The home care industry is booming. With U.S. home health care revenue surpassing $97 billion and AARP reporting that 90% of seniors want to age in their own homes, the demand for quality home care services has never been higher. If you've been considering launching a home care agency, 2026 is an excellent time to enter this growing market.
This guide walks you through every step of starting a home care agency — from choosing your business model and forming your entity to navigating state licensing, hiring caregivers, and building a client base. Whether you're launching a non-medical home care agency, a Medicare-certified home health agency, or a hospice, you'll find the actionable steps you need below.
Starting a non-medical home care agency typically costs $40,000–$80,000. You don't need medical experience. Licensing requirements vary by state — find your state's specific requirements here.
Understanding the Three Types of Senior Care Agencies
Before you begin, it's critical to understand the three main types of senior care agencies, since each has different licensing, staffing, and cost requirements.
Non-Medical Home Care
Non-medical home care agencies provide personal care assistance, companionship, meal preparation, light housekeeping, and help with activities of daily living (ADLs). No clinical license is required for caregivers. This is the most accessible entry point for entrepreneurs without a medical background.
- Startup cost: $40,000 – $80,000
- Revenue sources: Private pay, long-term care insurance, veteran benefits
- Licensing: State-specific; 28 of 50 states require a specialized license
Home Health (Medical)
Home health agencies provide skilled nursing, physical therapy, occupational therapy, speech therapy, and medical monitoring — all under a physician's orders. Home health agencies must be Medicare-certified and employ licensed clinical staff.
- Startup cost: $150,000 – $350,000
- Revenue sources: Medicare, Medicaid, private insurance, private pay
- Licensing: Required in all states; Medicare/Medicaid certification necessary
Hospice
Hospice agencies provide end-of-life comfort care, pain management, emotional support, and bereavement services for patients with terminal diagnoses (typically a life expectancy of 6 months or less). Like home health, hospice requires Medicare certification and licensed clinical staff.
- Startup cost: $200,000+
- Revenue sources: Medicare Hospice Benefit, Medicaid, private insurance
- Licensing: Required in all states; Medicare certification mandatory
Not Sure Which Model Is Right for You?
Our experts help entrepreneurs choose the right agency type based on their market, budget, and goals. Get personalized guidance in a free strategy call.
Book a Free Strategy Call Find Your StateStep-by-Step: Launching Your Home Care Agency
Choose Your Business Structure
Most home care agencies operate as an LLC (Limited Liability Company), which provides personal liability protection and tax flexibility. Other options include sole proprietorship (not recommended due to personal liability), S-Corp, or C-Corp. Your structure affects how you're taxed, your personal liability exposure, and your ability to raise capital. Consult with a business attorney in your state to determine the best fit.
Register Your Business & Obtain an EIN
Register your business entity with your state's Secretary of State office. Then apply for an Employer Identification Number (EIN) from the IRS — this is free and can be done online at irs.gov. You'll need your EIN to open a business bank account, hire employees, and file taxes.
Draft Your Business Plan
A solid business plan is essential — not just for securing financing, but for mapping your path forward. Your plan should include an executive summary, company description, service offerings and pricing, target market analysis, marketing strategy, organizational structure, operational plan, and financial projections with a cash flow forecast.
Obtain State Licensing
This is often the most complex step, and requirements vary significantly by state. In regulated states, the process typically involves submitting an application with a fee, passing owner and administrator background checks, providing proof of liability insurance, and presenting comprehensive written policies and procedures. Some states also require an on-site survey before approval. Check your state's specific requirements.
Develop Policies & Procedures
Your state will require documented policies and procedures covering client intake and care planning, caregiver hiring and screening, staff training requirements, emergency protocols, HIPAA compliance, incident reporting, and quality assurance (QAPI). These documents must comply with your state's regulations — generic templates rarely pass state review.
Secure Insurance & Bonding
At a minimum, you'll need general liability insurance ($1M–$2M coverage), professional liability insurance, and workers' compensation insurance. Many states also require a surety bond (amounts vary by state, typically $10,000–$50,000). Budget $3,000–$8,000 annually for insurance premiums.
Set Up Your Office & Technology
You'll need a dedicated business phone line, HIPAA-compliant record storage, scheduling and care management software, payroll processing, and a professional office space (many agencies start from a home office to reduce costs). Invest in a reliable home care management platform from the start — it will save you significant time and compliance headaches.
Recruit, Hire & Train Caregivers
Your caregivers are the backbone of your agency. Build a strong hiring process that includes thorough background checks, credential verification, structured interviews, and a comprehensive onboarding program. Invest in ongoing training — well-trained caregivers deliver better care and stay longer. Many states mandate minimum training hours for caregivers.
Build Your Marketing & Referral Network
Most home care clients come through referrals from hospitals, physicians, discharge planners, and social workers. Build relationships with these referral sources in your community. Simultaneously, invest in a professional website, local SEO, and digital marketing. Budget $3,000–$10,000 for initial marketing efforts.
Pursue Medicare Certification & Accreditation (If Applicable)
If you're starting a home health or hospice agency, Medicare certification is required to bill Medicare for services. This involves a separate application and survey process through CMS. Accreditation from bodies like ACHC, CHAP, or The Joint Commission can also serve as your deemed status survey — meaning your accreditation survey substitutes for the state survey. This can streamline your path to Medicare certification.
