Any money in Non Medical Senior Care?

When referring to feeding employees, I am referring to doing events at your referral source location. It would be around nurse's week, cna week, social worker week, etc. It takes place maybe once a quarter, if even that often. It's not feeding your own employees just to clarify. As far as happy hours, these are good ways to meet with social workers, discharge planners, directors of nursing, etc outside of the busy office. I would team up with skilled home health companies, hospice, etc to host happy hours. All of us were trying to reach these people in their facilities and a happy hour, mani pedi, etc gets them out of the work environment where you can really get to know them. The hosts split the cost and get plenty of time with the target audience. As far as dropping off food, snacks, gifts, etc. there is no rhyme or reason. I would do it if I hadn't seen someone in a while or when someone gave me a bunch of referrals. It is more of a judgment call. Some places didn't want food brought in while some requested it nearly every time. Your marketing area will let you know as you start to market.

 

1. I started out using some paid referral sources such as Eldercarelink. You will get alot of leads but a very low conversion rate. Many are just tire kickers and your rate of actually reaching them is pretty low. Leads ran about $20 per lead but if you convert just a couple of them, it can be worth it when getting started. Once I was established, I stopped these leads because I was getting plenty of actual referrals at that point. After a few years, my franchise parent started paying for paid leads but they were worthless.
2. I had a few clients using Long Term Care (LTC). Each LTC policy will vary as to what it will cover. Some policies give a daily rate while some had unlimited benefits. Clients will try to work within what their policies would cover so some cases were awesome while some were just ok. I would highly encourage you to set up where client pays you direct and have them file their own claims. Payments can be slow from insurance and you want to you get paid as quickly as possible. Some clients will want you to file though as they are elderly and it is difficult for them so you can leave the door open to do this. I had 5 cases like this going at the same time. i filed two of them and the other three clients filed them.
3. My first client came about 3 weeks into marketing. It was friend's mom from my church. My first real referral from marketing to facilities came about 6-8 weeks of marketing.
4. First call is to introduce yourself and meet the key people. Gather all the key business cards you can get and just a quick explanation of what you are marketing. Do NOT ask for a referral at this point. This is a very personal business and referral sources will want to know they can trust who they are referring their families to. It may take 7 to 8 visits before they will trust you enough to refer to you. If you commit to anything, be sure you do what you say you were going to do. Make weekly visits at first so they can get familiar with your face. There are alot of home care companies out there and many are established in some of these facilities. You can overtake them but it will take persistence and delivering outstanding service when the call comes in.
5. Texas rates start around $18 an hour for sitter service with a 4 hour minimum. This is critical. You don't want to take cases that are less then 4 hours because they will become a staffing nightmare. An employee may take it initially, but over time, they will decide that less than 4 hours is not worth it to them and they will stop going. Then you have to find someone else who will work it Trust me, it is not worth the headache. The only way it works with less than 4 hours is if the caregiver has another case in the same area where they are getting additional hours but this can be rare. Example would be a 4 hour sitter job in a nursing home from 8 am to 12 pm and then a 2 or 3 hour sitter job in the same facility that starts at 12:30 or 1. Otherwise, you will pull your hair out trying to staff this. Rates go up depending on level of care and also length of shift. Shorter shifts mean higher rates. Longer shifts mean lower rates typically. Incontinence care, feeding, bathing, dressing make the hourly rates increase as well. You will want to mystery shop your competition to better establish your rates for your area.
6. I never did a workman's comp case but they are out there. Our franchise parent set up a partnership with a company but I never received a referral in my area. Other locations in other parts of the country got quite a few of these though so they are out there. The VA is also a good source of referrals once you get through the red tape of working with the govt. One office in Ohio built 90% of their million dollar a year business with the VA. It take time to get approved but once you start getting the referrals, they will flow in. Medicaid in some states also will pay for this service. Reimbursements will vary by state so check your own state. I didn't take it in Texas because the rates were so low. In Pennsylvania though, the rates were higher than my normal rates so if you are in that state, definitely check into their program.
Hope this helps.

