California is a great state to start a business because there are plenty of opportunities and people to serve. One industry that's been getting a lot of attention is the nonmedical home care business.
Starting one of these businesses can help you make an impact on the community and still turn a profit. For this reason, it's not just a profitable business but a noble one.
The idea behind a nonmedical home care business is simple. Ultimately, you help people in their homes without providing medical support, so it's a bit different than a medical caregiver. For example, you would just bring them meals or cook them instead of handling their medication.
That said, starting a nonmedical business isn't always easy. You need to apply for the right licenses, go through the steps to form a legal entity, and even hire employees.
The good news is that we’re here to help. Read on to learn about how to start a nonmedical home care business in California.
How to Start a Nonmedical Home Care Business in California
Step 1: Create a Business Plan for Your Nonmedical Home Care Business
Step 2: Register Your Nonmedical Home Care Business
Step 3: Choose a Registered Agent in California
Step 4: Submit Your California Home Care License Application
Step 5: Secure Funding
Step 6: Insure Your Business
Contents
Thinking about starting an LLC in California? We’ve got all the details you need.
Begin by selecting a unique business name, appointing a registered agent, and filing your Articles of Organization with the California State Corporation Commission, which includes a $100 processing fee.
You can do this independently, consult with a business attorney for specialized legal guidance, or join the other 75% of our readers and hire a specialized California LLC formation service (recommended).
Zenbusiness (Starting at $0 Plus State Fees)
What Is a Home Care Organization in California?
A nonmedical home care business is similar to businesses that have medical caregivers, but in this case, the caregiver can’t provide medical assistance. These businesses are also known as home care organizations in California.
Typically, you visit the home of a client and have someone take care of their needs, which can range from cooking to bathing to cleaning their home. For your business, you can come up with some unique and innovative ideas to help your clients and separate yourself from the competition.
That said, the main thing to note about a nonmedical home care business is that you can’t provide medical support for your clients. While you can have nurses that work for you, the care has to fall within nonmedical guidelines. Therefore, you can’t offer medications or aid with a disability.
What Services Can a Nonmedical Home Care Business Offer in California?
Non-medical home care businesses can provide a few services. The main difference between nonmedical and medical home care companies is the types of things that can be done.
In short, nonmedical home care workers can’t provide medical support for their clients. While this makes your business more limited, you can still offer many types of care for people who need it.
Some examples of what you can include are:
- Food prep
- Feeding meals
- Meal delivery
- Cleaning around the house
- Bathing clients
- Feeding or caring for pets
- Maintaining gardens or houseplants
- Getting the mail for clients or going to the grocery store
- Transporting clients to nonmedical locations
You can get creative with the types of services that are offered by nonmedical home care businesses but you need to make sure you don’t do anything medical. If you do, you can meet fines, lawsuits, and even jail time.
Do Caregivers Need to Be Licensed in California?
Yes, according to the Home Care Services Branch home care organizations need to be licensed. This is because the state wants to ensure the safety of clients who have strangers entering their homes to care for them. The licensing application process can be done by mail or online, so it’s not too complicated.
Aside from licensing, caregivers who plan on working as independent contractors may not need a license, but they must pass courses and have some type of training. For example, you may need to have several hours of training with someone who is qualified to provide home care.
Additionally, contractors will typically have to pass background checks that look into their public and criminal records.
How to Start a Nonmedical Home Care Business in California in 6 Easy Steps
Starting a nonmedical home care business isn’t challenging. All you have to do is follow the appropriate steps to learn how to start a nonmedical home care business in California. Each step includes a few things you have to take care of, so make sure you check everything thoroughly to ensure you know what you need to get started.
Step 1: Create a Business Plan for Your Nonmedical Home Care Business
When you’re starting a nonmedical home care business in California, you need a plan. In fact, you need to create a business plan for any type of business that you want to create.
Without a plan, you’ll be disorganized, might not find the right target markets, and you can end up losing money. For this reason, we always recommend spending a lot of time on the business plan aspect of the business. It may seem like a lot of work, but it’s worth it to have a clear, concise, and readable plan.
