When you are starting up a home care agency, decisions that affect finances and budget are especially overwhelming. If you don’t make the right decision, you can lose money now or in the future. Even if you make the right decision now but aren’t flexible with it later, you could lose money. It’s no wonder why home care leaders are so stressed out during the start-up phase; decisions made now can make or break a business.
One crucial and complicated decision revolves around home care services prices. If you price yourself too high, you run the risk of not getting any clients. If you price yourself too low, you run the risk of losing money because your revenue cannot support your expenditures. Here’s how to strike the perfect balance now, and in the future.
You can’t set your own home care services prices if you don’t know how much your competitors are charging. Make a list of your competitors in the area, including home care agencies within a 30-minute driving radius from your office, and start inquiring about pricing. Most home care agencies have their pricing posted online, but you can also call to learn about their prices.
Keep a running tally of service prices and try to make your own service prices hit somewhere in the middle.
Determine Staffing Costs
While you can choose to let your pricing dictate your caregiver compensation, it’s much better if you choose to set your caregiver pay wage before you set your home care services prices. Remember that your caregivers are the foundation of your agency and they should be paid accordingly. Do your best to pay more than average and fairly compensate your team for their work. Then, use your wages to help determine your services rate.
Choose Your SetUp
The great thing about starting your own home care agency is that you have some flexibility in how you operate. Consider if it would be best for you to bill by the hour, by the half-day, or by the service. When making this determination, take ease of billing and estimating into consideration as well as what your competitors are doing across the area.
Factor In Levels of Care
Older adults living in senior living communities pay more money each month as they require more services. This “level of care” system works in home care as well, and it makes sense. If a senior is independent and just needs a few hours of friendly visiting or grocery shopping, they should not pay as much as a senior who needs a few hours of complex hands-on assistance with ADLs.
Develop your own levels of care, trying to stick with 3-5 in order to make it less complicated during the assessment and billing process.
Build In Deals or Price Relief
If you have a client book a certain number of hours or days per month, consider building in a lower rate. When you build in price breaks or deals, it keeps everyone on the same page throughout the assessment and sales process. It can also make a family book a few more hours in order to get a decreased price.
What are your biggest struggles with setting your price points?
Article written by Haley Burress.
Hi, my name is Wendell Scott and I help Home Care Agencies who are experiencing high caregiver turnover rates, have trouble coordinating client care and feel frustrated with their team to easily increase efficiency and scale their Home Care business.
I’d like to share with you my free Caregiver Recruitment Engine™ framework. In it, are the tools to help you develop a system to easily attract & hire caregivers (aka a repeatable system for recruiting quality staff), so you can organize your process, reliably recruit staff and efficiently scale your home care team.
The end result:
Faster than ever.