How to Start a Non-Medical Home Care Business (Complete Guide)
- Katarina Mirkovic Arsic
- Feb 11
- 15 min read
Updated: 5 days ago
Non-medical home care is one of the fastest-growing segments in healthcare. With more seniors choosing to age in place and high demand for services like personal care, companionship, and daily living support, starting a home care agency is a real opportunity for business owners ready to build something meaningful.
This guide walks you through every step, from licensing and insurance to hiring and retaining caregivers, getting clients, and managing your costs. All home care businesses, no matter if they offer companion care or specialized services like dementia support, start with the same foundation.
Here's how to set your non medical care operation for a long term success.
What Is a Non-Medical Home Care Business?
A non-medical home care business is a business that offers services to those who don't need medical care, but still need assistance with daily activities. These are usually agencies that employ caregivers who work in clients' homes or community settings. The goal of these non-medical care services is to help clients keep their independence for as long as possible.
Non-Medical vs. Medical Home Care
A medical home care business (in many cases called a home health agency) provides skilled care like nursing, wound care, and physical therapy delivered by licensed clinical professionals. Home healthcare agencies typically need both state licensure and Medicare certification, and are significantly more expensive to start.
Non-medical home care focuses on personal support rather than medical services. Your caregivers help with bathing, dressing, meal preparation, and sometimes transportation, but never with clinical procedures. Most states still require licensing for non-medical home care agencies, but the barriers are significantly lower. You won't need to hire nurses, and you won't need federal certification unless you plan to bill Medicare.
The Bureau of Labor Statistics draws a clear line between these two sides of the industry. Home health aides work under medical supervision and perform clinical tasks, while personal care aides provide non-medical daily living support. That same distinction applies at the business level, and it shapes everything from who you hire to what licenses you need.
Common Services Offered
The services offered by a non-medical home care agency generally fall into three areas.
Personal care covers hands-on assistance with daily living activities like bathing, dressing, personal hygiene, toileting, and mobility support.
Homemaking includes meal preparation, light housekeeping, grocery shopping, and transportation to appointments.
Companionship and respite care provide social engagement and supervision while giving families a break.
Some agencies also offer specialized services like dementia care or post-surgical recovery support. These require additional specialty caregiver training but can command higher rates and help set your agency apart.
Why Non-Medical Home Care Is in High Demand
The home care industry is visibly growing, and the data behind it shows that it will be sustained, long-term growth. and not just a short-term trend. Therefore, deciding to become a non medical home care business owner can be a very smart move. Here's some interesting data to show that this industry is in fact rapidly expanding and will continue to do so:
70% of adults who survive to age 65 will develop serious long-term care needs before they die, and nearly half will require some form of paid care. (U.S. Department of Health and Human Services, ASPE)
More than 80% of older adults prefer to receive that care at home rather than in a nursing home or institutional setting. (AARP/LTSS State Scorecard)
Home health and personal care aides are projected to account for 1 in every 8 new jobs added to the U.S. economy through 2033. (Bureau of Labor Statistics, Monthly Labor Review)
For anyone considering starting a senior care business, the math is straightforward: the people who need care want it at home, and the workforce to deliver it is the single fastest-growing occupation in the country.
What You Need to Start a Non-Medical Home Care Business
Before you rush to hire your caregivers and make a full home care business plan, you need to cross all t's and dot all i's when it comes legal, financial, and operational foundations. This is a highly regulated industry, and skipping on these creates risks that can mean fines and denied licenses.
Choose a Legal Business Structure
You need to decide how your non-medical home care business will be legally organized. This decision affects your personal liability, how you're taxed, and how you can grow. There are four main options, according to the U.S. Small Business Administration:
A sole proprietorship is the simplest — you and the business are the same legal entity, with no paperwork to file, but you're personally liable for everything. Risky for a business that sends caregivers in people's homes unsupervised.
A partnership works the same way but splits ownership and responsibility to more people. Plus, it adds a layer of complexity of shared decision-making.
A limited liability company (LLC) is the most common starting point for many home care agencies. It creates a legal legal barrier between your personal assets and your business. You can also benefit from a flexible tax treatment.
A corporation (C-corp or S-corp) offers the strongest formal structure.
An S-corp avoids double taxation by passing profits through to shareholders, but requires stricter record-keeping, a board of directors, and caps ownership at 100 U.S. shareholders.
A C-corp is taxed at both the corporate and personal level. Corporations make more sense if you're planning to seek outside investors or scale to multiple locations.
This is just an overview and you have to check the local state laws for specifcs. When it comes to legal matters like this one, always consult a lawyer before making such decisions.
Register Your Business and Get and EIN
Once you've chosen your structure, you need to make it official and register your business.
