How to start a home care agency

Between the UK’s ever-growing ageing population and the NHS crisis, demand for domiciliary (or home-based) care services is skyrocketing – and the industry is worth a whopping £7.8bn per year.

While the NHS provides care to countless vulnerable adults and elderly people, there’s plenty of room for new independent care agencies to offer care services to those who need them. Just look at the success of Startups 100 2023 business, Lottie. Founded in 2021, it has taken on a valuation of £45m in just two years.

Your business will find reliable, qualified care providers for clients, collect payment, and then pay your staff a fair portion of these earnings. It’s possible to manage your care partners or carers remotely without having to pay for office space – though you’ll still face significant start-up costs in the form of staff salaries and training.

To make a successful home care business plan, you’ll need to have qualifications and ample experience in the care sector, the ability to effectively manage a team, and a burning desire to provide high-quality, compassionate care. If this sounds like you, read on to find out how to start a home care agency.

Your care agency business plan

First of all, you’ll need to think about the types of home care you’d like your home care agency to provide – for example:

• Nursing and healthcare
• Personal care – such as dressing or washing
• Emergency care
• Housekeeping or domestic work
• Help with cooking and preparing meals
• Companionship

The type of care you’re able to provide will depend on your (or your staff’s) experience, skills and qualifications. In the care sector it’s of utmost importance that you hold the qualifications necessary to carry out certain services, but more on that in section two.

You’ll also want to consider whether your agency will provide care to clients in:

• Regular 15-minute visits
• Day-long care, for example in eight-hour shifts
• Round-the-clock 24-hour care
• Anything in between
• All of the above!

Again, this will depend on what you and your staff are qualified for and experienced enough to do – and what your clients need from you.

It’s worth investigating your local area and finding out what sort of care is in high demand. Take a look at popular local care services and find out what they provide.

Alternatively, if you’re interested in launching a care home rather than a mobile home care provider, check out our detailed step-by-step guide to starting your own care home.

Writing a business plan

Though it may seem like a mammoth task, writing a business plan will help you to think in depth about every aspect of running your business – from people management to marketing to financial forecasts – helping you to plan accurately for the future and pre-empt any obstacles.

To get started, we’d suggest checking out our free business plan template.

Once you’re up and running, the CQC (Care Quality Commission – the important regulating body for all things care) will undertake regular inspections of your agency to ensure it’s up to scratch.The commission will seek to answer the below questions about your agency. Stick to these expectations and you won’t go far wrong…

Is it safe?
You and your carers should:

• Respect your clients and protect their dignity.
• Rectify and investigate any mistakes or incidents openly and immediately.
• Be open with clients about their medications, and store and administer them safely.
• Be reliable, and ensure clients are made aware of any upcoming changes.

Is it effective?
You and your carers should:

• Have the knowledge and skills required to work with given clients.
• Ensure clients stay in good health by understanding their needs and listening to their preferences.
• Give as much control to the clients as possible.

Is it caring?
You and your carers should:

• Know your clients’ backgrounds and hopes for their care.
• Encourage clients to share their views.
• Develop trusting, positive relationships with clients and care about their wellbeing.

Is it responsive to clients’ needs?
You and your carers should:

• Work with clients and their families and friends to develop personalised treatment and support plans which adapt to clients’ changing preferences.
• Plan and support with any hospital visits as required.
• Take complaints and concerns seriously and deal with them quickly.

Is it well-led?
You should ensure that:

• Your staff are happy, well supported by management, support one another and know what’s expected of them.
• Staff feel confident that, if they report any concerns, they’ll be taken seriously and their worries will be investigated.
• Staff provide the best care that they can and work well with others who are involved in their clients’ care.

Chris and Will Donnelly, co-founders of Lottie

Need help staying on track?

If you’re starting a care home then you’ll be facing a number of tasks. Keeping everything organised is vital, and we recommend using a software management tool to help.

Project management software is a great help whether you’re working alone or with others. You can assign tasks, streamline projects and effectively track progress all in one place.

Find out which project management tool we recommend today.

