Research Outline

Assisted Living Facilities vs Home Care


To compare business models for assisted living facilities vs. home care by providing an itemised cost comparison for the two kinds of businesses.

Early Findings

Assisted Living Facilities in the U.S.

  • There are many types of assisted living facilities in the U.S., mainly based on types of residents, as different types of residents require different levels of care and therefore pay different rates. Some of the more common types of assisted living facilities are: senior housing board and care/adult living/supported care), memory care facilities, transitional care nursing homes, and facilities serving those living with disabilities, among others.
  • The rules in starting assisted living facilities vary between states such as licensing for the property and the operator.
  • Costs involved in setting up an assisted living centre include: employee wages, utilities, internet, nurse call buttons, security cameras, computer hardware, food and drink for patients, bedding, medical equipment, and software for facility management.
  • Assisted living facilities can charge between $2,000 and $4,000 per resident per month, though the exact cost depends on the location and the quality of the facility.

Sample Costs in Assisted Living Facilities

  • Costs for a state licensed assisted living facility:
  • Proportion of ongoing costs on an average facility with 80 units:
    • 9% of sales to business liability insurance, utility bills, and property taxes
    • 8% of revenue for high-level administrators, lawyers, and accountants
    • 7% of revenue for maintenance and security
    • 5% of revenue for marketing efforts
    • 5% of revenue on laundry and housekeeping services
    • 2% of revenue for an activity director
    • 1% of revenue for transportation.
    • 15% of revenue for food
    • 17% of revenue for caregiver staff
  • Average profit margin: 30%

Insights on Licensing Fees

  • License fees differ by state. For example in Colorado,the initial based on category/classification of 20-49 beds is $8,750.
  • Most states have a processing period of 30-90 days for licenses as in Colorado and Minnesota.

Summary of Findings

In this preliminary hour of research, although we found information on cost for setting up assisted living facilities, we did not fill in this information in the provided spreadsheet, as the information found was not for facilities with a bed capacity of 20 as provided. Further, our focus was on the U.S., but we found that different costs applied for different states, such as in licensing, and as such, a specific state would have to be considered