Startup Cost Breakdown
Here's a realistic breakdown of what it costs to start a non-medical home care agency in 2026:
| Expense Category | Cost Range | Notes |
|---|---|---|
| Business Formation & Legal | $1,500 – $3,000 | LLC formation, registration, legal consultations |
| State Licensing & Permits | $500 – $5,000 | Varies significantly by state |
| Insurance (Year 1) | $3,000 – $8,000 | General liability, professional liability, workers' comp |
| Surety Bond | $500 – $2,500 | Required in some states |
| Office Setup & Technology | $2,000 – $5,000 | Phone, software, equipment |
| Marketing & Branding | $3,000 – $10,000 | Website, SEO, initial advertising |
| Background Checks & Hiring | $500 – $2,000 | Employee screening, recruitment |
| Training Programs | $1,000 – $3,000 | Caregiver orientation, CPR/First Aid |
| Working Capital (3–6 months) | $20,000 – $40,000 | Operating expenses before cash flow stabilizes |
| Total Estimated Investment | $40,000 – $80,000 |
Many first-time agency owners start with non-medical home care to minimize initial investment and regulatory complexity. You can always expand to home health or hospice services later as your agency grows.
State Licensing: What You Need to Know
Licensing is the single biggest variable in starting a home care agency. Every state has different requirements, timelines, and fees. Here's a snapshot of licensing timelines in some key states:
| State | Estimated Approval Time | Approx. Fees |
|---|---|---|
| Texas | 30 – 60 days | $750 – $2,500 |
| Georgia | 45 – 60 days | $800 – $2,200 |
| Florida | 60 – 90 days | $1,500 – $4,500 |
| California | 90 – 120 days | $2,000 – $5,000 |
| New York | 120 – 180+ days | $3,000 – $8,000 |
Don't leave your licensing to chance. Incomplete applications, missing policies, or documentation errors are the #1 cause of licensing delays. Working with an experienced consulting firm can cut weeks or months off your timeline.
Find your state's complete licensing requirements, regulations, and key contacts here →
Policies & Procedures: The Foundation of Your Agency
State regulators will review your policies and procedures manual as part of the licensing process. This is not a formality — inadequate or generic P&P documents are one of the most common reasons applications get rejected or delayed.
Your policies and procedures must cover:
- Client intake and care planning — how you assess needs, create service plans, and document changes
- Hiring and screening — background check requirements, credential verification, and onboarding
- Caregiver training — initial orientation, ongoing education, and competency validation
- Emergency protocols — procedures for medical emergencies, natural disasters, and missed visits
- HIPAA compliance — how you protect client health information
- Incident reporting — documentation and response procedures
- Quality assurance (QAPI) — continuous quality improvement processes
Generic policy templates downloaded from the internet almost never pass state review. Your policies must be state-specific, aligned with your state's regulations, and tailored to your agency's service model. TBOSC provides state-specific, compliance-ready policies and procedures for every state.
Preparing for Your State Survey
Most states require an on-site survey (inspection) before granting your license. Surveyors will review your physical space, interview staff, examine policies and procedures, and verify compliance with all state requirements. Common survey deficiencies include incomplete staff files, missing training documentation, inadequate emergency plans, and non-compliant policies.
The best way to prepare is to conduct a thorough mock survey before the official inspection. This identifies gaps before the surveyor does — and gives you time to correct any issues.
Medicare Provider Enrollment
If you're starting a home health or hospice agency, Medicare provider enrollment is a critical final step. The process involves submitting CMS Form 855A, undergoing a Medicare survey (or achieving deemed status through accreditation), passing the survey, and receiving your Medicare provider number.
The enrollment process can take several months. Errors or omissions on Form 855A are a common source of delays. Many agency owners choose to work with a consulting firm to ensure their application is complete and accurate the first time.
Ready to Start Your Home Care Agency?
TBOSC has helped hundreds of entrepreneurs successfully launch home care, home health, and hospice agencies across all 50 states. From licensing and policies to accreditation and Medicare enrollment — we handle the complexity so you can focus on building your business.
Book a Free Strategy Call Find Your StateFrequently Asked Questions
How much does it cost to start a home care agency in 2026?
Non-medical home care agencies typically cost $40,000–$80,000 to start, including business formation, licensing, insurance, marketing, and 3–6 months of working capital. Medicare-certified home health agencies can cost $150,000–$350,000+ due to additional certification requirements and clinical staffing needs.
Do I need medical experience to start a home care agency?
No. Non-medical home care agencies provide personal care, companionship, and daily living assistance — none of which require clinical training. Many successful agency owners come from business, management, or entrepreneurial backgrounds. If you want to start a home health agency (which provides skilled nursing and therapy), you will need qualified clinical staff on your team.
What licenses do I need?
Requirements vary by state. Currently, 28 of 50 states require a specialized home care license. Common requirements include a state application, background checks, proof of insurance, and written policies and procedures. Check your state's specific requirements.
How long does it take to get licensed and start operating?
Timelines depend on your state. Some states like Texas approve licenses in 30–60 days, while New York can take 120–180+ days. Working with an experienced consultant can help streamline the process and avoid common delays that add weeks or months.