Start an Elderly Care Business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your Elderly Care Business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an Elderly Care Business?
Some of the initial costs include real estate, state licensing, marketing collateral, and staffing. Additional medical equipment may be required, depending on the level of care the community is designed to provide. Furthermore, compliance with the Americans with Disabilities Act (ADA) is absolutely required.
What are the ongoing expenses for an Elderly Care Business?
The largest ongoing expenses will involve food for the residents and salaries for the staff. A large staff will be required in order to provide the around-the-clock care that is required for residents. In order to retain the best employees, competitive compensation is needed. Aside from these expenses, utilities, building maintenance, and any required licenses or certifications will also be ongoing costs.
Who is the target market?
The target market will include families of senior citizens and medical care providers. Families will know if/when it is time to put their elderly family member in a care home. Medical care providers can provide options to family members when it becomes obvious that an elderly patient can no longer care for themselves.
How does an Elderly Care Business make money?
A retirement community makes money by filling rooms with senior citizens. Either the seniors themselves or their families will coordinate monthly or annual payments. Some payments may also be collected through insurance companies.
How much can you charge customers?
The monthly charge for staying at an elderly care home will depend on the level of care needed. A range from $1,200 to $3,000 per month is average. This price is all-inclusive, which means it covers medications, care, housing, food, bathing, 24/7 medical care, and other personal needs.
How much profit can an Elderly Care Business make?
At least half of the annual revenue will go toward food and staffing costs. Another 10% to 25% percent will go toward land, real estate, and recurring medical equipment costs. This means profit can be expected to be 25% to 40% of annual revenue.
How can you make your business more profitable?
This business becomes more profitable as long-term expenses are paid off. Medical equipment, land, and real estate that can be paid off faster allows the business to accrue more profit annually.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Elderly Care Business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market an Elderly Care Business
Printed materials, like leaflets, postcards, and flyers, will be crucial for marketing this business. This printed collateral can be mailed to senior citizens or left at medical care facilities. In addition, representatives from the elderly care home should visit medical care facilities in person and speak more about the services it can provide.
How to keep customers coming back
The best way to attract customers is to provide as much information as possible. Family members and care providers will want to see the facility before making a decision. In order to retain customers, all care needs must be met. Safety and health are of the utmost importance.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start An Elderly Care Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
This business is right for an individual who genuinely cares about seniors’ quality of life. Not every day will be filled with hearing old stories and reliving the glory days. There will be times that weigh heavy on the owner’s heart. Those who have a thick skin and genuinely care for others will excel as a retirement community business owner.
In elderly care, death is an inevitable part of the business. This is also a vital aspect that must be handled with care. Those who cannot handle death or grieving families may not be the best fit for this business.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at an Elderly Care Business?
A typical day involves waking seniors for breakfast and ensuring they take their morning medication. Morning to midday typically involves light activities to keep the body and brain active. When lunch rolls around, another round of medication may follow. At some point, visitors will come to visit their family at the facility. By the time dinner begins, rooms will have been cleaned, and laundry will be completed by community staff. After dinner, baths will be administered along with the final round of medication for the day.
There will come a time where a resident of the facility passes. When that comes, careful plans must be followed to ensure the wishes of the individual and their family are respected. Communication plans must be followed to notify the family.
What are some skills and experiences that will help you build a successful Elderly Care Business?
Experience caring for those who are older will be incredibly important. Whether it is from personal experience with grandparents or through experience working at a medical facility, it is important to have this knowledge. Additional skills include community organizing, communicating with family members about difficult subjects, and time management.
What is the growth potential for an Elderly Care Business?
The growth potential for a retirement community is currently high. The baby boomers are reaching an age where they no longer can care for themselves at home as well as they used to. Once the baby boomer generation passes, there will be a slight decrease in demand. Once the millennials begin to reach their elderly years, the growth potential will rise again.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting an Elderly Care Business?
Facilities can always be expanded to include more activities. However, the rooms and care facilities may not always have a time where they can be upgraded. Create the best housing and medical care areas possible at the beginning to avoid complicated remodeling projects in the future.
How and when to build a team
A team will be crucial from the very beginning. Nurses and doctors will need to be on-site to provide around-the-clock care. These individuals must be licensed and certified to provide care in the state. Speaking with medical schools and posting jobs online will help attract the right individuals for the team.