Start an Elderly Home Care Business: Requirements & More

The demand for medical and personal care is growing year after year. Learn how to start an elderly home care business to cater to that growth today!

There’s an increasing need for medical and personal care every year.

This is because of aging baby boomers (and other older adults) as well as a long life expectancy.

These factors present an excellent opportunity for anyone looking to enter the healthcare industry — particularly the home health care sector.

If this is something that appeals to you, we’ll tell you all about how to start your own home health care business.

What Is a Home Health Care Business?

A home health care business, also known as a home health care agency, hires home care providers to give in-home care to the elderly. 

These providers can range from medical professionals to non-skilled providers.

This kind of business can offer simple day-to-day assistance.

It can also be a medical service, which is especially great for seniors recently discharged from the hospital. But it’s also good if their health simply needs closer monitoring.

Overall, this kind of business helps senior citizens age in peace.

The Services Home Health Care Businesses Can Offer to Senior Citizens

You can offer many different kinds of home health care services for fair pricing like:

  • Personal care – This involves helping the elderly with daily living activities. Professional caregivers can help prepare meals, bathe, or dress their clients. It can also be limited assistance, such as giving medication reminders.
  • Health care – Trained professionals (like certified nursing assistants and occupational therapists) will provide at-home services like therapy or other checkups.
  • Transportation – The elderly might have trouble driving themselves, or they have difficulty with public transit. You can offer them transportation services, such as going back and forth to doctors’ appointments.
  • Household maintenance – You can help seniors stay on top of household chores — like gardening, doing laundry, and grocery shopping. Household maintenance can also involve financial and health care management.
  • Home modifications – Mobility tends to become harder the older we get. As such, you can offer home modification services to help the elderly move around their house safer. For instance, you can suggest adding grab bars or anti-slip mats in the shower.
  • Day programs – Day programs are mostly social in nature. This keeps seniors cognitively engaged by letting them interact with other senior citizens or caregivers. You can also add activities like playing cards and board games to these day programs.
  • 24-hour home health care – Two caregivers will work 12-hour shifts to ensure that a senior is safe and has all their basic needs met around the clock.

Home Care Business Requirements

A home healthcare agency license certification is the first thing you’ll need before you can run your business.

However, the processes and additional requirements differ per state. But in general, you’ll need to:

  • Take a specific training course
  • Get certified for CPR/AED

For some states, like Alabama and Arkansas, you don’t need anything else. But some states require more caregiver training hours and licensing.

In Connecticut, for instance, you’ll also need personal care licensing and an 8-hour course recommended by the Professional Association of Caregivers.

You can check the exact licensing and training requirements of your state here.

How to Start a Home Care Business for the Elderly in 9 Steps

Home care facility

Here are the steps that will lead to building a successful home healthcare agency:

Step 1: Start Drafting a Formal Business Plan

You don’t need to write down your whole business plan in one sitting.

But the most important things you need to figure out first at this point are:

  • Business name – The name will be the first thing people see (and should remember) about your company. So try to make it catchy while making it obviously connected to your business.
  • Company description – This part sums up what your home healthcare agency does. It also shows what makes your company unique. Some things to include are the company’s goals, target customers, and mission & vision statement.
  • Business ownership structure – This will determine many things — from how much tax you pay to any personal obligations you might assume.

Step 2: Get Your Employer ID Number

As the name suggests, the employer identification number (EIN) is used to identify business entities operating in the U.S.

You can get this nine-digit number from the Internal Revenue Service (IRS).

The EIN is also known as:

  • Federal Employer Identification Number (FEIN)
  • Federal Tax Identification Number

Step 3: Register With Your State

To formalize your business entity, you should register with the Secretary of State.

Your location and business structure determine how you should register your business.

Normally, this can be as quick as filing your company name with the local and state governments. This is especially the case with a small business or sole proprietorship.

But for an LLC, corporation, or partnership, you’ll need other things:

  • Registered agent – This person will hold official papers and other legal documents sent to your company. Agency owners can choose to be their own agent.
  • Certificate of Authority – If your home health care agency expands to other states, you’ll need to file for this certificate in that state. Some states may also require a Certificate of Good Standing from where your business originated.
  • State documents and fees – The total cost for registering a business is usually less than $300. But it still depends on the state and structure of your company.

