One of the biggest questions you’ll face when starting a home care business is what rates you should charge for your services. Many first-time home care business owners struggle with this question, whether they are opening a franchise home care business or starting an independent agency. Setting Rates When Starting a Home Care Business
Ultimately, the answer depends on your market, your business model, and the kind of care you want to deliver. But in our nearly 20 years in the home care industry, we’ve noticed that many agency owners sell themselves short when it comes to pricing their care. Setting Rates When Starting a Home Care Business
In our experience, too many entrepreneurs who start home care businesses look to their price point as their key point of differentiation. While this can seem like a surefire way to gain clients, often this strategy leads to sub-optimal results.
Here’s why: Setting Rates When Starting a Home Care Business
Price Point is Often Secondary in Home Care
When family members start searching for home care for their loved ones, price point is often a second-level or third-level consideration. That makes home care distinct from a number of other services where a low price point can set your business apart from the competition in a positive way.
In home care, a low price point can be a negative point of differentiation. While most families can’t afford the most expensive level of care services, they also don’t want to compromise when it comes to the care, well-being, and security of their loved ones. Setting your market’s lowest price point can scare clients away from your business if they think that your low costs come at the price of compromised care.
Low Rates Lead to High Turnover
Hiring and retaining caregivers is the number one challenge for the modern home care business. With such rapidly expanding demand for home care services, there simply aren’t enough quality caregivers on the job market. This challenge will affect anyone starting a home care business, but it’s compounded for agencies with lower rates.
Low rates almost always lead to low wages for care staff. This makes it hard to retain your best caregivers and even harder to hire quality caregivers in a competitive hiring market. This can lead to bleeding revenue as you scramble to maintain a steady staff. It also almost always leads to lower quality care, as it becomes harder and harder to keep your best staff members around.
A Successful Home Care Business Starts with Care Itself
If you’re starting a home care business, put yourself in a prospective client’s shoes. Think, “If it were my dad, or my grandmother, what kind of agency would I want in charge of my loved one’s care? What would set that agency apart? What would be the first thing I’d look for in their service model?”
You might surprise yourself with how far down price point falls on the list you come up with. Instead, you may find yourself thinking of qualities like quality of care, scheduling flexibility, and experience of care staff.
At Visiting Angels, our success is driven by placing care at the forefront of our mission and our approach. We believe that when starting a home care business, the biggest point of differentiation you can stake your reputation on is the way you treat those in your care. That doesn’t mean charging the highest rates for home care in your area — but it rarely means charging the lowest.
If you’re interested in starting a home care business, we hope you’ll reach out to our team at Visiting Angels. Visit us online to request information on our available home care franchises.
