5 Mistakes to Avoid When You Start a Home Care Business You have to ask yourself a lot of questions before you start a home care business. How much money does it take to get up and running, and what are the monthly operating costs? What’s the market size and who are my competitors? Which services should I offer? Who should I hire and how should I hire them? The list of questions goes on and on, and the difference between success and failure can depend on getting the answers right. There is little margin for error, especially in this increasingly competitive industry. Most home care agencies don’t fail because of the quality of their services. They go out of business due to a variety of operational reasons, which inevitably lead to revenue and cash flow problems. In other words, they have satisfied customers but an unsatisfactory balance sheet. Home Care Startup Mistakes Before you start a home care business, make sure you put all the right pieces in place to give you the best chance to succeed. Here are five of the most common mistakes agencies make and how to avoid them. 1. Poor Preparation Creating and implementing a clear strategy is critical from day one, and it starts with understanding your market. You have to perform your due diligence to select the area you’ll serve, get to know the needs of your potential customers, and develop services to meet those needs. You also need to perform a competitive analysis to know what your competitors are up to and how you can differentiate your services from theirs. Then you can start creating your marketing plan to determine the best way to beat your competitors to your ideal customers.
2. Insufficient Capital Of course, preparing to start a home care business also includes setting aside enough capital. The last thing you want to do is hamstring your agency by launching it with insufficient funds. Generally speaking, home care agencies need at least $40,000 to $60,000 to get started. Non-‐ Medicare home health agencies require $60,000 to $80,000, and Medicare home health and hospice agencies need between $150,000 and $300,000. 3. Sloppy Operations Starting a home care business with disorganized and inefficient operations is a recipe for disaster. You’ll find yourself burning through startup cash much faster if you haven’t defined and setup the right internal systems. These include everything from the software you use to your procedures for new client intake. All operational areas need to be addressed in your policy and procedure manual so you can be ready for every challenge your business throws your way. 4. Hiring the Wrong People Ultimately, the quality of your staff will make or break your home care agency. Establishing— and following—strict hiring practices from the very beginning is paramount. Create well-‐ defined position profiles so you can screen out candidates who aren’t a perfect fit for office staff and caregivers in the field. Recruiting and hiring employees without thoroughly assessing their experience, skills, and passion for the work are mistakes agency owners usually end up regretting. 5. No Tracking System Putting your agency on a path to growth means carefully measuring your progress along the way. Develop dashboard metrics so you can accurately measure all of the factors that contribute to your agency’s performance. Careful tracking also enables you to change course quickly when you see a downturn in one area of your business. Trying to start a home care business without a plan is like trying to build a house without a foundation. No matter how much money you invest or how hard you try, it’s eventually going to fall down. Make sure you have the planning, people, and processes in place from day one to position your agency for success. Whether you need assistance creating your strategic plan or improving your existing operations, Kenyon HomeCare Consulting can help take your agency to the next level. Schedule an appointment at KenyonHCC.com with one of our home care consultants to see how.
Published on May 22, 2014
There are many things to consider before you start a home care business. Making the right decisions from day one can help you avoid these st...