How to Write a Care Agency Business Plan
The home care service landscape has become one of the fastest-growing sectors in healthcare. Globally, people save money by getting care in the comfort of their homes. Also, chronic disease prevalence, medical advancements, cost-effective treatments, and flexibility of home care continue to drive the revenue growth of this industry.
On a global scale, there has never been a perfect time to lay the foundation of a home care business to serve millions of baby boomers. The world has a growing aging population of boomers. It means the demand for home care services will continue to increase. So, draft a practical and actionable business plan template and think of it as a foundational stepping stone to start your home care agency.
Let’s take a look at the basics of home care service mode, how to draft a basic care agency business plan, and follow in the footsteps of some of the best home care agencies across the world:
Basis of Home Care Agency Services
Home health care businesses revolve around basic services targeted to the elderly to meet their medical and non-medical needs through professional caregivers and medical experts at their homes. From checking blood pressure to wound care to monitoring someone’s mental state, home care services are expansive and cost-effective.
The idea is to provide convenient daily home care services to millions of people around the world. Most of these individuals are elderly and suffer from chronic illnesses. In some cases, the elderly are bedridden, disabled, or dealing with Alzheimer’s disease.
Home care services have become ideal for senior citizens or people who leave the hospital. Caregivers also play a crucial role in providing seamless care services and offering daily assistance services.
In layman’s terms, home healthcare allows professional caregivers and medical professionals to visit people’s homes and render a specific care service or assistance. In the last few years, home care services have become more diverse and can involve different types of services for different individuals.
Increasing Demand for Home Care Services
Throughout the world, millions of folks are employed in different home care services. In the United States alone, close to 2 million employed people work in thriving home care services. Home healthcare workers consist of therapists, personal care aides, and nurses.
Market research shows that home care service agencies are on the right track and will drive the healthcare space for years to come. By 2026, expect home care service revenue to hit over $140 billion. If you want to write a solid care agency business plan, you need to adopt and embrace the best practices and follow standard guidelines to start a growth-driven home care business.
With an increase in life expectancy across Asia, Europe, South America, and North America, there is bound to be more need for long-term home care services. And that means care agencies will require more private caregivers to meet the increasing demand. Apart from aging boomers – a higher mortality rate is another reason to dive into home care services.
Type of Care Services Agencies Can Offer
Home care services revolve around assistive care or medical treatment for people who don’t need hospitalization. A professional caregiver or medical professional pays a visit to, say, an elderly at home to offer care or assistance.
The most common home health care services revolve around speech therapy, skilled nursing, and physical therapy. In most instances, it also includes assisting the elderly with daily activities like eating, dressing, and bathing.
Don’t Confuse Medical Home Care with Non-Medical Care
Before you draft a legit home care business plan, differentiate between medical home care and non-medical care.
- Medical Home Care: The medical-based home care involves wound care and related nursing services like monitoring mental health and blood pressure. Recently discharged senior citizens from a hospital require this care.
- Non-Medical Home Care: As the title suggests, it refers to home care that isn’t medical-driven and involves caregivers and other non-medical personnel.
The focus of non-medical home care services is to provide day-to-day essential assistance. For instance, home care aides can take care of the house, prepare meals, and dress and drive individuals in need to doctor’s appointments.
Essential Elements and Considerations to Write a Care Agency Business Plan
There are many steps you can take to draft a business plan and start a new care agency. Since it is a competitive industry, starting and running successful healthcare services can be difficult. Home care services require businesses to be proactive and be part of the industry. But it often makes working in this industry stressful for home care businesses.
Here are the basic steps you can take to write a care agency business plan and kick-start your journey:
Choose an Appropriate Business Name
Selecting a business name may sound something so simple, but it can impact the growth trajectory of your home care agency. The last thing you want to do is choose a bold or inappropriate name that might put off clients. Instead, choose an inclusive and diverse name and confirm it is available so you can use it on brochures, business cards, and letterheads.
Research Different Elements When Creating Home Care Business Plan
A major part of your business plan requires researching and considering various elements to draft a viable, practical, and growth-driven home care business plan. Make sure your research process is strategic and avoid generalizations that might put you in a tough spot.
Instead, create a home care business plan that can help you navigate the different steps of creating a care agency and allow you to move forward. Despite the business plan format, consider elements that might significantly increase or decrease the cost of your agency care operations.
For equipment costs, consider expenses like:
- Nursing supplies
- Office Supplies
- Rental expenses
- Office equipment
- Business development costs
Once you consider all the required expenses to start and maintain home care agency operations, choose a strategy to raise capital. You can secure funds traditionally through small business loans, angel investors, bank loans, or grants.
In the first quarter of starting and running a care agency, consider potential losses and strategies to grow clientele and create a stable billing cycle. So, make sure you have a cash flow to run smooth operations for at least the first quarter of your new care agency.
Choose a Suitable Model for a Care Agency
Your first step is to figure out the most suitable way to get into the home care service business. Your business plan should revolve around creating a new agency from scratch. There might be higher risks and lower business costs.
In any case, conduct thorough research to better understand current industry trends and standards. You can simplify your business plan by acquiring an existing care agency. While this involves more costs, it incurs lower risks.
One of the barriers to entry is when you invest in a dedicated franchise. While it is also a popular and proven business model, it involves higher entry costs. Just to be safe, talk to a lawyer or broker with experience and expertise in franchise law. Remember, you can start a new care agency or acquire one.
Follow Standard Guidelines While Writing Care Agency Business Plan
The business plan will serve as the foundation of your care agency. When writing a care agency business plan, focus on the following elements:
Write a brief overview of your home care agency.
