Natalie is a business writer with experience in operations, HR, and training & development within the software, healthcare, and financial services sectors.
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 7, 2022 Updated on July 8, 2024
Fast Facts
Investment range
$9,000 - $19,400
Revenue potential
$65,000 - $234,000 p.a.
Time to build
3-6 months
Profit potential
$49,000 - $82,000 p.a.
Industry trend
Growing
Commitment
Flexible
Consider these crucial factors when launching your hospice business:
Services — Decide on the range of services you will offer, such as pain management, palliative care, spiritual support, bereavement counseling, and respite care.
Hire staff — Hire licensed and experienced healthcare professionals, including nurses, doctors, social workers, and chaplains. Conduct thorough background checks and verify credentials.
Location — Choose a location that meets the needs of your patients and complies with regulatory standards. This could be a dedicated hospice facility or an office for managing in-home hospice care services.
Medical equipment — Ensure you have the necessary medical equipment and supplies to provide comprehensive care. This includes beds, oxygen tanks, mobility aids, and medication management tools.
Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
Technology — Implement an EHR system such as Cerner, NextGen, or Kareo to manage patient records, streamline documentation, and improve coordination of care.
Interactive Checklist at your fingertips—begin your hospice business today!
Yes, hospice care businesses can be very profitable. You’ll need to spend time marketing your services to stand out from the competition. Consider getting the certification needed to bill Medicare and Medicaid to increase revenue.
What are the top referral sources for hospice?
The top referral sources for hospice care typically include healthcare providers such as physicians, hospitals, nursing homes, and home health agencies. Additionally, word-of-mouth referrals from satisfied patients and their families can be a powerful source of new business for hospice providers.
What is the difference between palliative care and hospice?
Palliative care and hospice are both forms of specialized medical care that focus on improving the quality of life for patients with serious illnesses. However, palliative care can be provided at any stage of an illness and can be provided alongside curative treatments, whereas hospice care is typically provided in the final stages of a terminal illness when curative treatment is no longer effective or desired.
How do I differentiate my hospice business from competitors?
Differentiate your hospice business by focusing on personalized care tailored to the specific needs and preferences of each patient and their family. Enhance your services with special offerings like music therapy or spiritual support. Emphasize quality by hiring well-trained, experienced staff and utilizing technology to streamline communication and coordination among your care team.
Can you start hospice business on the side?
Starting a hospice takes time and a passionate commitment, so it really cannot be a side hustle. You have to be devoted to what you’re doing full-time.
Step 1: Decide if the Business Is Right for You
Pros and cons
Before starting a hospice business, it’s important to weigh the pros and cons.
Pros
Hot Market – Demand for hospice care is on the rise
Good Money – Bill insurance companies for services
Rewarding – Assist families with end of life care for loved ones
Cons
Emotionally Taxing – Constant exposure to grieving families
Strict Regulations – Obtaining licenses can be onerous
The recent pandemic brought a rise in telehealth to replace in-person interactions. The hospice industry leveraged telehealth in creative ways throughout the pandemic and is continuing to develop them today.
Palliative care is similar to hospice care, but extends to patients who have a chance of recovering from their condition. This niche is rising in popularity, especially around those with terminal illnesses.
Challenges within the hospice care industry include:
Managing expectations with family members has always been a challenge for the hospice industry. Denial about the reality of their loved one’s condition can sometimes create a stressful working environment for hospice professionals.
Employee turnover within the hospice industry is high. Because they tend to carry a family’s emotional burden during the end of a loved one’s life, hospice aides are subject to burnout at much higher rates than other care-based professions.
Average level of education –The average hospice aide in the US is high school educated.
Average age – The average hospice aide in the US is 41 years old.
How much does it cost to start a hospice business?
Startup costs for a home-based hospice business range from $9,000 to $19,000. Your main costs will be related to obtaining proper licensure and certification. Other costs include a website and your marketing and advertising expenses. If you plan on opening an inpatient hospice facility with a full staff, your costs could be anywhere from $100,000 to $300,000.