 

Thanks for all the good info. I've been researching this topic, including reading every book available for months. I'm also in TX and looking to open a non-medical home care business. anonymous

1. What are your thoughts on consulting companies that help you get started, such as "Certified Home Care Consultants" or 21st Century Consultants"? The idea of using one of these companies sounds appealing to me because I don't have any experience with home care.

2. At what point will the market be over-saturated with home care companies? There seems to be so many, so that scares me a little to be honest. I realize this may be tough to answer, just wanted some general discussion related to this potential hazard.

 

1. The consulting companies are not a bad way to go especially versus a franchise that requires ongoing royalties. My franchisor was great to work with however once I knew what I was doing, I found myself never needing them. The advertising they provided did not result in any increased business so that wasn't a benefit either. The main thing I got from the franchisor was that we had 5 locations in my city which made us sound like a bigger, stronger company. Even with the franchisor, I actually used a consultant as well to get set up, assisted with my license, showed me how to make client and employee files and what was required in each one and actually conducted a mock survey so that I would be ready when the state showed up for my first survey. It did cost about $5000 but to me, it was worth it. The franchisor did not know enough about state specific laws to assist much in this area so the consultant was much better. 21st Century sounds like a more comprehensive set up than who I used. Again, as long as there are no ongoing royalties, I would definitely consider it. License fee in Texas is $1750 and the license is good for two years. You will renew at the two year mark. Licensing takes at minimum 45 days from the date the state receives it. If they reject for some reason, you must correct the deficiency and resubmit. They can take another 45 days to approve so potentially you could be looking at 90 days. If you get a reject, call the state immediately and find out what the reject is, how to correct and then resubmit asap. If you get a good licensing person, they will typically take your corrections and put your application on the top of the stack so it doesn't take the full 45 days. I had one deficiency and got it turned back around to them the next day. They were nice enough to approve within two days so I avoided the additional 45 days. As far as agency requirements, you will need an Administrator and Alternate Administrator. You can be the Admin and you will need to find someone willing to be the Alternate. There are pre-licensing training requirements for each person to complete as well as ongoing education. One or both of you have to be available if a surveyor shows up at the office. Just throwing out a few things to think about ahead of the game. I had no idea that I needed both before I started and I had to scramble around to find someone that met the requirements.

2. This is probably impossible to determine. The senior market is growing tremendously however you need to look at your specific area to determine this. You might have a million population in your area but if only 10 of them are seniors, it isn't the area where you want to be. There is alot of demographic data out there that will tell you how the population breaks down and projections for future growth. If you are not a franchise, you can market anywhere as long as you are licensed in the county where you want to operate.
Texas is county specific even though you apply with the state. The application will ask you which counties you want to work and you will check them on the application.
Franchises typically give you a specific set of zip codes that will be your exclusive marketing territory. They typically comprise population areas of at least 250k people regardless of the mix of seniors. Within 250k, there should typically be enough seniors to support a territory. One other thing to consider is if the area can afford your services. You don't want to set up in poor areas as you will operate majority private pay. 250k of people with no money won't do squat. Sorry to be so blunt but I do see some territories that these franchises sell and there is no way the income levels would support the territory. They might be full of seniors but they are all on fixed income. Not knocking fixed income people by any means but they honestly can't afford the services. If you're in Houston, you would choose the Memorial area, River Oaks, Katy, Sugarland, or the Woodlands. Memorial and River Oaks are full of old people with money but you will find more competition in these areas. Katy, Sugarland and The Woodlands are younger areas so the number of seniors is less but they have money in those areas. Dallas market is Highland Park. Old people who are loaded. You might also look at Frisco, Plano, McKinney, Rockwall/Rowlett areas. The suburbs again are less seniors but the ones there do have money to pay for it. I set my office in the affluent suburbs of Houston and did very well. Less competition and enough seniors with money to pay. I'm not as familiar with the Austin or San Antonio areas but I would think they would follow same suit. I think there are old urban areas in each city with seniors and lots of money followed by fast growing suburbs with younger populations but enough seniors with money to pay. Again, I think you will find less competition in these suburban areas. Not sure where in Texas you are but this should give a little direction on this. Please feel free to ask more about this.

 

Would you be willing to be paid to help me set up my business. We will work around your convenience.

