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How to Start Your Home Care Business Today

Written by on May 24, 2017

The home care business is certainly set to boom in the US and around the globe.

This can be easily seen by following demographic statistics of the US, for example. The US population 65 years and older is expected to grow to 19.6% by 2030.

Along with the aging population, there is also an increase in chronic disease, medical advancement, the general acceptance of the value of home care by physicians, and movements toward cost-efficient treatment options.

For that reason, the industry is now worth $89 billion and set to grow at a CAGR of 9.40% from 2016 – 2021.


According to the recent statistics, the US population 65 years and older is expected to grow to 19.6% by 2030. Additionally, the home care industry, worth $89 billion, is set to grow 9.40% through 2021.

Obviously, that’s a great upward trend, and one that will need more and more qualified, experienced and caring home care businesses.

If you’ve ever considered getting your own home care business set up, now would be the perfect time to start.

In our guide today, we’ll look at all the aspects you need to cover in order to start your business, from your business plan all the way to getting your first home care clients.

I. Types of Home Care Services

While there are many types of home care workers, to simplify, we’ll quickly look at the difference between two main ones:

  • home health care
  • non-medical home care

1. Home Health Care

This type of care is provided by a licensed medical professional (nurse or physical therapist) in the client’s home. These providers are normally only authorized to perform those tasks that the client’s physician prescribed.

Home health care providers are normally needed for occupational therapy, mobility training, pain management, IV therapy or injections, etc.

They are normally reimbursed through Medicare, Medicaid or other insurance. Licensing for this type of home health care can take several years.

These are the differences between home health care and non-medical home care

2. Non-Medical Home Care

This type of care is focused more on assisting their clients with regular daily activities needed to maintain their lifestyle, safety and health.

These types of tasks can normally be completed by family members without medical licenses, which is why this is termed non-medical home care.

Home care assistants normally help clients with bathing, toileting, companionship, meal preparation, light cleaning, transportation and other tasks.

In our guide today, we’ll address non-medical home care.

II. The Advantages and Disadvantages of the Home Care Business

Before we get started on the business side, let’s quickly review the pros and cons of the home care business.

1. The Advantages

There are many advantages to this industry

The advantages of starting your own home care business are easy to see. Let’s look at the most important.

Freedom

As with any self-employed individual, you’ll have the freedom to determine your own career and fate. You can work where, when, and with whom you want.

Of course, being a responsible business person, you’ll want to increase your business, so you’ll get great customers to fill up your time.

Doing what you love

I hope it’s safe to assume that you generally enjoy assisting others, in this case the elderly. They need help feeling independent and less of a burden on their relatives, which is where you come in.

You may also build up a bond with them, which makes the work that much more enjoyable.

Earning potential

The home care industry is one a great, upward-moving trend, meaning that you’ll be able to have a potentially great income.

Qualified home care providers are in demand, especially as the elderly population continues to expand.

With additional employees, you can ensure your home care business makes good money while helping others.

2. The Disadvantages

You should be aware of the disadvantages to this industry

However, there are some important disadvantages to be aware of for your home care business.

Isolation

While you are working with others to help them, you essentially have no colleagues with whom to work with and relax.

Home care providers mostly work on their own and they don’t get to have a support network, which is often necessary.

Long travel

Home care is great for the patient, as it is focused on comfort. However, in order to give them that comfort, you’ll have to give up some of yours.

You may have many patients each day, anywhere from 6-8. If they live scattered around a large geographical area, you may have to travel far each day and work late at night.

Upkeep

Due to technological advances, home care has become much more prevalent. These advances have helped bring equipment into home use, as it was previously only available in hospitals and clinics.

While that’s great for clients, for you it means that you’ll have to keep up-to-date with the latest technology, which requires time and training.

III. The Basics of Your Home Care Business

Getting started on your home care business will be quite a journey. But, as once was said: the journey of a thousand miles begins with one step.

So let’s take a step into the basic parts of your business.

1. The Home Care Business Plan

The first thing you need to do is make sure that you’ve got your business plan before starting anything else.

This may seem like an unnecessary document nowadays. However, that couldn’t be further from the truth.

Business plans allow you to organize your business idea by forcing you to think through all the aspects and plan accordingly.

In order to succeed at your home care business, you need to create your business plan first
In order to succeed at your home care business, you need to create your business plan first

In order to write your home care business plan, you need to include the following sections:

  • Executive Summary: this section will discuss the strengths of your business. Although it is first, it should actually be written last as it summarizes everything that will follow it.
  • Business Description: this section presents the most important and crucial aspects of your business
  • Industry and Competition Overview: as the name suggests, this sections goes over the health care industry based on your research, as well as your main competitors
  • Operations and Management Plan: this section goes over what your business operations are and how you will structure your management to achieve the results you’ve set
  • Service Description: this section shows the competitive benefits your health care service will be providing
  • Marketing Strategy: your marketing section will describe how you plan on getting your health care services in front of the right people, including price, promotion, distribution and sales channels
  • Financial Projection: this section shows what kind of revenues and expenses you forecast your health care businesses will have. It will also state whether you require any financing in order to run your business effectively

Creating your own business plan can be quite difficult, especially with so much conflicting information and resources out there.

