How to Start a Home Care Agency Step by Step

Danny Rosenthal
September 5, 2025

How to Start a Home Care Agency: Your Essential Checklist: Steps by Step

1. Plan Your Home Care Agency Startup

The first step in how to start a home care agency is developing a business plan. Your plan should clearly outline your target market, services, and how you will differentiate your agency from competitors. Whether you are focusing on non-medical home care, skilled nursing, or specialized care services, defining your services and understanding the home care market will be essential for success.

Tip: Consider focusing on specific services, such as elderly care or post-surgery recovery, to better meet market demands.

2. Understand Licensing and Compliance Requirements

One of the most crucial aspects of how to start a home care agency is navigating the complex web of licensing and regulations. Depending on your location and the services you provide, you may need to secure various licenses and certifications.

Federal and State Regulations: Ensure your agency complies with federal, state, and local laws.
Home Care License: Apply for a state-specific home care license to operate legally.
Medicare Certification: If you plan to offer skilled care services, you may need Medicare or Medicaid certification.

Solution to Licensing and Compliance:

To stay compliant, regularly review state regulations and keep detailed records of caregiver training and certification. Consider using compliance software to help track all required documents and schedules.

Read: Do Home Care Agencies Really Need a License? Requirements by State Explained

Check it out here!

Resource Workforce management

Do Home Care Agencies Really Need a License? Requirements by State Explained

When starting a home care agency, one of the first questions you'll likely ask is: Does my home care agency ...

3. Secure Startup Funding

Launching a home care agency requires a significant upfront investment. Costs can range from $40,000 for a small non-skilled agency to several hundred thousand dollars for a Medicare-certified agency.

Solution to How to Start a Home Care Agency Startup Funding:

SBA loans
Private investors
Grants for healthcare-related businesses

A well-prepared business plan will be crucial when seeking funding.

4. Hire and Train Staff

Hiring qualified caregivers is the backbone of any successful home care agency. However, this is often one of the most challenging tasks due to industry-wide staffing shortages and high turnover.

Solution to Hiring:

In how to start a home care agency by sure to use reliable background check services like TruDiligence to ensure you are hiring qualified, trustworthy staff. Additionally, create a positive work environment and provide competitive wages, benefits, and regular training to reduce turnover.

View the Entire What You Need To Know About Background Checks featuring Jerry Nielson, CEO of TruDiligence

5. Get the Right Insurance Coverage

Insurance is essential to protect your home care agency from potential risks and liabilities, such as accidents or lawsuits. The most common types of insurance for home care agencies include:

General Liability Insurance
Professional Liability Insurance
Workers’ Compensation Insurance

Solution for Insurance:

Partner with CareGuard Risk Partners , a specialist in how to start a home care agency insurance, to help protect your business. They will guide you through the process and ensure you have the right coverage.

View the entire Managing Risk & Insurance Insights Featuring Taylor George, Founder of CareGuard Risk Partners“

6. Implement Technology for Operations

To stay competitive and operate efficiently, you need robust systems for scheduling, payroll, billing, client intake, and caregiver management. Technology can simplify these processes, reduce errors, and improve communication.

Solution for Operational Systems:

Invest in an all-in-one home care platform like Enginehire to manage everything from scheduling to client communication. Features like branded mobile apps, electronic visit verifications (EVVs), and integrations with corporate care portals (e.g., Bright Horizons, MTI, A Place for Mom) make operations seamless.

7. Set Competitive Rates

Pricing your services correctly is crucial for how to start a home care agency, profitability and growth. You must balance being competitive with maintaining healthy margins.

Solution for Setting Rates:

It is easier than ever to use resources like ChatGPT or Perplexity to research local home care rates and consider the services you offer, overhead costs, and wages. Don’t undervalue your services, but be sure to stay competitive within your market.

8. Market Your Home Care Agency

In a crowded home care market, standing out is essential. Develop a strong unique value proposition (UVP) that highlights what makes your agency different from the competition.

Solution for Marketing:

Build a professional website and optimize it for search engines (SEO).
Use social media to increase your visibility and engage with potential clients.
Leverage referrals by building relationships with local healthcare providers, hospitals, and senior living facilities.

Check out Mastering Your Digital Presence: How to Drive Sales, Referrals, and Caregiver

Featuring Nick Bonitatibus, Owner & Founder of Digital Champions

Recruitment

9. Provide Exceptional Care and Client Satisfaction

The key to client retention and growth is delivering exceptional care. Be responsive to client needs, maintain open communication, and ensure your caregivers are providing quality service.

Solution for Client Satisfaction:

Implement regular feedback mechanisms, create a system for caregiver performance tracking, and develop a client loyalty program to maintain long-term relationships.

Ongoing Challenges in Running a Home Care Agency

While starting a home care agency is challenging, managing the day-to-day operations presents its own hurdles. Here are the biggest ongoing issues home care agencies face and solutions for overcoming them:

Staff Recruitment and Retention: Offer training programs, competitive wages, and career advancement opportunities. Consider implementing employee wellness programs to reduce burnout and improve job satisfaction.
Scheduling and Communication: Utilize a home care management platform like Enginehire to automate scheduling, track caregiver hours, and improve communication between caregivers, clients, and families.
Regulatory Compliance: Implement a compliance management system to track certifications, audits, and regulatory changes. Regularly update training programs to ensure your agency meets the latest industry standards.
Financial Management: Use accounting software to keep track of income and expenses. Create detailed financial forecasts and review your budget regularly to ensure financial stability.
Growth and Scalability: Automate processes and invest in scalable technology solutions like Enginehire to handle scheduling, billing, and caregiver management can be valuable in how to start your home care agency for expanding.

Leadership and Owner Wellbeing

Avoid Burnout. It’s Real.

Owner burnout is common, as many how to build a home care agency owners struggle to balance business operations with self-care. It’s important to delegate tasks and prioritize leadership development to sustain long-term success.

Solution for Owner Wellbeing:

Delegate operational tasks, hire experienced managers, and regularly check in with your own mental and physical health. Focus on personal growth and leadership development to keep your agency thriving.

How to Start a Home Care Agency Takeaway

Starting a home care agency involves addressing several challenges, from securing funding and complying with regulations to managing staff and delivering excellent care. However, with the right strategies, systems, and resources in place, you can overcome these challenges and build a thriving business.

By focusing on compliance, automation, competitive differentiation, and scalable growth, you will be well-positioned to build a successful home care agency that delivers exceptional service to families in need.

Technology plays a key role in streamlining operations. Platforms like Enginehire can help you automate scheduling, manage client relationships, and provide seamless caregiver management. With the right tools and a solid plan, how to build a home care agency can lead to both personal satisfaction and professional success.