 

This thread was extremely helpful I feel like you answered every question I have ever had. lol I just submitted my application to the state two weeks ago!! I have so many questions because I don't want to fail! Do you have a email that I can contact you with more questions?

Also how did you get your reserve money for your business ? And did u ever branch off to skilled nursing services ?

 

I also have a few more questions just in case you don't feel comfortable giving me your email.

How hard was it to get clients referrals from nursing homes rehabs etc ? Because I'm always thinking it can't be easy at all because there are so many other Agencies before you that already sold themselves to these facilities and I can't imagine these facilities wanting to partner with a whole lot of different agencies but I could be wrong what's your take on this ?

Also did you write up proposal letters and send them via email to HR departments ?

How do do feel about me hiring a marketing person to bring in these referrals and meet with these families? I'm good at many things but selling is not one of them. My partner however may be the one for this but I also think we should look into other marketers but this could be costly.

Again where did you at your reserve money for your company did you take out a loan ?

What was the number one source for your referrals ? How did they find out about your company ? I'm guessing referrals were not that hard for you because like you said u had a known franchise behind you.

How did you make your decisions for hiring how did you know that these people were competent and what trading did you provide ?


I'm also thinking about deducting workers comp percentages from paychecks to avoid that cost and have them sign off as independent contractors I noticed that most of the money made from these agencies goes to workers comp which is absolutely ridiculous!

 

you also mentioned your first year you made 224k was that what you took home personal or how much you made total before u paid your staff and over head ?

 

As long as you are in Texas, I would be interested in doing this. That's where my expertise lies so I would hate to lead anyone astray in another state that might have different rules and procedures. Can you say what city you are in? I'm in the Houston area.

 

When I left my last company as an employee, I rolled over a portion of my 401k for start up. You might hear it referred to as a ROBS. Some people say don't do it, others will tell you to do it. It is a personal choice. It worked out very well for me.

 

You might have the numbers incorrect. Let me give you the breakdown. One thing to keep in mind is that I ran quite a few things thru the company. 4 cell phones for my family. My car and all related expenses. Several vacations. Some medical expenses. Gifts. Gift cards. 401k funding. That is one of the good things about being self employed. One term to think about is Owner's Discretionary Earnings. When you see me say that I made $224,000, that number is an Owner's Discretionary Earnings. I can do what I want with the money. I took the bulk in salary but I again, I also took family vacations on the company, bought quite a few Christmas gifts, wrote off my car payments and expenses, other travel, etc. If I hadn't been running these items thru the company, I could have increased my actual salary to the $224,000 for that year. It all depends on how you want to use the money. If had taken that amount out in salary, I would gotten killed on the taxes before I paid for the car, vacations, Christmas gifts, etc so it's better to run them thru the business tax free where you will still enjoy them but you won't pay tax on them. Make sense?

Year 1 which was actually about 7 months June to December, I grossed $40,000 and I wasn't taking a salary.
Year 2 full 12 months, $425,000 gross revenues. I took a salary of around $90K and showed a loss on my tax return. Loss was in the $20,000 range but keep in mind, I ran alot of things thru the business to create a loss and avoid double taxation.
Year 3 $650,000 gross. Same salary and added some bonuses through the year. Take home that year was $109,000 with probably 50k in expenses thru the company.
Year 4 $675,000 gross. Again same salary and added bonuses. Take home again was around $110,000.
Year 5 $825,000 gross. Again same salary with adding a little more throughout the year. Salary ended up being around $120,000 with a year end bonus of $25,000. Again, I ran about $80,000 of personal expenses thru the business taking me up to the $224,000 mark for that year and if I had chosen not to run those expenses thru the company, I would have taken that amount in take home income. It's all in how you want to use it. Think of it this way. You should net (after all expenses) between $5 and $7 per billable hour. That doesn't sound like much but when you start running 3 to 4000 hours a month, you see how it adds up quickly. Non franchised locations will make even more per hour but since I was a franchise, I gave up 8% of my gross revenues right off the bat.

