Starting a home care business whether it be from scratch or through a franchise system, that can catapult your success, will require you to secure enough funding so you can hit the ground running from day one.
Creating a thorough home care business plan is the first step to enticing lenders and getting extra cash flow to secure your financing.
This article is designed to help you understand the importance of a home care business plan and provide a framework to get you started.
Quick Links:
– Understanding a Home Care Business Plan
– The Importance of a Home Care Business Plan
– Pre-Planning a Home Care Business Plan
– Steps to Building a Home Care Business Plan
Understanding a Home Care Business Plan
A home care business plan is an essential document that outlines your business’ future. The plan should explain your key strategy, goals, primary costs of operation and how you will overturn a profit.
This plan can also show the legal structure of your business including:
- Management structure
- Sales & marketing plan
- Current financial health
The Importance of a Home Care Business Plan
It is important to write up a business plan regardless of the industry as it gives you a roadmap to where your business currently stands and where it could potentially head in the future.
If you are seeking a business loan or external funding to cover your startup expenses, having a well-thought-out business plan is crucial for influencing an investor’s decision. A good business plan will show investors:
- Your business has cash flow
- There is steady growth in the industry
- A strong client base is available
By covering these three areas, you’ll be well positioned to receive working capital to help you set your home care business up for success.
Pre-Planning a Home Care Business Plan
When creating your business plan, the most important step is to actually plan out how you will approach writing up your business plan, in other words, taking a step back, thinking about your home care business as a whole and asking yourself a few questions.
The right questions can help better guide you to write a strong business plan.
These three key home care business plan elements can help you identify any gaps in your business operations as well as potential unknowns and barriers to entry:
Why are you writing a home care business plan?
One of the most common reasons for developing a home care business plan is to increase the chance for your to secure a business loan or additional funding by showing potential lenders that you have a viable business.
To achieve this, you will need to go into detail about your business, showing lenders exactly how your company operates and how you plan to overturn a profit.
Other reasons you could be writing up this business plan include:
- To help clarify that you have a sound business strategy that is not wasting precious resources
- If you’re applying for a business grant or competition
- Before taking on a partnership to see if there is an alignment between each other’s goals and values
- To plan for the future of your home care business
Who will read your home care business plan?
Once you’ve understood why you are writing your business plan, it is important to put yourself in your prospective reader’s shoes.
As a general rule, many business plans will cover the company’s profile that speaks to the mission and vision of their business but if your reader is a potential investor, you will need to back your statements up with concrete details, easily-digestible facts and figures, and a more detailed competitive analysis that shows what sets you apart from other competitors in the home care market.
What is happening in the home care industry?
This question is commonly overlooked when people are writing up their business plan but it is important to understand as it will come up in conversations with prospective lenders.
Industry research will help give you greater clarity on who’s in your market and what you’ll need to do to stay ahead of your competitors. It also helps you see your business and the overall home care landscape through a future lens, which can help you identify any potential roadblocks on the way to your success.
Steps to Building a Home Care Business Plan
Once you have worked through your reasons for writing the plan and done the necessary research, the next step is to start writing your home care business plan.
The below elements are applicable to most home care business plans and will guide you in creating a strong framework to set you up for success
1. Executive Summary
2. Company Description
3. Industry Analysis
4. Management and Organisation
5. Service Offering
6. Marketing Plan
7. Financial Projections
8. Appendix
1. Executive Summary
The executive summary is a summary of the entire business plan. It will be the first thing your audience reads and recommended to be no longer than a single page.
The executive summary should include a breif overview of what your home care business aims to achieve and can include:
- The business vision, mission and goals
- A description of the product or service
- An outline of your point of difference
- The target customers and target market
- The sales and marketing strategy
- Up-to-date financial data
- Financial projections
- Your organisational structure
- What you’re asking for e.g. funding, investment, etc.
2. Company Description
The company description should contain details of your home care business so your reader can better understand what you do and why you do it.
Including concrete details around your business structure (are you a sole proprietorship, franchisee or LLC?), a snapshot of the home care landscape and the point of difference that will make your business stand out from their competitors.
If you are writing a home care business plan to get funding for a franchise, your franchisor likely already has the information you need for your company description so you don’t need to start from scratch.
Your business mission statement should embody the company values in one or two simple sentences. For example, at Nurse Next Door, our mission statement is: “Making Lives Better”
Company descriptions will commonly include:
- The brand story
- The business mission and goals
- The business objectives
- How the business fits within the industry
- How the business stand outs out fromm competitors
- A detailed breakdown of the customer base (including demographics and psychographics)
3. Industry Analysis
The industry analysis will cover what the current home care market looks like and how your business plans to gain shares within the market.
This is where you can include:
- Information about competitors within the market
- Key distributors of nursing supplies in the market
- Market trends
- A customer analysis
- Your plan to gain shares
4. Management and Organisation
In the management and organisation section should detail the structure of your business and laying out who works there and why that’s important.
This is the time to mention your team’s expertise and any supporting players like advisory board members who are integral to the success of the business to prove that you’re serious about your new business venture and have assembled the right people you need to reach success.
When writing your home care business plan you can include:
- The number of skilled home health care staff
- The roles or your home health care team
- Who your leadership team are
- Advisory board members if applicable
5. Service Offering
This is where you will detail what services you will provide to your clients as a home care business.
If you are pursuing a franchise, it is recommended that you reach out to your franchisor for an accurate description and portfolio of all the services that can be provided.
Key elements to include in this section include:
- A detailed list and description of each of the services you will provide
- Information about any services you plan to implement in the future
- How you conduct background checks to ensure that quality and compliance
6. Marketing Plan
In this section, you’ll want to answer this key question:
“How will you acquire customers?”
It is important to provide a comprehensive marketing and sales plan so any potential lenders or investors can see that you’ve done your homework, researched competitors, and are entering into a profitable business model.
Franchise systems will usually already have a well-thought out marketing strategy that you can tweak to fit your location and customer base.
For example, Nurse Next Door offers a robust training program and supplies marketing support and materials to Franchise Partners.
A solid marketing plan should include:
- The cost of your services and how you decided on the price
- What are you selling and how are you differentiating yourself in the market?
- How will you promote your services to customers?
- Where are you selling your home care services?
7. Financial Projections
This part of your business plan essentially answers the question:
“Where do you want to be in five years?”
Using current financial statements, balance sheets, and cash flow statements along with the market research, you’ll need to create a five-year business forecast showing how your business revenue will grow over time.
Compare the direct costs of running your business with the number of clients you plan on acquiring.
In your financial projections plan, you can include:
- Equipment costs
- Payroll costs
- Business Insurance
- Taxes and permits
- Legal expenses
8. Appendix
The appendix is vital to help you back up everything in your plan and should contain any documents you reference in the rest of your business plan, as well as any relevant or supporting information.
This 8-step framework is designed to help guide you in building a successful home care business plan but, the appropriate pre-planning and research may require some adaptations.
Whether you are starting a home care business from scratch or going through a franchise system, that can catapult your success, a thorough and backed up business plan will yield great advantages when it comes to enticing lenders to secure your financing.
