How to Open Cornerstone Caregiving Business

Cornerstone Caregiving

Cornerstone Caregiving: Cornerstone Caregiving is a senior home care service built by experienced home care professionals who are trained and ready to serve.

They support those who need help, for as long as they need help.

They work with purpose, selecting caregivers who value the impact they can make on the lives of those they serve.

They equip exceptional employees with the skills and resources they need to best care for the clients.

The result is a compassionate team that provides seniors with outstanding, professional in-home care services whenever they need them.

But like any business, a caregiving business can be difficult to establish unless you have the know-how.

Whether your business is medical, non-medical, franchised, or independent, all in-home caregiving businesses have some important features in common.

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Planning Your Caregiving Business

Identify the care services paid for by Medicare and Medicaid.

These two government programs are the largest payers of assisted-living care in the United States.

Medicare covers a variety of home care services, including physical and occupational therapy.

The administration of medicine, and medical equipment.

However, it does not cover daily living care, like bathing or dressing, or homemaking services, like meal preparation or cleaning.

Medicaid coverage varies greatly by state, but usually covers ADLs and iADLs, medical supplies and part-time nursing.

• Figure out which aspects of the business are covered by these programs in your area.
• This will help you tailor your services such that they are entirely or mostly free to your customers.
  

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Perform a demographic study for the needs of seniors in your area.

Seniors are the demographic in greatest need of in-home care.

US Census data tracks the percentage of households with people aged 65 and over by the state.

And also identifies the population of individuals 65 and up within a given state.

Use this data in conjunction with more granular local data gathered by your state censuses.

To determine if there are enough individuals requiring in-home caregiving to warrant starting a business.

• For instance, if you wanted to establish a caregiving business in Florida, you’d see that it has the highest percentage of 65 and older individuals in the nation, and the second-highest population of elderly in the country.
• Check the census data closely for projections about the number of seniors in a given area. Is it going up, down, or staying level? If it is holding steady or increasing, an in-home caregiving business would do well in that area.

Define what services your business will offer.

Some in-home caregiving businesses are medical while some are non-medical.

The two types of caregiving businesses offer a variety of potential services.

If you have a medical caregiving business.

You’ll need to hire licensed nurses, rehab therapists.

And other medical personnel in addition to the more basic caregiving duties consistent with non-medical in-home care.

• Non-medical in-home caregiving, by contrast, consists of making and serving meals, housekeeping, transportation, and other daily life activities.

Decide if you want to go into business for yourself or with a franchise.

Each has its advantages and disadvantages.

If you choose to operate a franchise and pay the fees necessary to join a larger, already established caregiving company.

You get all the benefits that come with it.

Working with a respected brand means your in-home caregiving business will start with the positive reputation the brand has fostered, lower start-up costs, and an ongoing support system.

• Starting your own home-care business will require more time, energy, and start-up monies. You’ll have to register the business, come up with a business plan, and set your own prices.
• You’ll also need to engage in intensive marketing and develop your network to get your name out.
• However, as an independent outfit, you’ll have more freedom in how you run your business and won’t be constrained in the way you would be if you were operating as a franchise.
• For instance, if you want to expand your business later as a franchise, you will have to first check with the parent company to ensure that the area you want to expand into does not already have a franchise in that area.
  

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• Start-up costs for an independent business include staff uniforms and licensing costs. Ongoing costs for either an independent or a franchised caregiving business include office space, insurance, and staff training.
• Make sure to investigate new wage laws that could affect your ability to pay your employees. For example, many states have passed laws to increase the minimum wage, with California and New York both planning to jump up to $15 overtime.
• In addition, workers that make less than $47,476 per year are now to be paid overtime pay if they work more than 40 hours per week.
• There are also various state laws that differentiate between the treatments of independent contractors and employees. Check with your state’s own regulations to make sure you are adhering to them when hiring and paying employees.

Create a business plan.

The business plan is the road map for your business.

It defines where you are now and where you see yourself in one, three, and five to 10 years.

It also lays out the chain of command, including who is the owner or proprietor of the business, and each individual’s role within the business.

With your business plan in hand, you can grow your business and solicit funding and loans.