 

I forgot to answer your second question. I never branched off into skilled nursing but it is possible and doing non medical home care is a good way to start. This gets your feet wet with staffing, scheduling and doing care without jumping into skilled care which can be expensive and complex. We had the option of adding skilled care and some of our franchises did add it but I never did. A couple of things I know about skilled care is that you are required to have a Registered Nurse RN on staff. You might start out having them as a contractor due to the expense and just have them do the requirements that are needed to get set up. You are also required to have a separate office for skilled care. Now it might be a second bedroom at your house but you can't run skilled care from the same office as you run non medical. It takes a while to get approved for skilled care. I'm not exactly sure how long but I have heard 6 months to a year. Then you can apply to accept Medicare which is a whole different process. If you do skilled, you definitely want to accept Medicare as that is the major payer in skilled care. You will want to also take some private insurances in case you get cases where the patient is not Medicare eligible, I.E. a patient younger than 65. The billing can be somewhat complex as Medicare deals in episodes which is a group of visits to a client. There are also about 16,000 different billing codes (maybe more by now) and there is alot of uncertainty around healthcare right now with Obamacare and/or possible repeals. Obamacare was the main reason I didn't go into it as became more complex but it is definitely something you can explore. However, get your feet wet with non medical first. It is complex enough in the beginning. Once you are comfortable with it and you want to pursue skilled care, then feel free to jump right in. I have heard that it costs between $40,000 and $60,000 to get into skilled care once you pay for the RN, licenses, manuals, software, certifications, etc. so it is not something to be taken lightly. Also, some areas and/or entire states have put moratoriums on granting licenses due to fraud and the high number of skilled companies there are. Houston is currently under moratorium as is the entire state of Louisiana. If you want a license in those areas, you basically have to buy one from a company wanting to sell or is going out of business. You also invite another level of govt scrutiny into your life when you do this. You will be surveyed by the state as well as by Medicare so also keep that in mind.

 

I'll try to answer these in order.
1. Referrals were difficult at first. This was covered in another thread but the key is to be persistent. Yes there are a number of other established companies out there but if you stay persistent, you can get that first referral and show them quality work. Most facilities give families options (usually 3) when choosing a provider whether it be home care, skilled care, hospice or assisted living. Your first referral could be because the family likes your brochure better than the other two they were given. Or it could be because your office is close to their house or any number of reasons. Or it could be because of price. Once you get that client and provide good care, you then go back to the facility where your information came from and give them an update on how well the client is doing. The best scenario is if you get a sitter job IN a facility. The facility then gets a first hand look at your staff and how much follow up you as the owner provides. Be present at these cases. Introduce your staff member to whomever gave you the referral. Make sure your staff is following the rules. Make sure they are wearing their name badge. Get logoed shirts for them so they become walking billboards in the facility. Things like that. One thing I always told my facilities was to give families my personal cell number. That way I knew I would always answer, they were speaking directly to the owner, and I could react much quicker and they didn't feel like they were being routed all over the planet.

2. I did not write up proposal letters and send to HR. HR really has nothing to do with referrals. You should be focused on case managers, social workers, discharge planners (they all might be the same person depending on the facility), admission coordinators, outside marketing people, the executive directors, directors of nursing and doctors/PA's/NP's that actually go into the facilities. Letters typically get tossed as junk mail so I relied on face to face marketing. I was the marketer for my business. It made a lot more impact when they were speaking with the owner. This is not to say that a marketing person isn't sufficient but the owner gives a little more credibility.

3. If your partner is the marketing type, I would recommend starting with them. They are an owner (credibility) and they have skin in the game. They want the business to succeed just as much as you do. An outside person may not provide that at first. Also, there is a ton of turnover in marketing personnel in this industry. Just when you are getting traction with someone at a referral source, boom they have moved to a new job somewhere so you are now starting over with someone new. That works against you as well if you hire an outside marketer, they may leave you at the drop of a hat. This may sound sexist but hear me out. If you are going to hire a marketer, put a male in this position. A good looking male if possible. I only say this because he will be a unicorn in the industry first off. Second, the majority of people he will talk to all day are women and they will want to talk to him. This includes family members as usually it is a woman who is setting up care for a loved one. Trust me on this one and please don't take it the wrong way. Women can do fine marketing the industry, but good looking males definitely have an advantage. Years ago, the pharmaceutical industry started hiring young attractive women to market their products. Why? Because the majority of doctors back then were male and they would gladly talk to a cute drug rep. Again, not trying to sound sexist here but I told everyone in the beginning that you would get the good, bad and ugly and I wouldn't sugar coat it.