If you're forming an LLC or corporation, file your formation documents with your state's Secretary of State office — fees range from around $50 to $500 depending on the state. Sole proprietors and partnerships don't need to file formation paperwork, but may still need a local business license or a "doing business as" (DBA) registration if you're operating under a name other than your own.
Next, apply for an Employer Identification Number (EIN) through the IRS. It's free and takes minutes online. Your EIN is essentially your business's Social Security number — you'll need it for tax filings, opening a business bank account, applying for insurance, and in most states, submitting your home care agency license application.
Also check whether your city or county requires a separate business license or zoning permit, especially if you plan to run operations from a home office. Some municipalities have restrictions on businesses that dispatch employees from residential addresses.
Understand Your State's Licensing Requirements
Non-medical home care is regulated at the state level, and requirements vary significantly. Most states require a home care agency license issued by the state's Department of Health or an equivalent agency.
A small number of states do not require a state-specific license for non-medical home care, though standard business registration, caregiver background checks, and insurance requirements still apply.
In regulated states, the licensing process for non medical home care business typically involves:
submitting an application with a fee
passing business owner and administrator background checks
providing proof of liability insurance
presenting written policies and procedures that cover care delivery, hiring, training, and emergency protocols.
Many states also require an on-site survey or inspection before approving the license, and processing timelines range from under three months to well over a year.
Here are the licensing resources for several of the largest home care markets:
Washington — Dept. of Health, Home Care Agency license
Oregon — Oregon Health Authority, In-Home Care Agency (IHC) license
California — Dept. of Social Services, Home Care Organization (HCO) license
Texas — Health & Human Services Commission, Personal Assistance Services (PAS) license:
Florida — Agency for Health Care Administration, Homemaker & Companion Services registration
New York — Dept. of Health, Licensed Home Care Services Agency (LHCSA)
Illinois — Dept. of Public Health, Home Services Agency license
If your state isn't listed, search for "[your state] + non-medical home care license" or contact your state's Department of Health directly. Requirements change, and starting with the wrong license type can cost months.
Get the Right Insurance and Bonding
Even if you're not offering healthcare services, most states require home care agencies make specific insurance a condition for issuing a licence. Additionally, many clients and referral partners will ask for proof of coverage before signing a contract.
It's smart to plan for at least three core policies:
General liability insurance covers third-party claims like client injuries or property damage during care visits, with typical limits of $1 million per occurrence and $2 million aggregate.
Workers' compensation insurance covers medical expenses and lost wages when employees are injured on the job — most states require it as soon as you hire your first employee.
Professional liability insurance (also called errors and omissions) protects against negligence claims related to the care your staff provides, even in a non-medical setting.
You can also find offers for business owner's policy (BOP), which bundles general liability with commercial property coverage. If you get a deal, this can save you some of that investment money.
Bonding is separate from insurance. A fidelity bond (sometimes called a dishonesty bond or surety bond) compensates clients if an employee steals from them. Some states require bonding, but even when not mandatory, being bonded builds client trust and can be a competitive advantage.
Start the insurance process at least 30 days before you plan to take clients.
Write Your Policies and Procedures
When you own home care business, you get to write your policies and procedures. If you get audited or inspected, your policies and procedures are the first thing your on-site inspector will ask from you. Lacking these is one of the most typical reasons why non medical home care business operations stall. Here's what you need at minimum:
Client intake and care planning — how you assess needs, create service plans, and document changes
Hiring and screening — background check requirements, credential verification, and onboarding steps
Caregiver training — initial orientation, ongoing education, and competency validation
Emergency protocols — what staff do during medical emergencies, natural disasters, or missed visits
Client rights and complaint procedures — how clients report concerns, and how your agency investigates and resolves them
HIPAA for caregivers and privacy — how you handle, store, and protect client information
Incident reporting — documentation requirements for injuries, falls, allegations of abuse or neglect
Your state's licensing application will typically specify which policies are required and how they should be organized. Review those regulations closely before writing.
Set Up Your Operations and Software
Even if you are not a tech savvy person, you will soon learn that having at least some basic software to help you keep your records and run your business is worth the while it takes to learn how to use it. Of course, you can start with phone calls and spreadsheets, but the sooner you switch to a more professional stack, the sonner you'll get back your time and reduce the confusion. Here's what you need to look into:
Management software — an platform for caregiver shift scheduling, care plans, billing, invoicing, and caregiver documentation
Electronic visit verification (EVV) — many states now require EVV under the 21st Century Cures Act for agencies providing Medicaid-funded personal care services. Even if your state doesn't require it yet, EVV builds trust with clients and referral partners.
A dedicated business phone line — separate from your personal number, so clients and caregivers can always reach your home care agency.
