How Do You Start a Home Care Agency?

Are You Ready to Set Up a Home Care Agency?

The duties of a home healthcare professional will vary from personal care to meal preparation and assistance with medication or mobility. A caring and resilient disposition, plus relevant nursing or care qualifications will put you on good footing to start your own care agency.

Complement this with a strong business acumen and you can start and grow a successful home care business to fill the demand for carers. But it will be a complex and time-consuming process.

Before we begin, there are three important questions that you should consider.

Is starting a domiciliary care agency profitable?

While entering the domiciliary care sector shouldn’t be all about profit, thinking about the potential profitability of a venture is never far from an entrepreneur’s mind. As the number of people over the age of 65 grows, naturally there is going to be a growing need for care services.

According to a report, in 2021, the home healthcare market was valued at an incredible $320.6 billion (USD), and this will continue to grow at a CAGR of 7.9% (from 2022 to 2030). So, the short answer is yes, starting a domiciliary care agency is profitable.

What qualities do you need to have to start a home care business?

While a caring nature is essential when working as a service provider in this industry, a sound business acumen will increase the chances of growing a successful business.

Likewise, a resilient nature, compassion, and overall desire to deliver a good service that will improve the quality of life for others are essential attributes. You should also be able to step in at the last minute should one of your carers suddenly become unavailable (at least during the initial phases so that you get to experience first-hand what the business involves).

What home care service will you provide?

Non-medical home care has fewer barriers to entry. In your business plan, you’ll need to include which segment of domiciliary care you want to focus on.

Social care takes various forms, from assisting clients with daily personal care tasks, weekly shopping visits, providing end-of-life care and monitoring medicine compliance. The personal nature of these services has a profound impact on the health, well-being, and quality of life of your clients.

How Do You Set Up a Home Care Business?

Now that you have the answers to crucial questions, let’s take a look at what you can expect when setting up a home care business.

Get your business plan ready

The success of your new venture hinges on the time and effort you put into your business plan. A care agency's business plan is inherently more complex than other businesses due to the stringent regulatory requirements.

Your plan should detail the personal skills and qualifications you bring, an overview of the business (service offering, target market, staffing etc.), your competition, financing, costs, and sales forecasts. If you’d like more details, you can explore this home healthcare business plan.

Governing bodies and regulations

The care sector is a highly regulated industry globally. Social care providers deal with vulnerable young people, adults and seniors who require protection, care, and support to ensure they live fulfilling lives.

For this reason, every home care provider must be registered with the authorities, undergo background checks, and submit to periodic and random compliance checks. In the UK, for example, the Care Quality Commission (CQC) is the regulatory body overseeing all aspects of domiciliary care. When inspecting a business these governing bodies focus on the safety, effectiveness, responsiveness, and leadership quality of a care provider. These checks include the qualifications of care staff, the quality of care you provide and adherence to safety standards.

Depending what country you plan on starting your business in, you’ll need to ensure you understand who the governing bodies are, and what they require.

Know your legal position

As an operator in the care space, there will be legal acts you need to know. In the UK for example, every care operator must have knowledge of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 and The Domiciliary Care Agencies Regulations 2002. While in Australia, the Aged Care Act 1997 (government-funded aged care) takes precedence.

Registration

Taking the United States as an example, things can get a little complicated because of the Federal and State legislative requirements. For example, in Alabama, you will require a Certificate of Need plus approval from the Alabama Department of Public Health. In Ontario, the Retirement Homes Regulatory Authority (RHRA) is the licensing body while the Ontario Ministry of Health and Long-Term Care also plays a key role.

Either way, you will need to register your business with local and national authorities, depending on what your country requires.

Regulations and training

Depending on the role you will play in the business, you may require formal qualifications in the legal aspects of the sector. For example, in the UK, if you are going to be the nominated person in your care agency or the Registered Manager, you will require qualifications and certifications. However, as an entrepreneur, you can take charge of the business side while hiring suitably qualified personnel.

Usually, no qualifications are needed to start a home care business, but if you plan on administering medication to clients, it is highly likely that you’ll need some form of training or qualification to do so.

Insurance considerations

Business insurance is essential, especially when you are running a home care agency. Some of the insurance products you will need to consider are public liability, professional indemnity, employer’s liability, treatment liability, and medical malpractice liability. For the best coverage and premiums, look for an insurer specializing in care agencies.

Hiring a trustworthy and qualified team

How successful your home care agency becomes will depend on the skills and reliability of your staff. Passionate, reliable, and qualified people will allow you to deliver a superior service to your clients and grow your reputation. Preparing your recruitment material and offer in advance will help you secure the right people. Always plan to invest in your staff as time progresses with regular training. The number of carers you have allows you to tender for more clients while giving you the flexibility to service your existing clients.

