Starting a Non-Medical Home Care Company in 10 Steps

We work with existing agencies that are 3 years or older. For individuals wanting to start a private duty agency, please follow the steps listed below and be sure to read the last couple of paragraphs on this page for additional help!

Private Duty Non-Medical Home Care is the fastest growing segment of healthcare in America. If you are interested in entering this exciting, fast-paced business, here are 10 Steps to help you start your business.

Within each step we give you as much information as possible, as well as links to directories, articles, products and services. Many of these items are available at no charge and are supported by our sponsors. Some products and services are fee based, but we guarantee you will see far more value than your investment.

This guide is designed to help you launch your company, but nothing makes up for entrepreneurial spirit. If you have a passion for providing care, marketing savvy, an understanding of business administration, and high integrity, private duty home care is a great choice for you.

Before You Begin...

You will invest thousands of dollars and thousands of hours building your business. Before you invest your valuable time and hard-earned money you owe it to yourself to have a clear understanding of nonmedical home care as an industry.

The first hours and first dollars you spend should give you an overview to help you determine if this is the right business in which you should invest. Our guide, The 2009 Private Duty Home Care Benchmarking and State of the Industry Report combines our research data, clearly defining a benchmark company, as well as a detailed overview of the current state of the industry.

Let’s Dive In! Here are Ten Steps that will help you get started.

Step #1 - Determine the Structure of Your Business

Before you get started you must choose a structure under which your business will operate.

There are four options when starting a home care company.

Buy a franchise
Join a membership network
Create your own company
Buy an existing company

Buy a Franchise - We estimate that there are over 2500 franchise non-medical home care companies in America. You can get started quickly and effectively by purchasing a franchise, getting the training and support you need, and becoming part of a national or regional chain of home care company owners.

Join a Membership Network - You want your own business and you need some training and support to get started, but you don't want to be limited by an ongoing franchise agreement. Option number two is to join a home care membership network that will provide initial training and ongoing support, but in a more flexible arrangement.

Operate Independently - You have some business experience. You have studied the non-medical home care marketplace. You are convinced you can do this on your own. For some entrepreneurs operating independently is their first choice.

Buy an existing company - Today many of the companies created over the past decade are becoming available for sale. Profitable non-medical home care companies are available through business brokers.

Links to get you started:

Step #2 - Create a Business Entity and Meet Licensing Requirements

Starting a business varies slightly from state to state and you must be aware of the business registration and licensing requirements for your specific state.

Business Entity

When you choose your business entity you are describing to the government what type of business you are going to be operating. Every home care business must acquire a Federal Employer Identification Number. You can read further about what is involved in this process by reading the free article below.

Create Your Business Entity

Licensing

Every state requires general business registration and tax filings. Furthermore, an increasing number of states require specific licenses for non-medical home care companies. Many states don’t yet require non-medical home care licenses, but have licensing legislation under consideration.

Please visit our State-by-State Licensing Guide for Private Duty Home Care for current information for your state.

Step #3 - Develop Your Policies and Procedures

Every private duty home care agency should have and use written policies and procedures to clearly define a consistent approach to recurring business practices. This manual outlines the standards and practices that your team will implement and ensures safety for your clients as well as legal protections for your organization.

A wide variety of policies and procedures should be covered in your manual including:

clinical practices
clinical documentation
client rights and responsibilities
intake procedures
job descriptions
hiring practices
risk management.

If you purchase a franchise or join a membership network, a policies and procedures manual is often part of the package included in their start-up fee.

Independent companies can create their own, or purchase a customizable packaged manual. Leading Home Care publishes one of the most respected policies and procedures manuals in the U.S.

New Directions Policies and Procedures Manual

Not only is a policies and procedures manual a useful tool, it is actually required by some state licensing boards.

State-by-State Licensing Guide for Private Duty Home Care

Step #4 - Set Up Your Financial Systems

In Private Duty Home Care, happiness is positive cash flow. You can build a very successful business in home care, and earn a very nice living. You can also build a company that you can resell in the future. To do these things, you need to run a financially sound business. There are some steps you’ll need to take early on to set up your financial systems.

Set up a business checking account
Set up a business savings account
Set aside 3 months operating capital to pay your bills while you are getting the business started
Set up a credit card merchant account with your bank
Set up a pre-paid deposit process for new client accounts
Set up a computerized accounting system
Set up a chart of accounts for your financial statements
Determine your billing rates, gross margins, and expense percentages
Set up your payroll systems

Step #5 - Recruit and Hire Office Staff

Your administrative and support staff will become a tightly knit team that will act as the heart of your business. Finding the right mix of talents and personalities is critical to long-term success.

Read our free article Recruitment and Selection of Your Home Care Office Staff which includes:

up to 15 different positions and job descriptions
who's accountable to whom in the organizational structure
what positions can be combined for smaller companies

Step #6 - Develop a Recruitment and Retention Plan for Caregivers

While all of your employees are valuable, ultimately none are as important as your caregivers. These individuals are in a very real sense, your inventory.

The quality of your product is dependant on the quality of people you recruit. Your ability to compete long-term is influenced by your ability to retain the quality caregivers that you’ve recruited.

