Opportunities to start a home health care business are more abundant than ever before and is one of the largest growing industries. This is mainly due to the increase in elderly population as well as the baby boomer generation. It is expected by 2020 that nearly seven million people in the US will be over the age of 85. These individuals are preferring to be cared for in the comfort of their own homes. But to do so, many will need help with the daily tasks of living. This is where home health care businesses come to the rescue.
Home Care Related Businesses include:
• Non-Medical Home Care Agency
• Home Health Care
• Home Hospice Agency
• Non-Medical Transportation
• Geriatric care management
• Senior relocation services
No matter which of these entrepreneurial ventures you’re interested in, you can be sure that as baby boomers continue to age, the demand for home health care services will continue to rise.
Here are 10 Steps to set up a Home Health Care Business:
Step 1: Choose a Business Structure
Your home health care business can be a sole proprietorship, a partnership, a limited liability company (LLC) or a corporation. The business entity you chose will impact many factors from your business name, to your liability, to how you file your taxes. You may choose an initial business structure, and then reevaluate and change your structure as your business grows and needs change. Depending on the complexity of your business, it may be worth investing in a consultation from an attorney or an accountant to ensure you are making the right structure choice for your business.
Step 2: Draft and Sign Your Operating Agreement
An operating agreement set out the rules and procedures that will govern the company and its owners. If your business has just one owner, your operating agreement can be short. If it has multiple owners, it likely will be longer and include issues like economic rights, voting rights, management rights, transfer restrictions and more.
Step 3: Register Your Home Health Care Business Name
This is the first step toward making it real. Your business name plays a role in almost every aspect of your business, so you want it to be a good one. Once you chosen a business name, get an Employer Identification Number (EIN) to identify your business. You will also need to get the proper business licenses and permits. There may be city, county or state regulations as well.
Step 4: Plan Your Finances
Starting a home health care business doesn’t have to require a lot of money nor you certainly don’t need to join a franchise to provide in-home care, but it will involve some initial investment. To provide this service, you’ll need to be bonded, if you’re transporting seniors in your vehicle, you’ll need liability insurance, as well as involving some initial working capital to cover ongoing expenses before you are turning a profit. There are a number of ways you can fund your home health care business: family and friends, grants, small business loans, angel investors and crowdfunding.
Step 5: Open a Bank Account
It is important that your business maintain its own bank account separate from your personal accounts to avoid issues with commingled assets. Banks will require your ID, a copy of your Article of Organization and, EIN letter in order to open an account. Some banks will require all or portions of your operating agreement.
Step 6: Choose Your Accounting System
Home health care businesses run most effectively when there are systems in place. One of the most important systems for a small business is an accounting system. Your accounting system is necessary in order to create and manage your budget, track your expenses and profits, conduct business with others and file your taxes. You can set up your accounting system yourself, or hire an accountant to take away some of the guesswork. If you set up your accounting system yourself, you should purchase a subscription to a cloud-based accounting platform such as QuickBooks, FreshBooks or Xero. They will make tracking income and expenses easier and will save you all kinds of headaches come tax season.
Step 7: Hire an Accountant
It is important to understanding the numbers involved to help make smart business decisions and have the expertise of moving your home health business forward. Warren Buffet said “Accounting is the language of business.” Using a software program is a great start to getting your records in order; however, an accountant with expertise in working with home health care businesses will help ensure you are taking advantage of every tax incentive and deduction, as well as keep you in compliance with the latest rules and regulations. You will also have the added assurance of knowing your taxes are prepared accurately and on time to avoid late filing penalties.
Without financial and tax planning, you increase the chances dramatically that you’ll run out of money far quicker than you ever thought. Working with an accountant year-round not only allows for a smoother and more accurate income tax return process, but also to help determine your timeline to profitability through careful budgeting and planning.
Step 8: Set Up Your Business Location
Setting up your place of business is important for the operation of a home health care business whether you will have a home office or private office space, or a brick and mortar location. Make sure your business location works for the type of home health services you will be doing. Although many business mistakes can be corrected later, a bad location is sometime impossible to repair.
Step 9: Get Your Team Ready
Build a staff of key employees. Make sure you take the time to outline the positions you need to fill, and the job responsibilities that are part of each position. Don’t be afraid to hire out the payroll work. Wage and hours laws can be confusing. You aren’t running a home health care business because you want to spend time tracking the employment laws affecting the company, but not following them can put you out of business. If needed, get help from a qualified advisor who can help you navigate these and other complex employment laws to avoid costly mistakes. This will help improve the overall health of the business’s short-term and long-term goals.
Step 10: Promote Your Home Health Care Business
Marketing is critical to your long-term business success and growth. You will want to start with creating a marketing plan and explore many marketing ideas as possible so you can decide how to promote your home care business. Create a plan focusing on strategies that work for home care businesses use as using social media, establishing professional relationships and attending health fairs. In addition to creating your own business materials such as a logo, and business cards.