Once you’ve registered your agency, you can now open a business checking account and credit card account.

Step 4: Make a Solid Financial Plan

This is another crucial part of your business plan. After all, it’s what will keep your business operations going.

Things to include here are:

  • Cash flow forecast
  • Balance sheet snapshot
  • Break-even point analysis

A balance sheet snapshot is especially important here since it shows the company’s financial position at a certain point in time.

You can quickly determine if your assets are equal to your liabilities and any shareholders’ equities.

Related to having a financial plan is getting good funding. Opening a business bank account makes it easier to track and manage your finances.

There are many ways you can fund your business:

  • Traditional bank loans
  • Angel investors
  • Venture capital firms
  • Government grants and subsidies

Failing to secure funding means your working capital can be in danger. That can make it difficult for your now-small business to take off and expand.

Step 5: Have Adequate Business Insurance

Business insurance will cover any costs connected to property damage and liability claims.

Not having insurance means a business owner will pay out-of-pocket for any damages or legal claims against their company.

The kinds of insurance you should consider are:

  • Professional liability insurance – This is also known as the “errors and omissions” insurance. It will protect your agency from claims of incompetence and malpractice. This would make professional liability insurance the most important insurance to have.
  • General liability insurance – This will protect you against claims that involve bodily and property damage (concerning third parties) due to your service. General liability insurance can also cover medical payments for injuries that a non-employee sustains on your premises.
  • Cybersecurity insurance – A first-party coverage will answer for your company’s financial losses following a data breach or cyber event. Meanwhile, third-party coverage will protect you against claims made by others affected by the event. For instance, that can cover lawsuit expenses or HIPAA penalties due to a client’s accidentally-exposed Personal Identifiable Information (PII).

Step 6: Create a Sales and Marketing Plan

This is another essential part of your business plan. If you’re not sure you can make (and execute) a good marketing plan alone, you can enlist the help of a marketing agency.

The market segments or target audience of your marketing plan should include:

  • The baby boomers and other older adults themselves
  • Their adult children
  • Relatives of the seniors

Build a Website

Having a website is a quick way to be visible online.

You can build just a basic website at first to tell the world that your company exists. Make sure it’s easy to read and fits any device screen.

Put your agency’s name and basic information out there. This can include your company description, mission, and vision to give potential clients a good idea of your home health care agency.

You can always come back later on to improve how your website looks.

Try to create a blog on your site too.

You can also eventually publish reviews to give others social proof that you’re running a trustworthy agency.

Be on Social Media

Social media is another great way to establish your online presence.

You can share the articles on your blog or create bite-sized content that your target audience can interact with.

Run Ads

One way to run ads is through Google Ads. You’ll need to bid on keywords, but if you win, you get immediate visibility for that keyword.

For instance, your business can show at the top of the page if someone searches “home health care agency in [your location].”

You can also run ads in local newspapers, TV, and radio stations.


You can get clients through a referral system — and this is especially helpful if you’re just starting out.

Connect with healthcare facilities and professionals such as:

  • Long-term care facilities
  • Hospital discharge social workers
  • Rehab outpatient centers
  • Senior centers
  • Local physicians

Ask them if they can refer patients to your home health care business.

You can also ask if you can leave leaflets or other advertising materials in their offices.

If your first wave of clients is pleased, they can refer other people who need your service.

Step 7: Write Your Company’s Policies and Procedures

Policies and procedures will ensure smooth office operations. They also help you assess risk and perform compliance-related work.

Some things to cover in your policies and procedures are:

  • Hiring practices
  • Orientation and training
  • Employee and payroll records
  • New client admissions
  • Client billing
  • Client rights and responsibilities

Step 8: Hire Great Founding Staff

The home healthcare business is all about creating personalized care services. As such, you should find staff that perfectly represents your company’s vision.

The most commonly-employed healthcare professionals are certified nursing assistants and home health aides.

You can also enlist the help of other medical professionals like doctors, therapists, and medical social workers.

Together with hiring, you should also develop a good retention plan to keep your employees motivated to stay with you.