4. Funding source was a portion of my 401k in a rollover.

5. Number one source was nursing homes, assisted livings and memory care units. I really worked these hard and gained numerous clients thru these. Once we were established, we became the go to company for numerous facilities in my area. The franchise didn't really help much with this. The only advantage the franchise gave me in the Houston area was that if I got a referral that was outside my area that I couldn't staff, I could easily refer to another franchise office where I knew the owner and knew how they treated clients. Non franchised companies also can do very well. It all has to do with marketing and customer service. Those are the two most important factors. Customer service means serving the referred clients well but also follow up with the facility that referred them, being present, being quick to respond and making things right when things go wrong which at some point they will.

6. Hiring is a challenge in this industry. You are dealing with low paid, low skilled workers. They are not that loyal and will jump ship for an extra 50 cents an hour. You have to really look under the hood with these people and even then, they can turn out to be a bad hire. You will want to interview them extensively, look at their credentials and licenses and contact past employers. You will have to run a criminal background check. I can't tell you how many times one of them checked the "no" box when it asks if they have ever been convicted of a crime. Once I ran the background, I would find all sorts of things on them. The same old excuse was this. "I paid a lawyer to have that take off" or "they told me it wouldn't show up". The best one was a caregiver who said she hadn't been convicted of anything and I found something on her. She flat out denied that it was her and the mug shot wasn't real even though it looked just like her. So be careful. I was partial to hiring Nigerians because they knew how to take care of someone, they were dedicated to their client and they would show up for work. The challenge with them is the accents that some of them have is hard for a senior to understand but they are excellent caregivers. You will hire some duds and you won't know it until you send them on assignment but there is no way to know 100% ahead of time. We provided a 4 hour class before they went into a home and used competency skills tests. I also had them show me how they would do certain things like transfer a client from a chair or feed a client. If you find CNA's (certified nursing assistants) they are way ahead of the game because they've been through quite a bit of training.

7. I was only allowed to hire employees instead of contractors so I'm not familiar enough to speak intelligently on this question. My thinking is if they are contractors, you would not be required to carry workman's comp but that is a better question for an employment lawyer.

 

Thank you so much for answering my questions! I'm in Houston, TX as well. Would it be possible to get your email address or some other way to communicate with you for answers? I"m willing to pay also

I have a few more questions, if you don't mind :

· Are there any ways around the billing software (cost)? Is this something that the TXDADS would inspect during the surprise survey?

· Were you able to penetrate large hospitals for referrals (i.e. Methodist or MD Anderson?

· Can you refer me to some networking groups in Houston, TX?

· Do you think churches would be a good place to network and gain ere?

· Was it easy to get into the LTC referral network (of the insurance companies)? How soon/often did you get clients this way?

· How did you decide which home health or hospice agencies to partner with for happy hours? Approximately how many people showed up to this events on a typical outing? I'm wondering what the vibe was like. Did they know your sole purpose was to gain referrals? What did you all talk about over drinks?

· How did you charge for services other than the $18/hr for sitting? How did you go about "secret shopping" the competition?

This is overkill, right? Thanks & I really appreciate your help.

 

I'm glad I revived this thread!!! Thanks again for all the great information.


1. I asked the market saturation question earlier, I'm in San Antonio. It seems there are a ton of home care businesses in this area. This is a very difficult area to truly get a handle on. This is a large city but how can any possibly tell if there are already more than enough companies for a city this size or if it could handle more. This is mostly a rhetorical question as I realize it may be tough to determine. How would a franchise go about deciding if they wanted to invest their time and name brand in an area? Do they do anything special? This is my number one fear right now.

2. I'm writing a business plan and need to forecast sales (billable hours) over the first year and preferably the first three years. How is this possible? I don't have a clue as to what realistic numbers would be. 500, 1000, 2000 or 3000 hours per month??? Can you provide any insight into this?

3. Should I hire caregivers on basically a standby basis before I market and actively try and get clients/patients? Or should I secure the clients/patients first then rush to find caregivers?

