How to start a private home care business

Key takeaways

• A private home care business is one of the biggest entrepreneurial opportunities available given the size of the baby boomer generation 
• Launching a private home care business requires market awareness of what’s needed in your specific area 
• Specific licenses might be required based on your local or state government 

When starting a private home care business, you need to apply basic business principles as well as some of the unique aspects of running a home healthcare agency. Use this guide to understand what a home care business is and how to get one up and running.

What is a home care business? 

A private home care business provides health care services or assistance with everyday living to senior citizens, those with special needs, people who have been recently hospitalized, and/or individuals who are disabled in their homes. A home care business is a great way to become an entrepreneur. You can either start your own business or purchase a license to operate a home care franchise from an existing company.

For senior care specifically, private home duty care services fall into two categories. The first category is for those with licensed nurses and rehabilitators who provide medical services. The second is for personal assistants who provide non-medical home care, like housekeeping, meal preparation, and transportation. 

With baby boomers reaching age 65 by the year 2030 and high numbers of that population requiring various forms of health care, home health aides will stay in demand. Given that a private room in a nursing home costs a nationwide average of $290 per day, many seniors prefer to stay at home if they don’t have advanced medical needs. 

This means there’s a growing group of people who want the comfort of at-home senior care and the flexibility provided by home health aides. 

How to start a private home care business in 5 steps 

Starting a private home care business can be done most efficiently by following a methodical, step-by-step process. Having a plan in place for starting and growing your company will boost confidence and set you up for success. Follow these five steps to launch a private home care business. 

1. Conduct market research

Health care services for seniors are in high demand. As many as 1.4 million people are working in the home health care industry and home health care spending hit $123.7 billion in 2020. Since 10,000 people turn 65 every single day in the United States, there are many people who might need this care in the future.

Market research includes learning more about existing solutions in your area and the needs of your market. You can talk to potential clients, review websites like Answer the Public, and interview others who have worked in this industry before. When conducting market research, look for: 

• How many people in your area need home care
• How many other private home care business operations exist 
• How many of those other agencies provide medical services vs. personal home care 

If you haven’t worked in this industry before, you can try shadowing another home service caregiver. This will give you a true behind-the-scenes view of what it’s really like to provide personal care, which can help you confirm this type of business is the right choice for you. It’ll also help you build out your offerings in the future, and you’ll be more in tune with your future employees by knowing what their day-to-day looks like.

2. Determine legal and insurance basics 

To understand the upfront costs of launching your own home care business, research the specific legal requirements within your state. To start a medical home care business, you might need to file specific paperwork weeks or months before your formal business launch. 

For example, you may have to contact your Secretary of State to learn more about licensure or business formation requirements. As a new small business owner, you’ll need to register with the state either as a sole proprietorship, partnership, limited liability company (LLC), or corporation. This is also known as your business entity type. When you form your business, you’ll also get an employer ID number (EIN) from the IRS that will be used on your tax filings. 

Furthermore, your local or state authorities will help you with licensing requirements for your industry. You’ll need these business licenses before you open the doors to your startup home care business. 

Mitigating risks through insurance is important, as working directly with customers in a health care capacity exposes you to potential lawsuits. Make sure you investigate the costs and coverage options available for liability insurance. 

3. Create your business plan

Once you know the market landscape for your new business and have confirmed the requirements for launching, it’s time to create a formal business plan. This strategic plan for your home health care business helps identify: 

• Your marketing strategy for gaining new business from potential clients
• The business name and business owners 
• How you will fund start-up costs 
• Whether you’ll need office space 
• Sources of revenue, such as Medicaid, Medicare, or private pay programs
• Who you’ll need to hire to help you, such as other caregivers 
• Basic company policies
• Any companies or third parties you might partner with for referrals 

4. Determine your services and policies 

Your business plan is fundamental to how you’ll operate. Next determine what services you’ll offer and how you expect your business to operate, from staff scheduling to accepting payments to defining policies.

As you build out your operations, ask yourself: 

• Which services will we or won’t we provide?
• How will we hire, train, and incentivize employees? 
• Do we require a minimum amount of hours per week from our clients? 
• How will we handle scheduling concerns? 
• What information will we provide to new clients so they know what to expect? 

You should also think about the policies and procedures that will protect you, your employees, and your clients. This will help reduce the number of unexpected challenges you might face. 

Some examples of policies to develop include:

• How you’ll handle late payments or bounced checks 
• How you’ll attract, hire, and train new employees 
• What equipment you will or won’t provide to clients 
• Your mileage radius for traveling and whether you’ll accept clients beyond those boundaries at an additional rate 
• Expectations for your home care clients 

5. Make a marketing plan and celebrate your launch 

One of the hardest things about a home health care business as a startup is that you don’t yet have a reputation in the field. This can make it challenging to attract new employees and clients. Since your primary way to make an impression with your services and structure will be through your policies, mission, and values, communicate these clearly with a marketing plan. 

Tell the story about why you decided to start this business. If the story is personal for you, make sure that’s clear in your marketing. Maybe you recently went through the experience of caring for an elderly loved one and found a passion for it or have always enjoyed helping people.. When you’re a new company, people are often buying into you rather than the proven concept of the company. 

And once all the difficult pre-work is complete, it’s time to open up shop. 

Plan a specific launch day so you can capitalize on any press in the news and on social media. Make sure you have business cards you can share throughout town and with your current clients. 

From there, local business marketing tactics can help you connect with potential customers and referral sources. Content marketing with social media campaigns, print ads, and blogs is important for attracting new clients. 

Get your private home care business started

Starting a new medical or non-medical home care agency can be emotionally rewarding and financially lucrative. A business website, online profiles like a Yelp Business Page, and social media pages lend credibility to your company and provide useful information for potential clients. Once you’ve established your presence online, learn more about how to attract more customers to your business.