David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on June 5, 2022 Updated on February 14, 2024
Time to build
For aging seniors, home health care is a great alternative to nursing homes and hospitals. It’s also a fantastic way for busy families to help their loved ones, like ensuring they take their medication and get to doctor’s appointments on time.
The aging Baby Boomer generation, with the rise of diseases like Alzheimer’s and dementia, is driving increased demand for home health care, with the global industry poised for explosive 12.5% annual growth through 2026. As a result, a home health care business can be a rewarding and profitable way to make a living.
But before you start building your client base, you’ll need to boost your entrepreneurial knowledge. Fortunately, this step-by-step guide provides the tools and resources you need to start a successful home health care business.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
Trends within the home health care industry include:
The aging Baby Boomer generation is creating exponential growth in the health care industry. Demand for home health care services for this demographic is high.
Home health care is far cheaper than a nursing home or hospital, offering families a more budget-friendly solution.
Challenges within the home health care industry include:
Attracting and retaining reliable home health care aids is a challenge, due to demanding work and relatively low pay. Turnover is extremely high in this industry.
Caretaking as a profession takes a good deal of physical and mental energy. Burnout rates are high in the home health care field, so it’s important for providers to get enough rest and make time for themselves.
Highest level of education –The most common highest level of education obtained by home health and hospice care workers is a bachelor’s degree.
Average age – Most home health and hospice care workers in the US are between 20 and 30 years of age.
How much does it cost to start a home health care business?
You can start a home health care business for around $3,000. Many home health care providers use their existing vehicles to travel to clients, keeping costs low. Businesses that provide medical care services like nursing care, wound care, or physical therapy have strict regulations and require specific certification. Offering non-medical services such as assisting with personal hygiene, transportation to and from appointments, and companionship care allows you to avoid costly courses and additional licenses.
Licenses and permits
Marketing and advertising
How much can you earn from a home health care business?
The average rate for non-medical home health care services is $25 per hour. Assuming you’ll be using your existing vehicle, your ongoing costs should be fairly low. Aim for a profit margin of around 90%.
In your first year or two, you could provide non-medical services for $25 per hour 40 hours per week, bringing in $52,000 in annual revenue. This would translate into a profit of $47,000, assuming that 90% margin. As your company gains recognition, you could raise your hourly rate to $35 and hire two additional full-time employees, reducing your profit margin to 40%. With annual revenue of $218,000, you’d make a tidy profit of $87,000.
What barriers to entry are there?
There are a few barriers to entry when it comes to starting a home health care business. Your biggest challenges will be:
Competing with established home health care businesses
Building a solid pipeline of clients
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
Now that you know what’s involved in starting a home health care business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Why? Identify an opportunity
Research home health care businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a home health care company that provides fitness and personal training for seniors.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as live-in services or companionship care.
This could jumpstart your word-of-mouth marketing and attract clients right away.
What? Determine your products or services
You’ll be providing either medical or non-medical care services to clients in their homes. Non-medical services include preparing meals, medication reminders, and assisting with personal hygiene. Medical services include wound care, blood pressure checks, and physical therapy.
How much should you charge for home health care services?
Costs for non-medical home health care services range from $20 to $40 per hour and largely depend on your geographical location. Rates for medical services provided by a certified medical professional range from $30 to $50 per hour. If you’re starting your business by providing non-medical care services by yourself, expect your profit margin to be around 90%. As you hire additional staff, your profit margin will decrease to around 40%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who? Identify your target market
Your target market will be families of individuals who need in-home health care services. Focus your marketing efforts on social media platforms like Facebook and Instagram. You can also network with nursing homes and other care facilities for referrals through sites like LinkedIn.
Where? Choose your business premises
You’ll be traveling to client’s homes to provide services. In the early stages, you may want to run the administrative portion of your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Central location accessible via public transport
Ventilated and spacious, with good natural light
Flexible lease that can be extended as your business grows
Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Home Care Business Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
Name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “home care” or “caregiver”, boosts SEO
Name should allow for expansion, for ex: “Caring Hearts Home Health” over “Pediatric Care Services”
Avoid location-based names that might hinder future expansion
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Step 4: Create a Home Health Care Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
Executive Summary: A brief summary outlining the core elements of the home health care business, including its mission, goals, and key financial highlights.
Business Overview: A comprehensive introduction to the home health care business, providing details on its mission, vision, values, and the specific services it intends to offer.
Product and Services: Clear and concise descriptions of the home health care services offered, including any specialized care, in-home assistance, and medical support.
Market Analysis: An examination of the target market for the home health care business, including demographics, trends, and potential growth opportunities in the healthcare industry.
Competitive Analysis: Evaluation of other home health care providers in the area, analyzing their strengths, weaknesses, and identifying opportunities for differentiation.
Sales and Marketing: Strategies for promoting the home health care services, outlining the target audience, channels of promotion, and methods to generate client interest and engagement.
Management Team: Introductions to key personnel and their roles within the home health care business, emphasizing their qualifications and relevant experience.
Operations Plan: A detailed plan outlining how the home health care business will operate on a day-to-day basis, including staffing, equipment, and procedures for delivering services.
Financial Plan: Projections of the home health care business’s financial performance, including startup costs, revenue forecasts, and a break-even analysis.
Appendix: Additional information, such as detailed financial statements, resumes of key personnel, and any other supporting documents that provide more depth and context to the business plan.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Choose where to register your company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to home health care businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your home health care business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC)– Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Venture capital: Venture capital investors take an ownership stake in exchange for funds, so keep in mind that you’d be sacrificing some control over your business. This is generally only available for businesses with high growth potential.
