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Thursday, February 22, 2024

How Does the Aging Population Inform the Home Health Care Industry?

In the December, 2022 edition, Forbes offered an astounding statistic related to a looming increase in home health care. The statement indicated that, within the home health and personal care industry, it is estimated there will be growth at the astronomical rate of 924% during the next decade. This estimate is almost too staggering to comprehend, as it indicates a sea change is coming and doing so very soon. How will the aging population inform the home health care industry in the decade ahead? Like never before. 

An entrepreneur who estimates the percentage increase and the obvious need for a solution will consider creating a home health care business. The entrepreneurs who move beyond envisioning the business to actually conceptualizing and taking steps to start the business are the ones who will craft a winning strategy to capture the profits waiting to be made. The realization that the home health care industry is regulated and licensed state-by-state may add to the complexity of the process; however, this is the right time to invest and, within a few years of business, either scale your business to multiple locations or, alternatively, consider franchising the business. In the following, we will examine the steps to create a home health care business from the start to the launch. 

Step 1:  Assess the Target Market

With the idea of creating a home health care business comes the need to define who the consumers will be who purchase the services. In this case, the consumers are 99% certain to be those who are aged or infirm and cannot fully care for themselves. This may mean some are ambulatory while others are not, and some will have cognitive abilities, while others will not. As a result, the spectrum for the target market is quite large, enabling any number of scenarios to take place. In short, the target market for home health care businesses will be the consumers who need solutions to urgent problems. 

 

Step 2:  Analyze the Competition

Home health care agencies are carefully regulated and they are recognizable within the region. Most advertise services on some level and conduct marketing, although they often are filled to capacity and cannot accept new guests. Most importantly, secure pricing models offered by your competitors, as these will dominate most decisions of both the guests and their families. Research which competitors will accept guests with cognitive loss or will accept only those with full capabilities. Also, research to discover if non-ambulatory guests are welcome. Also importantly, determine the ratios for nursing, LVNs, and CNAs to guests, as this will be an indicator of the amount of time each has for caring for individual guests. 

 

Step 3:  Build a Business Plan

If scaling the business is in the future, it is imperative that a business plan be constructed to serve as the roadmap and the forecast for the future. Use this business plan as a comprehensive guide. 

 

Step 4:  Create Marketing Strategies

Although the target audience for home health care businesses has already outgrown the availability of services, the home health care business will want to create an integrated website with images, announcements, and a question-and-answer blog by the business owners. The consumer should be able to read any last-minute changes and other items of interest on the website and the phone number for the home health care business should be clearly marked in large font numbers. Other marketing strategies may include “open house” gatherings where families can bring guests who want to preview the facilities. Most of the marketing efforts will be traditional newspapers or radio spots to conform to the interests of potential guests.

 

Step 5:  Prepare a Financial Plan and Forecast

Creating a financial plan and forecast will be a crucial element within the business plan. It is one of the few parts of the plan that investors and lenders will want to read first, as it will indicate the health of the startup business. Project out up to five years with income and expenses as expected and be prepared to present the business plan if startup or growth-mode funding is needed. 

 

Step 6:  Develop an Operational Plan 

An operational plan is included in a business plan to highlight the efficiencies of the structure and planned roles and responsibilities for staff members. While much of this is a forecast, investors or lenders can see the expectations of the owners and will respond accordingly. 

After each of these steps has been completed, a business plan can be presented to lenders and investors for startup or growth mode funding. Analyzing the vast increase in the need for home health care in the decade ahead will act as a motivator for funding and investing in these businesses, as they meet the needs of the oldest members of our society.