Any money in Non Medical Senior Care?

What was your method of approaching the nursing homes and such business for clients? And also what was your method for hiring care givers? Did you get a business license before getting your LLC or are they one and the same? Thanks for bearing with me.

 

No worries. I hate to keep using the term, "down here in Texas" but that is where my experience is as this industry is state specific. I had to establish a business structure first. I.E. LLC, Corp, Sole P. I had to list a company name and structure on the license application. The license for operating a home care will be separate from your business structure. You will need the names of all owners of the company. In Texas, we were all required to submit for a criminal background check as well. You will more than likely also need a NPI number. This stands for National Provider Identification. Google this and you can get signed up for it. It is free to obtain but my license application required this as well. In Texas, you are not required to have an RN on staff for non medical but you are required to have an administrator and and alternate administrator. These roles usually require some type of experience either in caregiving or administration of health care. Pretty easy to fudge this on a resume that we were required to submit. Don't tell anyone i said to fudge it but that's what normally occurs. Wait times for a license in Texas are at minimum 45 days assuming they find no deficiencies on the application. If deficiencies are found, they can take another 45 days to approve once you submit what you are missing. I have heard of some states taking up to 6 months but again, I don't know how Maryland operates. This is what I can think of at this point but again, just post again and I will continue to help out.

 

To continue answering your question, as far as marketing to facilities, you are looking to see the discharge planners and/or case managers as they may be called. In nursing homes, there is usually one of these. You also want to market to the admissions people, director of nursing and the Executive Director. In hospitals, it will be case managers, social workers and discharge planners. Hospitals have become like Fort Knox to get into so you will need to do alot of planning to reach these people. Assisted living you will want to market to their marketing people, directors of nursing and executive directors as well. Home health and hospice, you will want to market to their marketing people as they are usually present for the start of care. This is where they could refer you to their clients when the client needs additional care that neither of these types of companies provide. Rehab hospitals are usually a little easier to access and there are usually lots of clients coming out of these. Again, see the discharge planners and maybe even the actual physical therapists if you can get to them. You will want to visit these places weekly to get yourself known and then maybe go to every other week so you don't become a pest. If you join some networking groups, this is where you will meet many of the home health and hospice reps that you can get to know and ask for referrals. It is a game of scratching each other's backs so you will need to feed them some referrals as well if you expect to keep getting them. Let me know what else you need.

 

Thanks again for replying so promptly and your insightful answer. I have a couple of questions for you.

What was your process for hiring your employees and how much did you pay them from the beginning??

What was your method of approach when it came to giving you your brochures and business cards, basically marketing?

Thanks for indulging me, these might be my last questions.

 

Good morning. Initially, the hiring is tough. You will place ads on craigslist, indeed, etc. You will get a ton of responses but don't get too excited because most of them are applying to get some type of benefit and you will have a tough time even getting them on the phone. Once you get to talk to some of them, you will set up interviews and some won't even show up for the interviews so just know this going in. You will find a couple of diamonds in the rough though. Once you are established though, you will recruit from your internal staff. Your good caregivers will always know someone who needs a job and you can recruit that way. Also, when you go to the nursing homes and assisted livings, the care staff there will approach you about working some shifts for you so you will start getting calls without even recruiting. You will be required to run criminal background checks on each employee and your state may require drug testing. We weren't required to but it I always left it as we have the right to drug test at any time for any reason. One of the biggest problems in caregiving is that you will have some no call/no shows, especially with new employees. I got tired of this so I developed a form that basically spells out that not showing up for work and leaving a senior unattended is considered elder abuse and neglect and that I will report them to TXDADS, Adult Protective Services and potentially the police. Once they signed this, I never had a no call/no show again. You pretty much threaten them with prosecution and it cures alot of ills. As far as marketing, you will want to develop some brochures and business cards and maybe some pens with your name and phone number. That is really all you need. These places get inundated with marketing crap and it usually ends up in the trash. The only things kept are brochures and cards. Again, see your top potential places once a week to start. You basically want to talk to 15 people per day when you are starting out. It is a numbers game. The more people you talk to, the faster you will start getting referrals. 15 may sound like a lot of people but when you go to a nursing home, you will see admissions person, ED, discharge planner and director of nursing. That's 4 right there and you can easily 4 nursing homes in a day giving you 16 people right there. Assisted living places will have about the same number of people in the building that you will see as well as hospitals if you can get in. Let me know what else you need.

