How to Start a Home Health Care Business

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How to Start a Home Health Care Business

The home health care industry is booming due in large part to the aging of the baby boomer generation. With many of them looking to stay in their home for longer periods of time, that demand is only expected to grow in the coming years.

So if you are considering starting a home health care business, chances are you’ll have plenty of potential business.

If you do decide to give this business a shot, you’ll want to make sure you take the appropriate steps when setting up the business.

That includes everything from creating your business plan, to making sure you have all the appropriate licenses for your locality.

So let’s take a deeper look at the dynamics of a home health care business and the steps you should take to start one.

What do home health care businesses do?

A home health care business can help in any number of situations ranging from injury and illness to helping care for the elderly.

Depending on the situation, a home health company may help with a number of different things including:

  • Wound care
  • Patient and caregiver education
  • Assisting with daily living activities
  • Bathing or dressing
  • Help with medications and other medicines (under the supervision of a nurse)
  • Arrange transportation to doctors’ offices and other locations
  • Other miscellaneous activities

The level of health care provided will vary by state regulation and the type of provider that is sent to a client’s home. 

Typically a home health aide is doing the work with a client, and is under the supervision of a medical practitioner such as a nurse.

But depending on the level of experience, a home health aide may help with more complicated medical conditions.

Steps to start a home health care business

Write a business plan

With no exception, every business should start out by writing a business plan. It doesn’t need to be a 40-page thesis, in fact, it can be just a few pages covering some of the most important topics. But making sure you understand the value proposition, resource needs, key activities, revenue, and cost projections, is critical.

Include information about your target market, what services you plan to offer, and how you’ll differentiate yourself from competitors.

You’ll want to pay close attention to the market with respect to your location. A home health care business is going to be very dependent on their being a critical mass of aging people.

You can find a ton of great information on demographics at the US Census Bureau.

You should also have a good handle on your competition. A large amount of demand for home health care has resulted in a lot of new companies entering the market.

Your business plan can be used as a document to help get financing, but will also serve as a project plan. You should make it a living document that is updated as the business begins to operate and makes changes to the original strategy.

Form a business entity

You will need to register your home health care business with the state in order to operate legally. This process will include registering your business name and getting a license for any of the services you plan to provide.

The state and local requirements for these types of businesses will vary, so we recommend engaging a business attorney or similar service.

If you are comfortable setting up a business on your own, you can fill out the forms and submit them for a minimal fee.

You can also use an online business formation service like ZenBusiness for a small fee and they can do the leg work for you.

If you don’t know what type of business to set up, you may want to consider talking to a lawyer before moving forward.

Related: Best Registered Agent Services

Select your location

As we discussed above, your location will be key because you’ll be targeting local customers. You’ll need to find a location that has the right demographic which in most cases is going to be seniors.

The location of your business is also going to affect the cost. Because your clients will not be coming into your office, you can select a physical location with lower rent and not be worried about high traffic.

As you become more familiar with running a home health care business, you may even find you can run it from home the majority of the time.

Find financing

You will have some startup costs associated with starting a home health care business. Costs like hiring employees, buying equipment, and marketing your business.

Some of these costs can be offset by getting a small business loan from a bank or an investor. However, you should also consider bootstrapping the business- that is, using your own money to finance the early stages of the company.

Develop a brand

A strong brand is important for any type of business, but especially one that services individual customers. You can use several techniques to create a strong brand for your home health care business.

One way is to develop a slogan and use it in all of your marketing materials. You can also create a logo and use colors that will be associated with your company.

Most importantly, make sure that you are consistent with your branding across all channels, from your website to your social media accounts.

There are also a number of excellent online options for creating your brand. We recommend Canva as a one-stop-shop to help with branding needs. You will find a large number of logo options, and other easy-to-use tools to create marketing material.

Create a Marketing Plan

Now is also the time to start creating a marketing plan. This plan should include your target audience, what kind of messaging you will use, and how you will reach your target market.

One way to reach potential customers is through online advertising. There are many effective ways to advertise your home health care business online, and it can be relatively affordable.

Remember to use your website as a means of collecting the email addresses of potential customers. You can then keep in touch with them, and sell to them through e-mail marketing campaigns.

