How Do You Start a Home Care Agency in Australia?

Are You Ready to Start a Home Care Agency?

As we age, it’s natural to need more support and assistance. Some senior citizens turn to aged care, while others prefer the freedom and comfort of ageing at home.

The home care market continues to experience stable growth, so it is more than possible to build a thriving domiciliary care agency. But you need the right knowledge and approach to compete with established agencies.

You’ll need to bring fresh business models and experiences to the industry while ensuring your clients are happy.

In this guide, we’ll cover how to set up, fund and market your home care agency. Before we jump into specific parts of starting your own home care business, you should consider a few factors:

1. Is starting a domiciliary care agency profitable?

While we can’t tell you exactly how much money a home health care business makes, starting an in-home care agency is profitable. That’s why for-profit companies are the most common in the industry. A BDO report confirms this, stating that 74% of home care providers were profitable.

2. What qualities do you need to start a home care business?

Caring for vulnerable people can be difficult and even though home care is a business, profits shouldn’t be your main goal.

To make it in this challenging industry you’ll need to:

• Have a customer-first mentality: Your customers depend on you to make their life easier when going through a tough time. So to run a successful home care agency, you must prioritise customers—even if doing so doesn't generate the most profits.
• Be empathetic and compassionate: Many of your clients will be going through tough situations, such as illnesses or loneliness. It’s up to you and your team to brighten their day and support them through daily life.
• Have patience: There will be difficult times and challenging customers. Ensure you’re patient and don’t take anything personally if a client becomes frustrated.
• Be orderly: Not only will you need orderliness to ensure your clients' lives are running smoothly, but also for running your organisation.
• Be dependable: Clients rely on you to make their lives easier, so without you, they may struggle. Ensure you show up and give 100%.
• Be attentive: Some clients may not voice all their needs to avoid inconveniencing you or to maintain maximum independence. So it’s up to you to give them everything they need (within the scope of your services), even if they don’t ask.

3. What care will you provide?

You can offer many services to your clients, and home care providers have seen success by introducing innovative service packages and pricing.

However, here are some services that most clients need:

• Basic hygiene, such as bathing and grooming.
• Nursing to support medical conditions.
• Therapies, such as podiatry or physiotherapy.
• Food preparation.
• Cleaning.
• Transport.

It’s up to you to decide how often to offer a particular service. But remember that customers may need some services, like basic hygiene, daily while others, like transportation, could be once per week or on an as-needed basis.

Before you choose services to offer, consider what your local competitors provide and their pricing. You can also browse customer reviews to learn what is and isn’t working.

On top of this, you should consider customer demand, your skills and the services you and your employees are willing to provide.

How Do You Set Up a Home Care Business?

Now that you know what it takes to start a home care agency, let’s dive into specific factors to consider.

1. Developing Your Home Care Business Plan

Starting a domiciliary care company isn’t as simple as starting a retail store or coffee shop since you’ll be taking care of vulnerable clients. That’s why your home care agency business plan must include as much detail about your services as possible.

Here are some topics to include in your home care agency business plan:

• Market analysis: Since the industry is highly competitive, you must understand the industry, your competitors and customer needs. Start with research reports from consultancies, such as IBISWorld or KPMG. Then consider visiting your competitors or checking out their websites.
• About section: This section should cover some background information about you, such as your goals and motivation for starting the company. Sharing this information will help investors gauge your chances of success.
• Marketing: Every business needs marketing strategies. You should cover the how’s and why’s, so you can effectively compare them to other options.
• Services: This section should be the largest and most detailed part of the plan. You’ll need to share the processes and pricing behind your services and how they follow aged care quality standards and rights. You can use the ACQSCs self-assessment tool to understand the Australian standards that consumers and regulators expect and write down how you’ll meet them.
• Finances: While starting a home care agency isn’t all about the money, you’ll need it to care for your clients. This section should cover revenue projections, startup costs and how you plan to fund your business.

2. Aged Care Regulations and Governing Bodies to Follow

In Australia, the main home care governing body is the Aged Care Quality and Safety Commission (ACQSC). This governing body ensures home care providers abide by the Aged Care Quality Standards.

