Business Overview


Hospice, also known as palliative care, offers clients a safe and caring environment as they prepare to pass on. Terminal patients are kept comfortable, receiving round the clock medical attention. Family members are offered support and education as they prepare for the passing of a loved one.

Who is this business right for?

This business is best suited for individuals who are passionate about helping others and can offer compassion and understanding to their clients. Additionally, owning a palliative care facility requires a leader who is ready to face the challenges that come with running a multi-faceted facility, meeting the needs of employees spanning several departments.

What happens during a typical day at a hospice business?

Your day-to-day activities will vary, depending upon how large of a role you wish to take within the organization. Initially, many palliative care facility owners serve as the hospice administrator, which requires them to wear many hats. Their typical duties include:

  • Answering emails and phone calls from prospective clients/patients
  • Meeting with prospective clients/patients to identify their needs
  • Keeping up with local, state, regional, and national regulations to ensure the facility is in compliance
  • Identifying organizational policies that require updating and implement changes
  • Budget management
  • Maintaining relationships with vendors, medical professionals, and support staff
  • Fundraising
  • Education
  • Overseeing the recruitment, hiring, training, and supervision of workforce

As the business expands, you’ll want to employ team members to take over many of the above duties, as well as the day-to-day administrative duties you’ll initially be tasked with.

What is the target market?

Hospice care is reserved for terminally ill patients with a life expectancy of 6 months or less. If an individual lives beyond that timeframe, the medical director or physician must recertify that they are terminally ill.

How does a hospice business make money?

Both nonprofit and for-profit hospices receive funds from multiple sources. For many, charitable donations and grants comprise a great portion of their revenue. Additionally, they’re reimbursed by private insurance, Medicare, and Medicaid for each terminally ill patient they care for. Most facilities are reimbursed on a per diem basis, offering a set payment amount for each day the patient is enrolled in the program, regardless of services required. For patients who require around-the-clock home nursing care, hospice is reimbursed on an hourly basis.

What is the growth potential for a hospice business?

Due to changes in patient needs and preferences and an increasingly aging population, the hospice industry has grown to almost $19 billion over the last decade. It’s projected to grow another 7.4% annually through 2017. Through strong marketing campaigns and cost-saving initiatives, many hospice founders report aggressive growth, beginning their first year of business. Dedicated and innovative entrepreneurs have a unique opportunity to participate in a profession with virtually unlimited growth potential.

Getting Started


What are some skills and experiences that will help you build a successful hospice business?

While not required, experience in the healthcare industry would prove beneficial. If you’re lacking this experience, hire an administrator that can offer their expertise in operating a medical facility of this magnitude.

Given the sensitive nature of the business, it’s critical that one possess strong interpersonal skills. Aside from patients and family members, you must be able to effectively communicate with staff, pharmacists, healthcare professionals, religious clergy, and funeral directors. Additional skills that would prove beneficial are:

  • Critical thinking - Must be able to identify strengths and weaknesses in your business’ care programs.
  • Problem solving and decision-making, particularly under pressure
  • Time management
  • Organizational
  • Analytical
  • Networking
  • Leadership
  • Compassion and empathy

What are the costs involved in opening a hospice business?

Your start-up costs will vary depending upon the type of hospice care you with to provide and which state your business is located in. If your business plan includes opening a licensed home health non-Medicare facility, start-up costs are an estimated $60,000 to $100,000, while Medicare-certified hospice agencies should budget for $150,000 to $350,000.

Investments include:

  • Licensing for faculty and staff
  • Computer hardware and software
  • Commercial space for office and/or medical facility
  • Accreditation
  • Website, logo, business cards and other printable material
  • Marketing strategy and materials
  • Insurance
  • Inventory

Due to strict regulations, many looking to enter the hospice industry choose to invest in consulting services or a franchise. While this requires additional start-up capital, entrepreneurs receive guidance throughout the process. Profits are maximized, as time and resources are properly allocated from the moment the facility’s doors are opened.

What are the steps to start a hospice business?

Once you're ready to start your hospice business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:

  1. Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
  2. Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your hospice business is sued.
  3. Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
  4. Open a business bank account. A dedicated checking account for your hospice business keeps your finances organized and makes your business appear more professional to your customers.
  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.
  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.
  7. Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
  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.
  9. Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Select your state below for an in-depth guide on completing each of these steps in your home state.

Where can I 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.

Recommended: Fizzle.co offers video courses and a supportive online community of like-minded entrepreneurs. Try one month membership for for free.