Some non-medical home health startup business packages may even include the foundation for a business plan along with any software you may need to get started. Non-medical home health startup business packages can streamline the process of starting this business.
If you plan on creating a business plan on your own, make sure you include the following information:
- Executive summary
- Target market
- How many employees do you plan on having
- Where you will operate
- The type of services you will provide
- How many vehicles you will have
- Licenses you plan on obtaining
- Marketing strategies
- Business structure
These are only a few quick ideas that can help you get started. When you’re starting a nonmedical home care business, you need to make a plan that’s specific to your business.
Step 2: Register Your Nonmedical Home Care Business
The next step is to register your business. Every business needs to be registered in order for it to function legally in California.
You have a few options when it comes to the legal entity you want to form, but we always recommend registering the name of the business first. Once you have the name registered, it’s a good idea to secure domains and other intellectual property associated with that name.
Then, it’s time to select a legal entity. Most businesses begin as a sole proprietorship, and while you don’t have to register if you stay one, we recommend forming a limited liability company (LLC) for the tax benefits and legal protections. Plus, it’s the only way to keep your finances separate from the business.
You also have some other options, like a partnership or corporation. Both of which can be suitable for a nonmedical home care business.
When you want to start a caregiver business in California we always recommend going the LLC route. An LLC grants you the most benefits and ensures that you have protection in the event of any issues with clients, your staff, or anyone getting hurt. Liability tends to run rampant in an industry where you’re likely helping people who need to be bathed, cleaned, or fed.
Still, you can start a caregiver business as an independent contractor or go any other route you want. Just make sure you provide your EIN or Social Security number so that you can file taxes properly. California and the Federal Government will want to see this information.
Step 3: Choose a Registered Agent in California
If you’ve opted to establish your business as an LLC or corporation in California, the next critical step is to appoint a registered agent. This is a necessary requirement when drafting your Articles of Organization, the document needed to officially register your LLC or corporation with the California Secretary of State.
So, what does a registered agent do? A registered agent is an individual or business entity designated to receive important documents on behalf of your business, such as tax forms, legal notices, lawsuits, and official government correspondence. In essence, your registered agent serves as the primary point of contact between your business and the state.
Who can be a registered agent? The registered agent must be a California resident or a corporation authorized to operate in the state, such as a registered agent service. If you choose to act as your own registered agent, you’ll need to designate an individual within your company, as California law does not allow business entities to act as their own registered agents.
For more detailed information on the requirements for registered agents in California, refer to the California Corporations Code.
Don’t forget that to run a business, you need to: register a business entity (LLC is the most suitable option, more details here), obtain an EIN (you can apply online here), open a business bank account (more details here), understand accounting and taxes (more details here), and register a domain and create a website (this is optional, you can do it here).
Alternatively, you can delegate all of this to a registered agent starting from $0 + State Fees and get everything done in 1 day. This can save you time and ensure everything is done correctly, leaving you to focus on growing your business.
Step 4: Submit Your California Home Care License Application
Next, it’s time to turn your focus towards having the appropriate licenses, permits, and other paperwork that you need to have in order.
While California doesn’t require you to have a license for general business purposes, you need a home care license if you plan on starting a nonmedical home care business in California. You may be asking “How to get a home care license in California?” and it all starts with the application.
You may also need other licenses if you plan on operating in a specific city because each city requires some type of license to collect revenue. You’ll want to investigate what the law is in your city or county, and keep in mind you may need more than one license or permit if you do business in other cities.
All of your caregivers also have to have some type of licensing and training. The extent of this licensing and training varies based on the county you’re operating in. For this reason, many people who start home care businesses tend to work with registered nurses and other medical professionals because they likely meet all of the requirements out of the gate.
Step 5: Secure Funding
Securing funding for a nonmedical home care business is also important. While you can use your personal funds to start a business, nonmedical home care operations are expensive to start and can cost you anywhere from $10,000 to $100,000 to get off the ground. For this reason, it’s best to secure funding from a bank or an investor.
