How to start a home care business
What it costs, what you file, what it earns and what ends most of them. Every number below is cited to where it came from.
No government or peer-reviewed source publishes a startup cost range for a home care business, so no figure is quoted here. The hardest part is caregiver turnover.
What it costs to start
No primary source publishes thisNo primary source publishes a dollar startup range specific to a non-medical senior home care agency, so both figures are null rather than estimated. The closest primary anchor is the US Census Bureau Annual Business Survey question on capital used to start a business, tabulated by the SBA Office of Advocacy: 24.1 percent of employer firms started with less than $5,000, 50.9 percent with less than $25,000, and about 12 percent used more than $250,000. That distribution covers all new employer businesses across every sector, so treat it as a shape rather than a home care number.
Source: source
What you have to file
Licensing is set by state, county and city, so this is what the category tends to require rather than a list for where you live. The state pages below carry the filing detail for each of the 50.
- State home care organization or personal care agency licence from the state health or social services department. California requires a Home Care Organization licence at $5,603 for a two year period
- Caregiver registration on a state registry with fingerprint clearance. California requires every home care aide to register at $35 for two years and clear a Department of Justice and FBI Live Scan check
- Criminal background screening for owners, administrators and financial officers. Florida requires Level 2 fingerprint screening for managing employees and financial officers, and for all new homemakers and companions before hire
- Employee dishonesty bond. California requires form HCS 402 documenting one as part of the licence application
- General and professional liability insurance evidence filed with the application. California lists insurance among required supplemental documents; Florida does not require it for homemaker and companion registrants, so this is state by state
- Workers compensation coverage plus state employer payroll tax, unemployment insurance and new hire registration once caregivers are on payroll
- Federal Employer Identification Number from the IRS, required once the agency hires employees or operates as a partnership or corporation
- Separate non-medical registration where the state splits hands-on personal care from homemaker and companion work. Florida charges $50.75 for a two year registration, bars hands-on care such as bathing or feeding, and bars business names implying home health, nursing or medical services
- State Medicaid provider enrollment and provider qualification to serve home and community based services waiver clients
- Fair Labor Standards Act compliance under 29 CFR part 552. Under the 2013 rule third party employers such as agencies cannot claim the companionship or live-in exemptions, so minimum wage and overtime apply. A July 2025 proposed rule would restore those exemptions; the Department of Labor states no final rule has been adopted
What the margins look like
IRS Statistics of Income, Nonfarm Sole Proprietorship Returns for Tax Year 2022, Table 1 reports health care and social assistance at a net margin of about 35.6 percent across 2,420,090 returns. SOI publishes no separate line for home care, so this sector line is the closest NAICS match. Sole proprietors do not deduct an owner's salary, so that figure pays the owner's own labor as well as profit, and will overstate margin against an agency that puts a salaried administrator on payroll.
Source: source
Whether demand is growing
Growing
Demand is rising sharply: BLS projects employment of home health and personal care aides to grow 18 percent from 2025 to 2035, much faster than the average for all occupations, adding 847,300 jobs. The constraint on a new agency is staffing supply rather than client demand.
Source: source
How big the market is
Home health and personal care aides numbered 4,677,100 jobs in 2025 with median pay of $35,800 a year, or $17.21 an hour, and typical entry at a high school diploma (BLS). BLS projects about 760,500 openings for the occupation each year on average over the decade.
The part that ends most of them
Caregiver turnover. The agency sells labor hours, so every departure costs a client relationship as well as a recruiting cycle, and BLS puts median pay at $17.21 an hour with about 760,500 openings a year, which is the wage floor that makes retention hard. One caution on the numbers: the often repeated home care turnover rates of 77 percent and roughly 79 percent come from a paid proprietary industry survey whose sample and methodology sit behind a paywall, so there is no public primary study behind them.
Before you start
- What it will cost you, since the numbers above are the category and not your version of it
- Sole proprietor, LLC or S corp, what actually differs, with no recommendation
- What your state wants filed, read from the state's own pages
- What you have to sell to break even, which decides whether the margin above matters
- Which way you actually work, if the choice between these is really a choice about you
A different business
Compare all twenty side by side
SideKix, “How to start a home care business”. https://sidekixhq.com/how-to-start-a-home-care-business.html
Questions people ask
How much does it cost to start a home care business?
No primary source publishes a dollar startup range specific to a non-medical senior home care agency, so both figures are null rather than estimated. The closest primary anchor is the US Census Bureau Annual Business Survey question on capital used to start a business, tabulated by the SBA Office of Advocacy: 24.1 percent of employer firms started with less than $5,000, 50.9 percent with less than $25,000, and about 12 percent used more than $250,000. That distribution covers all new employer businesses across every sector, so treat it as a shape rather than a home care number.
What licences do you need for a home care business?
Typically: State home care organization or personal care agency licence from the state health or social services department; Caregiver registration on a state registry with fingerprint clearance; Criminal background screening for owners, administrators and financial officers; Employee dishonesty bond; General and professional liability insurance evidence filed with the application. Licensing is set by state, county and city, so the exact list depends on where you operate.
What profit margin does a home care business make?
IRS Statistics of Income, Nonfarm Sole Proprietorship Returns for Tax Year 2022, Table 1 reports health care and social assistance at a net margin of about 35.6 percent across 2,420,090 returns. SOI publishes no separate line for home care, so this sector line is the closest NAICS match. Sole proprietors do not deduct an owner's salary, so that figure pays the owner's own labor as well as profit, and will overstate margin against an agency that puts a salaried administrator on payroll.
Is demand for a home care business growing?
Demand is rising sharply: BLS projects employment of home health and personal care aides to grow 18 percent from 2025 to 2035, much faster than the average for all occupations, adding 847,300 jobs. The constraint on a new agency is staffing supply rather than client demand.
What is the hardest part of running a home care business?
Caregiver turnover. The agency sells labor hours, so every departure costs a client relationship as well as a recruiting cycle, and BLS puts median pay at $17.21 an hour with about 760,500 openings a year, which is the wage floor that makes retention hard. One caution on the numbers: the often repeated home care turnover rates of 77 percent and roughly 79 percent come from a paid proprietary industry survey whose sample and methodology sit behind a paywall, so there is no public primary study behind them.