Funding Your Home Care Agency

While it’s possible to start many types of businesses with little cash, a home care agency often requires a significant amount of capital. How much you are likely to spend depends on how big you want your business to be. If you are going to go into business with, say a friend or family member as the primary carers, you will require less funding.

In America, the costs of starting a care agency can vary from as little as $40,000 to as much as $350,000. Most of these costs will go towards registering your business, licensing and accreditation, business administration software, legal guidance and accounting, marketing, plus office rental.

In the UK, you can get start-up care packages that are specific to domiciliary agencies.

There are several financing options for a domiciliary care agency an entrepreneur may turn to. A detailed business plan with a strong financials section showing an understanding of the market can lead to a successful loan application. While a bank loan is one source of funding for a start-up in this sector, below are two other options to consider.

• Self-funding - you can fund your care agency startup using cash from your personal savings. This option may not be available to a lot of entrepreneurs who are looking to start their first venture. The main advantage of going down this route is that you will retain 100% of the business, keeping you in control. Loans from friends and family can also come under the self-funding banner if you are not exchanging the money for part ownership.
• Small business grants - while a business grant may not cover all the costs of starting up your care agency business, it may cover some aspects. Again, your business plan plays a critical role in ensuring that you have a business idea that is likely to be successful. Read our small business grants guide to learn more about how grants work and how to secure grant funding in different countries.

If you are considering a business loan as part of your care agency funding option, read our loans to buy a business guide to discover valuable options on different funding methods.

How Do You Market a Home Care Business?

You can position your care agency in one of two ways. Firstly, you can target the public sector by submitting bids to local authorities to offer home care services. Secondly, go directly to your clients by advertising and marketing to individuals offering services on a one-to-one basis. Each of these approaches offers advantages over the other as well as some drawbacks.

The first option is a better fit for more established agencies with a proven track record and the scale to meet public sector demands. If you are starting small, then option two is better as it will allow you to build your client base slowly.

Here are some of the marketing tips you can explore as you look to acquire clients and grow your business.

1. Home care agency business website - design, launch and promote a website that not only looks beautiful but performs its primary function well. The purpose of your website should be to get the telephones ringing with new inquiries or to gather contact information for prospective clients.
2. Traditional advertising - traditional marketing methods still work if they target the right audience. Word your flyers, direct response letters, billboards, and letter drops so that they present a worthwhile offer.
3. Referral marketing - word of mouth is one of the best marketing methods you can rely on for this type of business. By providing the best service you possibly can, people will talk and will recommend you at every opportunity. Take advantage of serving your immediate community first and watch as referrals propel your home care agency ahead.
4. Social media - creating a presence on one or more of the major social media platforms and spending some money on paid advertising can put your brand in front of clients you would have never reached with other marketing methods. Social advertising is considerably cheaper than other forms of advertising and you can reach a wider audience.
5. Trade shows - Care agency owners can learn a lot from trade shows. You can understand the latest developments in the sector, liaise with potential suppliers and perhaps engage with investors. For example, Asia’s biggest care expo is Care Asia, The Care Show is one of the UK’s largest, and the Africa Health Exhibition is Africa’s best events to connect healthcare professionals.

Starting a Home Care Business Is Not Your Only Option

As exciting as starting a new venture can be, there are risks involved with building a business from scratch. More so within the highly regulated care industry, where going through the registration process could take weeks, if not months, before you can start operating.

An alternative is to purchase an existing home care business. Some of the advantages of taking this route include the following:

• The business comes with an existing client base, and you are ready to operate from day one.
• Contacts with the registration authorities are already in place and the business is established
• Proven financials will allow you to leverage your balance sheet to secure additional funding should you wish to expand
• An existing care agency has all the systems, processes, and procedures in place, including the staffing so you will just come in on the business side while leaving the operational aspects to existing staff

If this option is of interest, then you can explore hundreds of health care businesses for sale on our site. Alternatively, you can read our buying a business guide to find out more about the process of acquiring a business, and if it suits your business goals.

To end off, here is a useful checklist for starting a domiciliary care business:

• Registration with the government bodies responsible for overseeing care-related businesses in your country
• Setting up the business structure and company registration
• Funding – tendering, direct payments, cashflow
• Buying or leasing operating space
• Insurance
• Processes, planning and operating procedures in place
• Recruitment, backgrounds checks and training of new staff
• Tendering for public sector jobs and marketing the new business

As you can see, the process can be a long and challenging one with a lot of technical hurdles along the way. However, your passion and desire to provide outstanding service to your target client should provide the drive to persevere.

If you need support on your journey, feel free to get in touch. Someone from our team will try their best to assist you.