how to start a private home care business

How to Start a Private Home Care Business: A Step-By-Step Guide

Elena Hudgens
By Elena Hudgens 17 Min Read

The caregiver providers industry is becoming one of the fastest-growing healthcare industries in the United States. Market expansion is by more than 76 million baby boomers, representing nearly 25% of the U.S. Population. This industry growth is one reason why now is the time for you to know how to start a private home care business. 

Most seniors over 65 will eventually need medical or personal care. Therefore, there is a high demand for senior citizens’ home care services. Home care businesses are profitable and can be very successful when done correctly, but it takes a lot of effort and dedication to make this business work well. If you’re thinking about starting your own home-care business but aren’t sure where to start, keep reading this guide about how to start a private home care business! 

What is a Private Home Care Business?

There are two types of private home care businesses:

Medical home health providers: Medical professionals provide medical home care and includes wound care and general nursing services. Senior citizens typically need this type of care; people recently discharged from hospital or those with chronic diseases.

Non-medical home care services: Professional caregivers or other (licensed or unlicensed) non-medical personnel provide non-medical home care. This type of service is based around essential day-to-day assistance and can include tasks such as preparing meals, cleaning the house, helping with changing or dressing an individual, driving them to appointments, and more.

To know more about how to start a private home care business? Read this article carefully.

What Services Do Private Home Care Businesses Provide?

For the elderly, private home care businesses can render various care services. Some expected benefits include personal care such as bathing, dressing, grooming, toileting, and even light housekeeping. Caregivers provide companionship and light housekeeping to allow seniors to live independently in their own homes for as long as possible. The private home care business includes bathing, dressing, eating, toileting assistance with transferring, and more. The service also provides:

  • Grocery shopping for meals and medication support.
  • Companionship during doctor’s appointments.
  • Hair appointments.
  • Theaters and social engagements provide help to become cognitively engaged while living independently at home.

What are the Costs Involved in Opening a Private Home Care Business?

How to start a private home care business and the cost of opening one are two essential questions. Individuals can start a private home care business with little capital and hassle. Besides any licensing fees that a state requires, there are few startup costs. The two essential elements are a cell phone and a reliable vehicle, but most business owners use their car and telephone. Many business owners also use a computer, which they usually already have. Private home care businesses can keep the startup costs under $900 by starting with only non-medical assistance services offered instead of paying for classes or office space. If you’re starting a home health agency without prior experience, the costs will be much lower. You do not need any initial equipment, and if you work on your own, you won’t have to pay for employees. In some cases, starting your business for less than $1,000 may still cost more than hiring an outside professional.

Who is the Target Market?

Home care businesses are ideal for people who want to continue living independently but need help with basic tasks, such as cleaning and grocery shopping. Clients do not always have medical insurance, so they also need savings.  In understanding how to start a private home care business, It is essential to research the target market. The target audience may be:

  • An elderly senior who wishes to remain in their home and live independently- They need help with things like getting around, bathing, and dressing 
  • A patient who has just undergone surgery and would like to recover in their own house – They want someone to help them get back on their feet after treatment has been completed 
  • Someone with a medical condition requires assistance such as cooking or doing laundry for them.

How Much Income can a Private Home Care Business Earn?

If you are interested in starting a private home care business, the national average rates for senior non-medical home care are $24 per hour. This established provider could earn around $900 to $1000 a week or $45,000 to $50,000 per year if they have employees. There are also “add-on” services that can add even more income to your income! Assuming your company begins operations with a modest budget and hires only one non-medical home health care worker, their annual income (before taxes) would be about $27,000. If you expand and hire additional employees, they could earn an average hourly wage of $11-$15 per hour. This income could potentially amount to over $50,000 in total, depending on the services you offer. Starting your own private home care business could be the escape from the rat race or unemployment you were looking for. It is an ideal part-time business that offers seniors top-quality services at rock bottom startup costs and high earning potential! 

To know how to start a private home care business, here is a list of things you have to perform to form a legal business.

Create a Business Entity: There are a variety of business structures available, including Sole Proprietorship, Partnership, Corporation, and Limited-Liability Company. The type of business you form will determine how much tax you pay (and other personal obligations) and what kind of organizational structure your business will have. 

Obtain Employer ID Number: An Employer Identification Number (EIN), also known as the Federal Employer Identification Number (FEIN), is a unique nine-digit number issued by the Internal Revenue Service (IRS) to business entities operating in the United States for identification purposes.

Register with the Secretary of State: Your business scale and structure determine the need for registration. Most businesses need to register with state and local governments. In most cases, the company or individual can do this by filing a business name with the appropriate government body and checking the availability of a domain name for the website. When your business entity and name are approved and have all the necessary paperwork in place, go ahead and start selling!

Obtain necessary permits and licenses: A CNA(certified nurse assistant) approval is required for individuals operating their health care businesses- not just those providing home health services to others. They must also be certified in bathing and telling people to take medication. A home health aide needs an HHA(home health aide licensing) license to operate a business providing home health services. A failure to acquire this license can lead to hefty fines or even closure of the company. 

Steps To Starting A Private Home Care Business

To know how to start a private home care business, follow these essential steps:

Step 1: Plan your business

A business plan is a foundation for any company. It includes the executive summary, company description, services, and marketing plans. There are many different business plans, but this one will serve as an ideal starting point for your home health care business. A good business plan also includes a description of your healthcare service provider and how you will provide them with quality care. This plan would consist of a list of services you offer and provide quality patient care. Finally, it should contain information on pricing and financials so that you can make informed decisions about where to allocate resources within your organization.

