Non-medical home care businesses are one of my favorite business plans to write and they are one of the best possible businesses you can start. Most importantly, these businesses require very little in regards to startup capital and unlike skilled care agencies, the amount of licensure and time it takes to set up these businesses is far less. In some states, no licensure is required to provide these types of services. Once you’re up and running, you’ll be able to very easily scale this type of business within any specific market. The demand for in-home care services is substantial. Interestingly, within the next 10 years more people will be over the age of 65 than under the age of 18. This is going to cause an enormous demand for in-home care services.
One of the other things I really like about this type of business is that the risk of failure is very low if you start the business properly. The types of non-medical home care businesses I’ve seen become the most successful typically just started with the owner directly providing services to the initial client. This allowed them to start to generate revenue, which is always extremely important from a growth perspective, as it allows for ongoing reinvestment into a greater amount of marketing. By starting on a smaller scale, they were able to effectively create a head start on their brand name which allows them to acquire additional clients through ongoing re-investment into marketing with a focus on search engine optimization as well as direct outreach. Starting small also allows you to substantially control the risks that are associated with getting a non-medical in home care business off the ground.
Again, my favorite thing about this type of business is that it is extremely scalable. As more people make inquiries for receiving in-home care service, you’ll be able to hire additional staff that can render services relatively quickly. In most states, no direct licensure is required by an individual to render non-medical home care services but most states do require basic licensure for the company. The scope of this service typically is limited to companionship, meal preparation, light housekeeping, incidental transportation, medication reminders, and other services that don’t fall within the purview of directly providing a medical service.
Within the United States, there are so many families that have an older individual or an individual that has disabilities simply need someone to provide ongoing care for them throughout the course of the day while they’re at work. These businesses, with a degree of hard work, can easily reach a million dollars a year in revenue. This is especially true if you’re in a highly dense population area that has a significant amount of wealth.
One of the absolute best things about this type of business is that the revenue from these businesses is highly recurring. This is extremely important from a few stand points. First, it leads to a substantial amount of economic stability for your business. Once a family and the individual select their in-home care provider, typically they will stay with that individual at that company for a significant amount of time. This is simply do the fact that this is a very much a face-to-face business and the caregiver and the client often develop a very strong bond. Second, this highly recurring revenue stream allows for ongoing expansion, not only through reinvestment, but also through opportunities of receiving additional capital. Banks, financial institutions, and even private investors love working with companies that produce recurring revenue. This is simply because it substantially reduces the amount of risk they have to take if they’re going to extend a business loan or a line of credit for growth.
To march your non-medical home care business towards $1 million revenue, the most important thing is to have a very highly defined and very targeted marketing plan. Given the level of competition these days among any type of service-based business, you’ll need to find ways that you’re going to be able to reach as many potential families as possible within your target market. As I mentioned earlier, direct outreach is a huge component of how these businesses become successful. You can develop ongoing relationships with social workers in your market, medical professionals that frequently deal with older people or people have disabilities and require ongoing care, as well as developing relationships with skilled care agencies that can provide ongoing referrals to you when their clients have either transitioned out of skilled care and now just need general assistance or just as a professional courtesy as you expand your operations.
For many entrepreneurs, one of the most challenging aspects of scaling. For a non-medical in home care business, the major challenge is recruitment. You’re going to need to find a number of people that have the appropriate temperament and disposition to work with someone that is older or has a disability to be able to be patient with them while provide the ongoing care that they need on an ongoing basis. This is much easier said than done. One of the ways you can effectively do this is by working with placement agencies that can vet and qualify candidates that are appropriate for this job. You can also conduct direct outreach with regional academic institutions, such as community colleges and universities among people that are expressing interest in getting into the non-medical home care industry. In some instances, you may be able to source students as well as recent graduates that are looking for work within this field. It should be noted that if you are going to work with an employment agency then this can be a pretty significant expense. They earn their money in two ways. First, if it’s a temp agency, they will receive a per hour fee for each hour that the person works. You won’t directly employ this person. They’ll be a direct employee of the agency and you’ll pay the agency who then pays them. While this is a very quick way of getting the staffing that you need. It is expensive and there is the potential that that person who’s been on boarded may then be shift into a different position. If you’re building a long-term client base this can be disruptive because the person that has been caring for one of your clients is no longer going to be available and that can lead to a bad experience. A really strong recruitment apparatus place is one of the absolute keys of having a great non-medical home care business.
