, industry revenue is forecast to rise at an annualized rate of 3.8% to $40 billion during the same period.
As demand rises over the next five years, growth in the number of industry facilities is expected to outpace the number of companies. This slight increase in concentration would enable large companies to avoid labor redundancies. As a result, the value of industry wages are expected to continue rising over the next five years, while wage costs are expected to decrease as a share of revenue. This, in turn, will likely lead to rising profit over the next five years.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the aging and disabled residents of [company location] and its surrounding areas.
The community of [company location] has thousands of retired, elderly adults who require a greater need of attention. Many of the aging community has diabetes, arthritis, Alzheimer’s, dementia, etc. and require round the clock care. There is also a large segment of disabled adults who have disabilities that make it difficult to live independently.
Below is a demographic breakdown of this area:
| Riverdale | Santa Cruz | |
|---|---|---|
| Total Population | 26,097 | 10,725 |
| Square Miles | 6.89 | 3.96 |
| Population Density | 3,789.20 | 2,710.80 |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 54-60 | 3.68% | 3.52% |
| Age 60-69 | 5.22% | 4.50% |
| Age 70-80 | 13.80% | 13.91% |
| Age 81 and older | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
We will primarily target the following four customer segments:
- Elderly individuals who are being released from the hospital and their doctors highly recommended for them to reside in a facility that can provide 24-hour care.
- Elderly patients who had a recent fall and require physical and/or occupational therapy to heal from their injury.
- Elderly patients who are suffering from Alzheimer’s or dementia and would require constant oversight and attention.
- Disabled individuals who are unable to live independently and require 24-hour care and attention to enable a comfortable and enjoyable quality of life.
V. Competitive Analysis
Direct & Indirect Competitors
Adult Restorative Nursing Care
Established in 1986, Adult Restorative Nursing Care is a senior living provider that offers Adult Day Care in a home-like environment. It provides day care, as well as medical services for individuals with a range of illnesses and disabilities, including Alzheimer’s, Cancer, Cerebral Palsy, and Parkinson’s. While the specifics of Scenario’s pricing are not published on the website, it does state that it accepts insurance for payment.
Scenario’s services include:
- Therapeutic activity programs
- Nutritional programs
- Transportation
- Medical Services
Monastery Care
Monastery Care is a boutique assisted living facility that focuses on providing continuous compassionate care in an environment where residents’ emotional needs are met alongside their physical needs. Manchester Place Care Homes offer all-Inclusive Assisted Living Services in an upscale neighborhood setting. Its residential care homes were built specifically and exclusively for adults who need assistance with activities of daily living.
Hometown Care
Hometown Care is a luxury facility for those needing assistance with daily living, or wish to remain independent. The company provides individualized care, and offers a range of lifestyle options for senior living. Services and amenities include:
- In-House Therapy
- Wound Care and Healing
- Neurological Conditions
- Electrical Stimulation for Swallowing Dysfunction
- Lymphedema
- Pulmonary Programs
- Speech-Language Therapy
- Skilled Nursing, including Memory Care
Competitive Advantage
[Company Name] has several advantages over its competition. Those advantages include:
- Compassionate Staff: Knowledgeable and friendly staff of nurses, therapists, aides, and social workers who are not only knowledgeable in their field, but place a special emphasis on compassion.
- Location: [Company Name] will be able to service the entire metropolitan area of [company location] and its surrounding areas.
- Quality Care: [Company Name] will provide expert services and their patients will receive quality treatment and care so that the resident is as comfortable as they can be.
- Facility: [Company Name]’s facility will be constructed ADA-compliant, spacious, clean, and comfortable to ensure the resident is at their maximum satisfaction.
- Pricing: [Company Name]’s pricing will be more affordable than its competition. The company will also work on payment arrangements with the resident and their family so that the patient won’t have to sacrifice any type of care they might require because the cost is too high. The company will also accept most types of insurance, as well as Medicare and Medicaid.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Knowledgeable, friendly, expert staff of healthcare professionals.
- Quality level of service and care.
- Cleanest and most comfortable assisted living facility in the metroplex.
- Most competitive pricing for the area’s assisted living facilities.
Promotions Strategy
[Company Name] will target the elderly and disabled residents of [company location] within a 20-30 mile radius. The Company’s promotions strategy to reach the most clientele include:
Local Hospitals
[Company Name] will work to make sure the hospitals send referrals and highly recommend [company name] to its patients and their families upon releasing them from the hospital and into a permanent assisted living facility.
Home Health Care
[Company Name] will work with home health care agencies so that they recommend their assisted living facility for when a patient has to be moved from home health care and into an assisted living facility because their condition has worsened and now require a greater amount of care and oversight.