While they focus more on public-funded home care providers, it’s still wise to follow their guidelines if you want to be competitive.

You’ll also need to follow the Aged Care Act 1997, which the government has updated over the years.

3. Registering Your Home Care Agency

To register your domiciliary care business, you can head to the BRS website. Here you can apply for an Australian Business or Company Number (ABN or ACN).

Once that’s complete, you’ll need to register for GST and other taxes with the Australian Tax Office. Both applications are free to complete, and you can apply online at the same time.

If you want to offer services to government-funded individuals, you must also register with the ACQSC. Some caveats to this rule are if you provide home care for Australians under the Commonwealth Home Support Programme (CHSP) or National Aboriginal and Torres Strait Islander Flexible Aged Care Program.

You will need to pay for the application which currently costs:

• Single care type applications: $8,720
• Multiple (2) care type applications: $10,060
• Multiple (3) care type applications: $11,650

There may be additional fees for those who don’t provide enough evidence in their application. However, you can receive a fee waiver if you meet the criteria.

To register, you can follow the steps outlined by the Department of Health and Aged Care.

4. Do you need any training or qualifications to start a home care business?

An aged care or individual support qualification isn’t a requirement to start a home health care business.

But since you’re dealing with at-risk clients, we’d highly recommend at least getting a Certificate III in Individual Support. This qualification will help you better structure your services and ensure your future employees are performing well.

Other certifications that may be necessary include:

• First-aid & CPR
• Police Check
• NDIS Worker Screening Check (if you plan to care for government-funded patients).

While certification does help you prepare to offer home care services, it’s always helpful to get real-world experience. You can volunteer for a few months, intern, or take a part-time job.

5. Getting the Necessary Insurance

Since you’ll deal with people daily, you must have insurance for home care businesses.

At a minimum, you’ll need:

• Liability cover: Covers your legal costs if you’re guilty of inflicting personal injury or property damage to others or breaching any legislation.
• Professional indemnity insurance: Covers you against professional mistakes that lead to another person's financial loss.
• Accident and illness (personal and business) cover: Protects you against income loss that results from an injury or sickness, ensuring you can still pay personal and business bills.
• Vehicle insurance: If you plan to offer transport services, you need business vehicle insurance. But if you only drive yourself around, personal cover is enough.
• Workers compensation: If you hire employees, this insurance is a legal necessity. It covers employees for lost income due to injuries or illnesses from the workplace.

Without small business insurance for your home care agency, one mistake can be costly. So, ensure you enrol in the necessary policies.

6. Building the Right Team

To build a thriving home care business, you must employ the right people.

While support workers don’t need formal qualifications, we recommend that you choose people with a Certificate III in Individual Support or above.

Other certifications and checks that support workers should have include:

• First-aid & CPR
• Police Check
• NDIS Worker Screening Check (if you plan to care for government-funded patients)
• Diploma of Nursing or above (if you want to offer medical services).

In the beginning, you likely only hire home care workers. However, once you start generating revenue, you can look to employ administrative, marketing, IT, HR and accounting staff. When you hire these employees, you need to consider the relevant qualifications for each position.

As a rough estimate, you need one support worker for every two to three clients depending on the services they need. Then you can add other positions as necessary.

How to Finance Your Home Care Agency

It’s possible to start a small home care agency from scratch on a relatively low budget compared to other businesses.

The main things to consider include:

• Wheelchair-accessible vehicle: $20,000 - $50,000+ depending on model and age (can be much less if you convert an existing vehicle or don’t offer transport services).
• Licensing and certification: $10,000 - $14,000.
• Medical equipment: $1,000 - $3,000 (only necessary if you offer medical services).
• Medical consumables: $500 (only necessary if you offer medical services).
• Insurance: $500 - $700 per year (will increase depending on the size of your agency).
• Education: $0 - $100,000 (depends on concession schemes and qualification level).

