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4 Challenges Home Health Startups Face (And How to Come Out On Top)

by Ginny Kenyon, RN, MN

Every new business venture has its risks, but starting a home health agency poses significant challenges not all entrepreneurs know how to overcome. From not having sufficient startup cash to incorrectly setting up systems, many things can go wrong. To succeed, you have to understand the barriers standing in your way and then take the necessary steps to bust through them. Here are a few of the main challenges home health startups face, along with what you can do to beat out the competition and come out on top when the dust settles.

1. Finding Enough Cash

Extensive cash flow is needed to start any business, but especially a home health startup. Generally speaking, a home care agency needs at least $40,000 to $60,000 to get started. A home health agency needs $60,000 to $80,000, and a Medicare home health agency needs between $150,000 and $300,000. Finding such a substantial amount of cash isn’t always easy, especially in this economy. It starts with creating a sound business plan to attract investors and obtain funding from financial institutions. Consult with a home health expert or other business advisor who has experience starting new companies. Their guidance will be invaluable and can save you huge amounts of time and money—both of which are in short supply when you start a home health agency.

2. Hiring the Right Staff

Employing the right staff—from day one—is critical for your home health startup. Not only do you need well-trained, qualified caregivers in the field, but also skilled employees in the office to handle the many day-to-day management duties. Establish your hiring processes and procedures early. The most successful startups clearly define position profiles for each role before beginning the search for qualified candidates, which includes a thorough job description, experience requirements, responsibilities, and necessary skills.
Although you are undoubtedly in a rush to get up and running, recruiting the best talent takes time and patience. Always perform a comprehensive background check for every new staff member. The last thing you want to do is put both your business and your clients at risk by hiring the wrong employees. You can learn more about best practices for recruiting talent for your agency in this blog post.

3. Getting New Clients

The competition is high in the home health industry. Success or failure often depends on having effective sales and marketing strategies to attract new clients. Home health startups need an extensive network to promote the agency as well, which should include both online and offline channels. Remember that understanding the industry, having all of the right home health skills, and even how to run an efficient business doesn’t guarantee success. If you don’t have the right sales and marketing expertise to acquire new customers, you may never get the chance to put your skills to good use. Consider working with a marketing agency that has specific knowledge of the home health industry. This will free up your time to focus on the nuts and bolts of running your agency.

4. Having the Right Systems

Federal and state regulations set very clear guidelines for home health startups, and agencies that don’t follow them risk financial setbacks—or worse. Establish your policies and procedures early on to keep your agency on the right track from the day it opens. In addition to getting your internal processes in order, don’t forget to do your homework on vendors for your software systems as well. You want to select software based on future expectations for your agency—not just the position of your business today. The right software systems will grow with you, accommodate coding and billing changes (such as ICD-10 coding), and still be cost-effective when they’re implemented.

Home health startups that have a strategic plan in place before they open their doors are far more likely to be successful. 

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About Ginny Kenyon RN, MN of Kenyon HomeCare Consulting

Ginny Kenyon, Founder and CEO of Kenyon HomeCare Consulting, is passionate about helping clients achieve unique success in the marketplace. Known for her ability to produce substantial results in a short period of time, her keen understanding of the home care industry allows clients to develop and implement long-term solutions for their agency. Kenyon HomeCare Consulting can help you identify the challenges your agency is likely to face—regardless of the current size or state of your business—and set up a plan to help you overcome them. Schedule an appointment with one of their home health consultants to make sure your agency starts strong and continues to grow for years to come.

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About Kinnser software

Kinnser Software, Inc. provides web-based solutions that deliver clinical and business results to the home health, hospice and private duty industries. Founded in 2003 and headquartered in Austin, Texas, Kinnser Software serves more than 4,000 home health, therapy, hospice, and private duty home care providers nationwide. Kinnser helps thousands of clinicians and other staff in post-acute healthcare to manage scheduling, billing, electronic visit verification, day-to-day operations, and patient referrals. 

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