Home-care investors are on the side of the angels. They care for seniors, provide comfort and love and help them age with dignity.
This is an investment with eternal value. But aside from altruism, there is good money in it.
Home care brands are raking in millions. The industry is hot right now as the greying population grows at unprecedented rates. Given that over 40 % of seniors prefer to age in place, the demand for home care agencies is higher than the supply.
What is the Difference between Medical & Non-Medical Home Care?
Non-medical home care ensures independence, comfort, and happiness with services that range from housekeeping and meal preparation and personal cleaning. Medical home care revolves around nursing services, including wound care, injections, prescription management, and catheter management, to mention a few.
The Home-care Sector Needs You, and This is Why You Should Make a Move
Lower investment costs: If you are going to open a fast-food franchise, you might have to spend $500,000. If you are going to invest in a senior care business, franchises cost $150,000 or less to join. Unlike companies with high capital requirements, in-home care business costs are limited to hiring and training staff and marketing.
Higher revenues: Low investments coupled up with higher revenues are driving higher investor interest in-home care. Data by Home Care Pulse shows that the median franchise home-health revenue is $2 million.
Growing demand: The population of seniors aged over 60 is set to double by 2050. The opportunity is not just local in the US but internationally since the rest of the world is aging too. There are plenty of opportunities for growth in this sector.
The Most Critical Challenges in Home Care Business
Attracting and retaining staff: Over the past few years, the caregiver attrition rate has skyrocketed, with higher competitor salaries turning workers into Pavlovian dogs. 13 million new home care workers will be in demand by 2024.
Industry liability: The industry is yet to institute standardized requirements and methods for measuring and reporting the quality of home-based care. From environmental hazards to poor caregiver communications, agencies occasionally find themselves shouldering costly liabilities.
Competition: The pervasive growth of the home care market means that entrepreneurs must implement value-based and cost-effective strategies to stay ahead. Before investing the first penny, you should know and understand these three things: your customer, your competitor, and your company’s key differentiators.
Management challenges: An inefficiently run business will torpedo all your chances of success. A flawed business plan is one of the reasons a good number of home care agencies fail. Inefficiencies result from poor human capital management, aggressive projections, and overinvestment.
5 Essential Tips When Opening a Home Care Business
1. Invest in research
Before you start planning all the aspects of your home care business, adequate research should be conducted. You must study the market and evaluate your competition in various locations. You should analyze critical data on the needs of the communities you want to serve and simulate different scenarios to inform risk management and revenue generation strategies.
2. Create a comprehensive business plan
Map out the path your home care business will take from the start to total growth. The right plan should project where you want to take the company in three to five years and outline the steps and resources needed to get there. Time is another essential factor to plan for. For instance, licensure and accreditation may take up to a year or so. Implement a plan that enables sustainable growth through such low revenue periods.
3. Track costs and grow revenue
8 out of 10 new businesses fail before their second birthday, and overhead costs are to blame. Before you start your home care business, ensure that you understand costs. The price for joining a home care franchise is lower than for creating a new non-medical home care company. Do the math and find what works for you.
By amplifying revenue generation, costs may become a terrific boon –expansion and growth. Your two fail-proof solutions to increasing revenue include getting more clients and retaining them longer.
4. Focus on quality
Track the quality of care. As mentioned before, industry liability is one of the critical challenges businesses face in this sector. Track the quality of care that your caregiver provides and keep a pulse on your client’s needs. Communication is vital, and technology is your best friend. Forward-thinking solutions like Sensi can help you monitor the quality of care in real-time to meet client’s needs and prevent liability claims.
5. Focus on caregiver retention
The success of a home care agency is only as good as its staff management strategies. The cost of losing a caregiver is about 16 % of their yearly salary. Your caregivers are your biggest asset – invest in them. Help your caregivers understand their jobs and your standards of quality.
Contribute to their positive growth through employee training and regular positive feedback—and they will be yours for life. Cutting-edge solutions like Sensi can help to improve your caregiver retention and support ongoing loyalty and retention.
There is boundless potential in the home care sector. Even so, you be aware of the challenges and tread cautiously. High quality of care and caregiver retention should be top of the agenda on your plan. Use our guide to get started.