How to Start a Home Care Business: What the Industry Data Says It Takes

Starting a home care business comes down to a handful of things the industry data keeps pointing back to: choosing the right model, clearing the licensing hurdle, building a caregiver workforce you can actually keep, and earning the referral relationships that send you clients. Notice what is not on that list. A medical degree nor the heavy clinical machinery that most people assume the word “care” implies.

That gap between what people assume and what the data actually shows is worth closing before you commit time or capital. What follows is a data-grounded walkthrough of how to start a home care business, drawn from the largest annual benchmarking study of the private duty sector, so you can see the real shape of the opportunity and the real work behind it.

Step 1: Start With the Right Model: Non-Medical or Medical

Non-medical home care, also called private duty care, covers the non-clinical support that helps an aging adult stay safely at home: help with bathing, dressing, meals, light housekeeping, transportation, and companionship. Medical home care is the separate, heavily regulated world of skilled nursing, therapy, and Medicare certification delivered by licensed clinicians. Most franchise systems, HomeWell included, are built around the non-medical model, which is why you do not need a medical background to own one.

Starting here matters because it sets your licensing path, your staffing model, and your barrier to entry. The non-medical route is the reason first-time owners from corporate, sales, and operations backgrounds can enter this field at all.

Step 2: Choose Your Path: Independent or Franchise

Once you know what kind of agency you are building, the next decision is whether to build it alone or buy into a system.

The market is split almost evenly. In the most recent benchmarking data, https://homewellcares.com/franchise/franchising/what-percentage-of-home-care-agencies-are-franchises/ and just under half are independents. Going independent gives you total control and no royalty, but you assemble every piece yourself: the licensing process, hiring systems, training curriculum, care standards, software, and a referral strategy. A franchise offers a playbook and a support team, which can shorten the learning curve where new agencies most often stumble.

The right decision depends on your appetite for building versus executing. The operating gap between franchised and independent agencies is a real consideration worth understanding before you decide.

Step 3: Handle Licensing and Setup

This is the administrative layer, and it is where “you do not need to be a clinician” meets “your business still has rules to follow.”

While you personally do not need a medical credential, your agency might need a state license or registration to operate, and those requirements vary widely from state to state. Some states ask for very little. Some require a license, and some require you to designate a qualified administrator or, for certain service lines, a nurse on staff. On top of that sit the ordinary building blocks of any business: forming your legal entity, getting an employer identification number, and putting insurance and bonding in place.

Step 4: Build a Caregiver Workforce You Can Keep

If the first three steps get you to the starting line, this is the race. More than any single factor, the data says the home care business is won or lost on workforce retention.

The numbers are sobering and worth sitting with. Industry caregiver turnover peaked at 79.2% in 2023 and has barely moved since, sitting at 75.5% in 2025 according to the 2026 Activated Insights Benchmarking Report. The workforce challenge is not resolving on its own. When operators were asked to name their top threat heading into the year, caregiver shortages topped the list at 51.3%, ahead of every other concern in the industry.

The same data identifies the levers that move retention, with competitive pay, meaningful benefits, and structured training and onboarding chief among them. Agencies that treat recruiting and retention as an ongoing system rather than a periodic scramble are the ones that hold their teams together. This is also where a franchise tends to prove its value, and it is worth understanding how franchise systems support training and care quality before you decide to go it alone.

Step 5: Earn the Referral Relationships That Bring Clients

New owners often assume marketing means traditional advertising. In home care, the data says otherwise.

When agencies were asked to name their single biggest growth opportunity for the year, strengthening relationships with referral sources ranked first at 45.6%, well ahead of everything else. And word-of-mouth referrals remain the number one source of new clients, accounting for 23.9% of new business. The pipeline in this industry runs through relationships: hospital discharge planners, senior living communities, elder-law attorneys, physical therapists, and past clients who tell a friend.

That means your early growth work is about being the name a discharge planner trusts to hand a family.

Step 6: Put Systems and Technology in Place

Behind every reliable agency is an operational backbone: scheduling, caregiver matching, visit verification, billing, and the record-keeping that keeps you compliant.

Technology adoption across the sector is accelerating, and the tools that once separated large agencies from small ones are now within reach of a first-year owner. Getting your technology and automation foundation right early saves you from rebuilding it under pressure later, when you are juggling dozens of caregivers and clients at once. This is another area where a franchise can shorten the path, handing you a vetted technology stack instead of asking you to evaluate a crowded software market on your own.

What the Data Really Says It Takes

The demand underneath this business is real and durable. The non-medical home care market is projected to reach an estimated $18.7 billion by 2033, 75% of adults 50 and older want to age in their own homes, and the Bureau of Labor Statistics projects home care aide roles to grow 17% between 2024 and 2034, much faster than the average occupation. The tailwind is not the question.

The question is execution. The benchmarking data is blunt about this: the gap between agencies that measure their performance and those that do not is widening. What it takes to start a home care business is not a clinical background or a fortune in startup capital. It is the discipline to keep a caregiver workforce, the patience to build referral relationships, and the systems to run it all consistently. Those are learnable, and they are exactly the things a strong franchise system is built to teach.

When you get it right, you are not just running a company. You are standing up essential care your community is genuinely short on, becoming the operator families count on when they need someone to show up for an aging parent. HomeWell exists to give owners the training, systems, and support to do that with confidence.

Ready to see what it takes to start yours? Download the HomeWell Franchise Kit for a closer look at the model, the support structure, and territory availability in your area.