What are some insider tips for jump starting a hospice business?

The following are some tips from successful hospice professionals:

  • To realize long-term success, you maintain a commitment to networking within the medical and religious community.
  • Proper program planning is critical from Day 1.
  • Carefully choose your Board of Directors to include the talent and experience required to run a successful program.
  • Make sure you staff your facility with caring, knowledgeable employees and volunteers.
  • Avoid competition between other hospice providers in your area. Instead, work with them to clearly define and highlight each facility’s strength in services and educate the public.

Growing Your Business


How to promote & market a hospice business

In addition to traditional marketing strategies such as advertisements in community newspapers and magazines, there are a number of things you can do to promote your business. Even in the face of death, knowledge provides power. Educate those within the community by maintaining an online presence and making guest appearances in local and national blogs/mailers.

Additionally, establish relationships with doctors, surgeons, hospitals, and post-operative clinics. Work with them to create educational seminars and pamphlets that will educate their patients on what they can expect to face next. These relationships within the medical community will provide a strong referral base.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

How to keep customers coming back

Like many businesses, word of mouth is one of the most effective components of a marketing strategy. It’s important to keep in mind that current and prospective clients are facing the most difficult time in their lives. They’re struggling to say goodbye to family and friends, often while in pain. The best thing you can do for them is to educate and show compassion.

How and when to build a team

Your hospice care business will require an experienced team from the onset. Your team will consist of volunteers, nurses, physicians, billing, human resources, and administrative staff. Each team member must maintain a high level of professionalism and maturity at all times, so it is critical that you choose your staff wisely.

Read our hospice business hiring guide to learn about the different roles a hospice business typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.

Legal Considerations


Federal Business Licensing Requirements

To participate in Medicare, a hospice and must complete and submit an enrollment application. Hospices will be surveyed to determine if they meet federal requirements. Detailed information on the certification process can be found at the Centers for Medicare & Medicaid Services State Operations Manual.

State & Local Business Licensing Requirements

Each state has its own regulations regarding hospice care licensing. Here you can check out your state’s information and make sure your hospice center is operating according to state law.

If you are serving food at your hospice center, you will likely need to pass a health inspection with your local health department. Here are some tips for faring well on a health inspection.

For more information about local licenses and permits:

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, check out our informative guide, Sales Tax for Small Businesses.

Service Agreement

Hospice care businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.

Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your hopsice care business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.

Certificate of Occupancy

Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.

  • If you plan to lease a location:
    • It is generally the landlord’s responsibility to obtain a CO.
    • Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a hospice business.
    • After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
  • If you plan to purchase or build a location:
    • You will be responsible for obtaining a valid CO from a local government authority.
    • Review all building codes and zoning requirements for you business’ location to ensure your hospice business will be in compliance and able to obtain a CO.

Reduce Personal Liability

Structuring your business as a limited liability company (LLC) ensures your personal assets are protected in the event your business is sued.

What is an LLC?

Form an LLC in 5 easy steps

Earning Potential


How much can you charge customers?

Hospice facilities are reimbursed a daily rate for each patient, regardless of the level of services provided that day. Final payment amounts vary each year, but the average for routine care is approximately $146/day. If continuous care is necessary, Medicare reimburses at an hourly rate of approximately $40/hour.

What are the ongoing expenses for a hospice business?

In addition to the standard operational expenses, you’ll face a number of ongoing costs, ranging from $375,000 to $425,000 (and higher). Exact numbers vary, depending upon the size of your facility and specific services you offer. Payroll will consume the greatest portion of your budget, with fees and licenses coming in second. Business owners should also budget for travel and continuing education for employees, which will ensure the highest level of care for each patient.

How much profit can a hospice business make?

Successful hospice care business owners have reported $120,000 to $175,000 profit. Specifics vary depending upon: the number of patients your business cares for, the average billable hour rate for services provided, the number of hours each patient is provided each month. This figure, minus expenses and financing costs determines your total annual profit.

How can you make your business more profitable?

The following are a few strategies other hospice care business owners have implemented to ensure a more profitable business:

  • Identify underserved segments of the community and tailor to their needs.
  • Work with hospitals, physicians, and other facilities in the community to educate consumers on the benefits of hospice care. By creating awareness, you establish yourself as a leader in the industry and develop a strong referral base.
  • For those who would benefit, stress the importance of hospice care earlier in the disease process.
  • Develop a community outreach program.

Next Steps

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