Are You Ready to Start a Home Care Agency?
Before we tackle the complex elements associated with starting a home care business, let’s run through some important questions you should ask yourself.
Is starting a domiciliary care agency profitable?
Starting any business – especially one that cares for others – can be profitable. But South Africa faces a sad truth that entrepreneurs venturing into this industry need to know.
Starting a domiciliary care agency in South Africa can be challenging, as the industry is still reeling from the aftermath of a global pandemic that has decimated waiting lists and the demand for elderly care.
South Africans don’t plan for those rainy retirement days – with only 10% having enough to see them through their retirement. On a more positive note, South Africans do look after the elderly in their community – either at home or in a nearby frail care facility.
With families struggling with the high costs of living, retirement and care plans often become secondary. However, out of crisis comes opportunity, as any good entrepreneur will tell you. There remains a demand for elderly care and a service that needs providing – it’s just a matter of engaging with your local community and then determining what you can afford to do.
By working alongside your churches, hospitals, and community organizations, you can become a pillar of the community, spread the word that you have beds available, and turn a tidy profit in time.
With this in mind, the specific location of your domiciliary care agency will play a significant role in the likely profitability as you consider local competition and social affluence (a big factor in South Africa’s wealth and class divide).
What qualities do you need to have to start a home care business?
What qualities should an entrepreneur wanting to pursue this sector have? One needs a superhuman degree of patience, compassion, and mental strength to deal with the rigors of managing elderly patients and their concerned, demanding families.
Excellent human relations is another job prerequisite. You’ll most likely be dealing with a wide range of nursing and medical staff, as well as justifying expenditures. South Africa has a large influx of Zimbabwean and Malawian expats trained as independent frail care providers – so finding ways to overcome cultural differences when creating your own work culture is also necessary.
An unwavering acumen for entrepreneurship needs to combine with a robust financial literacy as you determine which of your staff are permanent and which can be independent contractors as you balance your books and deliver your business goals.
What care will you provide?
There are different types of home care available in South Africa, but these should complement your location choices. Care for the elderly can be divided into the following categories:
- Elderly daycare: This is a popular option for families who work and don’t want to leave their parents alone at home during the day. As setup goes, it’s relatively low cost too as existing homes can easily be modified to accommodate the elderly.
- Frail care: This may be short-term after an incident such as a stroke or a fall. Frail care facilities cost R13,000 – R25,000 a month, depending on the quality of care and the facility itself.
- Respite care: This is for someone with an illness or disability that needs care 24/7 – and is usually for the primary caregiver when they require a break. Respite care can range from assisting the elderly enjoy everyday activities like going to the hairdresser or church and more arduous tasks such as feeding and bathing.
- Memory care: The term ‘memory care’ is considered a more politically correct umbrella term than dementia, primarily for the elderly with early onset dementia and Alzheimer’s who can no longer live safely in their own homes. DementiaSA is one example of an organization for the dignity and rights of those living with dementia.
How Do You Set Up a Home Care Business?
Now that we have some crucial questions out the way, let’s look at what it will take to set up a home care business.
Why your business plan is crucial
A business plan for domiciliary care will need to hone in on the specific care you are looking to provide. Then look at the care providers you will most likely sub-contract so that you can avoid too much unnecessary human resource management and complicated medical oversight.
Medical expertise is usually outsourced – as are catering, cleaning, and maintenance services. While this may free you up from excessive monthly overheads and create less direct accountability for your business, you will still need up-to-date figures.
Work out which expenses you can pass on to your client (i.e., a short stint in assisted frail care) – and which will be necessary on a day-to-day basis regardless (i.e., daily sanitation of toilet facilities).
Your price offering to clients in terms of ‘packages’ should reflect the flexibility you can offer in terms of outsourced or included ‘add-ons’ such as in-house catering, 24-hour nursing care, security, etc.
Governing bodies you need to know
Care agencies are run by boards, with the executive serving as a board member. Medical oversight is done in-house, and there is no specific governing body that you will be accountable to – unless you are state certified.
If you do have state residents and rely on income from GEPF, you can expect more municipal visits, and aspects such as health and safety inspections will also be done more frequently.
Legal Acts you need to know
Familiarize yourself with the Occupational Health and Safety Act, the Older Person’s Act 13 of 2006, and the Employment Act.
The onus is then on the independent contractors with whom you do business to ensure that visas, work permits, and the necessary certification and qualifications are taken care of so that you don’t run afoul of any difficult staffing situation that finds you and your business held responsible.
