How to Start a Care Agency

Setting up Care Agency - Is it Easy?

The barriers to entry to setting up a domiciliary care agency are very low. Many providers begin with a very small team, often running the business themselves with a handful of carers, growing steadily as demand presents itself.

But this shouldn’t lead you to believe that starting out as a home care agency is quick and easy. There are many additional and necessary steps to take compared to setting up a business in most other sectors.

Software is becoming commonplace in home care, even for start-ups. If you are looking for a software package especially for home care start-ups then Access Care Foundations is for you. With special discounts and payment terms, so that even if your registration is not complete, or started, you could kick off the with best software available.

You can find out more about home care software prices here to be sure you're making an informed decision on how to choose your home care software.

If you’ve worked in social care already these may be familiar to you, but you would be surprised how many new providers I speak to that end up in a real mess because they’ve missed one of these necessary steps on the way. Not the ideal way to start a well-run home care business!

How Much Does it Cost to Start a Care Agency?

In the UK, it can cost anything between £3000 to £15,000 to start a care agency. These figures will allow you to purchase everything you need to run a professional business and the costs will vary depending on your personal budget, software packages you select, wages, your connections in the industry and whether you will be opening an office. Some things you should consider when it comes to managing your budget are:

• How many staff you will employ
• The qualifications, training, experience and skill set of potential employees
• The equipment you require
• The care and cost other home care businesses in the area offer
• How much care you will offer to each service user per day
• Whether your service will accept NHS, government, charity or grant-funded service users

You’ll also need to consider the basic, unavoidable costs, such as domiciliary care software, staff training and your independent regulator for health and social care registration fees.  

Your Registered Manager

Every care agency needs a registered manager. This is the person who manages the day to day running of the agency, specifically the provision of care rather than the business functions.

The registered manager is charged with making sure your agency complies with regulations and puts processes - for example for how care plans are created and reviewed - into place.

In many cases the registered manager will also be an owner of the new business, because so often people starting up their own agency have previously worked as registered managers or a similar role.

What Qualifications Do I Need to Start a Care Agency?

Regardless of whether you are hiring or doing it yourself, a registered manager needs one of the following:

In England

• QCF Level 5 Diploma in Leadership for Health and Social Care (Management of Adult Services)
• Registered Manager’s Award (RMA)
• NVQ Level 4 in Leadership and Management for Care Services

*While the RMA and NVQ (Level 4) are no longer offered, they are still accepted as valid registered manager qualifications by the Care Quality Commission (CQC) in England.

Not having these qualifications does not automatically mean a person cannot be a registered manager, but if they don’t then they must demonstrate to the CQC when registering that they have the necessary skills and qualifications and experience.

Find out more about the QCF Level 5 Diploma here >

In Scotland

the equivalent minimum qualification is the Scottish Vocational Qualification (SVQ 4) at level 9. The Scottish Social Services Council also accepts a wider range of qualifications when combined with experience. You can find a full list here.

If you are operating in Wales or Northern Ireland there is a separate qualification, the Level 5 Diploma in Leadership for Health and Social Care Services (Adult’ Management) Wales and Northern Ireland. More information here.

Qualifications to Start a Care Agency - Care Workers:

Any member of staff providing care needs to complete the Care Certificate in England, or be properly trained and inducted using:

• The SSSC codes of practice in Scotland 
• The All Wales Induction Framework for Health and Social Care (AWIF) in Wales 
• The NISCC Induction Programme in Northern Ireland 

Read more on how to properly recruit and retain care workers

Starting a Care Agency - Registering with the Regulator

In order to start a care agency and start delivering home care services every 'location' (i.e. branch or agency) and its manager, must be registered with their own nation’s regulator. Its a legal requirement and failing to do so can result in prosecution. The UK's national regulators are:

• The Care Inspectorate Wales
• The Care Quality Commission (CQC) in England
• The RQIA in Northern Ireland
• The Care Inspectorate in Scotland

Registering is not a quick process, so you should start as soon as you are able, each registration process and requirement differs depending on which nation you plan to operate in, but all focus on ensuring you are suitable to provide care. The CQC themselves have flagged that "receive a significant number of applications from domiciliary care agencies which do not contain the information we need to assess them."

For example, your regulator will require a statement of purpose covering the types of services you will provide, your aims and values – the CQC provides a handy template for this process. They will also need a reference from your GP to show you are healthy enough to provide care.

We've written a comprehensive blog: how to become CQC registered on that very subject so be sure to check that out before applying.

You, your registered managers and anyone else involved in founding your agency will need a DBS (Disclosure Barring Service) check, to prove you are all legally allowed to work with vulnerable adults.

Once you have your registered manager selected and your registration is either in progress or complete, there are a few more layers you will need to add to the foundations of your agency.

Even before you have registered with your regulator, you can take advantage of the UK's best care software, with exclusive discounts and payment terms for home care agency start-ups. Learn how at Access Care Foundations.

How to Start a Care Agency in Scotland

The standard rules for starting a care agency in Scotland are the same throughout the UK. In Scotland, you must be registered with the Care Inspectorate to legally provide registered care for people in their homes. You can register your care service by contacting your local Care Inspectorate office for an application pack or by applying online. A registration fee will be charged during your application.