Explain the type of home care services you will provide clients with competitive pricing.
Establish the mission, vision, and goals of your care agency.
Note down the details of care agency ownership and hierarchical structure.
Write down ways people can learn about your new care firm.
Draft the financial statement and break down the balance sheet and cash flow forecast details. You should also run break-even analysis calculations and write down details.
Include information about staff and facilities and how many supplies you’ll need to run day-to-day operations.
Get the Relevant Certifications and Licenses
No matter where you want to start a home care agency, you will have to comply with the rules and regulations of that region and country. Typically, each country requires home care agencies to get a certified license to operate and maintain all documentation to run legit home care operations.
If you’re unsure about your country’s home assistance and care service requirements, reach out to the Health Department. You should also research and find out if there are certain laws or regulations that instruct care agencies to provide physical therapy, nursing care, occupational services, or language-speech pathology services in a particular way.
You risk making your home care agency business model unorthodox without licenses and certifications. In fact, it puts you at odds against the regulatory authorities. In each country, people have to meet the criteria to receive home care services. So, don’t forget to research basic requirements and note down specific laws that might propel you to change your approach to provide a specific home care service to clients.
Perform Market Research and Analyze Competitors.
The home health care industry is highly competitive. Identify key competitors and run a comprehensive industry analysis. Your focus should be to better understand your competitors’ strengths and weaknesses. And spot opportunities that may favor your home care agency over others to target customers.
The more you understand local markets and close competitors, the better chances you will have to secure funding for your care agency. Focus on the home care service factors that your competitors are unable to meet and provide those care services with added value.
Competitive drive is high when you’re competing in a saturated community. So, run a thorough competitive analysis to improve recruitment and marketing strategies. It will help you identify potential pitfalls and opportunities to better penetrate the home care service target market.
Recruiting and Staff Management
In the home care business landscape, your staff becomes your product. After all, hired employees render service to the elderly under different conditions. It is critical to hire the “right” people to represent your care agency and provide services professionally. Make sure the people you hire can consistently provide high-value home care services to a diverse range of clients.
You can hire an experienced clinical supervisor. Also, understand that some countries require care agencies to hire only registered nurses with at least one year of experience and proper clinical supervision. So, note down added support you should give to hired staff in your business plan. It will also make it easier to manage personnel and expand your capacity to offer services to more clients.
Cover Banking and Payment Information
In the digital age, you can automate and streamline payment processing for your home healthcare service clients. Make a note to create a separate business checking account to ensure professional and personal accounts are not mixed. It is also an effective way to secure your business and personal assets. You should also learn the process to get business credit to support credit card payments.
Get Insurance Coverage
In the quest to protect your home care agency, prioritize getting insurance coverage., Note the type of insurance coverage you need for your home care agency. In most countries, you’ll need to get professional liability insurance. It protects your care agency from malpractice, incompetence, and negligence claims. While it depends on the home health care service agency provides, get general liability insurance that offers protection against claims related to third-party property damage or bodily injury.
Create a Robust Financing Plan
Financial stress is the bane of every company’s existence. So, ensure you have a comprehensive and accurate financing plan in your arsenal. Many business plans note down financing elements throughout the document to iterate the impact of different financial elements like balance sheet and cash flow.
Also, tie together financing elements and note down how they can help you perform better in the market in the first year. Right off the bat, you’ll realize the need to free up your cash flow to support more operations. Factor in financing elements that might help you run optimized operations and grow your care agency faster.
Highlight Sales and Marketing Strategy
Like any business, cover all the marketing and sales details when you plan to start a new home care agency. When operating in a service-based home patient care industry, you need to adopt progressive measures to make your sales and marketing strategy work.
Note down elements that can personalize your marketing efforts and increase your sales. Like a financial forecast, this should be one of the comprehensive sections of your home care agency business plan. Start by researching and identifying close referral sources in your area. It can include:
- Medical home care entities
- discharge planners
- elder law attorneys
- physical rehabilitation centers
- trust fund bank officers
- estate planners physicians
- geriatric care managers
Remember, the success of your care agency depends a lot on how you create and implement your sales and marketing strategy. If you promise efficient and cost-effective home care services, you have to stay on your ground and live up to all clients’ expectations.
For marketing purposes, note down the elements you want to include in your care agency site. If you want to cater to clients in the home care industry, you will have to promote your site to communicate basic information.
Focus on strong promotional content that communicates your techniques while providing different home care services. You may have to adopt more than one sales strategy to run multi-faceted home care agency operations.
One can use your business site to show potential clients how you stand out from other home care service providers. You can also join local community organizations to expand your overall reach. When you join local associations and groups, you will be able to access more clients in need of prompt and professional home care services.
Add Detailed Procedures and Policies
Last but not least, write down detailed procedures and policies in your agency care business plan. Your policies should revolve around providing home care services in different conditions.
For starters, highlight details about the orientation, hiring practices, payroll management, customer responsibilities, customer rights, different home care plans, the process of new client admission, the framework to follow planned schedules, steps to bill clients, and training guidelines.
Today, research options and tools have made it easier and faster to create a long-term care agency business plan and offer diverse and effective home care services that cater to the needs of the elderly. But before you even think about expansion funding, business sustainability, and startup security, you need to curate a solid home care agency business plan.
Crunch the numbers and gain a clear market perspective to stand out in the competitive home care service industry. With a comprehensive and clear care agency business plan, you can prioritize the individual needs of your home care service clients.
Don’t let a lack of a solid business plan hold you back from reaching your goals. Contact us today to see how our experienced team can help you create a comprehensive plan that will set you up for success. Don’t wait, take the first step towards reaching your full potential and schedule a consultation now!