• Your business plan must include data on your financial projections.
• How much have you spent on materials, marketing, and other expenses?
• How much have you earned? Do you expect earnings to go up, down, or stay steady?
• Include a mission statement. The mission statement is a brief description of what your business does on a day-to-day scale. For instance, your mission statement might be to “Provide comprehensive medical in-home care for those in need in (your area).” Your mission statement should be specific in the type of care you intend to provide, where you will provide it, and the specific level of performance or quality you intend to provide (“100 percent customer satisfaction” or something similar).
  

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• Include a vision statement as well. Your vision statement should be a long-term, expansive statement of specific goals for your business in the near future. A vision statement might be, “To continue building our reputation as the top in-home care provider in the region.”
• A related component is the goals statement. This lists specific, actionable goals that your business will adopt to meet its mission and vision. “Reach 97 customer satisfaction and gain control of 20 percent of the in-home medical care market over the next five years,” is a solid goals statement.

Decide what kind of business structure you want.

There are many different types of businesses.

The type of business you choose to form determines how much you pay in taxes, what type of organizational structure your business will have.

And the personal liabilities that you assume as the result of that structure.

• A sole proprietorship is a business in which someone owns an unincorporated business entirely alone. As the sole proprietor of a caregiving business, you control the business and make quick business decisions to respond to a changing market.
• However, you open yourself up to legal liabilities from both your employees and your clients. If an employee is in a car wreck or a client is given the wrong medication, they or their family might sue you. As the sole proprietor of the business, you may have to pay those damages out of pocket. A sole proprietor should buy liability insurance for such events.
• A partnership is a business formed between two or more persons’ businesses or organizations who each contribute in some way to the business and share the profits and losses equally.
  

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•  In the context of an in-home caregiving business, it would be beneficial to partner with someone who has experience in the field, especially if you do not. Alternately, you might enlist partners who bring different strengths to the company — perhaps one has connections with local hospitals, perhaps one has experience in medical training, and so on. Unfortunately, partnerships entail the same disadvantage as sole proprietorships, personal liability, as well as sharing control over operations and business decisions.
• A corporation is a type of business structure that eliminates double taxation and personal liability for its owners, and is led by a board of directors.
• While you can still be held accountable for criminal wrongdoing, business losses, fines, or legal settlements won’t come out of your own account.
• Corporations also tend to have easier access to capital and often enjoy significant tax breaks, which could be important considerations as you start up your own caregiving business.
  

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• If you plan on investing in medical equipment, especially, incorporating may be your best bet.
  • One type of corporation you can form is a Subchapter S corporation, which eliminates double taxation while limiting personal liability.
• A variation on the corporation is the limited liability company (LLC), a business run by members, who can be either corporations, individuals, or other LLCs.
• These businesses are highly variable in form, and must conform to state regulations concerning their makeup. If you are worried that the other members who you start the business with might bail, you should forgo this type of business in favor of a corporation. Like corporations, LLCs provide limited liability, so if your business is sued, you will not be personally responsible.

Take care of the paperwork. 

Forming your own company requires registering the business, filling out tax forms, and drafting a payroll. Ensure all your employees can legally work in the US.

Use their bank account info to set up direct deposit lines to save yourself the trouble of distributing paper paychecks.

• Medical caregiving agencies will require additional certifications from Medicare and Medicaid. These certifications will be granted after a Medicare/Medicaid surveying agent recommends that your business receive one. Medicare or Medicaid dispatches a surveying agent to verify one or several of your clients qualify for Medicaid or Medicare, conducts an investigation, and ensures your caregiving agency meets Medicare/Medicaid care standards. Only after this investigation is certification granted.
  

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• To begin the process of getting certified, your business must have at least 10 active patients on your client roster, and must have patients actively receiving every type of care service your business offers. Apply for a National Provider Identifier number at https://nppes.cms.hhs.gov/NPPES/Welcome.do and use the application to notify your state’s Department of Public Health that you are interested in receiving a state Medicare/Medicaid surveyor or private accreditor. The process can take six to eight weeks.
• Businesses which are Medicare-certified require higher start-up costs to cover the certification fees. They also require that employees are officially on staff as part of the company, and not acting as independent contractors.
• Non-medical caregiving agencies, by definition, will generally not require medical licensing. Check your state’s guidelines for specific rules.
  

