How to Start a Home Care Business in the US in 2026: Costs, Steps, and What You Need to Know

The U.S. home care market reached an estimated $173.6 billion in 2026, according to IBISWorld, driven by an aging population and growing preference for at-home services over institutional care. The Bureau of Labor Statistics projects 22% employment growth for home health and personal care aides through 2032, one of the fastest rates of any occupation. This article covers what opening a home care business in the U.S. typically involves: types of services, licensing steps, startup costs, and franchise alternatives.

Can Anyone Start a Home Care Business?

In the United States, home care businesses generally fall into two categories: non-medical home care agencies, which provide personal care, companion care, and homemaker services, and home health agencies, which deliver skilled medical services such as nursing, physical therapy, and wound care. The requirements to open each type differ significantly.

For non-medical home care, 47 states plus the District of Columbia require some form of licensure or registration, according to Harbor Compliance. No specific healthcare background is legally required in most states, though many states do require that agencies employ or contract with a licensed administrator or clinical supervisor. For home health agencies providing Medicare-reimbursable services, federal certification through the Centers for Medicare and Medicaid Services (CMS) is required in addition to state licensure, a considerably more involved process.

Senior home care businesses, focused exclusively on older adults, typically operate under the non-medical model and are subject to the same state-level licensing framework. Requirements vary widely: some states have a streamlined registration process, while others, such as New York, California, and Illinois, impose detailed regulatory reviews with timelines that can extend six to eighteen months.

8 Steps to Start a Home Care Business

Step 1 – Define the Concept and Target Audience

Home care businesses serve distinct markets, and the scope of services offered shapes every subsequent decision. Common service models include companion care, personal care assistance (bathing, dressing, grooming), homemaker services (cleaning, meal preparation), and skilled home health services (nursing, therapy). Agencies targeting seniors exclusively tend to focus on personal care and companion care, while home health agencies provide medically supervised care requiring licensed clinical staff.

• Non-medical home care: personal care, companion care, homemaking, transportation
• Home health agency: skilled nursing, physical therapy, occupational therapy, speech therapy, wound care
• Senior home care: a subset of non-medical care focused on older adults, often including dementia or Alzheimer’s care

Step 2 – Create a Business Plan

A business plan is typically the first document requested by lenders, licensing agencies, and investors. For home care businesses, it commonly includes a market analysis of the local senior population, a description of target payer sources (private pay, Medicaid, Medicare, or long-term care insurance), a staffing model, and projected financial statements covering at least three years. State licensing authorities in several states, including New York, require evidence of financial viability as part of the application package.

Step 3 – Find a Location

Non-medical home care agencies are generally operated from a small administrative office rather than a patient-facing facility, since services are delivered in clients’ homes. Most agencies rent commercial office space to meet state requirements for a physical business address. Location selection is commonly driven by proximity to the agency’s target service area, commercial lease costs, and zoning rules. Some states require the office location to be inspected before a license is granted.

Step 4 – Secure Permits and Licenses

Licensing is among the most complex and time-sensitive steps in opening a home care business. Requirements exist at the federal, state, and sometimes county or municipal level. The process typically involves multiple agencies and documentation submissions.

Business formation: Home care agencies are generally formed as LLCs or corporations, registered with the state’s Secretary of State office. An Employer Identification Number (EIN) is obtained from the IRS for tax and payroll purposes.

State home care license: In the 47 states plus D.C. that require licensure, the application typically includes:

• Completed state application form with owner and key personnel information
• Criminal background checks for all owners, officers, and administrators
• Proof of general liability and professional liability insurance
• Written policies and procedures covering patient care, infection control, emergency preparedness, and personnel management
• Organizational chart and evidence of qualified administrative leadership
• Office site inspection (in many states)

Medicare and Medicaid certification: Home health agencies seeking reimbursement from Medicare must obtain certification through CMS. This process requires a state health department survey and compliance with the Conditions of Participation (CoPs) under 42 CFR Part 484. Some states, such as New York, also require a Certificate of Need (CON) for Certified Home Health Agencies, a separate regulatory process involving demonstration of community need.

Additional permits and registrations: Depending on the state and service type, operators may also need:

• A Medicaid provider enrollment number (obtained through the state Medicaid agency)
• Workers’ compensation insurance (mandatory in all states)
• A federal Drug-Free Workplace policy (required for Medicaid providers in most states)
• HIPAA compliance protocols, including a Privacy Officer designation and staff training
• Accreditation from bodies such as ACHC or CHAP (optional for non-medical, often required for Medicare-certified agencies)

Step 5 – Procure Equipment

Home care agencies are not equipment-intensive compared to facility-based healthcare businesses. Core operational needs typically include office furniture and computers, scheduling and electronic visit verification (EVV) software (mandatory in most states for Medicaid billing), secure document storage for client and personnel records, and basic caregiver supplies. Medical home health agencies may also supply wound care materials, monitoring devices, or mobility aids depending on their service scope and state requirements.

Step 6 – Organize Operations and Hire Staff

Caregiver recruitment is consistently identified as one of the primary operational challenges in the home care industry. The BLS reports approximately 2.6 million home health and personal care aides are currently employed in the U.S., and a projected shortfall in workforce supply is widely documented across the sector. State-mandated training requirements for caregivers vary: in New York, for example, home health aides must complete a minimum 75-hour state-approved training program, while personal care aides require 40 hours of training.

Operational staffing for most agencies also includes a scheduler or care coordinator, an administrator, and, for agencies providing skilled care, a Director of Nursing (RN). Background screening through the state’s exclusion list and the federal OIG exclusion database is a standard compliance step for all staff.