HIPAA-compliant record storage — a secure method for storing and accessing client information, whether cloud-based or physical.
Payroll processing — a reliable system for calculating pay and managing mileage or transportation reimbursement
Setting up the right systems from the start is far cheaper than rebuilding them once you're already serving clients. The benefits are doublefold. State surveyors and auditors expect you to produce clean records. On the other hand, clients and partners love to see a non medical home care business that's run professionally.
How to Build Your Care Team
Your caregivers are your business. The quality of care your agency delivers, and your reputation with clients and referral partners depends on who you hire, how you train them, and whether they stay.
How to Find Qualified Caregivers
Start by defining what you actually need adn expect. Non-medical caregivers don't require clinical licenses, but they do need reliability, empathy, strong communication skills, and, in many states, a state-issued credential like a Home Care Aide (HCA) certification.
Include all that in your job descriptions and clearly state what the disqualifying factors are , as well as what are "nice-to-have" requirements. Also, it's useful to add whether your position offers visa sponsorship or not. Vague listings attract unqualified applicants and waste time on both sides.
The most effective recruitment sources for home healthcare agencies include caregiver training programs, word-of-mouth referrals from current staff, community events, and local job boards. Industry data consistently shows that caregivers hired through word of mouth have significantly lower turnover than those hired through large job platforms.
Read more on crafting good job posts here: The Anatomy of a Perfect Caregiver Job Post
Read more on making your selection: 13 Skills of a Caregiver to Look for in Your Candidates
Screen and Hire the Right People
Sending caregivers into clients' homes creates a position of trust, and your screening process needs to reflect that. Most states require criminal background checks before a caregiver can work unsupervised, and many require fingerprint-based checks through the state's Department of Justice or equivalent agency.
Washington, for example, requires both a state background check and FBI fingerprinting, with results due within 120 days of hire.
Beyond criminal history, run driving record checks (especially if caregivers will transport clients), verify employment history, and check references. A structured interview process that tests for situational judgment, not just experience, helps you identify candidates who can handle the real demands of the role.
Read useful tips on this: 17 Smart Interview Questions to Ask Your Caregiver Candidates
Ensure Quality Caregiver Training
Caregiver training requirements vary significantly by state. Caregiver training in Washington state requires 75 hours plus a certification exam, although not all of it is required to start working as a caregiver. California requires just 5 hours of initial training for home care aides. Regardless of your state's minimums, the home care agencies that invest in more thorough orientation and ongoing education consistently report higher retention and higher revenue.
Don't stop at initial orientation. Ongoing professional development in areas like dementia care, fall prevention, and chronic condition support improves quality of care and gives caregivers a reason to stay.
Build a Recruitment and Retention Plan
Non medical home care industry has a high turnover and replacing a single caregiver can cost your business several thousands of dollars. Not to mention, clients are not always happy to change the caregivers with whom they already have established relationship.
Your strongest retention tools are competitive pay, flexible scheduling, structured onboarding, and genuine recognition. According to 2024 Activated Insights Benchmarking Report, Agencies that pay above the 75th percentile in their market see turnover drop by over a third. Investing in your team's wellbeing pays back directly in care quality, client satisfaction, and referrals.
Read more on this: 3 Ways to Support Your Staff's Mental Health
Read more on how to make your home care business attractive to caregivers: Employment Branding for Home Care Industry
How to Get Clients and Grow Your Business
Growth in home care depends on being visible where families are searching and building relationships with the professionals who refer them.
Build an Online Presence
Most families start their search for home care online. Your website should clearly state what services you provide, which areas you serve, and how to request a consultation. Every service area needs its own dedicated page to rank in local search results. Don't worry if you don't know how to make a website for your home care business. Today, there are many user-friendly options out there.
Start with these steps — none require technical expertise or a marketing budget:
Claim your Google Business Profile and fill out every field — business name, address, phone number, hours, service categories, and a clear description of what your agency does
Add photos of your office, your team, and your branding — profiles with photos get significantly more engagement than those without. NOTE: Never post photos or videos of your clients or staff without an explicit and preferably written consent.
Create a separate page on your website for each city or county you serve
Add a visible phone number and a contact form on every page of your site
Ask satisfied clients and their families to leave Google reviews after a positive experience
List your agency on free senior care directories — Caring.com, A Place for Mom, and your state's Area Agency on Aging
Set up a Facebook business page and presence on other social media platforms with your contact information, services, and service area to showcase your home care business to potential clients.
Make sure your business name, address, and phone number are identical across every listing — inconsistencies hurt your visibility in local search
Reviews are often the deciding factor in a trust-driven industry. Make asking for them part of your regular workflow, not an afterthought in your marketing efforts.
