11 Steps to Starting a Homecare Business for the Elderly
As the baby boomer generation continues to age, there is more demand than ever for caregiving roles to help them age on their terms. If you have a passion for helping others and are looking to start a business, starting a homecare business for the elderly may be just the venture for you.
If you’re interested in learning how to start a homecare business for the elderly, this is your step-by-step guide to getting started.
What Is a Homecare Business for the Elderly?
Many older Americans are choosing to continue living in their homes as they age. As they lose some ability to care for themselves, there’s a market for in-home care.
Homecare for the elderly is a broad term for the business niche of offering in-home services for elderly people. The services offered are highly dependent upon the needs of the individual and can range from simple tasks such as companionship, running errands, or preparing meals to full in-home care including bathing and distributing medications.
Of course, you can choose which types of services you’re comfortable providing—this will, in turn, determine what types of clients you can work with. Just keep in mind that if you plan on offering medical services, you—and your staff—will all need to be appropriately licensed in the medical field. This can be a great business idea for nurses looking to branch out from a traditional hospital setting.
When you’re starting a homecare business for the elderly, it’s important to stay organized and understand all the steps you’ll need to take to open your doors. Here’s a step-by-step guide to starting a homecare business.
Step 1: Decide on Your Business Model
One of the first decisions you need to make when you’re learning how to start a homecare business for the elderly is to choose whether you’d like to start a business from scratch or join a franchise.
The upfront cost of purchasing a franchise is expensive, but as a franchisee, you receive a tried-and-true business model, guidance and support, and brand recognition (among other advantages). In comparison, starting your own business can have a lower initial fee, but you’re pretty much on your own to navigate the setup process and build up your client list.
Step 2: Write a Business Plan
Many first-time business owners want to skip over this step and get right to starting their business. However, writing a business plan for your homecare business is a crucial first step to make sure you’re fully prepared to launch your business.
A business plan is like a roadmap for how you’re going to operate your business. A business plan will help to guide you along the way and it’s a touchstone you can refer back to each time you need to make a decision. Your business plan will include information on how much money you’ll need to launch your business, what services you’ll offer, when you expect to turn a profit, how you’ll market the business, and more.
A business plan takes work, but going through each part will also prove to yourself that there is a market need for your business, that you have the skills and finances to get off the ground, and that you know how to grow your business from there.
Step 3: Choose a Business Entity
With the planning stage out of the way, it’s time to legally establish your homecare business. One of the first concrete steps in establishing a business is choosing your business entity.
Choosing a business entity is a crucial step, as it will affect how you file your taxes, your level of personal liability, how you structure your business, and more. If you’re unsure of which entity type is best for your business, you should consider consulting a business attorney familiar with homecare businesses for advice.
Keep in mind that when you’re working with other people and are, to some extent, involved in their care and wellbeing, you should carry some level of protection for your business. This means you will likely not want to choose a sole proprietorship and should instead consider an LLC or corporate structure. Once you decide which business entity is right for you, you can register your business with the state in which you’ll operate.
Step 4: Obtain an EIN
Whether you plan to hire employees or not, you’ll next want to apply for an employer identification number, or EIN, from the IRS.
An EIN functions for businesses in the same way that social security numbers are used for individuals. Your EIN is used on tax forms filed with employees and customers as well as when you file your own business taxes with the IRS.
An EIN is also important if you want to open a business bank account or credit card and if you plan on applying for a business loan down the road.
Step 5: Obtain Licenses, Permits, and Insurance
Once you’ve applied for your EIN, it’s time to obtain the necessary licenses and permits, as well as insurance, to legally operate your homecare business.
The specific licenses and permits you’ll need depend on the state and even county where you’ll operate your business, so you should consult your local secretary of state’s website or chamber of commerce to make sure you have all the paperwork you need.
In terms of business insurance, it’s crucial that you have coverage in an industry that deals with people in varying stages of healthfulness. Should anything happen to a client while they’re under your care, insurance can help protect your business from financial or legal problems. A business attorney can recommend the best policies to have, but you should start with general liability (and may want to look into professional liability as well), workers compensation, and unemployment insurance.
Step 6: Assess Your Finances
Once your business is planned out, registered, and legally established, it’s time to think about your business finances and any funding you might need.
Business Bank Account
One of the first things you’ll need to support your business financially is a business bank account. It’s important to establish a business bank account as soon as possible so that you can keep your business and personal finances separate from the beginning.
Business Credit Card
Once your business bank account is set up, the next step is to open a business credit card. This way, you can make sure any business-related spending is separate from your personal finances. Plus, you can start building your business credit. Not to mention, if you need to cover some upfront costs for your business, you may want to look into a 0% introductory APR credit card as an alternative to a business loan.
If you have larger financing needs than you can fund with a credit card, you may need to look into a business loan to help launch your business. Funding for new businesses can be difficult to qualify for; however, if you need specific equipment for your business, equipment financing can be a good solution.
Step 7: Learn How to Manage Finances
Setting up your business bank account and credit card and looking at loan options is just the first step in managing your business finances. While there’s a lot to learn in this space, there are also plenty of tools to help along the way.
One of the most important tools a small business owner can have is accounting software. Many business accounting software programs help guide you through the process of tracking your expenses, sending and tracking invoices, and keeping your paperwork in order for tax filing. Plus, there are even some free accounting software programs out there so you don’t have to stretch your budget too thin.
Hire a Bookkeeper or Accountant
Accounting software can only take you so far. A bookkeeper or accountant can help you throughout the year in tracking and managing your finances and can help ensure that you follow all federal guidelines when it comes to filing and paying your annual taxes. While an accountant does cost money, they generally help businesses to save money when filing their taxes.
Step 8: Choose Your Office Space
Depending on the size of your homecare business, this may be the perfect home-based business, which would save you the cost of leasing commercial office space. After all, the bulk of your work will be done in other people’s homes. However, if you plan to hire multiple employees right away, you’ll likely want a space to train staff and hold meetings. Consider your options and how this expense will affect your budget.
Step 9: Create Business Procedures
While you might be the sole owner of your homecare business, it’s likely that you won’t be the only one doing the caregiving. It’s important to create documentation, training guidelines, and business procedures so that you and all employees know how the business is intended to operate. These guidelines are a great reference point for any business decisions that need to be made down the line.
Step 10: Hire and Train Staff
Once you have all your business affairs, it’s time to bring in other people. In addition to caregivers, you may also need to find someone to handle the administrative work as well. Of course, appointment scheduling software or even a virtual assistant could help you save money in this space.
Once you have a roster of employees and documented business procedures, it’s time to train your staff so that every employee who deals with your clients and represents your business provides the same level of care and compassion. After all, reputation is everything, and you want to make sure you cultivate a positive one from the start.
Step 11: Market Your Business
With your business officially up and running, the last thing you need to do is find clients. Developing a comprehensive marketing strategy can help you determine the best channels to advertise your new homecare business.
Start with a business website and advertise your business online, in newspapers, or with direct mail campaigns. Networking is also key here, as word-of-mouth marketing can be a huge boon to your business. Reach out to local physicians, senior centers, rehab centers, social workers, and hospital discharge nurses to let them know your homecare business is up and running.
The Bottom Line
Learning how to start a homecare business for the elderly is just the first step in starting your business. Once you’ve got your business started, it’s all about maintaining the high-quality service that you set out to deliver to your customers when you first had this dream.
As a business owner, you owe it to not only your customers but also to your employees. One of the many ways you can turn your business into something stellar is to always provide ongoing training and continuing education to your employees. Your employees represent you and your business to the public. When they’re happy and well-trained, you’ll have happy customers—and the rest will take care of itself.