The single biggest expense, aside from employee wages and benefits, is recruitment and orientation. The cost of turnover can be dramatic. Successful organizations will see their profitability linked directly to their ability to recruit and retain top talent at every level of the organization.

Learn about Private Duty Caregiver Pre-Employment Assessment and Caregiver Quality Assurance

Step #7 - Set Up Your Office

Private Duty Home Care companies are typically run in a standard office environment. You’ll need to provide work areas for your administrative staff, scheduling staff, clerical support staff and a home base for field supervisors and salespeople. Click on the link below to read a free article about making decisions on office equipment, to choosing a location for your office.

Read our free article - Building Your Office Systems for Your Home Care Company

To run your office smoothly and professionally, there are a number of basic systems you will need to develop:

Scheduling
Billing to clients
Billing to government agencies and other payors
Bookkeeping Systems
Time Keeping Systems
Customer Relationship Management Systems
Client Record Keeping
Payroll
Benefits Administration
Continuing Education
Record Keeping

Review our free article Developing your Administrative and Operation Systems for Your Private Duty Home Care Company for advice on these agency areas.

Step #8 - Scheduling, Billing, and Time Keeping Systems

As early as possible, you will want to automate your office operations with computerized scheduling, billing, time keeping and financial software.

One of the most common questions we hear is “Which scheduling software is the best?” To help you evaluate scheduling and time keeping systems, we’ve created a list of twelve questions you should ask yourself and the potential vendor supplying your systems.

Read through the Twelve Things to Consider When Evaluating Scheduling and Time Keeping Software

Step #9 - Develop Your Sales and Marketing Plan

To grow a successful non-medical home care company, you will need to focus much of your time and resources on finding new clients. Having a focused sales and marketing plan will be critical to the success of your new start up company.

Create Marketing Collateral to Get You Started

Over time you will develop a collection of marketing pieces. These marketing tools are known as “collateral”. You’ll want to develop a few pieces early, and add more as time goes on. Additionally, you’ll want to update them relatively frequently in a cost-effective manner.

Creating Marketing Collateral for Your Home Care Company

Sales and Marketing Planning

Shortly after you start your business you have to figure out how to make your telephone ring!

There are three basic sources of new clients for Private Duty Home Care:

Consumers - including home care clients, their families, and friends
Healthcare Providers - including hospitals, nursing homes, doctors officers, rehab hospitals, and other providers of healthcare services
Trusted Advisors – including elder law attorneys, bank trust officers, geriatric care managers, social workers, clergy, physicians, and financial planners

There are three basic strategies to sales and marketing.

Networking and Direct Selling
Advertising and Consumer Marketing
Word-of-Mouth Marketing

Read our free article Sales and Marketing Planning to Grow your Private Duty Home Care Business to discover how to use these three strategies to benefit your company.

Start Selling

We want to serve. We want to make people happy, safe and comfortable in their homes. This passion for service is absolutely required for a successful home care company. Many entrepreneurs with compassionate personalities tend to view sales as something only done by used car dealers. They need a paradigm shift.

Business doesn’t begin until somebody sells something. You can only serve if first you sell. Your organization needs to learn sales techniques specifically as they apply to home care. Your sales people will be important when you start your company, and absolutely critical to continued growth. Give them the tools they need to develop these skills.

Check out these fantastic resources to assist you in sales planning:

Networking in Your Community

Success doesn’t exist in a bubble. You will speed up your company growth by communicating with other individuals, particularly ones that are having their own success. There are three opportunities to connect with other business leaders.

Connect with other business leaders three ways:

In Your Community
In Your Industry
With Other Franchise Owners or Network Members

In our free article learn how to Connect to Other Business Leaders in Your Community and in the Home Health Care Industry

Step #10 - Measuring the Success of Your Business

We have a saying in our company: “What gets measured get managed, what gets rewarded gets repeated.”

You’ll want begin tracking the results of your business from day one, and set up a scorecard to monitor the Critical Measures of Success as your business grows.

We’ve provided a list of Critical Measures of Success, along with tools for several of these areas of improvement, in our private duty home care toolbox. You can click the book store link at the top of this page or visit individual pages for the following tools.

Read over Quality Improvement in Home Care: Critical Measures of Success for evaluating and measuring your home care business.

Private Duty Home Care Tools and Scorecards:

We trust that this 10 Step Start-up Guide was helpful in assisting you in this beginning phase of starting your home care business.

If you're an individual who is wanting to begin the preparation stages of opening your agency, we suggest two things: First, here are three consulting referral sources that we recommend - www.onehomecaresolution.com, www.solutionsforcare.com and www.kenyonhcc.com

Please contact them for additional help.

Second, we HIGHLY recommend clicking here, to find your state and click on it for specific information or help within the guidelines of your state and clicking here to find your state association, and contact them as they can be of help to you!

If you have an existing PRIVATE DUTY AGENCY that is at least 3 years old and you're looking to grow your business to the next level or for strategic help, click here

If you have an existing HOME HEALTH AGENCY that is at least 3 years old and you're looking to grow your business to the next level or for strategic help, click here

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