Maybe you are a nurse or PSW who has watched families struggle to find reliable help for an aging parent. Maybe you have managed a team at someone else’s agency and know you could run it better. Either way, the idea of opening your own home care agency is exciting right up until you open a browser and face a wall of licensing rules, insurance quotes, hiring questions and software options. This guide puts the work in order, so you know what to do first, what can wait, and what will hurt you if you skip it.
The short answer: to start a home care agency, choose your service model (non-medical or medical, private pay or publicly funded), confirm the licensing rules in your province or state, set up your legal entity and insurance, hire and screen your first caregivers, set your rates, and put scheduling, documentation and billing systems in place before your first client. The order matters, because licensing and service model decisions shape everything that follows.
Step 1: Decide what kind of agency you are building
Every later decision depends on two choices, so make them first.
Non-medical or medical care. Non-medical (sometimes called companion or personal care) agencies help with bathing, dressing, meal preparation, mobility, light housekeeping and companionship. Medical or skilled agencies deliver nursing, wound care, medication administration and therapy services. Medical care brings heavier licensing, clinical supervision and documentation requirements. Many founders start non-medical and add skilled services later.
Private pay or publicly funded. Private-pay agencies bill families directly or through long-term care insurance. Publicly funded agencies serve clients through government programs: provincial home care contracts in Canada, or Medicaid and Medicare in the US. Public funding offers volume but adds contracting, reporting and, in the US, Electronic Visit Verification (EVV) requirements.
Your answers decide your regulator, your insurance and your hiring.
Step 2: Understand licensing in your province or state
Licensing is where Canada and the US differ most. The table below is a general orientation, not legal advice. Requirements vary by province and state and change over time, so always confirm the current rules with your regulator before you sign a lease or a client.
| Area | Canada | United States |
|---|---|---|
| Who regulates | Provinces and territories | States (plus federal rules for Medicare and Medicaid) |
| Private-pay, non-medical care | Licensing varies widely; some provinces have limited specific rules, others regulate more closely | Many states require a home care or personal care agency license; some do not |
| Publicly funded care | Usually requires a contract or approval with the provincial health authority or its home care organization | Requires Medicaid enrollment in your state; Medicare certification for skilled home health |
| Skilled or nursing services | Regulated health professionals must meet their college’s standards | Typically requires a home health agency license and clinical oversight |
| Visit verification | No national EVV mandate; funders may set their own reporting rules | EVV required for Medicaid personal care and home health services under the 21st Century Cures Act |
| Privacy law | PIPEDA plus provincial health privacy laws | HIPAA plus state privacy rules |
For a deeper look at the rules by region, see our sibling guide on home care licensing and regulation in Canada and the US. If you plan to bill Medicaid, read up on 21st Century Cures Act EVV compliance early, because your software choice depends on it.
Step 3: Set up the business foundation
Once you know your model and your licensing path, build the base.
- Register your business entity. Incorporation or an LLC protects your personal assets. Talk to an accountant about the structure that fits your province or state.
- Get your tax and payroll accounts. In Canada, that means a business number and payroll account with the CRA. In the US, an EIN and state employer accounts.
- Buy the right insurance. At minimum, look at general liability, professional liability, and workers’ compensation (or provincial workplace insurance). Many agencies also carry non-owned auto coverage, since caregivers drive between homes, and a fidelity or crime bond to protect clients’ property.
- Write your core policies. Client rights, privacy, incident reporting, infection control, caregiver conduct and emergency procedures. Regulators and funders will ask to see them.
- Open a dedicated business bank account and keep agency money separate from day one.
Step 4: Hire and screen your first caregivers
Your caregivers are your product. A small, reliable team beats a large, inconsistent one, especially in the first year.
Screen carefully. Run criminal record or vulnerable sector checks, verify references and confirm any certifications (PSW training in Canada, home health aide or CNA credentials where your state requires them).
