A Guide to Starting a Home Healthcare Business

January 8, 2021 •

Home healthcare is a burgeoning industry in the US and around the world. As medicine, medical technology, preemptive care, and the entire healthcare industry progresses, the greatest net gain is that more people are able to live longer, healthier lives. This also means that, as populations increase, aging populations are larger than they have ever been. And, with larger aging populations comes a greater need for in-home care for seniors.

The point: there’s never been a better time to start a home healthcare business. In order to help you get started as a private home healthcare practitioner and set yourself up for long-term success, this guide will break down building a home healthcare business into a simple, four-step process:

  • Step 1: Plan out your business
  • Step 2: Get registered, licensed, and certified
  • Step 3: Protect your finances
  • Step 4: Grow your business with new potential clients

Let’s get started!

Step #1: Plan Out Your Business

Before you start a home healthcare business, it’s important to do your due diligence and integrate your findings into a detailed business plan. This means identifying your business type, the scale you want to grow to, the resources you’ll need, and the environment you’re going to be working in as a home care provider. From here, you can conduct market research on your competitors, position your business, and discern what niche you’re going to try and target first. For instance, consider:

Business type: What kind of healthcare services will you be offering? For most home healthcare professionals the major distinction is between medical and caregiving services:

  • Medical care services: this kind of home care involves skilled nursing and providing treatment for medical conditions like wounds or illnesses. It typically requires a state license. Those that want to work with Medicare and Medicaid patients will need certification with both entities (see below).
  • Caregiving services: also called “non-medical,” these therapeutic services are less formally structured, including homemaking and companionship. They contribute to the overall holistic health of those receiving care by meeting psychological and social needs.

Scope, scale: This has to do with the organization and size of your home health care business, as well as its independence. Consider these questions:

  • Who’s involved: are you going to be the only business owner or care provider, or are you looking to incorporate partners or employees?
  • Franchise or going solo: are you going to begin your own unique business or start up with a franchise?

Resources: What do you have available, and what will you need? For instance, take into account your access to:

    • Personnel: yourself and any workers you’ll need.
    • Materials: the tools of the trade—from care products (medicines) to household items (sanitation products), you need to make sure you have a steady supply as a home care business.
    • Space: even if your business is conducted mostly within clients’ homes, you need to ensure you have adequate space for business practices and storage, such as a dedicated workspace in your own home or a commercial office.
    • Transportation: you also need to have transportation to get to and from clients’ homes. A commercial vehicle may be needed.
    • Funding: finally, you need money to run your healthcare business. Usually this is some combination of personal funds, loans, and investments.

Environment: This includes many factors involving your geographical location, its population, and your competition. For instance, consider:

    • Geography: what is the makeup of your area? How many residences are there, how easy is transportation between them and other destinations you and your clients will need to access?
    • Population: what is the population like in your area? How large is your target market? Consider age, affluence, and proximity of clients’ family and friends.
    • Competition: what other home healthcare or similar services exist in your area?
    • Local laws: are there any laws or regulations at the county, city, or state level that might impact your business?
    • Change over time: is anything about your environment and its population likely to change significantly over the next 5, 10, or 20 years?

Creating a business plan allows you to plan for the future. Even if your plans don’t pan out to exactly what you’ve outlined, it’ll help you identify opportunity, set parameters around your budget, and begin operating with a solid foundation.

Step #2: Get Registered, Licensed, and Certified

If you’ve set up a thorough plan and built the initial infrastructure, Step #2 is straightforward. The main components of starting up any kind of business involve covering your bases (legally) at the federal, state, and local levels.

Basic Registration

It’s time to name your company and choose a business structure.

For your name, consider something accurate and professional, but also warm and welcoming. After all, you’re going to be taking care of people. You want your name to be as professional as it is inviting. The research into your target market from Step #1 will help immensely when picking a name for your home care service.

Additionally, when it comes to your business structure, things like your current and future funding, partners (or lack thereof), scope, and scale will determine your choice. Some common options for business structures include:

  • Sole proprietorship
  • Partnership
  • Limited Liability Company (LLC)
  • Corporation (C Corp, S Corp, Nonprofit, etc.)

If you’re going to be a small business, at least to start, an LLC or partnership might be best. These structures give you many of the corporate protections while remaining flexible and affordable. However, if you’re envisioning an enterprise company, it might be wise to start out as a corporation from the get-go. If you can, it’s always advised that you seek professional counsel when choosing your business structure.

