With an aging population, the worldwide home healthcare market was valued at $299 billion in 2020, and is only expected to grow. If you’re an entrepreneur who sees the potential of the home care industry, you may be the perfect candidate to start a home health care service or partner with a franchise to get up and running in your neighbourhood.
But before you can secure financing for your home health care agency, you’ll need a rock-solid business plan to entice lenders and get extra cash flow.
We’re here to walk you through what goes in a business plan for the home care industry.
What is a home care business plan?
A home health care business plan is a written document that details the goals and objectives of your home health care business. It lays out the primary costs of operating your business and how you plan to turn a profit. It can also show the legal structure of your home health care agency, including employees, management structure, a sales and marketing plan, as well as the current financial health of the business.
Why should you have a business plan for home health care services?
It’s a good idea to write up a business plan, no matter what industry you’re in. It helps you see where your home health care business stands and gives you a roadmap to where your business is heading. It’s especially important if you’re looking to obtain a business loan or get outside funding or start up expenses.
If you can show investors that your home care business has cash flow, steady growth in the health care industry, and a solid client base, you’ll be well positioned to receive working capital that can further help your home care business succeed.
First steps of creating a business plan for home health care services
You could dive straight into ‘the writing part’ of your home health care business plan, but then you’d miss ‘the thinking part’—arguably the most important step when creating a business plan. By taking a few steps back, thinking about your home healthcare business as a whole, and asking yourself some questions, you’ll have everything you need to write out your business plan.
This exercise will help you spot any gaps in your business operations, while identifying potential unknowns and barriers to entry.
Here are three key business plan elements to consider:
What is the goal of business plan for home health care services?
The most common reason for creating a home health care business plan is to show lenders you’re a viable home health care company when you ask for a business loan or additional funding. For this goal, you’ll need to go into detail about your business, showing exactly how your company operates and how you plan to make a profit.
Other goals include:
- To clarify that you have a sound home health care business strategy before using up resources
- If you’re applying for a business grant or competition
- Before taking on a partnership to see if your values and goals align
- To plan for the future of your home care business
Who is going to read your home health care business plan?
Once you’ve decided on the goal of your business plan, make sure you put yourself in your prospective readers shoes.
If you’re onboarding a new hire, you only need to add the essential information, leaving out complicated financial documents. You can add a company profile that speaks to the mission and vision of your home health care business, but you don’t necessarily have to go into detail about your financial forecast (unless one of your new employees is an accountant).
However, If your reader is a potential investor, you can still include details about your business vision, but back them up with concrete details, easily-digestible facts and figures, and a more detailed competitive analysis that shows what sets you apart in the home care market.
What’s happening in the home health care industry?
This one may sound like a no-brainer, but you’d be surprised how many entrepreneurs skip the research step, only to realize they have to go back when they’re mid-way through writing their business plan. Industry research will give you a crystal-clear picture of who’s in your market and what you’ll need to do to stay ahead of your competitors. It helps you see things through a future lens and can help you take note of any potential roadblocks to your success.
What goes into your business plan?
Now that you know what you need to do before you write your home health care business plan, what comes next?
If you’ve been staring at a blank page, unsure of where to start, we’re here to help. Here are some sample business plan sections applicable to most home health care companies.
1. Executive Summary
Your executive summary is a high-level overview that summarizes the rest of your business plan. It will be the first thing people read so it shouldn’t be longer than one page.
Your executive summary should include a short overview of what your business aims to achieve and all the relevant information on how you run your home health care business.
You can include:
- Your home health care business mission and goals
- A description of your product or service, and why it’s different from your competitors
- Your target customers and target market
- Your sales and marketing strategy
- Up-to-date financial data
- Financial projections
- Your team (who you work with)
- What you’re asking for: funding, investment, etc
2. Company Description
After completing your executive summary, you need a company description. This section should contain a thorough description of your home health care business so readers can understand what you do and why you do it.
You should add in concrete details like your business structure (are you a sole proprietorship or LLC?) and a snapshot of the home care services landscape and why you stand out.
If you are writing a homecare business plan to get funding for a franchise, look at Item 1 of the Franchise Disclosure Document (FDD). Your franchisor likely already has the information you need for your company description.
Your business mission statement should encapsulate your company values in one or two simple sentences. For example, at Nurse Next Door, our mission statement is: “Making Lives Better”
You can include:
- A description of your home health care business
- Your business mission and goals
- How you fit in your industry, and where you stand out
- A more detailed breakdown of your customer base
- Your business objectives
3. Industry Analysis
Here’s where you can give a picture of what the current home care services market is like and how you plan to gain more shares in the market.
You can include:
- Information about your other home health care businesses in your market
- Key distributors of nursing supplies in the market
- Market trends
- A customer analysis
- Your plan to gain more shares of the market
4. Management and Organization
Home health care businesses are only as good as the strength of their team. This section should detail the structure of your organization and lay out who works there and why that’s important. This is the spot to mention the expertise of your team as well as any supporting players like advisory board members.
This section proves you’re serious about your new business venture and have assembled the right people you need to reach business success.
You can include:
- The number of skilled home health care workers on employees from registered nurses to physical therapy providers
- Your leadership team
- Advisory board members if applicable
5. Home Health Care Services Description
Here’s where you can get into the nitty gritty of the products or services you sell. This part of business planning may be easier than you think. We recommend looking at your FDD again to see if the information has already been provided by your franchisor.
You can include:
- A detailed list about the products and services you sell. The following services are usually provided by a home health agency: meal preparation, physical therapy, nursing services, personal care, speech therapy, and companion care.
- Information about services you plan to implement in the future
- How you conduct background checks
6. Marketing Plan
In this section, you’re answering the question: “how will you acquire customers?” It’s important to provide a comprehensive marketing and sales plan so any potential lenders or investors can see you’ve done your homework, researched other home health care businesses, and are entering into a profitable business model.
Franchises usually have a well-thought out marketing strategy that you can tweak to fit your location and customer base. For example, Nurse Next Door offers a robust training program and supplies marketing support and materials to our franchisees.
You can include:
- Price: The cost of your services and how you decided on the price
- Product: What are you selling and how are you differentiating yourself in the market?
- Promotion: How will you promote your services to customers?
- Place: Where are you selling your home care services?
7. Financial Projections
This part of your business plan essentially answers the question: “Where do you want to be in five years?”.
Using current financial statements, balance sheet, and cash flow statements along with market research, you’ll need to create a five year business forecast showing how your business revenue will grow over time. Compare the primary costs of running your business with the number of clients you plan on acquiring.
You can include:
- Equipment costs
- Payroll costs
- Business insurance
- Taxes and permits
- Legal expenses
Your Appendix should contain any documents you reference in the rest of your business plan, plus any relevant or supporting information.
Access Your Welcome Package which contains
- Discovery Video – 15 min overview of this opportunity
- Franchisee Testimonials
- The Nurse Next Door opportunity
- Access to our calendar to book a 1×1 call.