That’s why InvoiceBerry has created the perfect business plan guide (at more than 8,000 words) to help you with your health care business.

How to Write a Great Business Plan: Full Guide This ultimate guide will walk you through all the steps of creating a great business plan for your small business to help you succeed. READ MORE

2. Pricing Your Home Care Services

Now, let’s look at one of the most important parts of your business—money.

In order to have a successful business, you need to have effective pricing strategies. As part of your marketing mix, you need to make sure your prices reflect your business costs and desired outcome.

Although there are different types of strategies to use, almost all health care businesses are based on hourly work.

This is particularly understandable, seeing as the service may not be needed full-time. Instead, part-time, hourly work would be best.

This also takes into account what kind of services will be offered, ranging from caregiver (groceries, laundry, chores, etc.) to more involved care involving specific instruments and other processes.

However, the primary consideration for many clients (or clients’ families) is not price but quality, experience and the comfort of their elderly family members.

In these pricing considerations, home care will be more costly than alternative options (nursing home, assisted living, etc.) but offer more comfort and independence.

It's important to consider the pricing strategy for your home care business
It’s important to consider the pricing strategy for your home care business. Image source.

For example, according to Nurse Next Door, for a senior couple who needs caregiver services of 3 hours per day, twice a week, the costs come to $550 per month.

On the other hand, for clients with more serious conditions like ALS, and requiring 7 hours a day, 5 days a week, costs can come to $4000 per month.

15 Pricing Strategies to Boost Your Small Business We will explore the 15 most effective ways that you can set your small business pricing strategies to ensure competitiveness and profitability. READ MORE

IV. Qualifications, Licenses and Insurance

Now that we’ve gone over the very basics of your health care business, we’ll move on to making sure you’ve got all the right qualifications, licenses and necessary insurance.

These documentation requirements will obviously be different for each country and even each state you’re operating in.

However, it’s good to know whether you may potentially need the documentation below to start your health care business.

1. Qualifications

In the US, there are no requirements for formal education in order to become a home care assistant.

However, there are certain other requirements that will need to be taken care of before you can start your health care business.

Of course, the formal training requirements will differ from state to state. In some states, it is required that you first get formal training from vocational schools, agencies, community colleges, etc.

For agencies, there are stricter requirements, and there are requirements to pass a competency exam.

Beyond the formal training, there may also be certifications that are necessary or, in your case of starting a health care business, recommended.

The National Association for Home Care & Hospice manages certification requests. Usually, in order to become certified in health care, you will have to complete at least 75 hours of training plus clinical hours. Some states will require more.

This map shows you the different requirements by state.

There are various licenses and qualifications you'll need, based on your country or state
There are various licenses and qualifications you’ll need, based on your country or state

2. Licenses

Naturally, in order to start a health care business, you’ll have to get a business license according to your state requirements.

However, because health care is a particularly serious business, you’ll need to make sure you are protected.

For that reason, you should avoid registering your business as a sole proprietorship which offers no liability protection.

Instead, it is recommended you establish your health care business as an LLC (limited liability company), which will help separate your personal liability from the company’s.

Beyond that, there may be many licensing requirements according to your state. You will need to go through your state’s Department of Health and Human Services in order to determine your requirements.

Rules and regulations are constantly changing and being updated. Therefore, be sure to thoroughly go through these requirements, as well as call them directly and double-check.

For the most part, you might have to take examinations on your state’s health care provisions, policies, care and ethics.

If you are operating in other cities and counties, you’ll probably need to have licenses for those locations as well.

How to Set Up an LLC in All 50 US States & D.C. Get up-to-date and in-depth information on how you can start your own LLC in any US state—including D.C. Read here to get your business started today. READ MORE

3. Insurance

This is a particular important section for the primary reason that health care is serious business and can expose you to a lot of lawsuits.

You will not only need to insure your business, but also bond it in order to operate your health care business safely and legally.

Bonding is required as it protects the client against unethical or harmful business practices.

For example, if one of your employees steals anything from the client (or in any other way is harmful), the surety company that backs the bond will provide payment for the claim, and your health care business must reimburse that claim in full.

It provides a measure of security for your clients, and is often, if not always, required by state law.


Because health care is such a serious issue, you can be exposed to a lot of lawsuits and liability. For that reason, you’ll need adequate insurance to cover yourself and your business.

