StartupHomeCare Blog

3 Reasons Home Care Agencies Fail

by Editor

Posted in Senior Care | No Comments

The ability of a home care agency to get through that all important first 6 months of launching their business is of utmost importance. There are three main reasons why some home care agencies do not make it past their 6 month mark and it has nothing to do with getting a home care license in their state (if required – which is the easy part of starting a home care agency). Here are the top three reasons home care agencies fail within 6 months:

1) They have nothing that sets them apart from their competition. What will set you apart from others who have been around for years in your community? How will you get clients? Offering the same services as everyone else is not going to encourage case workers at healthcare facilities to choose your organization that is new and unproven – unless you offer them something the others don’t have. Our unique AHI Group Veterans Program is one such offering that helps our AHI agencies stand out from the crowd. Many may claim to have a VA Program but theirs is not the same as ours and cannot provide the options we provide to families allowing our agencies to win business almost every time when going up against other home care agencies in this arena. Some of our AHI Member agencies focus only on Veterans (and their surviving spouses) as this is such low hanging fruit and there is no real competition when one compares apples to apples.

2) They focus only on home care services AND have no corporate contracts. In today’s market place busy family members and looking for a one-stop shop when it comes to getting most things in life. We don’t have the time or patience to run around looking for every possible senior care option out there – and what if we are not looking at all the options? AHI Group member agencies provide home care services but also provide four other related senior care services – like assisted living placements to name one. The other three businesses are taught at our training and allow our agencies to provide a full spectrum of care services to their community.

Starting out, many home care agencies do not have any idea about how to bill Long Term Care Insurance, Workers Compensation, or Medicaid. AHI Group members get access to Corporate contracts that are difficult for individual home care agencies to get access to. Many Long Term Care Insurance companies like to work with large home care organizations so they can train one company and get 300 – 500 home care agencies under that one organization added to their system. This is much easier than adding 300 independent home care agencies who are not on the same page as each other and need a lot of individual attention. Private pay clients are great – but there is also a lot of competition in that space so having access to other pipelines of business is critical to the success and continued growth of a home care agency.

AHI Group not only trains its members how to set themselves apart in their community but also actually brings them clients to their door via AHI Group’s corporate insurance contracts. These clients are getting their care paid for via insurance so they sign up almost 100% of the time and don’t stop the care due to lack of funds.

3) They have no real support after initial training. With the franchise model, the franchiser is happy to supply and offer ongoing support; after all, you are paying them a lot of money to have the right to call them and ask them questions; it’s called a 2.5% – 7% Royalty Fee taken off the top of your Gross Revenue. At AHI Group we are similarly financially invested in our member agency’s success but the difference is that we do not charge a royalty on everything our member agencies earn – we charge a fee for optional programs they get to ‘opt-in’ to be part of. The three ‘opt-in’ programs AHI offers its members exclusively are its Veterans Home Care Program, its Agency Management Software solution, and the Workers Compensation Insurance Program. The Veteran and Workers Compensation programs bring clients to AHI Member agencies and allows them to receive revenue accordingly.

AHI Group Corporate contracts allow its member agencies to tap into pipelines of clients that can have their care paid for via insurance. AHI Group can even do all the client billing and guarantee payment to the member agency – for only a 4% of gross sales fee. Each member agency is not required to participate in these optional programs but 95% of AHI Group agencies do participate as they see it as a win-win scenario: The agencies get clients/revenue and AHI Group gets recurring revenue that allows us to keep the entry cost to our organization down and not have the need for a royalty to keep our organization running efficiently and provide the necessary resources to our members ongoing.

Any other income our member agencies make outside of these programs do not have any fees attached to them. Again, if an agency doesn’t want to use AHI VA Program and wants to use another solution out there to take care of their VA clients they are more than welcome to choose that other option and AHI Group will not take any recurring revenue from them. AHI will still support this agency just the same as all other agencies who use our programs ongoing.

AHI Group allows its members to make choices – that’s the key difference between AHI’s organization and a franchise or a membership company who charges a flat $500 a month fee – no matter what the agency makes in revenue. AHI is motivated to have its agencies make as much revenue as possible and is motivated to provide programs that its members will CHOOSE to be apart of. If AHI programs are not unqiue or competitive then AHI members will not choose to use them. AHI is motivated like no other organization in the home care industry to stay current and on top of the competition. Our recurring revenue depends on it!

At AHI Group (AHI) StartupHomeCare we know how important it is to have an experienced, prior home care business owner’s “hand to hold” when you are going into a new career and often into an industry you have never worked in previously. Our training and ongoing coaching is designed to help people through the maze of starting, operating, and growing their own successful home care business – with a focus on long term strategy and short term goals to maximize revenue potential. Our support is provided only by those who have owned their own home care business before. We are not like most other organizations who have people who have been “trained by a trainer” providing day to day support to their home care agencies. Unless a person has been in your shoes as a new home care agency owner how can they possibly understand what you are going through each day?

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