How to Start a Non-Medical Home Care Agency: Step by Step
Ten steps to open a non-medical home care agency, from services and state licensing to insurance, hiring, payers, systems and first clients, with real fees.
By Caregiver Scheduling Team ·
To start a non-medical home care agency, decide which services you’ll offer, check your state’s licensing rules, form a business entity, get insurance, write policies, hire and train caregivers, choose your payers, set up scheduling and payroll, and then market to referral sources. Expect 3 to 9 months to your first client, depending mostly on your state’s licensing process.
What are the steps, in order?
Ten steps. Licensing takes longest, so start it early and set up the business while you wait.
| Step | What you do | Cost and timing |
|---|---|---|
| 1. Services | Pick companion, personal care or both | Decides your license and insurance |
| 2. License | Apply to your state agency | $100 in Pennsylvania; $5,603 in California; weeks to months |
| 3. Entity and EIN | Form an LLC or corporation, get an EIN | State filing fee; EIN is free and immediate online |
| 4. Insurance | Liability, workers’ comp, bond | Quotes depend on state and payroll |
| 5. Policies | Write the manual your state requires | Weeks of work, or a template adapted |
| 6. Budget | Cover 2 to 3 months of payroll | Varies with hires |
| 7. Caregivers | Hire W-2, screen, train | Screening and training per hire |
| 8. Payers | Private pay first; Medicaid and VA later | Enrollment takes months |
| 9. Systems | Scheduling, check-in, payroll, invoicing | From $199/month |
| 10. Clients | Referral sources and local search | Ongoing |
Which services should you offer?
Start with what your state lets you provide fastest, then add. Companion and homemaker care (company, meals, housekeeping, errands) is regulated lightly or not at all in some states. Personal care (bathing, dressing, toileting, transfers) is licensed in most states. Wound care or injections are home health, a different license. Your service list decides your license, training requirements and insurance cost. See companion care vs. personal care.
Do you need a state license, and what does it cost?
In most states, yes, for personal care, and the fee ranges from token to substantial. Pennsylvania licenses home care agencies for $100 per location, non-refundable, with renewal filed at least 60 days before expiry (28 Pa. Code 611.2). California licenses Home Care Organizations through the Department of Social Services for $5,603 per two-year license, plus $35 per caregiver for Home Care Aide registration (CDSS application fees). Texas licenses Home and Community Support Services Agencies; some states need only a business license for companion-only care.
The fee is the small part. The application usually needs your policies, a qualified administrator, proof of insurance and sometimes an on-site survey. See do you need a license for non-medical home care?, how long licensing takes and your state in the licensing directory.
How do you set up the business itself?
Form an entity, get a tax ID, then buy insurance. Most agencies form an LLC or elect S corporation status, which separates business liabilities from your personal assets (SBA: choose a business structure). Get an EIN from the IRS, which is free and issued immediately online (IRS), register with your state’s tax and unemployment agencies, and open a business bank account. If you plan to bill Medicaid, get an organizational (Type 2) NPI.
Insurance at minimum: general liability, professional liability, workers’ compensation (required once you have employees in nearly every state), non-owned auto, and a fidelity bond. Some states and payers also require a surety bond. See insurance requirements and surety bonds.
What policies and budget do you need before opening?
A policy manual and two to three months of payroll in the bank. Your licensing agency usually requires a manual covering client rights, intake, care plans, supervision, training, incident reporting, infection control, emergencies, complaints and record keeping. See policies and procedures manual.
Budget for licensing, insurance, an office, background checks, training, software and payroll before revenue arrives. Clients pay in arrears and Medicaid pays slower, so cash runs out before clients do. See home care agency startup costs.
How do you hire caregivers and get paid?
Hire W-2 employees and start with private pay. Classifying caregivers as 1099 contractors is the most common and most expensive early mistake (why not 1099). Run the background checks your state requires and complete required training before the first visit.
Private pay is fastest to start. Long-term care insurance clients pay as private pay and claim from their insurer. Medicaid waivers and the VA add volume but need provider enrollment and EVV. See how to become a Medicaid home care provider.
What systems and first clients do you need?
Scheduling, caregiver check-in, timesheets, payroll and invoicing from day one. Paper and spreadsheets work for a few clients but leak money through overtime and missed visits soon after.
For clients, start with hospital discharge planners, social workers, Area Agencies on Aging, senior living communities, elder law attorneys and your Google Business Profile. See how to get home care clients.
How Caregiver Scheduling handles this
Caregiver Scheduling covers the scheduling and check-in part of step 9: scheduling and routes, GPS check-in, a caregiver app, AI visit notes, and on Growth and up, credential checks and authorized-hours tracking for Medicaid clients. Timesheets, QuickBooks payroll export and private-pay invoices are coming soon. $199/month for up to 10 caregivers or $299/month for up to 50, free for 30 days.
FAQ
How long does it take to open a home care agency? Usually 3 to 9 months. Licensing is the longest step in most states.
How much does a home care license cost? From $100 per location in Pennsylvania to $5,603 per two years in California. Check your state in the licensing directory.
Can I start a home care agency with no experience? Some states require an administrator with healthcare or management experience. An experienced care manager helps either way.
Is non-medical home care profitable? It can be, with pricing that covers wages, payroll costs and overhead. See profit margins.
This article is general information, not legal advice. Check your state’s licensing rules.