Step 7 – Launch Marketing

Home care agencies typically build their client base through referral relationships with hospitals, rehabilitation facilities, physician offices, discharge planners, and social workers, rather than direct-to-consumer advertising alone. Common marketing activities at launch include developing a professional website, establishing a Google Business Profile, attending senior care expos, and building relationships with local referral sources. For agencies targeting Medicaid clients, enrollment as a provider with the state’s managed long-term care (MLTC) plans is often a key marketing and revenue strategy.

Step 8 – Open Your Home Care Business

Once licensing is granted, the agency can begin accepting clients and scheduling caregivers. The first months of operations typically involve establishing billing processes (whether private pay, Medicaid, or insurance), onboarding initial caregivers, and conducting quality assurance reviews. Operators commonly address pre-opening preparation, such as policy development and staff recruitment, during the licensing review period to reduce time to first revenue.

Is It Also Possible to Start a Home Care Business as a Franchise?

Yes. The home care sector has a well-developed franchise landscape in the United States, with numerous established franchise brands operating nationwide. Franchising is a popular option for entrepreneurs entering the industry because it provides access to a recognized brand, proven operational systems, comprehensive training, marketing support, and ongoing guidance from the franchisor. Below are some of the leading home care franchise brands that operate under the franchise business model in the U.S.:

• Nurse Next Door: a non-medical home care franchise providing senior care, companionship, personal care, and respite services. The brand operates more than 100 franchise locations in the U.S. Initial investment ranges from $119,286 to $217,210, including a $72,000 franchise fee.
• Comfort Keepers: a non-medical home care franchise with over 600 locations across the U.S. Initial investment ranges from $119,560 to $190,700, including a franchise fee of $55,000.
• Home Instead: a senior care franchise with over 600 U.S. locations. Initial investment ranges from $98,000 to $125,000, including a $54,000 franchise fee.
• Visiting Angels: a non-medical home care franchise operating in hundreds of U.S. markets. Initial investment ranges from $125,460 to $171,150. The royalty structure is sliding-scale, starting at 3.5%.
• Right at Home: a home care and assistance franchise with over 700 locations. Initial investment ranges from $92,100 to $165,309, including a $50,000 franchise fee. .

How Much Will It Cost to Start a Home Care Business in the US in 2026?

Startup costs for a home care agency vary depending on the state, the type of agency (non-medical vs. home health), and whether it is launched independently or as a franchise. The table below provides an estimated breakdown of expenses typically involved in opening an independent non-medical home care agency in the U.S. in 2026.

Expense Category	Estimated Cost Range
Business formation and legal fees	$3,000 to $8,000
State licensing and application fees	$2,000 to $5,000
General liability, professional liability, and workers’ compensation insurance	$8,000 to $18,000
Office space and setup	$5,000 to $15,000
Policies, procedures, and compliance documentation	$3,000 to $7,000
Scheduling and EVV software	$2,000 to $6,000
Caregiver recruitment, background checks, and training	$3,000 to $8,000
Marketing and branding	$3,000 to $10,000
Working capital reserve (3 to 6 months)	$20,000 to $50,000
Total estimated range	$49,000 to $127,000

Source: The Business of Senior Care (thebizofseniorcare.com), 2026. Figures reflect a non-medical home care agency in a mid-to-high cost state (e.g., New York). Costs may be lower in states with fewer regulatory requirements.

Key factors that affect startup costs include:

• State of operation: highly regulated states typically involve higher licensing fees, more extensive documentation, and longer timelines before revenue begins
• Type of agency: home health agencies (medical) have significantly higher startup costs than non-medical home care agencies, with estimates generally ranging from $150,000 to $350,000
• Insurance costs: premiums for professional liability and workers’ compensation insurance vary substantially by state and number of employees
• Technology: EVV (Electronic Visit Verification) software is now mandatory in most states for Medicaid-funded services, adding an operational cost not present in purely private-pay agencies
• Working capital needs: the time between licensing approval and first invoice payment can span several months, particularly for Medicaid-billing agencies

The table below compares estimated startup costs between an independent home care agency and a home care franchise in the U.S. in 2026.

Cost Component	Independent Agency	Franchise Agency
Total initial investment range	$40,000 to $127,000	$92,000 to $191,000
Franchise fee	None	$50,000 to $90,000
Ongoing royalty fees	None	3.5% to 7% of gross revenue
Brand recognition	Self-built	Established brand included
Operational systems and training	Self-developed	Provided by franchisor
Licensing and compliance support	Self-managed	Typically supported by franchisor
Marketing support	Self-funded	Brand marketing fund contribution required

Sources: The Business of Senior Care (thebizofseniorcare.com), 2026; 2026 FDD data for Comfort Keepers, Home Instead, Visiting Angels, and Right at Home via Franchise Investor Data (franchiseinvestordata.com). Independent agency range reflects a non-medical home care model.

The Bottom Line

Starting a home care business in the U.S. in 2026 requires meeting state-specific licensing requirements, choosing between medical and non-medical services, and building compliant operations. Independent non-medical agencies typically require an initial investment of $49,000–$127,000, while franchise models involve higher startup costs but provide established systems and brand recognition. With demand for home-based care continuing to grow, the sector offers strong long-term opportunities for new business owners.

This content is provided for informational purposes only and does not constitute legal, tax, financial, or professional advice. Laws and regulations vary by state and individual circumstances and may change over time. Readers should consult a qualified attorney, tax professional, or other licensed professional regarding their specific situation. Nothing herein creates an attorney-client relationship.