Building an 8-figure a year home care agency is a significant milestone that only a few agency owners achieve. It requires determination, dedication, focus, vision, execution, financial resources, and time. However, achieving this level of success in the home care industry takes a more corporate-style approach rather than the traditional “mom and pop” agency. According to a recent Home Care Pulse Benchmark study, more than 50% of businesses that generate over $5 million annually have at least three locations. Therefore, the fastest way to grow a home care agency is through multiple locations.
This article, will focus on creating a regional business by using a base of operations with several satellites to support it. This approach will help grow a home care agency quickly and efficiently. Let’s look at the blueprint:
Bases
A base location is equivalent to a capital city of a state. This location serves as the primary hub of an agency, where all billing, scheduling, and corporate officers operate from. The base should be centrally located in an assigned territory and should have the largest population density. To scale over $10 million annually, ensure that the base location serves at least one million people. Ideally, a base location should be close to a hospital or several hospitals, making it easier to attract patients with the greatest immediate need. The base should manage at least 50 patients on its census and generate more than $4 million annually. When starting out, the business owner should open the base first.
Satellites
Satellite locations are small offices used for recruiting purposes, and they house the supplies needed for providing care and marketing. Each satellite should be about 30-45 minutes’ drive away from the base location. Ideally, the base location should have a satellite to the north, east, south, and west. Each satellite should have a branch manager who markets, recruits, and manages the patients in that area. As the satellite grows its patient census, add recruiters to help fill the demand. The satellite should maintain around 20 patients on its census and generate over $1 million annually. If there are requirements for each physical location to have its own license to operate, a “workaround” would be to create a separate business entity for the sole purpose of recruiting caregivers. Then, all recruited caregivers can be sent to work for the base business and managed accordingly. In this instance, all patients and management over these caregivers must operate out of the base.
Timing
While there isn’t a specific timeline for growth to this size, the Home Care Pulse Benchmark Study notes that most businesses took more than ten years to get to this size, with the second window of time being seven to ten years. However, using the model shown in this article should significantly reduce the time to reach this level of success if executed properly. With a heavy focus on recruiting and marketing initially, the base should reach the $3 million mark within its first three years of operation. During the fourth year of operation, plan to open two of the four satellites and then two more during the fifth year of operation. This is achievable because each satellite only requires one employee to launch. With a focus on proper financial management and a profitable business model, the savvy business owner should be able to scale to over $10 million in five to six years.
While there are many additional factors to consider when building a successful home care agency, this blueprint should serve as a starting point for the journey. By following these steps and continuously adapting an agency’s strategies and approach, owners can build a successful home care agency that can make a significant impact on the lives of clients and their families.
To learn more about how to grow a home care agency check out: https://homecareevolution.com/may-2023-referral-masters-boot-camp/.
Home Care Evolution
jill@homecareevolution.com
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