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.
Ilya Vakhutinsky Careswitch CEO, home health aide's son, Forbes 30 Under 30, caregiver advocate
Connor Kunz VP @Careswitch, former head of education @ Home Care Pulse, scaled a service business 7 figures in 3 years
Connor Kunz VP @Careswitch, former head of education @ Home Care Pulse, scaled a service business 7 figures in 3 years
Mark Johnson EA specializing in home care agencies
Jennifer Ramos Managed and sold three different home care agencies; CEO of JR3 Consulting
Jennifer Ramos Managed and sold three different home care agencies; CEO of JR3 Consulting
Jennifer Ramos Managed and sold three different home care agencies; CEO of JR3 Consulting
Angelo Spinola Home health, home care and hospice chair at Polsinelli
Jennifer Ramos Managed and sold three different home care agencies; CEO of JR3 Consulting
Adam Corcoran Director of Business Development at Golden Care, owner of Home Care Flyers, helped build a multimillion dollar agency from the ground up
Connor Kunz VP @Careswitch, former head of education @ Home Care Pulse, scaled a service business 7 figures in 3 years
Connor Kunz VP @Careswitch, former head of education @ Home Care Pulse, scaled a service business 7 figures in 3 years
Connor Kunz VP @Careswitch, former head of education @ Home Care Pulse, scaled a service business 7 figures in 3 years
Connor Kunz VP @Careswitch, former head of education @ Home Care Pulse, scaled a service business 7 figures in 3 years
Julio Briones Home care consultant specializing in helping 7-figure home care agencies grow
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.