Banks can provide you with business lines of credit, loans, and mortgages for any buildings you want to purchase.
On the other hand, investors will provide you with funding but ask for shares of the company. This means that you have to give up some of your ownership. The benefit of this method is that you don’t have to worry about debt because the investors don’t always need to be repaid.
Still, every deal you make with an investor is unique, and we recommend enlisting the help of a lawyer.
Unlike some other industries, home care organizations can qualify for grants. These are different from loans and investors because you usually don’t have to pay the money back.
For this reason, it’s worth it to see if there are any available grants to start a home healthcare business in your area. Depending on the type of grant, you can be approved for a lot of money.
Step 6: Insure Your Business
When you’re starting a business that involves people who go into other people’s homes, it’s smart to ensure your company. You’ll at least want general liability insurance to cover any issues that may occur but you might also want to consider more in-depth and niche-specific insurance options to shield you from any liability.
General liability is a good start, but we recommend property insurance if you plan on using a warehouse to store your equipment. You should also consider insurance for any transportation vehicles you use to get people around or to get people to your clients.
Nonmedical Home Care Business in California FAQ
Have questions about starting a nonmedical home care company? We have answers to the most popular questions below.
Is a Home Care Business Profitable in the USA?
Yes, nonmedical home care businesses are profitable in the United States. In fact, California has one of the largest economies in the country, so it’s safe to say that there is plenty of opportunity for a nonmedical home care business to operate in California.
In the US, the industry is valued at more than 10 billion dollars. As one of the largest economies in the United States, it’s safe to say that California is a great choice for nonmedical home care businesses.
How Much Does It Cost to Start a Nonmedical Home Care Business in California?
Starting a nonmedical home care business in California isn’t free. While you can operate as a contractor for little to no cost, you still have to pay for licenses.
If you plan on starting a home care organization, expect to pay around $40,000 to $80,000. You may also have to pay for Medicaid and Medicare licensing if you plan on expanding to medical home care businesses.
Staff charges and employees will also cost money, so make sure you consider the hourly rate they’re expecting before hiring for the best profit margins. In California, that rate is about $23 per hour. This can help you set your prices.
How Much Is a Home Health Care License in California?
Licensure is going to vary depending on where you are, but a home care business license in California costs $521. It’s an application fee, and you can’t have this money refunded once you spend it. So, you can figure this expense into your overall business plan when you’re getting ready to start a home care business in California.
You may also need Medicare and Medicaid licenses if you plan on operating a home care business that expands to medical services. You don’t have to go this route but it’s often a natural progression of a home care company.
Can a Nonmedical Home Care Business in California Accept Medicare?
No, nonmedical home care businesses can not accept Medicare in California. This is because you’re not helping someone who has a medical problem or disability. Therefore, you usually can’t accept insurance unless it’s from a private insurance company that has a coverage plan for nonmedical home care.
You’ll need to get a Medicare license if you want to work with patients who have Medicare, but in any other case, you’ll have to use private pay.
Can a Nonmedical Home Care Business in California Accept Medicaid?
No, nonmedical home care businesses in California can not accept Medicaid. Only companies that have a Medicaid license can accept Medicaid insurance. That said, if you have the appropriate license, you can accept Medicaid insurance.
On the other hand, if you don’t have the right license, you can only accept private pay. You should only be working with nonmedical clients anyway, so it shouldn’t be an issue.
Start a Nonmedical Home Care Business in California Today!
Starting a nonmedical home care business can help you make an impact on the community and live a comfortable life while you do so. Make sure your organization has all of the proper licenses before you get started, and focus on following the steps we covered in this article to start your business the right way.
Also, make sure you spend some time vetting the people you plan to hire. You should only work with people who can pass a background check and always consider their prior experience and licensing.
Now that you’ve learned about how to start a nonmedical home care business in California, it’s time to get started.