Before your application is approved, the Care Inspectorate will check your premises, management and your team. You must be able to prove that you meet the National Care Standards to succeed. The conditions you must follow include:

• Providing a detailed introductory pack that explains your service to your users – this includes your aims, the support you provide, information on fees, complaint procedures and your most up-to-date inspection support.
• Having sufficient management and staffing arrangements in place – you will need to prove that your careers receive quality training, have good knowledge of your policies and procedures, that your recruitment process is comprehensive and that management is reliable and supportive.
• Having written adult placement agreements with your users to set out the terms of their contract and to define the service they will be receiving.
• Drawing up a personal plan for your service users which should include a mutually agreed tailored plan with a nominated member of your team – this must be reviewed regularly.
• Providing a safe, clean, secure and accessible environment for your service users and staff.
• Providing bespoke care that fits each individual’s personal and social needs and preferences.
• Demonstrating proficiency with equipment and aids for your service users.
• Having systems in place that have been designed to protect your service users – including risk assessments and protection from bullying or harassment.
• Demonstrating respect for the social, cultural, religious beliefs and private lives of your service users.
• Making sure that carers help with the nutritional needs of the people they care for, like assisting with cooking and food shopping when required, and healthcare provision.

After you’ve registered, the Care Inspectorate will monitor you and carry out ongoing evaluations to make sure that you continue to follow the care standards. You are obliged to follow any conditions attached to your registration. Your certificate or a copy of it must be displayed in a prominent place on any of your care service premises.

Policies and Procedures Required to Start a Care Agency

In order to start a care agency and complete the registration process with your regulator you need to have your policies and procedures in place. Policies and procedures act like your internal guidelines, governing how you and your staff act on a day to day basis to ensure both service users and staff are kept safe. These must comply with the relevant legislation, reflect best practice in home care and adhere to the latest regulations in your nation. 

When starting a home care agency, many people underestimate the amount of work needed to put together the necessary policies and procedures. It will be time consuming and for some, daunting. You will need to be very knowledgeable and confident in a number of areas including legislation, regulations and best practice in providing domiciliary care, and the latest updates in all of these areas.

Before and after you get registered, once your policies and procedures have been created they will need to be constantly updated to reflect changes in those areas of regulation, legislation and models of best practice. You need to ensure ongoing compliance and your policies and procedures need to stay up to date to do so.  

For these reasons many providers resort to hiring consultants or agencies to write their policies and procedures for them. This would not be my preferred route. Using these consultants is expensive and as with many other things in life, technology, in this case digital policies and procedures software has lots of additional benefits and features that you won't get from a consultancy or a old fashioned provider of printed/PDF policies and procedures. 

You might find this comparison of the different policy options (care consultants vs other options) useful in weighing up which is best for you.

Full details on the supporting documentation required for apply for registration as a new home care agency can be found via the:

• CQC in England
• Care Inspectorate Wales
• Care Inspectorate Scotland
• RQIA for Northern Ireland.

Post Registration - Next Steps to Start a Care Agency

Once you have completed registration with your national regulator, and are ready to start providing care you can take the following steps to get the best start to setting up your care agency.

Insurance

When providing social care most generic business insurance packages will not cover the extra areas of risk that working with vulnerable people, medications and so on entails.

There are specialist packages provided by many insurance companies for domiciliary care providers. Towergate is one such well known broker. While I would not recommend any one brokers’ services to you, reviewing online resources offered by them and other insurance providers is a good place to get an understanding of what kinds of insurance you might need when you start a home care business.

Recruiting and Retaining Staff

Recruiting and retaining care workers is a massive challenge in social care in the UK. With churn rates exceeding 30%, providers can struggle to recruit and retain the right staff to deliver high quality care.

Pay is important, but there are many other reasons why care workers will stay and leave any agency. These include the working environment, recognition and reward (in forms other than pay) and development. Having a clear career path is good for those that want to progress 'up the ladder', to management positions for example. But not all care workers want to. Some may want to improve their skills, develop their confidence and so on.

It’s important to note that while employee churn in the sector is disproportionately large compared to other sectors, over 60% of those that leave a care employer do so to join a different care sector employer.

This shows that people are not leaving social care altogether and that improving things like working conditions, progression, culture, lifting the ratio of actual care to paperwork and giving staff recognition for good conduct, can all greatly improve retention and attract solid applicants in greater numbers.

This is important not just because high churn rates are bad for morale, they often result in greater reliance on staffing agencies, which are expensive. In addition, Skills for Care estimates that the average overall cost to recruit a new care worker at £3642. The financial merits of better care worker retention should be clear by now.

You can find tips on recruiting and retaining the best care workers here with tips from Neil Eastwood.

Securing Business – Local Authorities

Home care providers primarily get business through two routes, firstly through local authorities and secondly from private/self-funding clients. Some care agencies go after just one area of the market while others contract with all funder categories.