General Liability Insurance

The first type of insurance your business will need to have is general liability insurance, which is related to property damage and bodily harm that may occur while on the job.

If you don’t have this insurance, your clients can claim that you (or an employee of yours) caused them physical or property damage. This could result in a lengthy, expensive lawsuit, which can be avoided with general liability.

Professional Liability Insurance

Another type of insurance your business will need to carry is professional liability insurance (often referred to as Errors and Omissions, or E&O, insurance).

This helps protect you against any lawsuits related to malpractice, clinical misconduct or negligence.

The nature of your work, with health care assistants entering clients’ homes and performing health-related services, means you are liability to a great many claims normal entrepreneurs wouldn’t be susceptible to.

Workers’ Compensation Insurance

Lastly, you will need to have workers’ comp (by state requirement or not) if you decide to hire employees.

This is particularly important because if your employee gets injured or sick on the job, you could be liable for covering those costs.

IV. Marketing Your Home Care Business

Now that you have everything in place, you need to get your health care business in front of the right people.

There are many considerations to make, but you should understand that successful marketing will be the difference between a successful business and a quick failure.

It is also important to emphasize that effective marketing does not require you to have large budgets. With the right creativity, energy and sales pitch, you’ll be getting your first clients in no time.

There are generally two ways to market your health care business:

  • traditional marketing, including networking, conferences, fairs, etc.
  • digital marketing, which includes social media, blogs, etc.

Let’s look at these in detail.

1. Traditional marketing

Just because it’s traditional marketing, and we’re living in a modern world, that doesn’t mean you shouldn’t use some old school tactics.

Start networking with medical professionals

One of the best ways to get your business in front of the right people is to start making connections with related professionals, such as doctors and other health care workers in hospitals.

This can be done by attending health care-oriented events with networking as the main focus.

It is important that you remain positive and eager when working with other health care professionals that will refer clients to you. Try to say “yes” whenever they call, and be personable and reachable.

To get your home care clients, take advantage of networking and health fairs
To get your home care clients, take advantage of networking and health fairs

Attend health fairs

Furthermore, you should also try to attend important health fairs. Be sure to take necessary promotional materials (pamphlets, pens, etc.) that health care professionals will be able to have on display in their offices.

Another thing to remember is to get in contact, not necessarily with your clients that you’ll be assisting, but rather the clients that will be paying you: the family of your clients.

They tend to still prefer the old-school yellow pages, visiting senior centers and senior living guides. Try to have a presence in one or all of these avenues.

2. Digital marketing

This type of marketing can be very effective (and less expensive) if used correctly.

Primarily, you should have a presence online and a place to write informative articles.

Before purchasing home care services, the adult children or the elderly themselves will be looking for answers to repeating questions.

Use inbound marketing

In order to convince them that your service is important, you first have to educate them by providing answers.

Writing blog posts (on such platforms as Medium, which requires no payment) or your own website is a great way to build up your brand while involving your potential customers.

You can also write these posts on others’ websites to increase your reach by leveraging their audiences.

The Essential Inbound Marketing Guide for Small Businesses Inbound marketing may still be unknown to many small businesses starting out. In this guide, we give a complete look at what it is and how you can use it. READ MORE

Put yourself on social media

Another thing to do is to use social media to your advantage.

Although many people assume that social media is for young people, there are in fact a lot of 50 and over adults on platforms such as Facebook, LinkedIn and Twitter.

In fact, according to the Pew Research Center, 72% of online American adults aged 50-64 and 62% aged 65 and over use Facebook regularly.

That means that social media will put you in front of the clients who will pay you to take care of their parents or older relatives.

Get your business page up on Facebook first, then start using it to address issues related to older adults.

You can have competitions, funny quotes and memes, and many more to increase engagement.

We’ve got a great, free ebook on how to use social media effectively to draw in your health care customers.

Download The Ultimate Guide to Social Media for Small Businesses and Freelancers to improve your social media game.

VI. Summary

The home care industry is growing at a promising rate. Before you start, be mindful of the advantages:

  • the freedom do decide your own career
  • doing what you love and helping others
  • having a great earning potential

But also know the disadvantages:

  • isolation from not having or being around colleagues regularly
  • possibly long travel distance between client homes
  • the necessary technological upkeep and knowledge maintenance

In order to start, you should:

  • create a strategic business plan to really boost your chances of success
  • come up with great hourly rates to capture your customers

There are certain requirements, however:

  • make sure you have the proper qualifications and certifications
  • check your local business and other license requirements
  • due to the nature of your business, it’s crucial that you have at least professional and general liability insurance

In order to effectively market to your new clients, you’ll have to:

  • use traditional marketing like networking and attending health fairs
  • use digital marketing, especially inbound marketing and social media

With these comprehensive tips, you’ll be well on your way to creating a helpful, strategic and successful home care business.

Good luck!

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