How to Start a Private Home Care Business

This step-by-step guide will help you start your Private Home Care Business today!
Denise Elizabeth P
Senior Financial Editor & Contributor

Date Published: May 9, 2021

We are all going to be senior citizens one day, no matter how many anti-ageing products or methods we try, it is inevitable.

For this reason, there will never be a shortage of senior citizens in our community.

Most senior citizens over the age of 65 start needing some sort of medical or personal care and they often look to private home care businesses for the help they need.

Home care businesses are lucrative and can be a huge success when done correctly.

If you’ve been thinking of starting a business in the home care industry, but aren’t sure where to start, you’ve come to the right place.

Today we are going to cover the necessary steps for starting a private home care business so that you can successfully get your business off the ground!

What is a Private Home Care Business?

There are two types of private home care businesses:

  • Medical home health providers – provide licensed nursing and rehab services that are ordered by a physician with strict guidelines.
  • Non-medical home care services -provide personal assistant type services including meal preparation, daily errands, personal care assistance, assistance with daily living activities like functional mobility or bathing/showering, housekeeping, and transportation needs.

How to Start a Private Home Care Business

Create a Business Plan

Before starting any type of business, the first step is creating a business plan.

A business plan is what helps you describe your business goals and it helps you lay out how you plan on meeting those goals.

Many new businesses skip this step but it is not recommended.

A solid business plan helps you stay focused, identify any potential holes or gaps in your business model, and helps you look more credible if you are looking for funding or financing.

A solid business plan includes the following sections:

  • Executive summary – High level explanation of your business
  • Company description – This is where you define the mission and goals of your business.
  • Services – What services will your business be providing?
  • Marketing plan – How do you plan on getting your name out there and finding clients?
  • Management and organization – What is the management structure of your business? This includes ownership, shareholders, members, etc.
  • Operational plan – Logistics of running your business including supplies needed, staff, etc.
  • Business policies and procedures – Business policies and procedures are like a drivers manual for your business. They include care plans, on boarding process, hiring practices, client right and responsibilities, etc.
  • Financial plan – Cash flow projection, balance sheet snapshot and break-even analysis. In other words, how do you plan on making money?

Form Your Business

Before getting your first customers, you will need to legally form your business.

If you choose to start your own company from scratch, then you will need to come up with a name for your business.

Once you have a name, you’ll need to decide on a business structure.

There are several business structures to choose from including sole proprietorship, limited liability company (LLC), Corporation, etc.

You will want to consult and attorney if you are not sure which business structure to choose.

You can also use a formatting service to help you setup your business. Some of them are free + State Fee!

Many small business owners choose and LLC because it provides limited liability protection to you as the owner and it benefits from pass-through taxation.

You can learn more about LLCs here.

Here is a quick checklist of things you need to complete to form your business:

  1. Select a business entity type: Sole proprietor, LLC, Corporation, etc.
  2. Obtain an EIN (Employer Identification Number) from the IRS – once your application is complete, you will receive an EIN instantly.
  3. Register your business locally in the State in which you will be conducting business. This is done with the Secretary of State.
  4. Obtain any business licenses or permits required in your State to operate a personal care business. These can also be found at your local Secretary of State website.

Obtain Certificates

If you plan on operating a “home health care” business that sends medical professionals or professional caregivers to go into individual’s homes and provide some sort of help or care, then you will want to apply for Medicare and Medicaid certificates.

Medicare and Medicaid certificates give your agency the ability to provide health care services like nursing care, physical therapy, and other services provided by Medicare and Medicaid plans.

Becoming accredited can take up to a year, so make sure you start early.

For more information and to apply visit cms.gov.

Hire Staff

If you are just starting out, you may not need to hire employees quite yet.

Many home health care businesses start with one person until they gain more clientele.

So if you are not ready to hire staff, you can skip this section.

When hiring staff, you want to decide if you will hire employees on payroll or independent contractors who will receive a 1099 form.

Spending time interviewing potential candidates is important as well as doing extensive background checks.

Hiring a bad employee could be detrimental to your reputation and raises the concern for liability issues.

You can work with a recruitment agency to find qualified talent or perhaps even ask around in your network of friends, family and professional contacts for referrals.

Always ask for at least three professional references when possible.

Marketing

While word of mouth is a great way to gain new clients, sometimes it is not enough, especially when starting out.

You will want to tap into your local resources to get your name out there.

Consider dropping off marketing materials at senior centers, gyms, with local physicians, churches, and rehabilitation centers.

You can even put ads up on certain websites where people can go and look for caregivers.

Sometimes investing in a referral program where leads are sent your way can help you build your initial client list.

Have a website where people can go and learn more about your business, rates, and services.

The more you market and get your name out there, the faster you will grow.

Growth Plan

Now that you have your business setup, perhaps a few certificates under your belt, and a few clients, you will want to define your continued growth plan.

Some questions to consider to help you grow are:

  • Can we branch out into other services such as becoming a placement agency or referral agency?
  • Can we become certified in other areas or expertise?
  • How can investors or funding help us take our business to the next level?

Successful business owners are always looking for ways to grow and expand their business and this is something that is continually changing and evolving over time.

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  1. CMS.gov "Centers for Medicare & Medicaid Services" Page 1 . May 4, 2021

  2. SBA.gov "Register your business" Page 1 . May 4, 2021

  3. IRS.gov "Business Structures" Page 1 . May 4, 2021

  4. IRS.gov "Starting a Business" Page 1 . May 4, 2021