How to Make a Non-Medical Home Care Business Plan?

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The Non-medical Home Care market is expected to expand in North America, particularly in the US, with the baby boomers of the 1980s, entering the 60s and 70s of their lives.

While in 2018, the seniors in the US society (65 years and above) comprised 16 percent of the population, this figure is expected to rise to 22 percent of the population by 2050, or in just about 30 years.

That will be roughly 80 million people, which will constitute your target market for a non-medical home care business. Team Respect Caregivers brings to you, easy steps to make a non-medical home care business plan.

Non-Medical Home Care Business Plan

Non-medical home care businesses provide a variety of services – including but not limited to help with day to day household chores, personal hygiene and cleanliness, monitoring of timely medication and doctor-prescribed dietary requirements, mobility assistance, and a range of services aimed at improving the lifestyle of the elderly client.

Making a Non-Medical Home Care Business Plan

While it is one of the businesses in which you will not have to immediately worry about the shrinking of your target market, expectedly this space will have a lot of competitors, vying for market share.

Therefore, to stay ahead of the competition, the first step is to create a detailed business plan, which will help you estimate the costs and plan for your finances.

What to Decide While Drawing Up a Business Plan?

Before firming up a business plan, you need to make a few decisions about your business – these are the catchment area of your business, foolproof and channel-diversified marketing, and advertising plan, and the scale of your business to start with as well as how you are planning to expand your business in future.

Market research will help you to identify the area which has a higher proportion of your target segment of customers – at the same time keep an eye open for the number of potential competitors that are operating in the same area and how they are doing.

Try to strike a balance between a good target market and a reasonable competitive landscape.

Also, to start with, we recommend you lay out a marketing plan which focuses on a smaller area and slowly widen the scope of the plan as you expand your business.

In the beginning, it is expected that your business will not generate much cash, hence, you would not want your marketing dollars to spread too thin and not be very effective.

It is always advisable in this kind of business (driven by reputation capital) to build a strong reputation within a local area, before venturing out of your stronghold.

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How Much Revenue Can You Expect per Customer?

Revenue per customer is a metric that closely reflects the health of your business – if your clients are paying you more on an average, either your service is high on customer satisfaction or your clients choose your business for more number of services or both.

It is important to set a target of revenue per customer before you start your business.

Making a Non-Medical Home Care Business Plan

The average revenue per customer for non-medical home health care businesses is somewhere between $2500 – $3500, depending on the responsibilities of the caregiver.

While you run your business, you must keep an eye on your revenue per customer metric and your aim should be to touch your target number as soon as possible.

Once you achieve your target number and a pre-determined number of customers, only then you should look to expand beyond your stronghold area.

Ways of Financing Your Business

Depending on your initial decisions and the initial scale of your business, it may take you anywhere between $ 75,000 to $ 200,000 to start your business. It may not be possible for you to cough up the entire amount yourself and you must look at debt sources.

In fact, your return on equity will improve drastically if you load your business with 50 – 60 percent debt, to start with. Typical funding sources will include bank loans and angel investors – however if you have access to friendly loans (funding from friends and family) it may be the cheapest source of funding for your business.

Franchise vs Non-Franchised Option

The benefit of going ahead with the franchise option of an already established brand is that there is a lot of brand equity, marketing, and training support. But, on the other hand, it will entail you a steep upfront franchise fee (that is almost 30 percent of total upfront cost).

Also, you need to pay a monthly/quarterly fee which is generally calculated as a percentage of your revenue. Even with these costs, oftentimes buying an existing franchise makes sense, because it will come with its ready base of customers and will generate a cash flow right from day 1.

Moreover, a lot of businesses may have been started about 30 years ago by the baby-boomer generation and the owners may be planning to sell it now and retire. Therefore, these business owners will be strongly motivated to sell, and you may have the opportunity to pick up an up-and-running business at reasonable valuations.

While you may have to pay an extra premium for the business because it is generating stable cash flows, but you save yourself the first few months of burning through cash and having to build your customer base from scratch which may be a difficult thing to do.

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What are the Costs Associated with a Non-Medical Home Care Business?

The costs associated with a non-medical home care business, or any business as such, can be categorized as one-time business set up costs (costs which you can capitalize and show as assets) and recurring business running expenses.

One Time Start-Up Costs

  • Business Incorporation & Licensing: First and foremost, before running any other costs (except for probably costs related to market research), you should be getting your company registered and apply for the relevant licenses for operating your business. The home care business deals with sensitive information of clients – therefore, take extra care to be fully compliant with the starting up requirements. These are fees paid to government departments and should be in the range of $500 – $1,000, depending on the state or province in which you are setting up your business.
  • Website & Company Logo: A website is absolutely essential nowadays, not only as a source of information about your company, but it will also help you take advantage of the digital marketing techniques that businesses have access to. The website should be as informative as possible, for the target segment, in this case, the elderly population. This will help you in establishing yourself as an expert in your area and will help you in creating trust among your target customers. The company logo should be closely aligned with the service your company provides and the vision of your company. While you can get a logo professionally designed at $500, a good and informative website may cost you anywhere between $8,000 – $15,000, including the content.
Making a Non-Medical Home Care Business Plan
  • Business Stationery, and Signage: Once you got the company logo developed, you can start printing company stationery, and signage. These will include business cards, marketing materials like brochures and pamphlets, and signage or standees to be put outside your office.
  • Lumpsum Payments on Rental & Vehicle Lease: When you are leasing an office space for your business, it is common to have to pay the first 6 months’ lease at one go – this amount can be capitalized and amortized over time. The same goes for a vehicle lease – you may want to pay down a fraction of the cost to reduce your biweekly lease payments. However, initially, while you will require a vehicle for emergency purposes, starting off from your home office is not uncommon and saves you significant upfront investment in your business which may be better utilized in marketing or staffing activities.
  • Software: Software like ClearCare or AxisCare are web-based or cloud-based applications that help you organize the activities of running the business – like tracking your leads, sending emails to leads, tracking conversion, scheduling new jobs and employees, invoicing clients, and collecting payments. While in the initial stages you may be able to manage your business on an excel sheet, it is better to start using the software as early as possible as it will reduce repetitive work, save you time, and are quite the value for money.
  • Franchise Fee, if Applicable: Franchise fee is most likely to be the largest cost item among the one-time upfront costs. If you are following the franchise model, be prepared to provide for a large one-time payment equal to roughly 30 percent of your total upfront cost. All major home care brands will have a franchise page on their website – where you can find the cost of the franchise and the benefits that you will receive. Some brands allow for deferred payments for the franchise fee – you may want to decide the payment mode depending on the state of your finances.

