The home care industry has been growing 3.4 percent annually since 2013. With the baby boomer generation aging and the elderly population growing, the industry is primed for more growth.
If you’re looking to start a home health care business, there is no better time than today.
However, the fact that the industry is on a growth trend isn’t a guarantee your business will succeed. You must get the basics right; otherwise, you will be among the 30 percent of new businesses that close shop in the first two years.
Read on to learn what it takes to start a successful home health care business.
Create Your Business Plan
Starting a business without a business plan is akin to driving at night without headlights. You will crash.
This document is the blueprint for starting and running your business. It should include the following details:
- Business name and address (physical and digital)
- Names of the owners/directors
- A detailed description of the mission and vision of the business
- A list of services on offer, including pricing
- Marketing plan – how will you spread the word about your business?
- Organizational structure – describe how your business will be run
- Operational plan – staff, equipment and other supplies needed to run the business day to day
- Financial plan – explain your funding and include your financial projections.
Of course, before you embark on writing a business plan you need to do market research and identify a suitable location. Ideally, this should be a neighborhood with a sizeable aging population.
You must also be thoughtful with the business name. Because you’ll be offering health care services, it’s preferable that the name evokes feelings of compassion and care.
Register the Business in Your State
Home health care is a highly regulated industry. You will go through a thorough registration process before your business can be granted the necessary licenses and certification it needs to be open its doors to the public.
Although registration requirements vary from state, expect to:
- Take a criminal background check (along with co-owners/directors – if any)
- Provide proof of liability insurance
- Provide a National Provider Identification number
- Proof of physical address
In most states, it’s illegal to run a home health care business without an active license. It’s not only immoral and unethical, but you’ll also be risking hefty fines and even jail time.
It’s also important to register your business as a limited liability company (LLC), instead of running it as, say, a sole proprietorship. Home health care businesses are naturally exposed to a lot of risk and negligence or professional malpractice lawsuits. An LLC limits your personal liability in such cases.
Hire Key Staff and Obtain Medicare and Medicaid Certification
There aren’t many industries where you’re required to hire employees before you even start doing business. In home health care, though, it’s necessary to hire crucial staff before beginning operations, and here is why.
The vast majority of your target market is certainly on Medicare and Medicaid insurance plans. This means your business will file insurance claims (on clients’ behalf) and present them to the Centers for Medicare and Medicaid services for payment. CMS requires home health providers to obtain certification in order to process claims.
One of the certification requirements is that your agency must offer skilled nursing services in any of the following areas:
- Speech-language pathology
- Home health aide services
- Medical social services
- Physical therapy
- Occupational therapy
To prove that your home health care business provides any of these services, you need the relevant employee on staff. For instance, if the agency offers physical therapy, you need a licensed physical therapist on staff. However, the need to hire key staff might be negated if you (the owner) are a practicing professional in any of those fields.
Note obtaining Medicare and Medicaid certification can be a lengthy process, sometimes taking months. Plan for this accordingly.
Get Your Capital Right
After obtaining the necessary licenses and certifications, you’re ready to start operating on a larger scale. This involves hiring additional staff and purchasing company vehicles, office equipment, and other supplies.
To pull that off, you need capital.
If your agency is self-funded, ensure the money is in the company’s accounts. If you’re relying on external funding, reach to your investors or lenders and get the money. Either way, don’t launch the business without sufficient capital at hand.
Deploy Your Marketing Strategy
With over 400,000 home health care agencies in the country, competition for clients is fierce. Getting started on a good footing can be even more challenging if you chose a location that hosts an established competitor.
What you need is a solid marketing strategy.
A combination of outbound and inbound marketing should give your business some traction, but it’s not that straightforward. Marketing a home health agency isn’t the same as marketing a retail store.
There are marketing limitations in health care. For instance, the Anti-Kickback statute prohibits health care providers from marketing a service that might be deemed unnecessary to a potential or existing client.
Unless you’re a trained medical marketer, it’s almost impossible to run a marketing campaign without violating a federal or state regulation. As such, it’s advisable to outsource your marketing to an agency that specializes in medical marketing.
Ensure Quality Service Delivery
At the end of the day, it all comes down to the quality of your services.
Make it your mission to wow your clients with exceptional home health care services. To do this, hire compete care providers and keep training them to become better at what they do. Treat your clients and their families with empathy and compassion.
Gradually, your agency will develop a reputation for quality service delivery. Existing clients will likely refer it to their friends. That’s how you increase your clientele.
Starting a Successful Home Health Care Business
As home health care businesses spring up right, left and center to cater to America’s aging population, you might be tempted to quickly set up one, too.
However, we have demonstrated that starting a successful agency requires intricate planning and attention to several regulations. If you follow the tips fleshed out above, there is no reason you shouldn’t find success.
Good luck, and remember to keep tabs on our blog for more business tips.