How To Start A Nursing Home Business With Little To No Experience

September 28, 2022

Adam Hoeksema

Knowing how to open a nursing home from scratch comes after a long search into why you might want to, as well as how to find the information you need to get it registered and filled with staff and residents. 

If you’re starting with little to no experience, you’re going to need to learn the basic differences between a regular startup and one with the restrictions and regulations of the care industry. Then, you’ll want to figure out whether you think you can make it profitable, and how much it’ll cost. 

When done right, a nursing home can be a profitable contribution to society, but it won’t come easily. The first step is figuring out why you want to, and whether it’s worth the trouble. Then, we’ve got some useful tips on how to begin, followed by how to find your staff and open your nursing home to its first residents. Let’s take a look! 

Thinking of Starting a Nursing Home Business? 

There are plenty of good reasons to open a nursing home, not least of which is that running your own business is a liberating and rewarding enterprise if it’s successful. Nursing homes provide a valuable service to those in need, and this is also a source of satisfaction for those who run them. 

They’re also profitable. The cost of living in long-term care facilities is increasing at a rate that outpaces inflation, suggesting that it’s’ becoming more profitable all the time. However, if you’re considering running the home as a nonprofit, you may be interested to know that nonprofit facilities have better resident outcomes and better rates of staff satisfaction. 

Whatever your business model will be, you’ll need to identify your motives first, before you know where to look into how to start a nursing home. Once you have these in mind, there is a series of steps that are relatively consistent for all business startups, with a few specifics that relate to nursing homes in particular. 

Before you think about how to open a nursing home, it’s important to consider the responsibilities involved too. Working in the care industry may well be rewarding and possibly very lucrative, but it’s also a heavily-regulated industry that involves a lot of work and licensing. Further, there will be a lot more overheads to consider than in many other startup ventures, so you will have to consider your capital sources in depth. 

If you’re still ready to go ahead, let’s look into some of these and other factors that you need to consider when learning how to start a nursing home.

Tips on How to Start a Nursing Home from Scratch

You’re starting from the beginning, and you have little to no experience, so we’re going to break it down from the start. Of course, a comprehensive guide to starting a business of any kind would be well beyond the scope of any single article, so consider these as pointers to set you off in the right direction, but be sure to delve much deeper into each section using other sources before you get going. 

Here are the six major components to starting your nursing home business from nothing. 

1. Understand your Market

The very first step to starting any business is market research. The early stages of this are free and they are absolutely invaluable, especially when planning to start a business with such significant overheads. 

If you’re fixed in one location, your options will be limited to that market, but if you can move, you’ll do well to investigate areas with a greater need of your services. Then, you’ll have to identify and explore the competition and see what they do. 

You’ll be building an ideal customer as you go, and identifying unique ways to reach and supply them with your solution to their problem. Start looking for holes in the services that are currently provided, and build up your business model in your head, in a way that fills in these gaps. This is how you’ll stay competitive, and provide something that others don’t. 

2. Get your Head Around Funding Options

There are various sources of funding available to new businesses. For any standard business you typically have the following three options to choose from:

  • Bootstrapping – You can start a lot of businesses with the funds already available to you. Many companies begin with funding that comes from the credit card or savings account of a founder. We’re going to rush past this option here, since setting up a nursing home involves significant overheads that most founders won’t have access to alone.

  • Bank Loans – Far more likely is the option of taking out money from the bank. As a founder, this comes with the added benefit of keeping all your company equity, but the loan will have to be secured somehow, and you’ll be on the hook to pay it back, even if your nursing home business fails. Loans can be a rapid injection of significant capital that may get you off the ground or scaling quickly, so they’re well worth considering.

  • Investors – Another approach would be to get investors involved. If you can persuade the right people that your business idea is a good one, you can get a heavy dose of capital that may or may not come along with some serious expertise in the industry too. This process can take a long time, since finding these people is difficult, and of course, they’ll want something in exchange: shares in your company.

    This means you will no longer have total control over the direction of your project as you’ll have to appease the shareholders. However, this money is invested at their own risk, not yours, so if you do fail, you won’t be left with a huge debt to pay back too. 

However, for the care industry, it’s also worth considering grants. Again, do your own research on this, but look out for grants that might cover the cost of skilled services, nutrition programs, personalized care assistance, and other elements of your business model. 

Understanding the funding options is a good place to start, but to choose the right one for you will require you to know exactly what your costs are going to be, and where they’ll be coming from. For this, you’ll want to know who and what you’ve got to pay for.

3. Itemize and find your Equipment

This section alone takes some serious research. If you’re buying a new building, you’re going to have to get it equipped, and if you’re taking over an old care home building, you’ll still need to know what has to be put in and taken out. Some examples of equipment you’ll need for a care home are:

  • Beds
  • General Furniture
  • Specialized Furniture
  • Medical equipment
  • Bathroom equipment
  • Kitchen Equipment
  • Communications Equipment
  • PPE

There’s going to be a lot more to consider than just these listed, and from itemizing them you’ll also need to source and cost them to start building your budget. Once you’ve got your market research down, you’ll have a better idea of what equipment you’ll need to reach your customers. From here, it’s time to look at the legality of the whole project. 