I’m just going to go back to financing here for just a moment. This is primarily due to the fact that once you’re up and running you’re most likely will need some form of working capital to expand your operations. As these businesses don’t require much in regards to furniture, fixtures, and equipment – they do need a substantial amount of capital on hand to cover the operating costs. Additionally, as this is a fee for service business, you’ll also need to cover the accounts receivable as you render service and then receive payment on a biweekly basis. Most home care businesses typically receive their fees bi weekly. As such you’ll have to cover those underlying operating cost, including payroll. If you’ve hired anyone then you’re going to need to pay them a normal paycheck while you’re waiting for payment from your clients.
One of the ways that you can grow your business is through the acquisition of ongoing capital is to use a working capital line of credit that secured by your receivables. This can help fill in any gaps in regards to paychecks, under underlying expenses, as well as managing your taxes as you’re waiting for a client payment to come in. As I mentioned earlier, there are numerous programs available and banks love to provide this type of financing for non-medical care businesses simply because they’re profitable, their economically stable, and they’re in substantial demand.
Now we’re going to return to discussing what type of market works best for this type of business. Most importantly when you’re determining your market, you want to make sure that that there is a substantial number of people over the age of 65 and that the income of the market will fully support rendering your services. Non-medical home care businesses are not able to receive any type of funding from Medicare or Medicaid or private insurance. This is strictly a fee for service business, and the families were the individual that needs care are going to be paying you directly. For many families, this can be a pre-significant cost given that ongoing care can be quite expensive. Even if a family is making $100,000 a year, they may not be able to even afford the $30,000 to $50,000 a year for providing the ongoing care for their loved one. As such, it’s important to make sure that you’re going to be operating within a market that is incredibly large, has a significant number of people over the age of 65, and also has a significant number of people that have the wealth and the resources to pay for these services regardless of how the economy is doing. These businesses tend to thrive in areas where there is an immense population density given that there are a number of executives, business owners, physicians, dentists, CPAs, and attorneys that are able to afford this type of service for their loved one. Again, if you’re struggling with figuring out how to calculate these metrics, feel free to reach us anytime we can walk you through the entire process.
As much as these businesses are fantastic for scaling, this can be quite challenging. As I mentioned earlier things like recruitment, securing capital that you can make sure all your bills are paid, and engaging in a widespread marketing campaign. While relatively straightforward are still somewhat complicated in regards to execution. If you are a non-medical home care professional then you’re going to be making the transition from being someone who is more independent and working on their own into a full fledge business owner or an entrepreneur. For many people this is a challenge because now you’re no longer directly rendering services now your job is to run the business. You’re going to need to deal with matters related to human resources, the complexities of managing the tax filings, ensuring that all clients are happy so that they leave positive reviews, which will ultimately lead to higher business growth, and making sure that all of the liabilities that are faced are properly addressed.
Right off the bat, one thing I can say is that having a highly competent attorney will be very helpful for you as you progressed to this journey. They will be able to put together all of the appropriate documentation and intake forms that will showcase the scope your services to potential clients. They’ll also be able to address any licensure that may be required in your state to operate in a non-medical home care capacity, and they can assist you in the event that there is a conflict with a client that may ultimately result in some form of legal action being taken. Every great business always has a very good lawyer on speed dial.
Returning to marketing, this is often one of the most complex and challenging parts of establishing a very successful non-medical home care business. I know I touched on this briefly, but direct outreach with potential referral sources is usually one of the best ways that you can expand your operation. If you’re starting your business on your own and will be directly rendering services, then you can ask your client to provide referrals that you can work on scaling the business. Having a massive online presence is probably the quickest and most straightforward way as to how you can grow your business into $1 million company.
