We've brought together a team of educators and home care experts to answer the burning questions that you and every home care owner will ask at some point.
Gabrielle Pumpian Chief Development Officer at Cheer Home Care; 3-time home care marketer
Marissa Snook President/CEO of corecubed care marketing
Connor Kunz VP @Careswitch, former head of education @ Home Care Pulse, scaled a service business 7 figures in 3 years
Debbie Miller Former pharma sales rep who built a $10M home care company and founded 52 Weeks Marketing
Debbie Miller Former pharma sales rep who built a $10M home care company and founded 52 Weeks Marketing
Connor Kunz VP @Careswitch, former head of education @ Home Care Pulse, scaled a service business 7 figures in 3 years
Gregg Mazza Founded a home care agency, almost ran out of capital after two years, figured things out and scaled past $5M
Erica Horner Home care sales consultant & project manager at corecubed
Erica Horner Home care sales consultant & project manager at corecubed
Brett Ringold Vice President of A Long-Term Companion & HCAOA board member
Jeremy Fuller Managing Director of Grow Home Care Marketing; website, SEO, and digital marketing expert
Short answer: 36-50% gross profit margin and 10-15% owner's cut—if you're at the stage where you're reliant on your business to support you financially and the business has gotten off the ground.
Let's give a little context for that since it varies from business to business.
During a forum on this year's Home Care Growth Summit I asked this question to two veteran home care leaders: Jeff Wiberg, CEO of Family Resource Home Care and a member of the Home Care Association of America board, and Tim Murray, Co-founder of Aware Senior Care.
Here are some key points from what they told me:
You'll notice the caveat I included at the beginning: these are owner's cut that make sense in some circumstances. Jen Ramos, who's operated and sold three of her own agencies and now brokers mergers/acquisitions in home care, gives a different take.
Jen says you should aim to take as little as people out of your business for at least the first two years, if not longer, so that you can invest it back into the business.
Then, she says, it depends on your goals with your agency and your financial situation. You stand to make the most money by selling your agency; so, if you have the financial means to play the long game, continuing to invest profits back into the business will help you hire the right people who can accelerate the agency to the scale and position where it's ready to sell.
The vast majority of agency owners aren't in a position to reinvest all their profits back into the business for the foreseeable future, and that's okay. Manage the differing perspectives above and decide what makes sense for your long-term goals.