Your decision of buying a home healthcare business is a testament to two primary traits. One is that you care about people. Another is that you are ready to invest time and money to build this passion into a business.
Home Healthcare is one of the most promising business ideas for aspiring entrepreneurs. It is not affected much by recession or any major adverse economic events. The demand for home healthcare will increase because of the aging population. It is also an increasing concern that seniors are unwilling to move to a new place for healthcare needs.
There are two options to build a business. Either you start your business from scratch, or you invest in an existing business. In this article, we provided details on the possibilities of the latter option.
Options Of Buying A Home Healthcare Business
Owning a Franchise
The option to start your business through a franchise is not a bad idea at all. Franchising might be an appealing option to new entrepreneurs. It provides a simple way to begin your entrepreneurial journey.
You get the necessary tools and technology to handle the day-to-day operations. You have the advantage of beginning with an established brand that already has a name in the market. You need not spend a lot of time to market and sell your proposition in the community.
You need not spend your efforts to fall behind on the documentation or approvals. Customers come to your doorstep with pre-defined expectations and trust. You need not worry about developing brand new policies and procedures. These will most likely come down from the franchise owners.
The franchise option is usually considered a shortcut to the business world. But, that does not mean that you can view it as a casual stroll in the park.
You have to invest a large capital while starting a franchise. All brands expect a considerable upfront cost to enter their business empire. They might expect you to maintain a stringent mandate. You cannot expect much flexibility in terms of financials and operations.
Getting a franchise can provide a general foundation to build on. But, you still have to gain customers’ trust through your operations. It would be best if you worried about keeping up the brand’s name and not tarnish it in any way.
You are still responsible for attracting customers. It might take some time to build a network based on referrals and relationships. There is also the risk of your parent brand becoming a reputation hazard for your business. If they fall into the wrong side of the minds of people, no matter how good you are, your business will take a hit.
Buying An Existing Homecare Business As An Individual
Buying an existing business might also mean that the operations are already setup. You will have to spend less effort and time in bringing the company to a running stage. Moreover, if you are buying an existing business, you have an existing client base too.
The reasons mentioned as cons of franchise ownership no longer apply to you in this case. You will not have any restrictions on flexibility and financial constraints. You can go ahead with your goal and change the business model such that it fits your vision.
You might face some challenges from existing staff who are reluctant to change. But that does not mean your ideas are wrong. It is a matter of managing expectations. Once you gain their confidence, you will have better productivity.
While buying an existing business, you might take in the previous owner’s problems. The rating, reputation, and fame of the current company will have to be borne by you. In case the company is on the wrong side of people’s perception, you have to work extra hard to reverse it.
Not only the perspectives, but your research must also be thorough before the sale. The existing business’ liabilities might come back to bite you. The asking price of an existing business with a decent reputation and client base might be high.
Factors To Consider While Buying A Home Healthcare Business
Regulations and Licenses
The Healthcare industry is a regulated one. It deals with the lives of people, and it should be. For a franchise, it is easier to get through the regulations and licenses. The franchise owner might take care of the documentation and approvals.
For a non-franchise sale, you might have to go through the process yourself. Each state has a different set of rules and policies on license transfer and renewal. You might have to work with the previous owner to get it done legally.
Experience and Skills
It is not mandatory to have related education and experience to own such a business. But specialized training will help you understand the intricacies of the internal workings. As an owner, you might delegate many of the workstreams to your team or existing staff. You will gain respect from your team if they understand that you know what their duties are.
Below are some of the expenses while setting up your business –
- Franchise fee
- Computer Equipment
- Signage and trade fees
- Furniture, fixtures, equipment, and supplies
- Building expenses
- Legal and incorporation fees and licenses
- Training costs – accommodation, travel, and meals
- Local advertising
- Vehicle costs
- Working capital
You might need to research more on different kinds of ownership models. Investing as a single unit owner or going through a partnership might be suitable. It would help if you explored the short-term and long-term implications of such models.
One of the most important things to check is how the bookkeeping practices are. You have to be thorough in reading through the financial statements of the past few years. In case of any red flags, it is better to clarify and confirm the correct reasoning for it with the previous owner.
Buying a business takes a lot of effort, time, and MONEY! There are several options to raise the necessary capital to invest in a company. Irrespective of the business model, below are some of the financing options you can explore –
Bootstrapping a company means that you are raising capital through your savings. It means that you are not taking any help from external lenders. It would need planning from many years to bring about a considerable amount of funds onto the table.
Family and friends
The immediate help that you can get is through your friends and family. You can gather a few people close to you and walk them through your vision and business plan. Many companies have kick-started their journey through support from near and dear ones.
There are many small and medium business lenders that you can approach. You can also look at crowdfunding options as an alternative to raise money. If the above options are not suitable, you can discuss options with a big bank.
More Revenue Streams
The business you are planning to buy might cater to a specific set of care facilities. In the initial days, you can go ahead with the same set of services while getting hold of the business. But you can start thinking about new facilities after settling down a bit. You can build the foundation for new potential revenue streams.