Regulations and training

Every care agency must have what’s known as a registered manager – an individual who manages the day-to-day running of the agency and oversees its activity, ensuring it complies with regulations.

While this doesn’t have to be the business’ owner, it also can be – so unless you decide to recruit a senior staff member right away, you’ll likely act as the registered manager yourself.

You do need to have the experience and qualifications called for by the role, though – including either:

• A QCF Level 5 Diploma in Leadership for Health and Social Care (either a pathway in Management of Adult Services or Management of Adult Residential Services),
• A Registered Manager’s Award (RMA), or
• An NVQ Level 4 in Leadership and Management for Care Services

While the latter two are no longer offered, they are still accepted by the CQC as valid qualifications.

It’s also worth noting that these qualifications do need to be supplemented by another which shows you have a practical understanding of your specific care setting. For example, a nursing or health and social care qualification.

If you’re going to be providing care to clients yourself, you (and any care staff you hire, for that matter) must also have completed what’s known as common inductions standards (CIS) training.

Registering with the CQC

Before you take any steps towards getting started, you must first register with:

• The Care Quality Commission (CQC) if you’re based in England
• The Care Inspectorate if you’re based in Scotland
• The CSSIW if you’re based in Wales

It’s a legal requirement under the Health and Social Care Act that you do this; registering both your agency and the person who’ll be your registered manager – whether that’s you or someone else.

Registering with the CQC is a fairly long process – but it gives you the opportunity to prove that you’re appropriately qualified, experienced enough, and truly committed to providing home care of exceptional standards.

As part of the registration process, you will:

• Apply for a DBS (Disclosure Barring Service) check. This check aims to prove whether or not you’re legally able to work with vulnerable adults – so without passing your DBS check, you can’t legally set up a care agency. If you have any co-founders and a registered manager who isn’t you, they’ll also need to undergo a DBS check.
• Supply references from previous employers.
• Give a reference from your GP which states that you’re healthy and fit enough to provide care for others.
• Fill in the appropriate CQC registration form.
• Apply to be named registered manager (or have your intended registered manager fill in an application to be named so).
• Create a statement of purpose. This should cover every aspect of your business in detail – including the services you’ll be providing, what you intend to achieve with your agency, and your contact details. Don’t worry – the CQC provides a template to help ensure you don’t miss anything important.

Once you’ve done all of the above, you’ll be able to submit your CQC registration application! You can get started online by visiting the CQC website.

In order to register, you’ll need to pay an annual registration fee. You can calculate what your registration fee will be by multiplying the number of clients you’ll have by 45.77, then adding 239:Your registration fee = £239 + (number of service users × 45.77)

NB: This fee can reach a maximum of £78,047. This applies to those who have 1,700 service users or more.

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Insurance

Because you and your staff will be responsible for your clients’ wellbeing – coming into close contact with them and administering medications and treatments – your business will need to be insured against any costly legal claims that could come your way.

You’ll need to look into getting:

• Public liability insurance
• Professional indemnity insurance
• Employers’ liability insurance
• Medical malpractice cover
• Treatments liability insurance

Plus any other covers which you believe are suitable.

Rather than buying these covers separately, it may be that you’re able to find an insurance package specifically for care agencies. Remember to shop around rather than settling on the first offer you see.

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Equipment and costs

It’s difficult to predict how much it’ll cost to start a care agency. Your start-up costs don’t have to be crippling – after all, you can start from home, and won’t need to hire hordes of staff right away – but you will have a few significant outlays:

• Paying your CQC registration fee (you’ll need to pay this once a year to keep your registration)
• Getting insurance
• Paying staff salaries
• Taking on marketing costs (i.e. paying for a website building service, organising promotional materials, etc)
• Buying or renting care agency software
• Paying for any training required by you or your staff
• Renting an office space (if you’re not starting from home)

When you start up, you might find that cashflow can be problematic – for example, you might have to pay a member for staff for care that they’ve provided before the client they cared for pays you.

