For U.S. first-time operators
Your break-even is not two residents. It is five and a half.
Almost every first-time model for a six-bed assisted living home puts caregiver wages in the wrong column. Move them where they belong and the business changes shape. Here is what the corrected math looks like, and what it costs to survive the first year.
Six-bed home, mid-cost market
| Common model | Corrected | |
|---|---|---|
| Caregiver payroll treated as | Variable | Fixed |
| Monthly fixed costs | $5,700 | $16,900 |
| Contribution per resident | $3,100 | $3,100 |
| Break-even occupancy | 1.8 beds | 5.5 of 6 beds |
| Ramp-up working capital | $11,400 | $23,000–$38,000 |
State licensing rules effectively require staffed coverage around the clock. That obligation does not shrink when you have two residents instead of six. Illustrative model, not a forecast — full workings in the free guide.
What the corrected model says
Five numbers decide whether a six-bed home works.
These come from a worked example: a six-bed facility in a mid-cost Texas market, fully staffed, with a census split evenly between private pay and Medicaid waiver. Your inputs will differ. The structure will not.
Where facilities actually fail
Not on opening day. Four or five months later, when the start-up budget is spent, the beds are still filling, and the cumulative cash position is at its lowest point. Most first-time operators fund the opening and forget to fund the ramp. Budgeting $11,400 for that window instead of $23,000 to $38,000 is the difference between trading through it and running dry inside it.
Free · 6 tools
The Small-Scale Care Facility Starter Kit
Three guides and three working templates for the four decisions that get made before opening day: where to put the facility, what building to put it in, how to fill the beds, and how to make the numbers work. The financial model above is worked through in full in the first guide.
Pay what you want, and $0 is a real option. The kit is complete on its own — you can build a defensible projection without buying anything.
Once you are choosing between specific states and need the reimbursement and licensing data, there is a paid bundle as well. Read the free guide first.
Writing
Operating notes, published weekly.
33+ articles across six categories, written from the operator’s side of the desk rather than the consultant’s.
The Real Math Behind a Profitable Care Facility (And How to Scale It to Three)
Break-even model, the five profit levers, and what actually changes when you run three locations off one staffing structure.
The Daily Operations Playbook Behind a Care Home That Doesn’t Fall Apart
Care plans, shift handoffs, and incident logs — the three documents that decide whether a small facility holds together under pressure.
From Zero to Full: The Right Order One Care Home Owner Got Right
A case study on reaching full occupancy in six months, and why the sequence of referral relationships mattered more than the marketing spend.
Questions
Before you download anything.
Are these numbers from a facility you actually operate?
No, and I would rather you knew that before you read them. The U.S. figures are models, built from published Medicaid waiver rates, Bureau of Labor Statistics wage data, and state licensing requirements. Every table in the guide is labelled as illustrative.
My operating experience is outside the U.S. The structure of the math transfers; the specific numbers need to be replaced with your own state’s inputs before you rely on them.
Is this for first-time operators or experienced ones?
First-time. If you already run a licensed facility, you know most of this and the free kit will not tell you much you have not learned the hard way. The audience is people within about twelve months of opening a first home of six to twelve beds.
How is this different from a U.S. senior living consultant?
A consultant will know your state’s rules better than I do, and if you are close to signing anything you should hire one. What is here is the operating logic behind the numbers — why staffing sits where it does in the model, what the ramp actually looks like, which levers matter — written by someone who has run the facilities rather than advised on them.
The two are not substitutes. Use these frameworks to work out whether the numbers can work at all, then pay a professional to check the specifics.
Do I have to buy the bundle to use the free kit?
No. The free kit is complete on its own — you can build a defensible projection with it. Two of its files, the calculator and the property checklist, have expanded versions inside the paid bundle. I would rather say that up front than have you discover it after paying.
Do you offer one-on-one consultation?
Not as a paid service. If you have run your numbers and something does not add up, email me and I will look at it. I read every message myself and aim to reply within 48 hours.
About the author
Koujirou Nagata
Founder, smallcarefacility.com
- 20+ years operating small-scale care facilities, 2005 to present
- 3 facilities built from the ground up
- $2.7M M&A exit via stock transfer, 2022
- Currently operating
- Based in Kobe, Japan
I opened my first care facility in 2005 and built two more over the following years. In 2022 I completed a $2.7M M&A exit through stock transfer, then returned to small-scale operations, which is what I run today.
My operating experience is outside the United States. That matters, so I will say it plainly rather than bury it: the U.S. figures on this site and in these tools are researched models, built from published reimbursement rates, wage data, and licensing rules. They are labelled as models throughout. They are not a report of results from a facility I have run in the U.S., and you should not treat them as one.
What does transfer is the operating logic. Break-even structure, the real cost of round-the-clock coverage, how occupancy actually ramps, what families respond to on a tour, why direct care staff leave. Those hold across markets, and they are what these frameworks are built from.
Find out whether the numbers work before you sign a lease.
In some markets they do not. The guide walks through a six-bed facility that cannot break even at any occupancy level, because local reimbursement rates and wage costs make it structurally impossible. Better to learn that now than in month four.