Care agencies are typically able to charge higher fees to self-funding clients, and some would say these fees are simply adequate to meet their operating costs, compared to underfunded local authority funded packages.

Regardless, despite the growth in self-funding clients, local authority funded clients still represent the majority of the social care market in the UK. Running a private-only service might prove more lucrative in pure revenue terms, but your clients will typically be more disparate, and you will need to invest more heavily in marketing to get their attention.

With the number of people needing care constantly increasing, and the capacity of existing providers unable to meet demand, you should not be deterred from entering local authority tenders as a new provider, even if you lack the current staff or track record.

That said, taking on more than you can deliver once the contact begins could put clients at risk and under-performance will damage your reputation with clients, the local authority and could see you receiving negative inspections or even sanctions from regulators like the CQC.

It is worthwhile to speak with other local providers, to your local authority and read existing tenders before starting to understand the process and the priorities of your local authority so that you are best placed to secure and deliver successfully, upcoming contacts to provide home care services.

The Tendering Process

Typically, the first step once a tender is advertised is to complete a Pre-Qualification Questionnaire produced by the local authority.

Tenders are advertised and applications submitted via an online hub for that local authority.

Once the deadline for submission of PQQs has passed, shortlists of providers are selected and asked to go through an official tendering process to provide the care services.

PQQs and tendering processes can vary greatly depending on local authority, size of contracts and types of services being tendered for, but most will include:

• Evidence of financial viability of the applicant organisation
• Evidence of registration with the CQC
• Evidence of relevant experience in the provision of similar service
• Evidence of previous businesses including director prosecutions, insolvency, etc.
• Evidence of suitably qualified and trained staff
• Contact details for suitable referees
• Personnel information about both the provider and any staff
• Certificate of incorporation
• Health & Safety information
• Company financial information
• Business Continuity Plans

The top tips to winning social care tenders 

Selecting a Strategy

You should also think about how you will compete against others. One of the most established models of determining a competitive strategy is Porters’ Generic Strategies (other models are very much available!) In this model there are four routes to take, and according to Porter you need to choose just one.

Firstly there’s ‘Cost Leadership’. This means targeting a broad base of clients and competing by offering a lower price than competitors. In home care this would mean providing personal care and as many other additional services as possible.

Essentially you’re not offering much different to your competitors but you are offering it for less. While this may be a strong factor when competing for local authority contracts, people selecting care for their loved ones are likely to be much more concerned with quality, dignity and safety than saving a few quid.

Differentiation still involves going after a broad market but focusing on the uniqueness of your service rather than charging less. This could mean offering cleaning, putting great focus on each individual, days out, offering electronic updates to family members, better trained staff and so on.

Often in social care differentiation will depend on showing people looking for care services that yours will be kinder, of a higher quality and treat their loved one as a loved one, as an individual and not just part of a job to be completed.

This can include using lots of testimonials, videos, ‘about us’, ‘values’ and other messages on your website and other advertising.

Encouraging referrals is another reliable method, as a recommendation from someone you know and trust is typically more strong and reliable than your marketing efforts.

Cost focus is similar to cost leadership, but rather than focusing on a wide market like personal care for the elderly, you might focus on high acuity or specialist care, but compete against other providers in this area by offering lower fees.

Differentiation focus targets a niche market but secures business through uniqueness of service, for example learning disability services for young adults that incorporates innovative, new and proven intervention approaches that others are not providing as part of their services.

It could also mean focusing on a very small geographical area, and creating partnerships with health, leisure centres, cafes and so on to help provide more group outing activities, with a focus on improving health and well-being for elderly people that you care for.  

To choose the right strategy for your business a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis can help. 

However, as a new start up in care, you can have greater flexibility as you are dealing with less existing strengths and weaknesses. Therefore, you can put greater emphasis on discovering and targeting opportunities!

Targeting Self-Funding Clients

Bringing enough self-funding clients to use your services at a high enough frequency is all about reaching them, getting noticed and convincing them to use your services instead of the competition. 

There are many business and marketing models that can help explain the ‘buyer’ process, one that is widely used especially for online marketing is RACE (Reach, Act, Convert, Engage). 

While local authorities will examine your services in depth and measure you against other providers using scoring systems, most people purchasing care services for themselves or a loved one will be swayed more by emotional factors and the impression a provider gives them.

These can be broken down into three areas:

• Reputation (e.g. Word of mouth, positive/negative press)
• Presentation (e.g. The look of your website, staff uniforms, staff and company profiles)
• Proof (e.g. Inspection ratings, testimonials, references, growth).

As we’ve already said with so much research and decision making happening online you need a website from the get-go. Using Google-Ads and focusing on search engine optimisation (SEO) is very important to get seen in the crowd.

Despite the importance of a strong and distinctive online presence, things like incentives for existing clients who refer new clients and word of mouth recommendations are especially effective in a decision-making process that involves people’s family members and is usually focused within a specific locality.

You can also read some of these other articles by my colleagues on learn more on home care marketing and then how to grow your home care business.

Learn more about how Honest Senior Care used Care Foundations to streamline their operations, go paperless, and deliver exceptional quality care to their service users.