Website
[Company Name] will have an informative and attractive website that will feature all of its services and referrals from other satisfied residents and their families. The website will be highly informative and be designed in a way that is friendly and eye-catching.
SEO
[Company Name] will invest in a high SEO presence so that the assisted living facility is listed at the top of the Google or Bing search engine when a family member is researching assisted living in [company location].
Billboard
[Company Name] will have a billboard in an area of town at a busy intersection where thousands of cars and pedestrians pass daily. The location of the billboard will be in an area of town where there are a lot of doctors offices, rehab facilities, and a hospital nearby.
Advertising
[Company Name] will invest in advertisements in featured local publications, such as community newspapers and newsletters that focus on the retired and aging population.
Social Workers
[Company Name] will work with social workers who deal with individuals who have severe disabilities and are not able to live independently.
Pricing Strategy
[Company Name]’s pricing will be moderate, so customers feel they receive great value when purchasing its services.
VII. Operations Plan
Functional Roles
[Company Name] will need to fulfill the following functional roles in order to execute their business plan and ensure the company’s success:
Administrative Functions
- General & administrative functions including legal, marketing, bookkeeping, tax, etc.
- Staff management and scheduling
- Hiring and training staff
Health Care Functions
- Nurse
- Physical Therapist
- Occupational Therapist
- Personal Trainers who place on emphasis on elderly and disabled
- Social Worker
Miscellaneous
- Cook or chef
- Kitchen staff
- Social director
- Janitorial
Milestones
[Company Name] expects to achieve the following milestones in the following [xyz] months:
- Secure 20,000 square foot facility
- Develop website, logo, and company website
- Secure small business loan bank financing
- Develop and finalize list of assisted living services
- Hire and train staff
- Begin advertising campaign with hospitals, nursing homes, billboard, doctors, social workers, and print publications
- Grand Opening of [Company Name]
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is owned and operated by [Founder’s Name], an LVN who has worked for the past twenty years in various assisted living facilities around [company location]. At each assisted living facility he worked at, he was never satisfied with the level of care, compassion, and cleanliness of each facility. He knew in his heart that this disadvantaged and deserving segment of the population deserved a better quality of care, and he set out to find a building worthy of becoming an esteemed assisted living facility that will provide the best level of nursing, rehab, and assisted living services in the area.
[Founder’s Name] graduated from the University of ABC with a LVN (Licensed Vocational Nurse).
Hiring Plan
[Founder’s Name] will serve as the agency Founder and Chief Executive Officer. He will hire the following personnel in order to maintain a high-quality assisted living facility.
- Office Manager will assist [Founder’s Name] run the administrative tasks to operate the assisted living facility. This person will handle bookkeeping, tax payments, payroll, and office inventory.
- Nurses – 3–4 nurses will be on staff to provide the nursing services.
- Occupational Therapist – 1 OT will be on staff to provide occupational therapy services.
- Physical Therapist – 1 PT will be on staff to provide physical therapy services.
- Social Director – will organize all events, games, and activities for the resident.
- Trainer – will develop an exercise and activity program for each resident so that they are able to partake in fitness activities suitable for their specific needs.
- Social Worker – 1 social worker will be on staff to oversee the welfare and care of each resident.
- Kitchen staff – 1 chef or cook and 2 – 3 dishwashers/assistant cooks to help prepare and serve the meals for the resident.
- Janitorial staff – 3 – 4 custodial workers to ensure the facility is clean at all times.
IX. Financial Plan
Revenue and Cost Drivers
The revenues for [Company Name] will come from the income it will charge the residents and their insurance for the health care services it provides.
The cost drivers for the company will be the payroll of the staff, lease on the building, office supplies and equipment, food, beverages, social event supplies, decorations, fitness equipment, and marketing and advertising costs.
Capital Requirements and Use of Funds
[Company Name] is seeking $250,000 in funding to launch its assisted living facility. The capital will be used for funding capital expenditures, construction build-out, staffing, training, marketing and advertising expenses, and working capital.
The breakout of the funding may be seen below:
- Facility design/build-out: $100,000
- Capital expenditures: $20,000
- Furniture, fixture, and equipment: $35,000
- Marketing and advertising: $10,000
- Staffing costs: $75,000
- Working capital: $10,000
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of patients per month | Per location |
|---|---|
| Year 1 | 1200 |
| Year 2 | 1300 |
| Year 3 | 1450 |
| Year 4 | 1550 |
| Year 5 | 1750 |
| Annual Lease (per location) | $50,000 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