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• Requirements for specific licenses and registration processes vary by state. Check with your state’s Department of Health for specifics about your business.
• Register your business with either your county clerk or your state’s Department of Treasury if your business is a corporation or a limited-liability company (LLC) or limited liability partnership. Sole proprietorships and partnerships will need to register a “doing business as” (DBA) name, but can generally avoid much of the paperwork required of the other types of businesses.

Obtain sufficient liability coverage.

You and your employees will be working with a vulnerable population, and unfortunately, that means you have a significant professional liability risk if something goes wrong. Negligence, for instance, is a common claim against home care companies.

To avoid costly lawsuits, make sure you have adequate insurance coverage in the form of an Entity Professional Liability policy.

• You may also want to encourage your employees to obtain Professional Liability insurance coverage themselves.

Set your rates.

Deciding what to charge for your services is difficult.

Before settling on your service rates, check out other caregiving services in the area and set your prices at a comparable level.

You should also stay conscious of the type of services you’re providing.

For instance, it would be unwise to charge $20 per hour for a patient who only or primarily needs to be driven to and from appointments.

• You also need to be cognizant of Medicare and Medicaid reimbursement limits, as well as major insurers in your area.
• Factor in the strength of your local economy, the number of clients you have, and the distance to and from a given client when setting your prices.
• Since you’re a new business, set your rates lower than those of more well-established caregiving services and the big brands that you refused to franchise for.
• The average rate for home care is $20 per hour.
• You might need to adjust what your rates are depending on your clientele’s finances. For instance, it might be better to take on a financially-challenged client for a lower pay rate than to turn them down entirely, assuming there is still profit to be made. (Plus, that customer might be a good ambassador for your business and suggest you to others in need of home care.)

Hire the right people.

Working with assisted-living patients takes someone special. It requires patience, versatility, dependability, and well-developed interpersonal skills.

In addition to these important personal qualities, if your caregiving business offers medical care, you must hire employees who have all the necessary professional licenses and certificates to work in that field.

• Remember to check up on changing wage and employment laws.
• Medical professionals commonly employed in home care include certified nursing assistants (CNAs) and home health aides (HHAs).
• One of the more common non-medical certification programs is the online course offered by the American Caregiver Association (ACA). Decide if you want your non-medical professionals to obtain this or other certifications.
  

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  • The ACA offers both a general caregiver certification and an assisted living manager certification. Both certifications consist of an online course and an online exam. The courses can usually be done in two days, though there is no time restriction on how long you can take to work through your course. Each costs $80 and can be taken through the ACA site at http://www.americancaregiverassociation.org.
  • Check https://www.caregiverlist.com/Caregiver-Training-Requirements-By-State.aspx to see what your state’s licensing or certification requirements are for non-medical caregiving personnel.
• Ensure you bond all your employees. Bonding is a process by which you provide a guarantee that any client who successfully charges one of your employees with theft in court will be repaid up to $5,000. For this reason, conduct rigorous background checks on all employees.

Make connections with local healthcare professionals.

Introduce yourself to discharge planners at your local hospitals.

When a patient is discharged and in need of home care, they should think of you first.

Be accommodating when you get a call asking for home care and say “yes” to as many offers as you can.

You should especially look for hospitals that are unsatisfied with their current in-home care providers.

• Introduce yourself to hospital discharge planners at local or regional medical conferences. Hand them your business card and a brochure with information about your business.
• Explain that your business is expanding and looking for more clients.
• You could also call them on the phone or send them an email to the effect of: “We are a growing in-home caregiving business that puts the needs of our patients first.
• We would like the opportunity to partner with your institution to better fulfill our patient-driven mission.”
• Propose a tour of your offices. Inquire as to what certifications or services the hospital expects the in-home caregiving agencies it works with to have.

Obtain requisite equipment and materials.

If your in-home caregiving business is non-medical, you will only need uniforms and a strong marketing budget.

If you’re a medically licensed caregiving business.

However, you will need to invest in relevant medical equipment.

• Depending on what services you offer, syringes, sterile needles, stethoscopes, dialysis machines, and other medical tools and technology might be necessary.
• As technology improves and you make more types of medical care available.
• You will need to update and improve your medical equipment.

Engage in vigorous marketing.

Marketing is an important part of promoting your business.

Your marketing strategy should encompass not only traditional modes of advertising on radio, local TV, and the web.