Special Licensing and Certifications

What licensing you need to acquire as a private home healthcare business, if any, depends heavily on the kind(s) of private home healthcare your business is based upon. Starting a non-medical home healthcare business can involve fewer rules and regulations.

Requirements for medical licensing vary by state, as well as city and county. There may be an inspection associated with state licensure.

However, across the nation, if your private home healthcare business involves medical skilled labor, you’ll need certification in order to receive payment from Medicare and Medicaid insurance. This involves applying and filling out a survey through the Centers for Medicare & Medicaid Services (CMS).

This kind of certification is typically only necessary for medical services paid for by clients’ medical insurance. If your business is focused solely on services like homemaking, this might not be necessary.

Again, check your state and federal rules and regulations. Home healthcare business licensing varies from state to state.

Step #3: Set Up Your Business Finances

First and foremost, you’ll need to set up an Employer Identification Number (EIN). Doing so will enable you to file and pay taxes, as well as open up a business bank account. Every business owner should keep their business finances separate from their personal assets. Doing so has a few immediate benefits:

  • Adds professionalism to invoices and other business billing
  • Protects personal assets from business debts
  • Streamlines general accounting

This is especially true for a business as personal as home care service. While it may be tempting to purchase domestic items clients need along with your own personal goods, separating these expenses is the key to sound business practice. It safeguards your business, creates financial efficiencies, and protects your personal assets.

Speaking of safeguards, you’re going to need insurance.

Business Insurance

Once your basic finances are established, it’s time to make sure you’re protecting your and your business’ financial health with home health care insurance. While certain insurance policies are required to get off the ground, there are also other coverages that, whether legally required or not, are essential for protection and growth.

All across the US, there are two kinds of insurance coverages required for all businesses if they meet certain criteria, with differing policies and requirements across individual states.

These coverages are:

  • Workers’ compensation insurance (if you have employees)
  • Commercial auto insurance (if you have a company owned vehicle)

In addition, there are also coverages you’ll want to integrate, no matter where you’re located.

These include:

  • General liability insurance: This is protection from third-party claims of bodily injury, property damage, or personal injury, including medical and legal fees.
  • Professional liability insurance: This is protection in the event of a professional mishap (i.e. error or omission while providing care) that leads to a lawsuit.
  • Cyber liability insurance: With the growing telehealth definition, this is protection from the various risks that conducting your business online exposes you to, particularly as it pertains to the financial impact of security breaches, cyberattacks, and lost or stolen data.

NOW Insurance offers all three. Our Home Health Care insurance can bundle Professional and General Liability into one policy. We recommend all small businesses take our cyber risk assessment to gauge the financial impact of a cyberattack on your business, and then fill out the cyber application to add on cyber liability.

Step #4: Grow Your Business

Now it’s time to think about how to grow your business, acquire more clients, and scale at a healthy pace. This involves continued planning and preparation with a focus on strategies for efficiency and growth.

To begin with, you’ll want to regularly evaluate your business’ strengths, weaknesses, opportunities, and threats. This practice, sometimes called a SWOT analysis, is best done at regular intervals, such as every quarter, year, 5-year marker, etc.

In addition to this continuous planning, you’ll want to make sure you’re always looking for opportunities to:

  • Expand or diversify your offerings
  • Branch out into new locations
  • Build your online presence to attract new customers

Of course, these considerations are also helpful at start up. It all comes back to having a strong plan in place to set yourself up for success. Over time, you’ll be able to allocate funds towards marketing and expand the channels you use to promote your company.

With that said, it’s time to…

Start Your Home Healthcare Business Today!

Home is where the heart is. With your help, that heart is as healthy and comfortable as can be.

Now that you know what it takes to start a home healthcare business, you’re ready to get out there (and into homes) to provide care to those who need it most. After what you’ve just learned, you now know that starting a home healthcare business requires four simple steps:

  • Step #1: Planning
  • Step #2: Registering
  • Step #3: Protecting
  • Step #4: Growing

Now it’s time to get started. The sooner you establish a business plan, register your business, acquire the appropriate insurance, and allocate your resources, the sooner you’ll be able to care for the many clients that are currently dreaming of your services. The best part about your business?

Improving their quality of life means enriching your own.


Absher, C. Starting Your Own Home Care Business. https://www.carepathways.com/articles/starting-a-home-care-agency-business.cfm

PRN Funding. How to Start a Home Health Care Agency. https://www.prnfunding.com/start-home-health-care-agency

Touching Hearts. How to Start a Home Healthcare Business.