Home Care Agency Startup Costs: A Line-by-Line Budget
What it costs to open a non-medical home care agency: real state license fees, insurance minimums, office, hiring, software and the working capital most owners underestimate.
By Caregiver Scheduling Team ·
An independent non-medical home care agency usually needs $30,000 to $100,000 to open, and the biggest single item is working capital: payroll you pay before clients pay you. License fees run from $100 in Pennsylvania to $5,603 in California, and setup is a smaller share than most owners expect. Franchises add an upfront fee and royalties on top.
What does the budget look like, line by line?
The estimates below are ours, not published figures. They assume a single-location, private-pay agency in a licensed state opening with 5 to 10 caregivers.
| Item | What drives the cost | Our estimate |
|---|---|---|
| State license and application | Your state and service type; some states also survey | $100 to $5,603 (see below) |
| Business formation | LLC or corporation filing, registered agent | $100 to $800 |
| Surety or dishonesty bond | Required in some states and programs | Premium of 1 to 3 percent of the bond amount |
| Insurance (first year) | Services, payroll size, state minimums | $3,000 to $10,000 for liability; workers’ comp on top |
| Office | Required for licensing in some states | $0 at home to $1,500 a month |
| Policies and procedures | Write yourself, buy a template or hire a consultant | $0 to $3,000 |
| Background checks and drug tests | Number of hires | $30 to $100 per applicant |
| Training | Required hours in your state | Paid time for caregivers plus materials |
| Software | Scheduling, EVV, timesheets, invoicing | Caregiver Scheduling is $199/month for up to 10 caregivers or $299/month for up to 50 (timesheets and invoicing coming soon) |
| Marketing | Website, Google Business Profile, print, referral visits | $1,000 to $5,000 to start |
| Working capital | 2 to 3 months of payroll and overhead | $20,000 to $60,000; the line most often underfunded |
How much does the license actually cost?
Between $100 and $5,603. These are initial fees published on each state’s own page as of October 2026:
| State | License | Initial fee | Term |
|---|---|---|---|
| California | Home Care Organization (CDSS) | $5,603 | 2 years |
| Washington | In-home services agency (WAC 246-335-990) | $5,000 per service category | Initial 12 months; renewal fees vary by agency size |
| Minnesota | Basic home care (Minn. Stat. 144A.472) | $2,100 ($4,200 comprehensive) | Renewal scaled to revenue |
| Texas | HCSSA (26 TAC 558.3) | $2,625 | Set on the license |
| Pennsylvania | Home care agency (28 Pa. Code 611.2) | $100 | Set on the license |
California adds $35 per aide for Home Care Aide registration. See do you need a license and the licensing tool.
What insurance do you have to carry?
Whatever your state sets as a minimum, and usually more to satisfy referral sources. Washington requires commercial general liability of $1 million per occurrence or a $2 million combined single limit before it will license you (WAC 246-335-320). California requires general and professional liability of $1 million per occurrence and $3 million aggregate, workers’ compensation, and a $10,000 employee dishonesty bond (Health and Safety Code 1796.37). See insurance requirements and the surety bond tool.
Why is working capital the biggest number?
Because caregivers are paid weekly from day one and clients pay later. Private-pay clients pay after the care; long-term care insurers and Medicaid can take 30 to 90 days. The SBA’s startup guidance says to “count at least one year of monthly expenses” when you estimate what you need (SBA).
A worked example: 10 clients at 20 hours a week is 200 hours. Caregivers at $18 an hour (the May 2025 BLS median for home health and personal care aides is $17.21) plus 17 percent for employer taxes, workers’ comp and paid leave comes to about $4,200 a week in payroll. Six weeks of that before collections catch up is over $25,000, before rent, software and insurance.
How can you reduce startup cost?
Start private pay, bill in advance and buy one system instead of four.
- Start private pay. No Medicaid enrollment delay, faster payment.
- Collect a deposit or bill weekly in advance. See deposits and prepayment.
- Price correctly from the first client. See how much to charge.
- Use one system for scheduling, timesheets and invoices instead of several subscriptions.
Where does the money come from?
Savings first, then an SBA-backed loan once you have a few clients. SBA 7(a) loans go up to $5 million and can fund short- and long-term working capital (SBA 7(a)). SBA microloans go up to $50,000, and the average is about $13,000 (SBA microloans). Lenders will want a business plan and a cash flow forecast.
Should you buy a franchise instead?
Only if you value brand and systems more than the fee and the royalty. Franchises add an initial fee, royalties on revenue and required marketing spend. See franchise vs. independent.
How Caregiver Scheduling handles this
One subscription covers scheduling, routes, GPS check-in, the caregiver app and AI visit notes, so your software line is one number. Timesheets, QuickBooks payroll export and private-pay invoicing from verified visit records are coming soon. $199/month for up to 10 caregivers or $299/month for up to 50, free for 30 days, so you can set it up during licensing.
FAQ
How much money do I need to start a home care agency? Most independent agencies need $30,000 to $100,000, mostly for working capital.
What is the biggest startup cost? Payroll before collections. Insurance is usually second.
How much is a home care license? From $100 in Pennsylvania to $5,603 in California; Texas is $2,625 and Washington $5,000.
Can I start a home care agency from home? Some states allow it; others require an office for licensing.
This article is general information, not legal or financial advice. Check your state’s licensing and insurance rules.