Build Referral Relationships
Referrals are the most consistent source of new clients for non-medical home care agencies. The Home Care Benchmarking Study consistently identifies current and former clients as the top referral source — followed by hospital discharge planners, home health agencies, hospice providers, and skilled nursing facilities.
Discharge planners are especially valuable. Their job is to ensure patients transition safely out of the hospital without readmission within 30 days. If your agency has a track record of responsive intake and reliable caregivers, they will refer to you first.
Other referral sources worth developing: primary care physicians, elder law attorneys, case managers, faith communities, and senior centers. Community events like health fairs put you in front of families before they're in crisis.
Build reciprocal referral partnerships with home health agencies that handle skilled nursing — they refer non-clinical clients to you, you refer clients who need medical services to them.
Price Your Services Competitively
The national median rate for non-medical home care is approximately $30 per hour, with state-level rates ranging from roughly $21 to $50 depending on location and services provided. Your pricing needs to cover caregiver wages, payroll taxes, insurance, overhead, and a sustainable margin, while remaining competitive in your local market.
Research what other agencies in your area charge. Most require a minimum number of hours per visit, typically two to four, and may offer discounted rates for higher-volume weekly schedules.
If you're pursuing Medicaid or VA contracts, understand the reimbursement rates those programs set and build your model to be profitable within them. Set rates based on what it costs to deliver reliable care, not on what you think families can afford.
Keep Clients and Build Long-Term Growth
Client retention is what makes a home care business sustainable. Long-term clients cost less to maintain than new ones cost to acquire and they generate the most referrals.
Retention starts with consistency. Assign the same caregivers to the same clients whenever possible. Families build trust with individual caregivers, not with your brand.
Regular care plan reviews, check-in calls with family members, and fast response times when issues arise all signal that your agency takes the relationship seriously. Track satisfaction formally through periodic surveys, and agencies that act on that data retain more clients and earn more referrals.
As your client base grows, every expansion should be driven by actual demand, not by what competitors are doing. Build your marketing strategies around data: which referral sources produce the most clients, which services generate the highest margin, and where your marketing efforts get the best return.
Key Costs to Plan For
Understanding your costs before you launch is the difference between building a sustainable business and running out of cash in year one.
Every business owner starting a non-medical home care agency should map out both startup and ongoing expenses in their business plan before spending a dollar. You can classify all your non medical home care business costs into three categories.
Startup Costs
Startup costs for an independent non-medical home care agency typically range from $40,000 to $80,000, depending on your state's licensing requirements and local market.
Franchise models run higher, often $100,000 to $200,000 or more. Plan for six to twelve months of personal living expenses on top of business costs.(Sources: Entrepreneur; SharpSheets, Clarify Capital)
The major cost categories:
Licensing fees — range from under $100 in states with light registration requirements to over $5,000 in states like California. Texas charges $2,625 for a three-year HCSSA license (Texas HHS) . Florida's non-medical registration is $50.75 for two years, but the full home health agency license runs $2,255.
Insurance and bonding — general liability, workers' compensation, and professional liability are required in most states before you can operate. Some states also require a surety bond
Office setup — lease deposit, furniture, dedicated phone line, internet, computers, and HIPAA-compliant storage. Many agencies start from a home office to keep this cost low, but plan to move to a professional space as you scale.
Common Mistakes to Avoid
Many non-medical home care agencies fail because of avoidable operational mistakes made in the first year. Here are some key considerations:
Launching without enough capital. Underestimating startup home care operational costs or not budgeting for the months before revenue stabilizes is the most common reason new agencies close. Your business plan should account for at least six months of operating expenses with zero clients.
Hiring fast instead of hiring right. Filling shifts matters, but putting an unscreened or poorly trained caregiver in a client's home can destroy your reputation before it's built. One bad placement costs more than a slow start.
Waiting until you need clients to start marketing. Referral relationships and online visibility take months to build. Start your marketing efforts before you're licensed, not after.
Ignoring caregiver retention. Recruiting is expensive. Agencies that treat retention as an afterthought spend more replacing caregivers than growing their client base.
Competing on price instead of quality. Undercutting competitors on rate attracts price-sensitive clients and makes it harder to pay caregivers competitively. Differentiate on care quality, training, and reliability instead.
Skipping compliance basics. Missing a license renewal, falling behind on background checks, or operating legally without proper insurance can shut you down faster than low revenue.
Starting a non-medical home care operation takes planning, capital, and a willingness to get the details right. The agencies that achieve long term success don't cut corners on licensing, training, or hiring Plus, they treat caregiver retention as seriously as client acquisition.
The home care demand is there. The opportunity is real. What separates the home care agencies that grow from the ones that stall is execution.