If you’d like to learn more about what it takes to start a hospice business, the National Hospice and Palliative Care Organization offers plenty of tools and resources. They also offer online courses for around $500, some of which can be completed in around 14 hours.
Start-up Costs
Ballpark Range
Average
Insurance
$300-$1,000
$650
Certification and accreditation
$5,000-$10,000
$7,500
Licenses
$500-$1,000
$750
Computer
$1,000-$3,000
$2,000
Website
$800-$1,600
$1,200
Software
$100-$300
$200
Marketing and advertising
$1,000-$2,000
$1,500
Misc
$300-$500
$400
Total
$9,000-$19,400
$14,200
How much can you earn from a hospice business?
The average daily rate for in-home hospice care is $250. Inpatient care facilities charge a higher rate, averaging around $750 per day. If you decide to run an in-home, non-medical hospice business, aim for a profit margin of around 75%. If you’re running an inpatient facility, your margins will be much higher, probably close to 15%.
In your first year or two, you could provide non-medical, in-home hospice care five days per week at a rate of $250, bringing in $65,000 in annual revenue. This would mean $49,000 in profit, assuming that 75% margin. As your business and client base grows, you could raise your rates to $300. You would also likely hire additional staff, reducing your profit margin to 35%. With two extra aides working five days per week, you’d bring in annual revenue of $234,000. At that 35% margin, you’d make a handsome profit of $82,000.
There are a few barriers to entry when starting a hospice business. Your biggest hurdles will be:
Obtaining the certification and licenses required to run a hospice facility.
Competition with existing hospice care providers
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.
Step by Step Business values real-life experience above all. Through our Entrepreneur Spotlight Series, we interview business leaders from diverse industries, providing readers with firsthand insights.
Read our interview with Sara Egan to explore transformative strategies in hospice care and gain valuable insights for advancing patient-centered healthcare.
Step 2: Hone Your Idea
Now that you know what’s involved in starting a hospice 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 hospice care facilities in your area and online to examine their services, price points, and customer testimonials. You’re looking for a market gap to fill. For instance, maybe the local market is missing a business that offers in-home hospice services.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as palliative care or hospice care with a focus on spiritual healing.
This could jumpstart your word-of-mouth marketing and attract clients right away.
What? Determine your services
Hospice care services vary greatly, depending on a provider’s credentials and experience and what level of care is needed.
For example, medical-based hospice care provided by a registered nurse at an inpatient facility may include administering medications and monitoring vital signs. Non-medical home hospice care services could include everything from companionship to assistance with personal hygiene.
How much should you charge for hospice services?
Costs for in-home hospice care typically range from $150 to $350 per day. Daily rates at inpatient hospice care centers with medical care range from $500 to $1,000. If you’re providing non-medical, in-home hospice care services, aim for a profit margin of around 75%.
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 the families of loved ones who are close to the end of life and are looking for care and support services. Consider marketing your services on social media sites like Facebook and Instagram. Network with local nursing homes and assisted living facilities to generate potential leads.
Where? Choose your business premises
In the early stages, you may want to run an in-home hospice business to keep costs low. As your business grows, you’ll likely need to hire workers for various roles and may wish to rent out an inpatient facility. 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 Hospice 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 “hospice services” or “life care”, boosts SEO
Name should allow for expansion, for ex: “Loving Hearts Hospice” over “Cancer Care Hospice”
A location-based name can help establish a strong connection with your local community and help with the SEO but 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.
Executive Summary: A brief overview of your hospice business, highlighting its mission, goals, and key achievements, serving as a snapshot for potential investors or partners.
Business Overview: A detailed description of your hospice business, including its mission, vision, values, and the specific services it will offer to patients and their families.
Product and Services: Clearly outline the range of hospice services your business will provide, emphasizing the compassionate and comprehensive care for terminally ill patients.
Market Analysis: Evaluate the hospice industry, identify your target market, and analyze trends, demographics, and potential opportunities for growth in your geographic area.