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Ongoing Recurring Costs

  • Staff Payroll: This should be, by far, the largest proportion of your business running cost – in fact, in this business the raw material is technically your staff. Ideally, payroll should comprise 50 – 60 percent of your entire business running costs. Fortunately, staff costs should be rangebound in your area. We recommend you hire staff at the higher end of the range which will help you attract good talent. It is particularly important in this industry as your staff will be the ambassadors for your business and will help you create reputation capital over time. Hiring mistakes may cost you dearer than any other business. Moreover, you will do well to keep only a small portion of your staff on the permanent payroll, the rest of your staff should be hired on contract so that you are able to closely match your staff strength with your business volumes. It is also advisable to have some bench strength, which will add on to your costs but will keep you prepared in times of more demand.
  • Rental Expenses: This is the cost of your office space; However, as mentioned earlier, it is best to avoid this cost for as long as possible, at least till the time your business stabilizes or starts generating steady cash flows.
  • Marketing and Business Promotion Expenses: Depending on your marketing plan, you may use a combination of local physical marketing and digital marketing. However, to start with, we recommend you use local marketing more as most of your customer leads should be generated locally. Over time, you will understand which marketing campaigns and channels are being more effective and it will help you rebalance your marketing budget across channels.
Making a Non Medical Home Care Business Plan 3
  • Insurance: You must take a professional liability cover and a general liability cover in the name of your company for covering against the risks arising out of the crystallization of heavy claims and financial liabilities. There are multiple websites that can help you in estimating your insurance premia, depending on the assets covered, liability amount, and co-pay amounts. The premia for these covers are generally paid once a year and is a recurring cost that ensures your peace of mind.
  • Interest on Loan: The interest rate charged for any debt that you take on may range anywhere between 5 percent to 12 percent. You should avoid taking loans which are even more expensive. Bear in mind that this is like a fixed cost and you will keep on incurring this cost irrespective of your business volumes, till the time you pay off the debt.
  • Utilities: Utilities include the cost of communication (cold calling from a landline in your office for the purpose of lead generation), electricity, internet, heating & water charges. Though individually small numbers, these can add up annually to derail your return calculations, if not accounted for in your business plan.
  • Franchise Fee, if Applicable: Businesses which start as franchisees of an already existing band have to pay a royalty to the umbrella brand at specific intervals. The extent of the franchise fee really depends on the brand, however, in most cases it is a percentage of sales. Businesses bear this cost as being a franchisee of a known brand reduces your own marketing spend – since the brand equity automatically generates some customers for you. Also, you may receive regular training for your staff and other benefits aimed at standardizing the brand’s services, in lieu of the franchise fee.
  • Legal & Accounting Services: To be able to concentrate on your business, you must quickly offload two aspects of running your company to professionals with better knowledge – legal documentation and accounting services. Costs related to these services may be sporadic – accounting will be an annual or quarterly cost to be borne by you in lieu of tax filing services and preparation of company statements.
  • Taxes: These are payments to be made to the government and heavily depends on the state or province of business operations. In the event that your business is running a loss in the first year, do not forget to check whether you can carry the losses for tax adjustment in the second year. Moreover, to make your business projections more accurate, make sure to take advantage of any depreciation or amortization benefits, depending on your capitalized costs of initial investments. The actual filing of the taxes is best left to the accountant that you would have hired.
  • Miscellaneous Costs: Irrespective of how accurately you try to project the financials of the company when you actually run it, you are bound to incur miscellaneous expenses or out-of-pocket expenses. Examples of such expenses will be website maintenance costs, vehicle repair costs, office heating system repair costs, and so on. You really cannot project these costs and they loosely depend on the scale of your business. Typically, assuming cumulative miscellaneous costs of 2 percent of the annual revenue should serve your purpose.

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Conduct Breakeven Analysis and Payback Period

Once you have firmed up your business plan and have arrived at the projected earnings, it is time for the final part – the real stuff which any investor would want to see for the business – the breakeven analysis.

Breakeven analysis refers to the point in time by when you have recovered your initial investment, adjusted for the time value of money.

The longer the time taken to recover the initial amount, the more you need to recover to match that initial investment as time tends to devalue the currency.

For example, if you had invested $100,000 in your business (including debt), to start with, you would roughly need to have net earnings of $55,000 for 2 consecutive years to get back your money adjusted for the cost of the time value of money of around 5 percent per annum.

In this case, your payback period is 2 years.


Finally, it is often the case that you start deviating from your business plan projections as you start running your business. You may question the utility of creating a business plan in the first place.

However, having a business plan will make you better prepared to deal with unforeseen circumstances that crop up during business operations.

Therefore, even when you are some months into your business, do not forget to alter and adjust the plan and the projections as per your expectations – which will be different, now that you have some experience under your belt.