In the Startups Forum, forum user Hannah states the importance of having “positive cashflow”, and advises: “You need a strong factoring company to support cashflow.” You can find out more about what’s available in our guide to the best factoring companies.

Equipment

When it comes to starting a care agency, you won’t need much in the way of equipment – but as you’ll be dealing with confidential care records you should ensure your business operates from a room (whether that’s a room in your home or in an office space) that can be locked tight.

You’ll also want to invest in a fire-proof, lockable unit – such as a safe or filing system – where confidential staff and service user records can be stored.

Of course, if you opt to go paperless and only store records digitally using a care software programme, this won’t be so much of a concern for you – though you will need to ensure your computer or laptop – and the software on it – is password-protected and stored securely when you’re not in your office.

Uniforms

You might also choose to supply care uniforms for your staff, although it’s also perfectly acceptable for you to ask them to purchase their own. If you do this, though, you’ll need to be able to direct them to a reputable company from which they can buy their uniform.

You will, however, need to supply your staff with photographic ID badges – it’s important that they have these on them when visiting clients’ homes and carrying out care services.

It’s also a good idea to provide any protective clothing that your staff might need, such as aprons or disposable gloves.

Home care software

If you want your care agency to run smoothly without the need for endless paperwork on your part, investing in home care scheduling software is a must.

In short, care agency software aims to automate administrative, paperwork-heavy tasks that might otherwise take you (and your staff) hours to complete.

A good software package can enable you to:

• Plan and record your staff’s shifts and appointments in a digital timetable
• Hold a record of both your staff and clients’ details
• Possibly ask staff to check in and out of appointments so you can monitor their activity

If you opt for a cloud-based software system, you and your staff will be able to access the portal remotely using any device – from office computers to personal smartphones. So if you/they need to check schedules or upload notes on the run, you can.

You’ll save yourself a lot of time and headache if you opt for a package which also includes financial capabilities such as accounting and invoicing, and HR functions.

There are a number of software packages on the market for call scheduling, rotas, invoicing and call monitoring.

But new providers should be wary of off-the-shelf packages for policies as many of them are not compliant with the Health and Social Care Act essential standards.

You might also want to consider creating a business email to better communicate with your patients. Check out our step-by-step guide on how to create one.

Will Donnelly, co-founder of Lottie, an online care agency community, emphasised the importance of digital solutions when starting a social care business.

“The social care market is broken in so many ways. Consumers lack transparency, it’s digitally backwards and in the long-term, the sector is unsustainable without a dramatic increase of funding and innovation.

“For me, the opportunity to redesign a sector from the ground up is incredibly exciting, but also to instil positivity in an unloved market and to champion families across the UK in one of life’s most stressful scenarios.”

Handling your care agency’s finances

Starting a business takes money and time, and accountancy software can help with both. Whether you’re self-employed, a sole trader, or running a business with staff, you’ll need to stay on top of your finances. If you’re not ready to employ an accountant to help out, then we suggest using an online accountancy tool.

Running a care agency can be hectic, so you probably don’t want to spend a lot of time thinking about your money. However, you can’t ignore it if you want your business to succeed. Accountancy software is designed to simplify the complex processes related to money.

From tracking your outgoings to managing your taxes, you’ll find any finance process simpler with the right tools in place. Take a look below at the accountancy software that we’ve rated highest.

Ranjan Singh, co-founder and CEO of HealthHero, told us that there is lots of different financial information to keep track of when running a care business: “There is a range of information that is critical to me on a very regular basis, but first and foremost it is about growth.

“I keep a close eye on metrics related to service levels, the consultations we offer people, and client satisfaction. Then, of course, product integration/development, budgets and where we are placing our bets in terms of investment in technology. We are growing so quickly and we have such a huge opportunity to change healthcare for the better, that being laser-focused on our objectives is critical for success.”

Attracting care workers to your agency

Hiring qualified, trustworthy, friendly and reliable care workers is crucial to the success of your home care agency.