4. What's your estimate of funding needed up front to start a non-medical, non-franchise agency?

 

Thank you so very much for your help and feedback !

 

Sorry for the delays guys and gals. I don't want to give out my email on here but if you want to talk live, you can call the following number after 3 pm most weekdays and we can chat live. 346-707-8168 and ask for Chris. Once we chat, I can share my email and cell number. I'm glad to see the information is helping move people forward.

 

wow this was a great thread. But I have to ask--what business are you in now? Sorry for being nosy!

 

I own a dry cleaners now.

 

1. This is a difficult question to answer. As far as a franchise making that decision, the parent (franchisor) doesn't really look at it. They will cut up a city by zip codes and build territories where an owner would end up with approximately 250,000 residents per territory. Might be a little higher in some areas, a little lower in others. The franchisor has no clue on the levels of competition in the area. They leave that up to the prospective buyer to figure out. The franchisor will sell a territory to anyone willing to pony up the money to go into business. A good example is the state of Louisiana. My franchisor was still selling territories over there even though there is/was a licensing moratorium, meaning the state wasn't issuing any more licenses due to the state recognizing the saturation of the market. If you wanted to go into home care there, you had to find an existing business that wanted to sell their license to you. The franchisor was still offering territories and left it up to the buyer to acquire a license. Having a franchise is no guarantee of success unless you are McDonalds or Chick-fil-a. They are successful because of the brand name and very few if any fail. In home care, Visiting Angels is probably the most well known franchise. Watch Fox News one night and you will see several ads at prime time but even those can fail if the work is not put into them. Most franchises fail because not enough work is put into them. If you know anyone in any type of care, home care, home health care, hospice, nursing home, assisted living, you might ask them this question to see what the market levels are, who the leaders are, etc. I honestly wouldn't have a clue about the San Antonio market except that my previous franchise just opened a two territory office there back in the Spring. I don't know how well they are doing as I've been out of the system since last December.

2. Another tough question but I'll try to break it down. In my first 7 months, I did around $40,000 so on an annual basis, that's about $70k in the first full year. $70 divided by $17 per hour on average is roughly 4100 divided by 12 is roughly 343 billable hours a month. My first full year, I ran $425k so divide that by 12 is $35k per month. $35k per month divided by $17.5 average comes out to 2000 billable hours a month. $650k divided by 12 equals roughly $55k per month. $55k divided by $18 per hour average ( I was gradually able to increase by rates as I got established) 3055 billable hours per month. My biggest year was $805k which is roughly $67k per month divided by $18 is 3722 billable hours per month. One thing to keep in mind is that this business will swing from time to time. Summer is slower than any other time. You also might have a 24/7 case that is bringing in 672 hours a month and it will suddenly end due to death, patient improving or they move into a facility. Those hurt. So the bulk of your hours will come September thru about May. You will keep hours thru the summer but the new starts will slow during this period. My best single month ever was $85k in revenue so that's about 4700 billable hours that month. Does that help at all?

3. Two weeks before license approval, put out a job ad and hire 5 caregivers. It will take you two weeks to sort resumes, interview, be stood up on interviews, sort thru more garbage, run background checks, formally hire and train 5 people. A month after you hire them, with no hours coming in, 3 of them will be gone or unavailable. You should always be recruiting but not necessarily hiring. When you get that first case, hopefully you will have at least one or two people still available but if you've been recruiting, you will have a pool of candidates to quickly hire in a pinch. You would be surprised how many times a caregiver shows up on a new assignment and they were just hired the day before. It's the nature of the business as most cases aren't well planned. Remember, you are only paying caregivers when you have billable hours so you can always be building a bench with almost no cost.

4. I think somewhere earlier in the thread, I estimated around $60k to get started and have enough in reserve. Up front, you need $1750 for a license, approximately $500 for training, maybe $500 for brochures, business cards, pens, etc., and then I would budget around $500 to get your software set up assuming you already have a desk, chair, computer and printer. You will need a locking file cabinet as well plus about $300 in office supplies, printer paper, file folders, etc. One thing to keep in mind is some slow pay customers. They may not pay you until after payday. Your caregivers will not wait for their pay so you want to have reserves for payroll due to slow pay or the fact that client payments coincide with pay dates.