As the global job market continues to change rapidly and unpredictably, many people are taking this time to think about other options for the next phase of their careers. For those interested in starting their own business or purchasing a franchise, home health care makes sense. As demand continues to grow, people are increasingly seeing the opportunity in-home health care businesses. If your idea of fulfillment is helping family or friends age more comfortably, there’s a real opportunity to combine purpose and profit to build an organization with heart—especially now.

Nurse Next Door are experts in the home health care industry. We’ve helped over 200 Franchise Partners so we know a thing or two about what’s involved. As with anything, it’s important to do your research. We’ve outlined three key points that you’ll need to address before you get started.

So what’s actually involved in setting up a home health care agency? Here’s an executive summary of what we’ll cover:

How to Start a Home Health Care Business

The home care business industry is growing at a rapid pace

The home care industry is rising to meet the demand. According to the Industry Market Research Report, as of 2018, the American senior care business industry revenue is expected to grow at an annualized rate of 3.3% to $92.8 billion.

Factors such as the aging population, prevalence of chronic diseases, medical professionals growing acceptance of home care, medical advancements, the longevity of life and more have contributed to significant growth of the senior home care business sector.

According to FranchiseDirect, over the past five years, in-home senior care franchises grew at an average rate of 9.1% annually. Research firm, IBISWorld states that there are now more than 60 franchise brands, combining for over 6,800 business locations and employment of over 350,000 and expects growth to keep accelerating.

Here is some detailed information on the growth of the home care business industry.

growth of the home care business industry.

What Services Does a Home Health Care Business Provide?

The term home health care means providing supportive or assisted care provided by a professional caregiver or a nurse in the comfort of the patient’s own home or place of living. Caregivers & nurses set up appointments and visit the client’s home to provide help.

This help can be of different types ranging from companionship to medication administration. Even though home care involves medical assistance, most forms of home health care revolve around providing basic assistance like personal care, grocery assistance, and companionship. If you need more information on the types of services offered by a home health care business, click here.

Medical Or Non-Medical Home Health Care Business?

Choosing what kind of services to offer is the first step of starting a home health care business. It’s a big decision that influences everything from the laws you’ll need to follow to the qualifications of the professional caregivers and employees you hire.

There are two main types of home care agencies, each with its own benefits and limitations. The structure that’s right for you all depends on how you’d like to provide services and what you want to accomplish.

Non-Medical Home Health Care Agency

Non-Medical Home Health care agencies support aging in place. Potential clients could include seniors who need some assistance around the house but otherwise are in a healthy mental state. Instead of admitting senior citizens into nursing homes, relatives can have peace of mind that their loved ones are being cared for while they remain independent.

A non-medical home health care business may only require caregivers, home care aides, or certified nursing assistants.

Services of this type of business include:

  • Assisting with personal care and hygiene needs
  • Prepare meals and fold laundry
  • Transportation to doctors appointments
  • Medication reminders
  • Companionship care

Medical Home health care agency

The names are similar, but traditional home healthcare agencies differ from home care agencies in a few ways. While medical home health care agencies still support aging in place and independence, they also provide other services that go beyond meal preparation and personal care, requiring registered nurses and medical professionals. Regulations for this type of business are much stricter and your state may expect Medicaid certifications.

These services can include:

  • Nursing care
  • Blood pressure checks
  • Wound care
  • Occupational therapy
  • Palliative care
  • Physical therapy

A lot goes into establishing a health care business. To set up your business successfully, you need to be aware of all of the legal information, licensing requirements, and insurance recommendations. Here is more information on medical vs non-medical home health care business.

What are the legal requirements of home health agencies?

Starting a home healthcare business begins with ensuring you’re in line with their state and federal departments of health.

Some states require home health care agencies to undergo 40 or more hours of approved training from local licensing authorities as well as Medicare and Medicaid certifications before they can provide services. While others don’t require any training for private-pay agencies. This depends on whether you provide simple assistance like personal care or more complex care like nursing care.

Because different states require different legislation, we recommend talking to the Department of Health and Human Services. These agencies can direct you to any other government bodies that may need to approve your request.

Setting up your home care business plan

If you’re thinking of setting up your own home health care agency, you’ll also need a business plan. It’s a good idea to keep these general small business requirements in mind:

  • Choose a healthcare agency business name and company description
  • Have working capital and a business plan to stay afloat in the first year
  • Decide on an ownership structure for your home health care business
  • Get a federal employer identification number that identifies your business entity to the IRS
  • Find out if you need a local state license
  • Open a separate business bank account for all business operations
  • Create a financial plan, an operational plan, a marketing plan, and an online presence

What licenses do I need for a home health care business?

Starting a home health business that provides both medical and non-medical services will require the appropriate state or provincial licenses. Getting your licenses approved can take as little time as one month or as long as a year, depending on where you set up. (Note that California has different health care laws and licensing requirements than Washington or Maine, so make sure you plan accordingly.)

If you decide to start up with an established home health care agency brand like Nurse Next Door, our clinical team will guide and support you through this process. Here is also a full guide on How To Get License For A Home Health Care Business which provides you with all the necessary information on the business requirements and paperwork.

A nurse next door home care franchise after getting home health care license.


What home health agency insurance do I need?

When starting a home health care business, you need to prepare for setbacks. But when you’re in start-up mode, it’s difficult to know which insurance is best for your business.

Healthcare can be a risky industry. Without proper insurance, you could be liable to pay damages and legal fees out of pocket should anything bad happen on company time. Even one legal mishap could affect the long-term financial viability of your business. Any small business with employees should have unemployment insurance, disability insurance, and workers’ compensation. Although it varies from state to state, this is usually required by law. The right liability insurance will protect you and your home health care business when faced with the unexpected. Professional liability insurance is designed to protect you against medical malpractice, clinician misconduct, or negligence lawsuits which is especially important if you plan to provide nursing care or employ medical professionals.

How much does running a home health care agency cost?

Home care isn’t a one-size-fits-all business, and the costs of starting a home health business can vary (especially if you’re starting from scratch).

At Nurse Next Door, it costs our Franchise Partners $5k-10k for legal and accounting services, $2.5k-6k on insurance, and $500-10k on licenses and permits. The numbers can fall across a large spectrum depending on your location, the size of your operation, and other variables.

The marketing, technology, branding, office, and other costs associated with making your home care business successful can extend upwards of $100k, and potentially reach $200k–especially when you have to consider cash flow for staff. If you are looking for financing we have a full guide highlighting the key points on How To Finance A Franchise. This article gives you all the options to secure a loan in 2020 for franchising.

Rather than do this all yourself, have you thought about teaming up with someone who’s done it countless times and can handle the paperwork, marketing, and scheduling for you? Investing in a home care business with Nurse Next Door means you can spend more time on the fun stuff. Leave the setup and admin to us.

Further reading: Here’s how a family from Fishers, IN started their home care business.


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