Step 9: Meet Compliance Requirements

When your new business eventually gets up and running, you should still continuously meet compliance requirements.

Part of this means your employees should undergo annual education in topics such as cultural diversity and emergency/disaster training.

For an idea of what to audit in your home health care agency, take a look at this checklist.

But remember that the checklist will NOT guarantee that you’ll get a successful accreditation decision. It’s only to give you a gist of some laws and regulations you should follow.

To ensure your healthcare agency is on the right path, check what your local laws require.

Why Should You Start a Home Healthcare Business?

Why Should You Start a Home Healthcare Business

Home health care agencies are big in the healthcare market. In fact, they actually make up the fastest-growing healthcare industries.

In 2019 alone, around 1.4 million people worked in the home healthcare industry.

This demand is pushed by aging baby boomers — which comprise around 25% of the U.S. population.

A longer life expectancy and record low birth rates also contribute to an aging population.

In-home care service is also a more attractive option to people compared to assisted living facilities. After all, it allows them to maintain some independence or age in place.

Already, 12 million people have been receiving in-home care compared to living in other care facilities like nursing homes since the COVID-19 pandemic hit.

How Profitable Is a Home Care Business?

A home health care agency is very profitable.

How much you earn in a year will depend on:

  • How much you charge for your services 
  • What services you offer
  • How many clients you have 

But the national average hourly cost for at-home non-medical care is $27 per client.

Your expenses might go up if you expand the business, but that also means more profit — for you and all your employees.

Frequently Asked Questions

We’ll cover a few related questions to home health care businesses:

What’s the Difference Between a Caregiver and Home Care?

Home care is the service that caregivers give.

Home care services are all about making sure the elderly are safe and comfortable in their own homes.

Professional caregivers can prepare meals, help seniors stay on top of bills, and offer transportation, among other things.

What’s the Difference Between a Medical and Non-Medical Home Care Business?

Medical home care and a home health business are the same. This business is more concerned about the elderly’s health.

Services here are provided by medical professionals and can range from monitoring blood pressure to checking the senior’s mental state.

Meanwhile, non-medical home care can simply be called home care.

Services are provided by non-medical professionals and are centered around day-to-day assistance. These include anything from helping the senior get changed to scheduling doctors’ appointments.

Together, medical and non-medical home care can collectively be called home health care.

How Much Does It Cost to Start a Private Home Care Business?

Starting a home health care agency can cost anywhere from $40,000 to $350,000, depending on your services and certifications.

When planning your startup costs, you should take into consideration the following:

  • Accreditation and certification – Accreditation and certification fees differ per state and ownership structure. Accreditation, in particular, can be tedious because of the criteria you need to hit. These include services, types of patients, and operations.
  • Equipment – This can be more expensive for a home health care agency since you’ll need to invest in specialized medical equipment too. Aside from equipment, it would be best if you also have good software to streamline processes. You may need technical support for this part too.
  • Commercial office space – You should also find a good place as your base of operations. Other business owners might try to use their homes as an office, but this might not be the wisest decision — especially if you need to store equipment.

If you’re a first-time business owner, you’ll be relieved that non-medical home care agencies are relatively inexpensive to start.

You can expect to spend $40,000 to $80,000 depending on how big your operation is and what services you’re offering.

For a medical home care agency, not being Medicare-certified means you might spend $60,000 to $100,000.

But if you are Medicare-certified (which is more common), you can shell out $150,000 to $350,000.

Do I Need Medicare and Medicaid Certifications?

It’s NOT required, but most agency owners prefer to get these certifications.

Getting certified basically means you can bill Medicare and Medicaid for reimbursements. Having these certifications also assures your clients that your business meets the minimum health and safety standards.

However, the process can take as much as a year.

The Center for Medicare & Medicaid Services has an enrollment guide you can follow. Some states also require the business owner to pass a jurisprudence exam.


The home health care business is a profitable industry that continues to grow as life expectancy increases.

Starting your own agency might sound overwhelming, but having a good business plan helps you solidify your vision and put you on the right path.

Licensing and accreditation might take a long time too. However, when you have them, potential clients can see your company as a trustworthy one that passes standards.