Two Most Important Things To Consider Before Starting A Home Care Business

by David Goodman
in Blog
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If you’re exploring new business opportunities, chances are you’ve come across the personal home care and home health care businesses.  Chances are also good that you’ve reached the conclusion they are in an industry that offers great potential. 

After all, with the population aging – and estimates calling for the number of seniors to grow to an estimated 72 million (or one in five people) over the next 10 years – the demand for such services is unprecedented.  While people are living longer, many as they age grow increasingly sick and frail and are in need of some kind of assistance in order to continue living independently at home. 

In any discussion of the home care business, there are two questions that will need to be answered at the very onset: 

Should I open a medical (home healthcare) or non-medical personal home care business?   A medical home care agency (also known as home healthcare), which is typically reimbursed by Medicare or Medicaid, provides skilled care.  On its behalf, home health aides, nurses, rehabilitation therapists and social workers perform such services in the home as changing wound dressings, dispensing medication, giving injections and providing rehabilitation treatments. In most cases, it can take several years for a medical home care agency to earn the necessary licensing and certification.  Meanwhile, a non-medical personal home care business provides services for individuals who don’t require as much care – although this can include those who have had minor strokes, undergone surgery and other treatments, or have mild dementia.  Services include helping with washing, grooming, mobility, dressing and feeding; transportation to medical appointments; light housekeeping; medication reminders; and companionship.  Reimbursement is generally through private pay.  In most cases, the licensing for a non-medical home care agency generally occurs quickly and, unlike with a medical home care agency, there is little state oversight. In some cases, non-medical personal home care agencies later get a license for medical care as well.

Do I join a national membership organization or buy a franchise?  Individuals looking to open a home care business may also choose to start from scratch or buy an existing one.  The problem with the former is that, like a young child entering the woods all alone, it can be very scary to traverse new territory without someone to lead you by the hand.  For the latter, unless the situation is nearly perfect – the company has a good reputation, the seller agrees to stay with the organization until the buyer learns the ropes, the cost of the purchase is manageable – it can end up the same way many feel after they’ve bought a used car:  they’ve overpaid to take over the past owner’s headaches.  That’s why many end up deciding between a home care business (membership) organization and a home care business franchise.  With a membership organization, the new owner learns the business (usually by participating in training sessions offered in person or online).  New members are taught how to recruit and train caregivers, market themselves to different audiences, and price their services accordingly; are introduced to the most cost effective scheduling programs and insurance carriers; and get walked through the licensing process.  They remain independent and can eventually choose to stay with the “mothership” by paying a small monthly fee for ongoing support, or opt to go off on their own.  Meanwhile, the price tag for joining a franchise can be double or triple the amount.  The training is commensurate.  Unlike with a membership organization, a home care franchisee must maintain its relationship with the franchisor, must comply with its rules, and must pay steep royalty fees.  Although the franchisor provides branding and name equity, the truth of the matter is that there are no Burger Kings or Jiffy Lubes in the personal home care business.