You may also want to consider investing in some offline advertising as well. Things like print ads, direct mailers, and even door hangers can be successful means of marketing your business.

Market your business

No matter how good your services are, you won’t be successful if no one knows about your business. You’ll need to invest in marketing to get the word out there.

With this type of business, you will be marketing to an older demographic. But also keep in mind that you might be marketing to the children and other caregivers of your eventual clients.

You will want to use a mix of traditional marketing tactics like search engines and print marketing, along with out-of-the-box tactics. Think about unique ways you can reach the customer base that might give you a leg up on the competition.

Set up an Accounting System

Making sure you can account for your money is especially important. There are a number of software programs designed to help small businesses track their finances, like QuickBooks.

Setting up a system now will help you avoid any surprises down the road. If you’re new to owning a business, it’s critical you understand the cash flow and other financial levers of your business.

Create a budget, and make sure you manage as closely as possible to avoid overspending before the business is generating much revenue.

Build a Website

Having a website is no longer an option for businesses – it’s a necessity. Your website should be easy to navigate, and it should provide potential customers with all the information they need about your company.

It’s also a good idea to set up a blog on your website. This will help you keep your website updated with fresh content, which can help with your SEO (search engine optimization) efforts.

Check out these website builders that make it simple for anyone to set up a website in minutes.

You’ll also need a hosting company which will often make it very easy to set up the most common website platforms of today like WordPress.

Open a business bank account

Right along with the implementation of an accounting system, you should open a business bank account. You’ll want to present yourself professionally to your banker, and be prepared to answer some questions about your business.

This account will help you keep your finances separate from your personal accounts, and it will make it easier to track your business expenses.

Related: Best Business Credit Cards

Hire employees

Because your employees will be interfacing directly with clients, this is a very important step for a home health care business.

You will need to find people who are trustworthy, patient, and compassionate. They will be dealing with people in very difficult circumstances, and their ability to help navigate those situations will be critical to maintaining clients.

Get business insurance

No matter what kind of business you operate, insurance is a must-have. Insurance will help protect you from any unexpected accidents or lawsuits. It’s especially important in a home health care business because you are already dealing with sick people.

It’s a reality that some clients or their family members may take issue with your services, especially if a patient does not recover or passes away.

These things shouldn’t deter you from starting the business, as they are a reality for many businesses. Just make sure you are prepared, and having business insurance is critical.

There are a number of different types of insurance that are relevant to the home health care business, including general liability insurance, automobile insurance, workers’ compensation insurance, and property insurance.

Talk to an insurance agent to find the right coverage for your business.

Consider a Franchise

If you’re hesitant to start a company from scratch, there are multiple home health care franchise opportunities available. A good franchise will provide you with all the training and support you need to be successful.

This can be a great option for those who want the benefits of owning their own business, but don’t want to deal with the hassle of starting from scratch.

Home Health Care Business Start-Up Costs

As with any business, accurately estimating how much money you will need for startup is essential. If you underestimate the cost, and/or overestimate your revenue, that can leave you in a rather precarious postition.

The startup costs for a home health care business are going to vary based on the state and many other factors. But here are some of the basic startup costs you should be thinking about:

  • Marketing materials
  • Hardware and Software
  • HR materials
  • Office space
  • Office furniture
  • Phones
  • Supplies and equipment
  • Personnel costs

Be sure to check any additional requirements especially if you are being reimbursed by Medicare. Accepting Medicare means you will have specific requirements to ensure the financial viability of the business, as well as the capability to serve patients adequately.

The bottom line

Because of the favorable demographics, starting a home health care business is a reasonable risk to take. But be reminded that you are taking a risk, and such a hot market is sure to have competition.

You will need to come prepared with a plan, and an understanding of the financials it will take to succeed in this industry.

Be especially sure you have planned appropriately for that first year or two of business when most companies that fail will run into problems.

Keep in mind the importance of the people you hire, as they will be the front line of your business. Word of mouth can go a long way when it comes to getting new business in such a localized business.

If you take the time to think through the details, you will greatly increase your chances of success in this lucrative industry.


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