If you’ve been researching how to start an assisted living business, you’ve likely come across the debate on whether or not you need a license. Many traditional assisted living facilities operate under state licensure, requiring strict compliance with regulations, staffing requirements, and operational procedures. However, there’s another way—one that eliminates much of the red tape while still allowing you to build a successful, profitable care-based business.
In this article, we’ll break down the process of starting a licensed assisted living facility and compare it to the Group Home Riches method, an alternative approach that offers a more accessible and scalable business model.
How to Start a Licensed Assisted Living Facility
Starting a licensed assisted living business requires significant planning, compliance, and investment. Here’s an overview of the steps involved:
Step 1: Research State Licensing Requirements
Each state has different regulations for licensing assisted living facilities. Typically, you will need to:
a) Apply for a state business license and a specialized assisted living license
b) Meet zoning and safety regulations
c) Complete an administrator training program
d) Undergo state inspections and approvals
Step 2: Secure a Suitable Property
a) A licensed facility must meet specific building codes, including:
b) Adequate room sizes and common areas
c) Fire safety measures
d) Accessibility compliance under the Americans with Disabilities Act (ADA)
Step 3: Obtain Necessary Certifications and Staff
a) Licensed facilities require hiring trained medical and care staff, which may include:
b) Registered nurses (RNs) or caregivers
c) Compliance officers to maintain state regulations
d) A licensed administrator to oversee operations
Step 4: Develop Policies and Procedures
a) Regulated assisted living facilities require structured procedures for:
b) Resident care plans
c) Medication administration
d) Emergency preparedness and staff training
Step 5: Pass State Inspections and Open Your Doors
Before accepting residents, your facility must pass state inspections and be approved for licensure. The licensing process alone can take several months to over a year, and ongoing compliance is required to maintain your license.
The Alternative: The Group Home Riches Method (No License Required)
Now that you understand the traditional licensed approach, let’s discuss an alternative model—the Group Home Riches method. This approach enables entrepreneurs to start residential group homes without the extensive licensing and regulatory burdens of a licensed assisted living facility.
How It Works
Instead of a medical-based model, this method focuses on providing affordable housing and outsourcing supportive services that require any licensing or certification for individuals in need. Common resident groups include:
a) Seniors who don’t require medical assistance but need a structured living environment
b) Veterans and individuals with disabilities
c) People transitioning from homelessness
Advantages of the Group Home Riches Model
✅ Faster Start-Up Time – No lengthy licensing process; get up and running in a matter of weeks instead of years.
✅ Lower Overhead Costs – No need to hire expensive medical staff or maintain regulatory compliance.
✅ Higher Profit Margins – Lower operational expenses lead to increased profitability.
✅ Scalability – With fewer restrictions, you can expand faster and open multiple homes more easily.
✅ Community Impact – You’re still providing much-needed housing and support, without the burden of medical licensing.
Potential Disadvantages
⚠ No Medical Services – Since you won’t be running a medical facility, you can’t provide nursing or medication administration directly. ⚠ Different Resident Demographics – Licensed assisted living facilities cater to higher-needs individuals, while group homes often focus on independent or semi-independent residents.
⚠ Self-Promotion is Key – Without state referrals, you’ll need strong marketing and networking to fill your homes with residents. With our model, this is the bread and butter of your business, typically the first step that we recommend taking, and if you’re on a tight budget this is great news because all you need to start is an internet connection and a phone!
Which Model is Right for You?
If you want to operate a state-regulated medical care facility, a licensed assisted living facility may be the right choice—but be prepared for a long, expensive, and bureaucratic process.
Our goal here at Group Home Riches is to arm you with information and let you decide what your path to Group Riches will entail.
We’ve found that many people that have chosen to go down the licensed path do so because they think that they NEED TO.
For a simpler method that can still 10x the cashflow of a typical rental property, give you way more control over a property, get guaranteed checks from the government and have a massive impact on your community then sign up below for free training material.
Check out these helpful videos that will highlight the advantages and disadvantages of each business model and make sure to like and subscribe to our Youtube channel for more free, helpful information.