First, you need to attract candidates using a targeted recruitment strategy. Think about the type of person you want to hire, and advertise the job in the places they’ll see it. For example:

• Get in touch with local universities and ask them to share your details with graduates in care qualifications.
• Consider taking on apprentices.
• Partner with your local JobCentre Plus, asking them to put you in touch with candidates with the right values and qualifications.
• Advertising the role on your website.
• Listing the vacancy on online job websites such as Reed and Indeed, or on the government’s Find a Job service.

NB: Any staff you hire must:

• Undertake a DBS check to confirm that they’re legally able to work closely with vulnerable adults and children.
• Complete CIS training and gain a Care Certificate (if they’re new to the care sector). If they haven’t already done this, they can do so after you hire them – but it must be within 12 weeks of their starting to work for you.

After hiring a new care worker to your agency, you’ll need to be prepared to pay for any training they need to advance their skills, and shadow them as they go out on care visits and shifts until you’re confident that they’re strong care workers.

While inducting a new carer can be costly and time-consuming, it’s also a crucial process. One of your workers providing inadequate care to a client could lead to a loss of clients, legal claims and even bad publicity – so inducting and training carers properly will benefit your business in the long run.

Will Donnelly told us: “As a first-time founder (ignoring my events business previously), I’ve learnt so much about employment and people management. Ultimately, you can’t do everything yourself and finding/maintaining incredible talent is what defines any business.

“Thankfully, I have started Lottie with my brother, Chris, who’s previously built a successful business, which has allowed us to jump a lot of the hurdles, I would have inevitably been tripped up by.”

Securing contracts and growing your agency

Care agencies can receive care contracts from their local authorities, who pay them for the services they provide to clients.

While this can be a simpler way to gain contracts than attracting private clients through marketing, it’s worth remembering that local authorities often don’t pay very well. So, while tendering for contracts from your local council can be a good way to kickstart business, it’s not always viable to rely on them as you grow.

Local authorities do give contracts to new care providers, especially those in their own borough. Some local authorities are allowing new domiciliary care providers to bid for tender; even those who have not yet been inspected by CQC and are new care service providers.

The number of service using clients is growing all the time, and there are only so many existing service providers in one borough. If the existing service providers do not have the capacity to accommodate new service users, the local authority will gladly take on new service providers and keep business in their borough – otherwise users go to their neighbouring areas for new service providers.

There are certain rules and regulations within the public sector about making space for new start-up businesses and not always going for the big fish to give new start-ups a chance, but as mentioned, different local councils work in different ways in terms of whether they follow that rule or not.

Will Donnelly, co-founder of Lottie, said: “To date, we’ve been overwhelmed by the reception for Lottie, both from customers (families) and care partners. However, doing something different and new in any sector is always going to have its challenges, let alone a market as behind as the care home industry.

“But, persistence is key and staying true to your company’s value and mission is paramount.”

Marketing for private sector clients

Alternatively, care agencies can publicly advertise their services in order to encourage clients to organise care directly with the agency.

In order to market your agency, you should try:

• Setting up a website. No matter how you get your contracts, an informative, easy-to-use website is a must – you can set one up by either hiring a freelance web designer or using a website builder software. Be sure to list your services, price packages and contact details on your site, and optimise it for search so that it appears on Google when someone searches for care in your area.
• Leaflet drops. These entail printing out a number of professional-looking leaflets – which detail your services and list your contact details – and delivering them through local letterboxes into peoples’ homes. This is something you can do yourself, or enlist the help of an organisation that can coordinate large-scale postal campaigns, such as Royal Mail.
• Traditional advertising. Have an advert printed in the local paper and magazines, or read out over the radio. Just ensure what you’re putting out there is of a professional standard – you may need to hire a freelance copywriter or designer.
• Referral marketing. Reach out to local doctors and hospitals and work to build a positive relationship with them, with the aim that they will recommend you to their patients who are in need of home care. You should also ask current clients to spread the word about you.
• Social media. This is a good way to grow your client base and connect with people who might be looking to use, or learn more about, your service. As with a website, be sure to list your services, price packages and contact details on your site, and optimise it for search so that it appears on Google when someone searches for care in your area.

Lottie’s Instagram profile

What’s next?