Angel investors: Reach out to your entire network in search of people interested in investing in early-stage startups in exchange for a stake. Established angel investors are always looking for good opportunities.
Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal: Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best option, other than friends and family, for funding a home health care business. You might also try crowdfunding if you have an innovative concept.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your home health care business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as WellSky, Alora, or Axxess to schedule visits, store client information, and create invoices.
If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Develop your website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
For your home health care business, the marketing strategy should focus on highlighting the quality of care, the professionalism of your staff, and the personal touch you bring to healthcare services. Emphasize your commitment to patient well-being, specialized care services you offer (like geriatric care, post-operative care, or disability support), and your adherence to healthcare standards. Here are some powerful marketing strategies for your future business:
Professional Branding: Your branding should convey trust, care, and expertise. This includes a professional logo, staff uniforms, and well-designed marketing materials.
Direct Outreach: Establish connections with healthcare professionals, hospitals, and clinics for referrals. Networking with senior centers, community groups, and local physicians can also help spread the word about your services.
Digital Presence and Online Marketing
Professional Website and SEO: Develop a user-friendly website that details your services, staff qualifications, patient testimonials, and clear contact information. Optimize your website for local SEO to rank for searches related to home health care and related services in your area.
Social Media Engagement: Utilize platforms like Facebook and LinkedIn to share information about your services, health tips, and stories that showcase your care’s impact on patients’ lives.
Content Marketing and Engagement
Healthcare Blog: Share informative blog posts about home health care topics, caregiver tips, and health advice for patients and their families. This establishes your business as a knowledgeable authority in home health care.
Email Newsletters: Keep clients and their families updated with regular newsletters featuring health tips, updates on your services, and relevant healthcare news.
Webinars and Online Workshops: Host online sessions on topics relevant to your patients and their families, such as managing chronic conditions at home or understanding the benefits of home health care.
Experiential and In-Person Engagements
Community Health Events: Participate in or sponsor local health fairs, senior expos, and community events. Offer free health screenings or consultations to introduce your services and interact with potential clients.
Educational Seminars: Conduct seminars or workshops at community centers, libraries, or churches on topics related to aging, rehabilitation, or home health care.
Collaborations and Community
Partnerships with Local Healthcare Providers: Forge partnerships with local doctors, hospitals, and rehabilitation centers to ensure a continuous care cycle for patients.
Community Service Projects: Engage in local community service initiatives to build goodwill and increase brand visibility.
Customer Relationship and Loyalty Programs
Referral Programs: Implement a referral program that rewards clients or professional contacts for referring new patients to your services.
Patient Follow-Up Programs: Establish a robust follow-up system to ensure ongoing patient satisfaction and to address any emerging care needs.
Promotions and Advertising
Targeted Local Advertising: Use local newspapers, radio, and community bulletin boards, as well as online platforms, to reach potential clients in your community.
Informational Brochures and Flyers: Create informative brochures and flyers that outline your services and distribute them in doctors’ offices, clinics, and community centers.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your home health care business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your home health care business could be:
High-quality, trustworthy, compassionate home health care
Attentive caregivers for help with housework, transport, meal prep and more
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a home health agency, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in home health care for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in home health care. You’ll probably generate new customers or find companies with which you could establish a partnership.
Step 12: Build Your Team
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a home health care business include:
Caregiver – Assist clients with daily tasks, provide transport to and from appointments
Administrative Assistant – Schedule appointments, bill clients
Marketing Lead – Manage social media accounts, generate leads
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Step 13: Run a Home Health Care Business – Start Making Money!
Owning a home health care business takes a lot of hard work, but it’s one of the most rewarding ways to make a living. You’ll help people live fuller lives and build strong, lasting relationships with your clients and their families and make great money doing so. You’ll likely also receive plenty of referrals, putting you on the fast track to success!
Now that you’ve gained the necessary entrepreneurial insights, it’s time to get started. Go forth and create your town’s top home health care business.
Home Health Care Business FAQs
Is a home health care business profitable?
Yes, a home health care business can be very profitable. Although it takes additional certification and accreditation, being able to provide medical care is significantly more profitable than non-medical care.
Where can I take a course on home health care?
Sites like Udemy offer home health care courses for under $100. You may also want to check out in-person classes offered by your local community college.
How do I differentiate my home health care business from competitors?
To differentiate your home health care business from competitors, you can focus on providing specialized services that cater to the specific needs of your clients. For example, you can specialize in caring for clients with dementia or other cognitive impairments or provide palliative care services.
Who uses home health care the most?
Home health care is used by a wide range of people, including seniors, people with disabilities, and individuals recovering from illness or surgery. However, seniors tend to use home health care services the most, especially those with chronic conditions that require ongoing care.
How do I find clients for my home health care business?
You can start by networking with other professionals in the healthcare industry, such as doctors, nurses, and social workers. You can also use online directories and referral services to connect with potential clients and their families.
How to Start a Home Health Care Business
Decide if the Business Is Right for You
Hone Your Idea
Brainstorm a Home Care Business Name
Create a Home Health Care Business Plan
Register Your Business
Register for Taxes
Fund your Business
Apply for Home Health Care Business Licenses and Permits
Open a Business Bank Account
Get Business Insurance
Prepare to Launch
Build Your Team
Run a Home Health Care Business - Start Making Money!
Home Health Care Business FAQs
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