Decide employee or contractor early. Most agencies employ caregivers directly, which gives you control over training, scheduling and quality. Misclassifying caregivers as contractors is a common and costly mistake, so get professional advice.
Plan for retention from the start. Predictable schedules, accurate pay and real support in the field keep caregivers longer. Our guide on reducing caregiver turnover covers what drives people away and how to prevent it. For the hiring process itself, see the caregiver recruiting playbook.
Step 5: Set your rates and find your first clients
Price from your costs, not from your competitor’s website. Add up caregiver wages, payroll taxes and benefits, travel time and mileage, insurance, office overhead and software, then add a margin that lets the agency survive a slow month. Many agencies set a minimum visit length (often two to four hours) so short visits do not lose money once travel is included.
For your first clients, focus on referral sources who see care needs every day: hospital discharge planners, family physicians, seniors’ centres, retirement communities and elder care lawyers. A clear one-page service sheet and a fast, friendly response to every inquiry will win more early clients than paid ads.
Step 6: Put your systems in place before client one
This is the step new owners skip most often, and it is the one that causes the most pain later. Our article on the systems you need before hiring goes deeper, but at minimum you need:
- Client records and care plans that caregivers can see before each visit.
- Scheduling that handles recurring visits, availability and last-minute changes.
- Visit verification with clock-in and clock-out at the client’s home.
- Visit notes captured on a phone, at the point of care.
- Billing and invoicing that pulls from verified visits, not from memory.
- Reports so you can track hours, revenue and missed visits from month one.
Paper and spreadsheets feel cheaper, but migrating mid-growth costs far more than starting clean.
How the right software helps you launch with confidence
A new agency cannot afford a back office that breaks under its first ten clients. CompanyOn is practice management and EVV software built for home care agencies, trusted by 1K+ practices across Canada & US with a 4.8/5 average rating.
Instead of stitching together a calendar, a notes app, a timesheet spreadsheet and an invoicing tool, you run scheduling, client records and care plans, a caregiver mobile app with GPS clock-in and clock-out, visit documentation, billing and reports in one system. Caregivers can work from their phones, even in homes with weak connectivity, and every verified visit flows into invoicing. It all runs with HIPAA and PIPEDA aligned security and SSL protection. See how it fits a growing agency on our home care agency and EVV solutions page.
Frequently asked questions
How much does it cost to start a home care agency? It depends heavily on your model and location. A private-pay, non-medical agency run from a small office costs far less to launch than a Medicare-certified home health agency. Budget for licensing fees, insurance, legal and accounting help, recruiting, software and several months of operating costs before revenue is steady.
Do I need a license to start a home care agency? Often, yes, but it depends on where you operate and what services you offer. Many US states license non-medical home care agencies, and skilled home health almost always requires a license. In Canada, rules vary by province, and publicly funded work usually requires a contract with the provincial health system. Confirm with your regulator; this is not legal advice.
Can I start a home care agency without a medical background? Yes. Many non-medical agency owners come from business, management or family caregiving backgrounds. If you offer skilled services, you will need qualified clinical staff and supervision in place.
How long does it take to open a home care agency? It varies with licensing timelines. A private-pay agency in a region with light licensing can open within a few months, while agencies seeking state licensure or Medicaid enrollment should plan for longer.
Do new home care agencies need EVV? In the US, any agency billing Medicaid for personal care or home health services must use EVV. In Canada there is no national mandate, but verified visits still protect your billing, payroll and reputation.
What software does a new home care agency need? At minimum: scheduling, client records and care plans, a caregiver mobile app with visit verification, documentation, billing and reporting. Having them in one system saves hours each week and avoids data entry errors.
Build it right from the first client
Starting a home care agency is a big step, and the owners who grow steadily are the ones who get licensing, people and systems right before the phone starts ringing. Book a demo to see how CompanyOn can run your agency’s scheduling, EVV and billing from day one, or start your free 14-day trial and set it up with your first caregivers.
