Cayenne Consulting

How to Start a Home Care Business

  • Jimmy Lewin

    • The home care business in the United States will produce over $110 billion in revenue in 2021 and grow at an annualized rate of 5.1% to $140.8 billion by 2026 according to IBISWorld, a global market research firm.

    We think those kinds of numbers suggest that home care is an exciting business to be in.

    According to Statista, a leading provider of market data, home care refers to medical treatment or assistive care for patients who do not require hospitalization or other inpatient care but do need additional support to live safely at home.

    Introduction

    In-home care services can help someone who is aging and needs assistance to live independently, is managing chronic health issues, is recovering from a medical setback, or has special needs or a disability.

    Many home care professionals or the companies for whom they work require special licensing, while others do not. Once you have decided the type of services you intend to provide, the types of patients you intend to serve, and the state in which you intend to focus your efforts, you will be able to determine the licensing requirements for your business.

    As you progress, you will need to develop a business plan to document your intentions and your path forward. Let’s examine some essential components of your business plan.

    Description of Services

    Home care can be broken down between medical and non-medical.

    Medical services typically include:

    You should assume that, in all instances, providers of medical in-home care must be licensed by an agency of the state in which you operate.

    Non-medical services can include:

    Sometimes, home care includes services provided outside the home. For example:

    As you can see, both medical and non-medical home care include a wide range of services. No matter how you intend to participate in the industry, the market is large, and the need is great.

    Describe the Target Market

    Once you have determined the services you intend to offer, then it is imperative that you figure out who your target “customers” will be and the size of that market.

    You must match your target customer to the services you intend to offer. One of the most important issues to consider here is: “who is paying you?”

    Generally, the choice is private pay or government reimbursement. Private pay means that the client herself, or the client’s family, or the family’s insurance company pays for your services.

    Government reimbursement means that you will be paid by Medicare, Medicaid, or a state-provided insurance fund. Private pay usually pays better, while the market for government-paid patients is always much larger.

    Next, you will need to determine whether your target client requires non-medical or medical services. You probably already know the answer to this based on your training or past experience.

    As we address in the Market/Competitor Research & Analysis page of our website, “You need to think about such questions as: What are the demographics and psychographics of your target audiences? How can you best reach them? What kinds of concerns do they have? How do they like to be marketed and sold to?” Here are some helpful tips:

    Competitive Landscape

    Now that you have determined the types of services you intend to provide and you have defined your target customers, you had better take a good look at the competitive landscape. It is critically important for you to know as much about your competitors as you can learn. For example:

    You will find many of the answers you seek simply by visiting your competitors’ websites. You can also learn a great deal by networking with other firms that provide services to seniors. More on that when we discuss marketing your services.

    Staffing

    Staffing is a very complex challenge in the home care business. The reason is that it is impossible to know the needs of the next client that requires your services. Does the new client require someone to stop by once a week to do laundry, light housework, and drive the client to doctor appointments, or does the client require 16-hours a day, 7-days a week of in-home care. Multiply that by the 5-10 or more clients and therein lies the staffing dilemma.

    Most workers in the home care industry are compensated on an hourly basis, remember that, like any other kind of worker, home care workers take vacations, get sick, must care for a sick child, or sometimes simply do not show up for work.

    Chances are, you will spend more time on staffing issues than any other issue in your business. Below are the five biggest staffing issues that you will face:

    Equipment, Software & Systems

    In the home care business, you spend so much time worrying about staffing, training, and customer service that it is easy to forget that this is a real business that must be constantly measured and managed.

    Here’s a great tip. Start with a health care management software solution that provides the ideal combination of a cloud-based back-office system and a point-of-care app, which will positively enable both the administrative and the field sides of the business.

    One of the many available solutions describes its features and benefits for administration and for the workers in the field as follows:

    Administration

    In the Field

    Most of these solutions charge on a per-user basis so the cost will grow as you grow your business.

    Develop a Winning Marketing Plan

    You will need a winning marketing plan that will create awareness for the business, establish your brand just the way you want it, build on your great reputation, and bring prospective customers into your sales channel.

    Below are some marketing strategies you can employ that will be effective and not break your bank account:

    Sales Prowess

    In the home care business, selling is a full-time, all-hands-on-deck endeavor. What does this mean? This means that everyone in your company must know how to sell your services. That means you, your bookkeeper, and each one of your caregivers. All caregivers should be armed with business cards, printed brochures, and enough information to get the prospect or prospect’s family connected to you. By the way, if your caregivers love working for you, they will always be your best salespeople.

    Ready to Launch

    What did we forget to mention? What else do you need to know? Let us know in our feedback form. As you can see from the list below, our “How to…” articles have been well received by our readers. If there is a “How to…” article that you would like us to write, let us know about that as well.

    Related “How To” Articles

    Did you like this article? Read some of our other guides for other industries:

    Exit mobile version