Get started free with our free intro course!

The Simple Solution to RAL Profitability

The Simple Solution to RAL Profitability

Great marketers agree that price is everything.  When it comes to owning and operating a residential assisted living home, price is the thing. This is why Gene Guarino, owner and founder of Residential Assisted Living Academy, has created a resource to help RAL business owners and operators thrive. This much needed industry resource is called the Profitability Calculator, which enables owners to plug in financial information during the planning stages and thereafter. There are several aspects RAL business operators must take into consideration. It is imperative that owners have a firm grasp of the location in which they plan to establish their home. It’s also important to know what the local market is in that area in terms of affordability for your RAL home model. Owners and operators of residential assisted living homes must consider several pricing factors.

The Price Perception, Predicament, And Theory Of Relativity

  • The Perception of Price

Those who find themselves in the position of a salesperson, be it retail or otherwise, often forget what it is like to be a consumer.  In an effort to gain sales, the novice almost immediately lowers the price.  The thought behind this strategy is to lower the price in order to generate quicker and frequent sales.  This marketing philosophy is wrong when it comes to assisted living.

In a residential assisted living home environment, price has a definite perception – value.  The consumer of these services intimately associates price with quality.  Afterall, the goal of residential assisted living is to provide quality care for seniors, and quality service rarely comes to mind when thinking about bargain prices. Therefore, the novice salesperson might want to avoid the cardinal sin of lowering the price to drive the sale.

  • The Pricing Predicament

A Short Story – More than five years ago, a retired residential assisted living home owner spoke at length about one of his prior properties.  He was concerned by the increase in vacancies.  One might think, “Why does he care?  He’s retired, right?” The ultimate goal of a quality RAL home model is to do good and do well.

His discovery of the cause alleviated his fears.  The new owners painstakingly committed the cardinal sin – lower fees.  The new owners thought that by lowering the fees, potential residents would pour in for tours and compete for occupancy.  Unfortunately, that concept has failed time and time again – the lower the fees, the less tours.  The lower the fees, the more residents vacated the property.  The lower the fees, the lower the perception of the property.  

Pricing your residential assisted living home is more an art than a science.  It must be done by taking industry and market information into consideration.  It must also be done with local demographic intelligence coupled with hard financial data.  There is no one correct formula but there is an effective concept. 

  • The Theory of Relativity In RAL

So often entrepreneurs like to base price on hard formulas devoid of nuance.  However, in the residential assisted living industry it is nuance, which keeps the cruise ship afloat with a full passenger manifesto.  How does the theory of pricing work effectively in residential assisted living?

Consumers of residential assisted living homes do not think about:

  • the cost of land
  • construction and finishing costs
  • operational costs
  • profit margins
  • rate of return
  • insurance requirements and protections
  • entity structure.

Rather, consumers of residential assisted living homes consider:

  • location, location, location
    • proximity to family members
    • proximity to hospitals
    • proximity to shopping centers
    • proximity to church, synagogue or mosque
  • the size of units and amenities
  • friendliness of staff and management
  • does the staff seem competent
  • the variety of care provided
  • the food – does it look good and taste good?
  • perception of the home in the community.

It is clear that what owners consider vital to success is not at all what drives a senior to make a decision when shopping for a residential assisted living home. This is another benefit of utilizing the Profitability Calculator. It helps owners to shift their thinking from that of an entrepreneur to that of a provider of care. Doing good and doing well is not just the motto of RAL Academy. It is a fundamental approach to operating a successful residential assisted living business. While the financials matter a great deal, the financials do not drive occupancy. Without the latter, there will be no financials to attend. The Profitability Calculator will help users to factor every important step.  

Pioneers On A New Frontier

Gene Guarino’s Profitability Calculator is a pathfinder for the RAL industry. Historically, in the senior living industry experts have been plenteous. Even today, the industry touts experts in design and construction, market analysis, interior design, human resources, training and development and life enrichment. 

What is one of the most important aspects missing when pioneering this new frontier? Pricing. This is now changing with the Profitability Calculator. While pricing is more of an art than a science, owners of residential assisted living homes need not become painters of portraits and creators of wax sculptors. 

Information technology has made it more plausible to calibrate nuance in financial calculations. The difficult task of pricing has become and continues to become more precise based on a variety of factors that are present. The Profitability Calculator is solving the mystery of pricing. The solution is in viable tools that are available to accomplish the task.  Being resolved because these tools are improving to accommodate the one constant in life – change. 

Don’t Miss This

Pricing is perhaps one of the most single important decisions any senior living operator needs to make, both initially and on an on-going basis. 

The Profitability Calculator impacts all aspects of pricing and has huge meaning for asset value.

  • How do you know if your RAL plans have the right financial foundation?
  • Get access to and try the Residential Assisted Living Profitability Calculator today!

Special Bonus from Gene Guarino

Sign up for the Profitability Calculator and receive immediate access to a special bonus video with Residential Assisted Living Academy founder, Gene Guarino. Visit to learn more about how the profitability calculator will best benefit the pricing methods for your business. Watch as Gene explains how to use the calculator and shows you how profitable a Residential Assisted Living Home can really be.

Email This Article
Gene Guarino


Gene's Introductory Course for Residential Assisted Living

Discover how RAL works, why now, and how it will work for you! Register for the free course below and we’ll send you immediate access.

This introductory course is taught by our late Founder, Gene Guarino.


RALAcademy FREE Introductory Course

Learn how Residential Assisted Living Will Work for You!

What’s the best email to send your course access info to?

Your privacy is protected.

Get Access to the One & Done Formula!

Complete the fields below and we’ll send your access link to the webinar via email.

Privacy Policy: We hate spam and promise to keep your email address safe