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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.    


5 Mistakes to Avoid When You Start a Home Care Business