How to Start an Elderly Care Business

Start an Elderly Care Business by following these 10 steps:

1. Plan your Elderly Care Business
2. Form your Elderly Care Business into a Legal Entity
3. Register your Elderly Care Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Elderly Care Business
6. Get the Necessary Permits & Licenses for your Elderly Care Business
7. Get Elderly Care Business Insurance
8. Define your Elderly Care Business Brand
9. Create your Elderly Care Business Website
10. Set up your Business Phone System

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.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

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.

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.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

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.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

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.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

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.

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.

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.