But take advantage of social media to attract attention to the work you’re doing.

Use updates on Facebook and similar sites to talk about how your business is growing and contributing to the community.

• Enlist the aid of a web designer to help you develop a professional website.
• Your site should include contact information, a list of services your business provides, testimonials from satisfied customers, and images of the happy customers you’ve provided care for.
• Maintain a blog about the joys and challenges of in-home care to demonstrate that your business is serious and passionate about caregiving.
• Get some brochures printed advertising your business and the services it provides.
• Keep several brochures in the main office of your business.
• This way, when potential clients inquire about your business, they can leave with the information in your brochure and consult it later. Inquire at local hospitals, doctors’ offices, and VFW halls about leaving some there for potential clients.
• Obtain business cards with your name, your company logo, and position. Distribute them when meeting with someone interested in your business.

Funding Your Business

Obtain a personal loan or fund yourself.

If you have a significant nest egg socked away, or can obtain a personal loan from a wealthy family member (perhaps in exchange for 5% – 10% of the company royalties).

You may be able to cover your start-up costs yourself.

This is the best option for covering your start-up costs.

An interest-free loan means you don’t have to fill out all that pesky paperwork and can negotiate a more generous repayment plan than you’d ever get from a bank or private funding source.

And if you fund the whole enterprise yourself, you won’t even have to do that.

• On average, a new home care business will need $50,000 – $75,000 to get started.

Get a loan.

There are a number of financing options available to a new in-home caregiving business.

You could consult a local bank after setting up your business account and negotiate a loan with them.

To do so you’ll have to present your business plan and make a convincing case as to why your business is worthy of the loan.

You could also get a loan with a guarantee from a public or private organization, like the Small Business Administration (SBA).

• The SBA has a number of attractive loan-guarantee programs.
• These programs require another lender to provide the loan, which is then guaranteed by the SBA. The most logical one for a new in-home caregiving business is the 7(a) Loan Program, which is available to new businesses.
• For loans of less than $150,000 (an amount your in-home caregiving business is unlikely to surpass), interest is set at zero percent.
• You can start working on an SBA 7(a) loan application at https://www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs/general-small-business-loans-7a/7a-loan-application-checklist.
  

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Apply for a grant.

Grants from a private organization or government agencies are probably the most attractive option for funding a new business.

With a grant, you aren’t spending your own money, or money you’ll have to pay back later.

The money awarded with a grant does not need to be repaid.

However, compared with loans, grants are much more difficult to get.

Most small businesses do not qualify for government grants, but you can use the federal BusinessUSA financing tool online at https://www.sba.gov/loans-and-grants to investigate your options.

• Look for local, private, and state grants in addition to the big federal grants.
• Community development corporations are a great option for funding.
• Always apply early, follow all the directions in the application, and ask lots of questions of the grantor.

Consider brand recognition.

Is the company that you’re thinking of franchising for a well-known name in the in-home caregiving world?

And, more importantly, is the price you have to pay in franchising fees and revenue shares worth operating under the brand name?

• Carefully research the company or companies you’re considering opening a franchise under. Request and review the Franchise Disclosure Document.
• Look at current market trends and the company’s history.
• Is the franchise facing stiff competition from a new up-and-coming brand? Is the brand in good standing locally and nationally?

Apply for a franchise license.

Contact the company you’re interested in franchising for and inquire as to their franchising process.

Each company is different, but they will definitely want to see that you have significant funds, often between $40,000 – $260,000.

Once you’ve been approved for a license, you’ll have to make a payment for the license, which can run anywhere from $20,000 – $90,000.

Cornerstone Caregiving

Attend training under franchise leadership.

When you first join the franchise, you will need to understand the protocols and service techniques that the franchised utilizes.

The business you’re franchising for has been successful for a reason.

Find out what it is by consulting them with any questions you have and attending as many of the professional development conferences they host as possible.

Negotiate the franchise’s cut.

To continue operating under the franchise’s name and availing yourself of their support networks and training, you will have to give them a share of your gross earnings.

These royalty fees can range anywhere from 2% to 8% of your monthly gross.

Negotiate for a low fee, especially when you’re just starting out.

• If you can procure your own office supplies, software, and marketing budget.
• You’ll be able to save money on the contract by accepting a lower level of assistance.

Conclusion