Competitive Analysis: Assess other hospice providers in your region, highlighting their strengths and weaknesses, and articulate how your business will differentiate itself to gain a competitive edge.
Sales and Marketing: Develop a strategy to promote your hospice services, outlining how you’ll reach potential clients and referral sources, emphasizing relationships with healthcare professionals and community outreach.
Management Team: Introduce key personnel, emphasizing their relevant experience and qualifications in hospice care and business management.
Operations Plan: Detail the day-to-day operations of your hospice business, covering staffing, facility requirements, regulatory compliance, and the overall process of delivering quality care to patients.
Financial Plan: Provide a comprehensive financial projection, including startup costs, revenue streams, and profit margins, demonstrating the financial viability and sustainability of your hospice business.
Appendix: Include any additional documents or information that supports your hospice business plan, such as resumes of key personnel, legal documents, or relevant market research data.
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 hospice 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 hospice 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.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
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.
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 hospice business. You might also try crowdfunding if you have an innovative concept.
Starting a hospice business requires obtaining a number of licenses and permits from local, state, and federal governments. If you wish to receive payment from Medicaid or Medicare, additional licensure is required.
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.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
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 hospice 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 Axxess, Alora, or HospiceWorks to store patient records, maintain care schedules, and receive payments.
Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero.
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.
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.
Marketing
Here are some powerful marketing strategies for your hospice care service:
Professional Branding — Develop branding that communicates compassion, professionalism, and empathy. This includes a distinctive logo, business cards, brochures, and staff uniforms that reflect your commitment to care.
Website SEO — Create a professional website detailing your services, staff qualifications, and patient testimonials. Optimize for SEO to target searches related to hospice care, end-of-life care, and palliative care services in your area.
Social Media Engagement — Utilize platforms like Facebook and LinkedIn to share informative content about hospice care, highlight patient stories, and provide resources for families dealing with end-of-life situations.
Content Marketing — Maintain a blog that offers valuable information on hospice care, coping strategies for families, and guidance on end-of-life decisions. Host educational webinars and workshops to further share your expertise.
Direct Outreach and Networking — Network with healthcare providers, hospitals, clinics, and elderly care facilities to establish referral partnerships. Participate in healthcare conferences and community health events to increase your visibility.
Email Marketing — Send newsletters to healthcare providers and families to keep them informed about your services, community involvement, and developments in palliative care.
Experiential Marketing — Conduct community talks and seminars in places like community centers, churches, or senior centers to educate about hospice care. Participate in health fairs and community events to engage directly with potential clients and their families.
Partnerships and Collaborations — Build partnerships with local healthcare facilities to ensure seamless care transitions and to foster referral relationships. Engage with local support groups to offer community support and enhance your community presence.
Customer Loyalty and Referral Programs — Implement a referral program that complies with healthcare industry regulations, rewarding those who refer new patients to your services. Develop support and counseling programs for families of patients, enhancing your overall care offerings.
Targeted Local Advertising — Advertise in local media, healthcare publications, and on community bulletin boards to reach your target audience effectively.
Educational Content and Public Speaking — Provide educational content in local newspapers or magazines and seek speaking opportunities at healthcare events to establish your team as experts and trusted advisors in hospice care.
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 hospice 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 hospice business could be:
Compassionate end-of-life care for your loved ones
Comprehensive, comfortable hospice care for all
Guiding loved ones through the end of life journey with dignity and respect
Networking
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 hospice business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in hospice 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 hospice 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 hospice care business include:
Hospice Aides – Provide care services, assist family members
Administrative Assistant – Maintain care schedules, billing and invoicing
Accountant – Bookkeeping, tax preparation
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 Hospice Business – Start Making Money!
Providing hospice care isn’t for everyone, but those who have a passion for helping people through difficult times can make a great living. The families you serve will always remember you and the impact you had while assisting their loved one through the last chapter of life.
Now that you’ve done your homework and have the necessary knowledge to start a profitable venture, it’s time to build your successful hospice business.
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