 

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Good afternoon.
Thank you kindly. I feel like a mentee, i'll be sure to pay it forward.
I may come from time to time to ask you questions if that's ok with you.

 

If you don't mind sharing, how much did your start your home care aids off with as far as pay?? Thanks

 

Market rate in Houston is $9 per hour for CNA's (Certified Nursing Assistant), $8.50 for sitters. More experienced caregivers might command $10. I always started low and dangled a raise in front of them. i simply explained that I didn't know them and they didn't know me. They needed to prove to me why I needed to pay them more. You will know within 30 days if someone is worthy. Also, I might pay more for bi-lingual staff or for someone willing to take out of the norm shifts. But for the most part, $9 an hour is the going rate.

 

Hello, thank you for all the information you have taken time to share. This has been very informative and really encouraging. I live in Los Angeles, I have a nanny agency but my husband is very much interested in starting a non-medical home care business. I am helping to research the business before taking a plunge. Please I have some questions for you and I hope you don't mind. How did you charge you clients - one-time flat fee or hourly rates? What kind of softwares did you use to run the business? If we hire employees before getting referrals, do we just pay them for doing nothing? About how many hours a day do we have to pay them to keep them from abandoning us - before referrals come in? Did you ever have to go in to take care of a client due to a no-show employee? Do you know anyone that has successfully run this type of business as a referral agency instead of actually employing the caregivers? Thanks.

 

Hello, thank you for all the information you have taken time to share. This has been very informative and really encouraging. I live in Los Angeles, I have a nanny agency but my husband is very much interested in starting a non-medical home care business. I am helping to research the business before taking a plunge. Please I have some questions for you and I hope you don't mind. How did you charge you clients - one-time flat fee or hourly rates? What kind of softwares did you use to run the business? If we hire employees before getting referrals, do we just pay them for doing nothing? About how many hours a day do we have to pay them to keep them from abandoning us - before referrals come in? Did you ever have to go in to take care of a client due to a no-show employee? Do you know anyone that has successfully run this type of business as a referral agency instead of actually employing the caregivers? Thanks.

Certainly. You are welcome. We had several locations in California so I know a little bit about it but I'm not an expert. I can still give you the general overview though surrounding your questions. As far as charging clients, we charged on an hourly basis unless it was a "live-in" case. A live in case is charged by the day typically. However, with the new overtime laws around caregivers, I stopped doing live-ins altogether due to the documentation of time required. I strictly went with billing by the hour. Live-ins are very profitable though so do your research before just saying you won't do them. But for me, it was too much of an administrative headache.

I used a billing/scheduling software called Soneto. There is also Clear Care which other offices used and they really seemed to like it. I started with Soneto so I was used to it and didn't want to switch but I have heard great things about Clear Care.

As far as hiring employees, I only paid employees when I had billable hours. It is tough when you first get started because you may not have any clients available and they won't stick around long so it is a balancing act. I'm no expert on California employment law but I don't believe you have to pay them unless you have billable hours to pay them. You might look at caregivers who are already employed part time somewhere so they are not trying to rely solely on your hours as you start to ramp up.

I only had to cover a case one time in 6 years. It was due to a caregiver having a flat tire on the way to work and this was a brand new client so I did everything I could to start the case off right. It was a simple sitter job with no hands on care required so it wasn't a big deal other than it was overnight. Otherwise, I always made sure I had plenty of back ups who could fill in if someone couldn't make it to work.

For your last question, you will want to google "caregiver registry" to find information on this type of scenario. There are several companies out there that act as a registry. This means the caregivers are not employed by you. They are independent contractors that you will send out on cases that you earn thru your marketing efforts. This allows you to charge a lower rate typically and you don't have to withhold taxes and things like that. The good thing about this type of set up is you are more price competitive and no taxes to pay on the employee side. The bad thing about these are that alot of clients want to know that you actually employ them and that you have done your due diligence in hiring, i.e. background checks, reference checks, etc. So it could go either way as far as client acceptance. I'm not 100% sure how this works, but I recall hearing clients tell me that they had used a registry in the past and would pay the agency around $4 an hour and pay the caregiver $12 an hour. It is a split payment like that. Not sure those are the exact numbers but it is not unusual to have that type of arrangement in a registry set up. If you are NOT a registry though, you will collect the full payment from clients and then pay the caregivers.