4. Figure out the Licensing you will Need

There are several documents you’re going to have to get. These range from TV subscriptions to state and Federal licensing requirements, as well as insurance and staff background checks. 

Insurance will need to cover residents and staff alike, as well as the business itself and the property. If you’re going to have an internal kitchen, you’ll need hygiene certificates for the food you’ll be providing and the environment it’s produced in. There may be levels to food hygiene certificates, so once you’ve finished designing your business plan, you’ll want to understand these levels to know which ones to apply for. 

If you’re going for Medicare, check out the requirements for that, and if you’ll be a nonprofit institution, there are further legal hoops to jump through to register for that also, so make sure you know what you’ve got to do.

This is the bulk of the research you’ll need to be doing to get your company off the ground, and your findings from these steps will be compiled as part of a comprehensive business plan document, which will also act as a framework for any of the other research you need to do to get going, as well as a persuasive account of how profitable your project is going to be. Here’s how that should look.

5. Build your business plan

Your business plan is more than just a formal document, it’s a journey into the inner workings and the future of your business. The business plan document is split into seven major sections:

  • Executive Summary – The front page of your document will cover an introduction, leading the reader through the problems, solutions, and your value proposition. This should be a general overview, and it should be appealing, but never overblown or inaccurate. This page is probably going to be the last you complete, as it’s a summary of a lot of the material from within the document.

  • Market Analysis – Your market research should give you a good idea of where your company sits among the competitors and the current state of the market. Include an overview of the industry, and identify how your nursing home will contribute something unique to that market. Lay out a simple plan of action that explains how you’ll take your share of the market, and whom that share represents in terms of ideal customers and their problems.

  • Company Description – Now it’s time to go into more detail about who you are and why you’re the right company for the job. List the things you can do that nobody else can, and specify how you’re going to treat the pain points of your customers. Work to set your company apart from the others in your market.

  • Organizational Structure – One of the ways you can expand on the company description and how you’ll stay relevant is to display the strengths of your team. Present the management and specialists that you have on board, and how what they can do will contribute to your success. This section can include profiles and resumes of your management team and specialists, where appropriate.

  • Products and Services – Here you’ll list the services you provide in the nursing home, along with any products you may sell, if you plan to. Nursing homes often offer insurance packages along with partner organizations, and these should be included. Any services the home provides should be listed here too, along with the details of how the services will be administered and by whom.

  • Sales and Marketing – This section will go over your approach to finding your nursing home clients and getting your name out there. List the media avenues, such as TV or radio, and lay out your campaign plans. Detail how you’ll reach potential residents once you get going.

  • Financial Projections – Your pro forma income and cash flow statements, as well as your balance sheet, should be completed and accurate for you to be able to form detailed and realistic projections of the financial future of your company. These projections will be important for you, but also absolutely critical for any investment or loan you might want to take on in the future. 

For financial projections, consider using a professional template, like the one we have here at ProjectionHub. The Nursing Home and Assisted Living Projection Template is specifically designed for your needs and can be further customized with your input and by making use of the free support that comes with it. Templates like this can help you present your findings in a style that’s appealing to financial providers, and boost the accuracy of your estimates. 

And that’s the essence of how to start a nursing home business plan. The next step is to populate your nursing home with competent staff and residents. 

6. How to Hire When Starting a Nursing Home Business

Your budget and planning sections should have established who and what you can afford, so now hiring becomes a matter of reaching out to find them. Of course, every carer will need the appropriate background check and disclaimers to be filled out, but how do you find them in the first place?

Headhunting from the competition is one method, especially if you have a better salary package or benefits available. As long as you create a comfortable working culture with good compensation, many staff in less-friendly companies will be happy to switch over. 

You can also start networking in appropriate groups and locations, and spread the word of your new home opening up. For lower-skilled roles, university graduates may be looking for experience, so get onto forums and social groups to find them. 

For specialists, consider people with a wide range of skills at first; those who can impart their experiences onto your new staff and build up skill sets from the inside. Early investment in training can save a lot in the long run, and focus strongly on retaining the staff you do get, to save on the future cost of talent acquisition. 

Once you have a team, you’ll be ready to open your doors. This means you’re going to want to have people to look after. 

7. How to Open a Nursing Home: Finding your First Clients

From building your business plan and completing your market research sections, you should have identified the right approach to find your first customers. Many nursing homes don’t have a large number of beds, so depending on the size of yours and the demand, this could be a relatively short process. 

Your market research should have identified your ideal customer and where they put their attention. If these people are typically watching TV at noon, this is where you’ll put your ads. If they’re out hiking in the mornings, then joining those community groups is how you’ll find them. Whatever you’ve learned from your research will tell you where the people are who want your services the most.

Once you know this, it’s a simple matter to tailor your media towards them and have people signing up with your company. 


Setting up a nursing home is no easy feat. It’ll take lengthy planning, lots of paperwork, and significant overheads. However, with an aging population, the demand for such a company is always going to be high, and with the right business model and sufficient financial backing, you could be on your way to a lucrative and rewarding business opportunity. 

A business plan forms the framework of all of the preparation you’ll need to take on to get off the ground, so follow it clearly, and make sure your data is accurate. From there, get out and market your roles and your residential positions, and see how your idea quickly evolves into a valuable service. 

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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