Foremost, having a well-developed website that clearly showcases your services, your pricing, and your contact information will allow people to very quickly find your business when they do online searches. One of the things that you can do in order to make sure that your site is very quickly found when relevant searches are done is to engage in what’s called search engine optimization. This involves creating a substantial amount of content specific for people that are seeking or types of services. It’s not just about writing about the capabilities of your business, as you can also create a number of articles that address matters that are relevant to people that have an older individual or an individual with disabilities that does require ongoing care. I’ve seen numerous clients become successful when they create list of tips or checklist that are relevant to the needs of a family that is that requires this type of care. You can also create articles that are more general in nature that just discusses in home care and what to look for in a service provider. By creating a website that operates as a trusted resource, that’ll go a long way in securing ongoing clients. This will also substantially contribute to your site being found far more quickly when searches are being done specific for your area and specific for non-medical in-home care.
Once your business gets a little bigger, you can work with a regional search engine optimization firm that can do this on your behalf. Essentially what they will do is create a lot of content for your website will also placing your website address on a number of other third-party websites. This naturally elevates your standing so that when someone does a search for let’s say a non-medical home care provider in Austin, Texas, the site will appear frequently within the search as an example. This is not a short-term strategy. This takes about 3 to 9 months to become fully effective.
Social media is also a really good way of creating brand name awareness as you can attract people who are on Facebook or any other platform looking for recommendations. This will also contribute to your search engine optimization campaign through what’s called social signaling. As your website address is more frequently passed around through a number of social media platforms, search engines will become aware of this and typically will place a higher weight on your web address when they’re ranking websites for any particular search.
As it relates to using targeted social media, this can be a little bit of a challenge because the people that are seeing these advertisements are not always looking for in-home care services. Often, you’re just targeting a wide spectrum or demographics that are specific for your market, but may not necessarily need to have someone provide care for a loved one. As your business expands, you may engage in this type of marketing just to increase brand visibility, but from a direct advertising standpoint, this is not always the best way to go about things. If you are looking for a way that you can directly reach people that are seeking your services within your target market, you could use pay click advertising. Everyone is aware of this when you do a search a whole bunch of sponsored results will show up. These companies have paid to be on that part of the search, and so when someone is searching for non-medical in-home care, the names companies and their web address will pop up once that search is made. You can engage in this type of marketing on a regional basis. It should be noted that this type of advertising can be somewhat expensive, especially for a business like non-medical home care given the level of competition.
Each time someone clicks on your site you may incur a fee of $5 to $10 which is why it’s so important to have a really good website because those expenses can add up very quickly. These days people will go on a website just for a matter of seconds take a quick look and then jump off to another website and you still incur that full cost.
One of the things you can do to make the engagement on your website higher is to have a number of videos where you introduce yourself, where you introduce your business, and discuss exactly the scope of services that your business provides. One of the things I have found that is incredibly effective is to immediately showcase your pricing. This often leads to a much higher degree of engagement because people are now aware of what you charge and it’ll be more interested in seeing the scope of services provided. Beyond this type of online marketing you can also use print advertisement, especially in regional journals and magazines that are specific for the demographics that you’re targeting. One of the nice things especially for a non-medical home care business is that older people typically will still read a number of magazines and journals so this is an incredibly effective way of bringing attention of your business to potential clients.
You can work with a local or regional advertising firm to place these ads on your behalf as this is usually far more time effective and really doesn’t cost anything more than if you were to directly contact the magazine or the publication for printing an ad. Those are just a couple of the ways that a non-medical in-home care business can become very well known within any local market.
Finally, we come to acquisition. Once businesses get to a certain size some entrepreneurs decide that they are done, and they simply want to cash out the equity that they’ve built over a significant amount of time for developing a strong brand-name, creating a large client base, or are they simply ready to retire. There are numerous opportunities out there for you to acquire an existing non-medical in-home care business. If you take a look at bizbuysell.com, you can see a number of these businesses that are available for immediate purchase. Additionally, if you are starting your own non-medical home care business you can easily acquire an existing company and then merge that into your business’ ecosystem.
Similar to receiving a working capital line of credit once your business starts growing rapidly, most financial institutions are willing to provide a significant amount of capital support so that you can buy an existing business. Again, given the immense level of economic stability for these businesses– banks are always more than happy to lend usually around 80% of the total purchase price.