Step 2: Form your business

The best way to start your own business is by legally formulating it. There are different business structures you can choose from, depending on what you want your business to be called and how much liability protection you need. Many small-business owners choose LLC because it provides limited liability protection and benefits from pass-through taxation. You have to perform all legal formalities as mentioned above in the guide. The checklist for the same is here:

  • Create a business identity
  • Obtain Employer ID Number
  • Register with the Secretary of state
  • Obtain necessary permits and licenses

Step 3: Obtain the necessary certificates, skills and training

To know how to start a private home care business, here is a list of things you have to obtain to improve your skills and become a professional in this field. 

Certificates: Suppose you plan to run a home health care business that provides medical professionals or professional caregivers to provide services like nursing care, physical therapy, and other services through Medicare or Medicaid plans. In that case, you will want to apply for Medicare and Medicaid certificates. These certificates give your business the ability to become certified in providing home care services. Becoming accredited can take up to a year- so make sure you start early! 

Skills and Training: Starting a home care business does not require formal education or medical training. Common sense, caring, compassion for your seniors, honesty, and organizing skills are the four most essential skills. These skills come in handy to schedule clients, errands, and household tasks at clients’ homes. Honesty is way up there on the “essentials” scale as, without honesty, your clients will never trust you or recommend you to other seniors – the best way to build your business.

Step 4: Set up your office

After understanding how to start a private home care business, setting up your office becomes crucial for running a successful business. Finding a location where care is affordable to the population without excessive competition is essential. You can save money on costly commercial office space and instead find a cheaper accessible place for your employees. If your in-home caregiving business is non-medical, you will only need uniforms and a substantial marketing budget. However, if you’re a medically licensed caregiver business, you will need to invest in appropriate medical equipment. 

Step 5: Hire staff members

Many private home care businesses start with one person until they gain more clientele. So if you are not ready to hire staff, you can skip this section.

When hiring staff, it is essential to decide if you will employ employees on payroll or use independent contractors to receive a 1099 form (1099-B). It would help if you also spent time interviewing potential candidates for the job doing extensive background checks and asking for references from previous employers. 

Hiring an incompetent employee could have harmful consequences and lead to liability issues. It is always a good idea to ask at least three professional references when possible to assure that the individual would be a good fit for the role and would not cause any harm while working with clients or other professionals.

Step 6: Create your business website

You control how your customers identify you – choose a simple, easy-to-remember name and logo! With our online content, you can also keep it simple and easy to remember. Website building is a quick and easy way to create professional-looking websites for your business. Several website builders are available that use drag and drop style tools so you can quickly build a site for your home care business. Wix and Squarespace are two popular website builders that use this construction tool. There are many legitimate reasons why you should not delay building your website. If your business is small or in an industry that doesn’t require a website, it’s not worth pausing due to these reasons.

  • All business websites have been created by businesses, no matter the size. 
  • Social media accounts like Facebook pages and LinkedIn profiles cannot replace owning a business website.
  • Website builder tools such as GoDaddy Website Builder make creating an essential website straightforward, so you don’t need to hire someone to create something beautiful for you- all you need is access to some standard coding blocks!

Step 7: Market your business

You will want to get started by marketing your business to local resources like senior centres gyms, with local physicians, churches, and rehabilitation centres. You can also put ads on specific websites where people can look for caregivers. You can also invest in a referral program where leads are sent your way – this is an excellent way to build a list of clients! Have a website that provides more information about your business – rates, services, etc. The more you market and provide information about yourself online, the faster you will grow! Your marketing strategy should encompass traditional modes of advertising on radio, local TV, and the web, as well as social media. It would help if you used updates on Facebook and similar sites to talk about how your business grows and contributes to the community.

Step 8: Get your business insurance

To operate safely and legally, your business needs insurance. Business Insurance protects your company’s financial wellbeing in the event of a covered loss. There are several types of policies designed for different levels of risk, depending on what kind of business you have.

  • Professional liability insurance protects you from claims of negligence, malpractice, and incompetence. This type of insurance is known as “errors and omissions” insurance.
  • General liability insurance: It protects you from claims involving third-party bodily injuries and property damage resulting from your product or operation. This type of insurance is the most common coverage that small businesses need, so it’s a great place to start for your business.
  • Cyber security insurance: It can protect you from some HIPAA penalties resulting from a hack or breach that reveals a customer’s PII (Personal Identifiable Information).

Conclusion

The home healthcare industry is one of the fastest-growing healthcare industries in the United States. Home care workers – comprising nurses, therapists, and personal care aides – provide a range of medical and daily living services to nearly 12 million Americans who are elderly or many chronically ill, disabled, bedridden, or struggling with Alzheimer’s disease and other cognitive issues. If you have a heart for caring, now is the time to make a difference in people’s lives. Investing in an established business model popular with private caregivers will help you meet the demand for your services. After reading this guide, you’ll know how to start a private home care business on your own. You’ll be able to do good in your community and start a successful, profitable business.

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Posted by Elena Hudgens
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Elena Hudgens is an entrepreneur with 10+ years of experience. She started her journey by building her own e-commerce website on Shopify and turned her $1000 savings to millions in just 2 years. Soon she started different ventures in which she failed and succeeded. And now, she's on a mission to help other entrepreneurs with her life and business lessons.
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