However, costs can ramp up if you want to employ people straight away—for example:

• Personal care worker: $45,000 - $55,000
• Aged care registered nurse: $70,000 - $85,000
• Bookkeeper: $60,000 - $70,000

On top of salaries, you’ll also need to pay more for insurance and buy more equipment, consumables and vehicles.

If you want to keep your startup budget low, consider:

• Buying second-hand or demo vehicles. These vehicles are often still in good condition but are considerably cheaper than new models.
• Offering services that require minimal equipment. Some examples include basic hygiene, food preparation and cleaning. Once you build revenue, you can invest in the equipment necessary for other services.
• Taking care of bookkeeping and administration yourself. Bookkeepers are more expensive than support workers, so you’ll save money if you take care of it yourself.

In saying that, if you need funding to start your domiciliary agency, here are some options:

• Government grants: Since aged care is a vital service, the Australian government offers many grants to support new home care companies. Check out our small business grant guide for application advice.
• Loans: Getting a loan is the typical option for most home care agencies. You can contact banks or private lenders for an assessment. You can learn about different options in our loans to buy a business guide. While this guide is specific to buying a business, it still offers valuable information on loans to financing a business.
• Angel investors: If you know some high-net-worth people, you can ask them about funding options for your business. But if you don’t, it’s worth visiting your local chamber of commerce to do some networking.

Ensure that your business plan is complete before you try to secure funding as investors will use it to predict future success.

How to Market Your Home Care Business

Your home care clients will either be public or privately funded. The major difference is that the former will receive government subsidies to pay for their care.

There’s no real difference in caring for government-funded clients except that:

• They’ll have restrictions on the amount they can spend and the services they can spend it on.
• Your home care agency must be approved before you can receive government funds—unless you provide services under the two schemes we mentioned above.

The good news is you don’t have to stick to only private or public clients. You can offer services to both customers and even provide privately funded services to clients who also use public funding.

Now, here’s how to get clients for your home care business:

• Create a website: A website is crucial as home care is a service that most people will research thoroughly before deciding. At a minimum, you need a home page, about page, services page and a page covering your privacy policy and terms and conditions. Afterwards, you can consider adding a blog to support SEO and add testimonials for social proof.
• Traditional advertising: Since your target demographic will likely be over 65, traditional advertising can be effective as your customers are familiar with these ads. Consider radio or tv ads on popular stations, or take out ads in popular senior magazines, such as Australian Over 50’s.
• Referral marketing: Senior citizens often have other senior citizens as friends. Use referral marketing to give back to your loyal customers—for example, you can offer 50% off their monthly payment for a successful referral.
• Social media: A survey of 2,277 senior Australians found that 97% of people used Facebook within the last six months. This engagement makes Facebook an excellent platform for pay-per-click home care advertising.
• Trade shows: Australia has several trade shows and expos, with popular options being the Care Expo and Care and Ageing Expo. Here, you can setup referral relationships with local industry colleagues, learn about the latest care innovations and connect with potential customers.

Starting a Home Care Agency Isn’t Your Only Option

Starting a home care agency from scratch can be daunting. You need to develop your own operating procedures for different departments, build a brand and figure out what works through trial-and-error. While we do encourage you to pursue your dream into business ownership, you do have other options.

If you’d prefer extra help on your journey, you can find care-related franchise opportunities. With franchising, the head office will provide you with proven guidelines, so you don’t waste time developing your own.

Another option is to buy an existing care-related business. The main benefit of this option is that the business is already generating revenue. However, you won’t have ongoing support like you would with a franchise. You can learn more about this option in our buying a business guide.

Once you’ve done that, you can check out some home care businesses for sale to see if anything catches your eye.

To recap, here’s a checklist to start a home health care business:

1. Develop the right qualities.
2. Decide on the services you’ll offer.
3. Develop a domiciliary care business plan.
4. Follow Australia’s aged care regulations.
5. Register your business with the government and My Aged Care (for government funding).
6. Get the right qualifications and experience.
7. Build a high-performing team.
8. Secure funding.
9. Create a marketing plan to entice clients.

Regardless of which option you choose, we wish you luck with your home care agency. If you have any questions along the way, don’t hesitate to contact us.