What are the Steps in Opening a Home Care Business?

Paul ChastainSenior Care

Despite this rapidly changing world, mostly due to the advancement of science and technology, there is one thing that has remained the same, the fact that everybody ages. At some point in our lives, almost everybody is going to need assistance with everyday tasks, things like meal preparation, housekeeping, shopping and getting to appointments. These tasks can be very challenging to certain people in our population, especially our elderly seniors. At the end of the day, there is always going to be a need for medical home care services.

If you are here because you are wondering how to start a home health agency of your very own, then congratulations on beginning what may be a very rewarding experience for both you and your clients! For the past 10 years, medical home care businesses have been the fastest growing segment of healthcare in America, this may be related to the amount of baby boomers getting older and reaching the age of retirement. Either way, many thanks for your interest and compassion in wanting to help take care of our growing senior citizen population.

Types of Home Care Businesses

There are several ways to get into the home health care industry, such as buying a franchise, purchasing an existing business or starting your own from scratch. While each option is a great way to get started, starting your own business may not be as hard as it seems. So, if you have made the decision to join other small business owners in the successful home care industry for senior citizens and other members of the population who may need help with their everyday activities, then there are several steps that can be required in order to open your very own home care agency.

1. Develop a Business Plan

A clear plan is essential for starting a home care business. Templates are available on several websites, such as SCORE. Things to consider when developing a business plan are;

  • What are the startup costs and ongoing costs of the operation?
  • Who is your target market?
  • Who are your competitors?
  • When will the business become profitable?
  • What will the name of your business be?

According to Senior Service Business, startup costs for a home health care business can be kept under $900. The requirements are usually a personal cell phone, vehicle and laptop. In the beginning, many companies only offer non-medical services to reduce the costs of training and certifications required. Additionally, many new businesses can be run from a home office, reducing these costs as well.


2. Make it Legal

You must obtain the necessary licenses to operate as a small business and to receive funding from medicare, medicaid, and from private insurance policies.This includes;

  • Incorporating your business and setting up a business entity (i.e. LLC, sole proprietor, or corporation)
  • Registering with the Secretary of State
  • Obtaining an EIN (Employer Identification Number), which can be done for free on the IRS website
  • Registering for Taxes
  • Obtaining NPI (National Provider Identifier), if necessary

Requirements can vary state to state, in order to determine the requirements for your specific area you must speak with your state Department of Health and Human Services. For most companies, medicare and medicaid are the main source of income, so meeting their requirements to operate are essential to success. Keep in mind, the process for obtaining all the necessary requirements can be very time consuming, so do not give up hope! You can always visit your local county clerk for more information on specific requirements by county and state.

3. Prepare Your Finances

Once you have legally formed your business and have met all the state and national requirements to begin operating and receiving payment, you will want to prepare your finances. This can include things like;

  • Opening a business checking account
  • Opening up a business credit card account to help keep business and personal finances separate
  • Acquire and set up computerized accounting, billing, and scheduling systems
  • Have at least 3 months of operating costs on hand, up front
  • Determine your rate by doing market research in your area to see how much other business are charging, typically rates can range anywhere between $18-$40 per hour with the national average being $24
  • Set up payroll services

4. Write or Buy Policies and Procedures

After establishing yourself as a company and preparing your finances, you will want to write or buy policies and procedures to put in place. Your policies and procedures will need to address things like;

  • New patient admissions
  • Plans of care
  • Scheduling
  • Employee handbooks for policies and conduct
  • Employee and payroll records
  • Hiring practices
  • Orientation processes
  • Training procedures
  • Client billing
  • Client rights and responsibilities

5. Find and hire employees

After you have experienced some growth as a company, or if you intend on hiring additional staff up front, you will need to make sure you are meeting all the federal and state requirements. Doing things like screening your employees, following regulations, and having established disciplinary procedures in place will help to ensure that efficient hiring practices are followed.

6. Connect with referral sources

Reach out to places like local physicians, senior centers, long term care facilities, physical rehab outpatient centers or hospital discharge social workers to receive referrals while still in the early stages of certification. This will help to bring in new clients.



7. Develop a marketing strategy

Having a marketing strategy is essential for any new business. The best marketing comes from word of mouth, especially when quality care is received. For example, being flexible with things like scheduling can really help set you apart from others. While word of mouth is usually the best method of advertising, you will still want to invest your time and money into other avenues, such as;

  • Set up a website, while most of your market base may not be computer savvy, their friends and family most likely are
  • Run an ad through your local TV network or newspaper
  • Advertise on websites like google, bing, and yahoo
  • Become involved in the community by doings things like visiting trade shows or hospitals
  • Consider hiring a digital marketing agency who can enhance your business presence without all of the hassle


Hopefully this article has helped you better understand the process in starting your own home health care business!

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