Registration, regulations, and training
The registration process for someone wanting to start a home care agency depends on the level of frail care you are offering. The usual rules of business apply insofar as you’ll need to register your business with CIPC (Companies and Intellectual Property Commission) and then approach your local municipality for a trading licence, and fire and health inspection.
The Department of Health will oversee the training and development of your medical personnel, and the Health Professions Council of South Africa will keep up-to-date records of the practicing licenses of all those involved in your nursing care.
Insurance considerations
Insurance is crucial for any business – especially a home care business. You should be looking for public liability insurance (in case someone is injured on your property), building insurance, insurance for all your assets, and third-party cover too. When it comes to working with the aged, mistakes happen more often than not, so the right coverage for your business is practically essential.
Finding a qualified and trustworthy team
Depending on the size of your business, you will need a manager, a doctor, a nurse, nursing assistants, caregivers, cleaners, chefs, security, driving staff, and on-hand maintenance.
All caregivers in South Africa need to register at their nearest social developments office department and undergo home-based care training before becoming certified. There are courses available for carers too, that can be found online, depending on your area.
Familiar, friendly staff faces, earnest in their endeavours to assist and engage with the elderly, will help your business develop brand credibility in your area, as building a healthy rapport between clients and staff is essential for a happy home care environment.
Find out more: Need funding? Check out our guide on small business grants.
The Cost of Starting a Home Care Agency
The start-up costs for this type of business will largely depend on whether you are building from scratch or modifying an existing building. Most care agencies won’t have hospital-grade medical facilities in-house, but you should factor in the following frail care specific tools for the job:
- Hospital beds that can be lowered and adjusted (if you have a sick bay)
- Wheelchairs, crutches, and walking aids (all easily on hand at the reception)
- Handrails for ease of movement around the building
- Commodes and modified toilets for easy bathing and ablutions
- Oxygen tanks in case of emergency
If you’re planning on turning your home into care facility, the above alone will set you back in the region of R100,000 alone. If you’re in partnership with a real investor and are creating your home care village from scratch, your start-up costs can run into the tens of millions before you’ve even welcomed your first client.
Financing options for a domiciliary agency
With the right business plan for the right demographic in the right area, you may well be onto something. A bank can potentially assist with a loan, as can private investors who see potential in your idea.
If you’re looking for assistance and advice on applying for grants, our small business grants guide can prove helpful to you if you’re unsure of what to search for or how to apply.
And while we have a guide that details loans to buy a business, it can be helpful for entrepreneurs that are looking for start-up loans in South Africa.
How Do You Market Your Home Care Business?
Consider these five forms of marketing to tap into your community:
- A website domain: This is where you should clearly illustrate your offering, pricing structure, community engagement, case studies and other valuable content that will attract new clients.
- Traditional advertising: Local community newspapers offer affordable advertising rates and are a great way to reach clients in the surrounding area.
- Referral marketing: Engaging with community stakeholders such as local hospitals, schools, churches, and businesses (coffee shops, hair salons, shopping centres, etc.) with fundraising drives in the form of bake sales and events is a tried and tested way of generating awareness of your brand in the neighbourhood.
- Trade shows: These offer a macro view of what is happening in your industry and are a great place to make contacts in the market. Opportunities for trade shows in your area can be found online.
- Social media: The beauty of social media is that it remains free. All you need is some imagination and inspiration, and you can be marketing your care agency to the outside. Who wouldn’t want to watch a wholesome TikTok video of the elderly playing Bingo on a Friday night in your care?
Find out more: Need more advice on this sector? Read our sector-specific articles.
Starting a Home Care Business Is Not Your Only Option
If starting your own care agency sounds a little too daunting, there are certain benefits to be found in buying an existing one. All of the setup work will have been done for you, allowing you to focus on the renovations to the property and alterations to the business model you would like to make to suit your vision.
Our buying a business guide will offer you valuable insights and tips on buying a business in South Africa. There are many health care businesses for sale on our site that are being bought and sold every day, so feel free to explore the options available to you.
As we’ve outlined, the aftermath of COVID, coupled with concern around retirement pensions and the amount South Africans save, makes this a challenging industry to enter, especially if you have no previous frail care experience. Nonetheless, we do encourage you to pursue this business venture, and grow into something great!
We are here to advise you on your entrepreneurial journey into the world of frail care in South Africa, and you are welcome to connect with us as and when you need. Care for the elderly is a noble industry to get involved in, so we applaud your interest.