One thing I do recall hearing from our California offices was around California employment law. In Texas, I had caregivers working 12 hour shifts and as long as they didn't go over 40 hours a week, I had no overtime. I heard though that in California, if they work over 8 hours a day, you are responsible for overtime on a daily basis. You will want to confirm this of course but if you are already running an agency, you are probably familiar already.

I hope I answered all of your questions but feel free so respond here and I will clarify anything that I missed. Good luck in your decisions.

 

Thank you so so much for responding!

 

About how much cash flow do you advice to have before starting this business if you want to do it on your own. No franchise. Can I start with very little and just pay employees as I get paid? Of course I will take care of the bonding and all insurances. Do I need much after that? Thanks.

 

What company did you use for background checks? How did you get a background check done when your caregiver was needed asap? What is the minimum you can spend on quality background check? Thank you.

 

I'm going to make three assumptions with this question. The assumptions are that you will office from home, you will not need a salary for the first year and that you will be your marketing person. With those assumptions in mind, the additional expenses you will need to cover over and above payroll are the following:

Liability Insurance which will include bonding. I carried $3,000,000 in liability that included $25,000 in bonding. The premium on this ran roughly $3,000 a year. My carrier allowed me to pay it in 4 installments but check with your carrier for payment arrangements. My carrier was Philadelphia Insurance.

Worker's comp varies with payroll amounts. They will ask you to estimate your payroll for the year. Give them the lowest number possible to keep your premiums lower. They will probably audit you at the end of each year and if you go over your estimated amount, you will owe the difference. It's better than overestimating your payroll, which gives you a higher premium throughout the year. My last year in business, my payroll ran around $375,000 and I was paying around $500 a month.

Scheduling/billing software. Budget $250 to $300 per month. This number will fluctuate a little depending on how many caregivers use the Telephony system to clock in and out. I highly recommend using this system as it provide accurate records for billing and payroll. The caregiver has to use the home phone or client's cell phone to prove that they are on sight.

Marketing expenses will vary but you will want to order business cards ($80), brochures (around $400) and writing pens with your name and phone number on them (about $100). I recommend buy some shirts as well that you can embroider with your logo (budget roughly $300). Also, don't forget about gas for your car. You will be driving alot to go from place to place so maybe budget $50 a week.

Ongoing marketing expenses would include advertising, meals for staff at facilities, happy hours, donuts, cupcakes, popcorn, etc to drop off at your referral sources. For the happy hours, you will want to partner with other companies such as home health, hospice, assisted living facilities so the cost can be split. (budget around $800 a month for this)

Recruiting costs which includes ad placement and background checks. Depending on who you use for background checks, these can range from $3.00 per check up to as much as $30 per check. Texas only requires a state search and those cost $3. Every now and then if I had a funny feeling about someone or if they moved from out of state, I would splurge for the $30 nationwide search just to be sure. Ads on craigslist will run $25 per ad. Only need one per month and may not every month as you will get bombarded with resumes with each ad.

When I add all of this together minus the cards, brochures, etc one time expense, you will need roughly $2000 a month. This is a little on the high end because I included $500 a month for workers comp but I didn't include the recruiting expenses as those vary quite a bit. If you wanted to budget $100 a month for this, that would more than cover it. When you start out, it won't be near that high but I'm putting worst case scenario. It's better to be over funded than under funded. And the good news is if you are not going franchise, you won't have the royalties. That added another $500 a month in expenses from the get go. Hope this helps.

 

I had a nationwide background check company but I don't remember the name as I rarely used it. In Texas, we were only required to do state specific BG check so I used the DPS website and each check cost $3. The results were almost instantaneous so you knew at the interview table if they could pass or not. I occasionally would do a nationwide search if I had a feeling or if they had moved from out of state. Those ran as high as $30 per check. Those results took a little longer but I'm talking minutes, not days. Use your best judgment on this one.

 

Thank you for you help. You are so kind. Be blessed!

 

Hello, I noticed that in one of your response you mentioned feeding the employees and happy hours. How does this work? Do you have to feed the employees daily? Do you have to feed them at all? How often did you drop off food for your referral sources?

 

You havd no idea how helpful you are! I have a few questions for you:
1. Do you have any experience using paid referral sources?
2.Did you have any number of clients paying via long term care insurance?
3. How long did it take you to get your first client and how did you get them?
4. What approach do you use when visiting facilities and how did you pitch to them on your very first visit?
5. How much did your charge clients for hands on service and sitter services (hourly)?
6. Was it fairly simple to gain workman's comp clients? If so, what process did you follow (if the franchise didn't handle)?