Do you want to start a senior placement agency? If YES, here is a complete guide to starting a senior placement agency business with no money and no experience
Okay, so we have provided you an in-depth sample senior placement agency business plan template. We also took it further by analyzing and drafting a sample senior placement agency marketing plan backed up by actionable guerrilla marketing ideas for senior placement agencies. In this article, we will be considering all the requirements for starting a senior placement agency. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- Why Start a Senior Placement Agency Business?
- Starting a Senior Placement Agency Business – Market Feasibility Research
- Starting a Senior Placement Agency Business – Legal Aspect
- Choosing a Suitable Location for your Senior Placement Agency Business
- Starting a Senior Placement Agency – Technical and Manpower Requirements
- The Service Process of a Senior Placement Agency Business
- Starting a Senior Placement Agency Business – The Marketing Plan
Why Start a Senior Placement Agency Business?
Senior Placement Agencies are businesses that help families locate assisted living residence which is best for their loved ones. Deciding on a residence can be a worrying process, especially for individuals who know little or nothing about assisted living and who are currently caring for an elderly person. These agencies are also helpful for persons who live far from their loved ones who need adequate attention and care.
They provide significant assistance in narrowing down the choices and they provide their services to families free of charge. It’s very important to state that when matching an individual to an assisted living community, there are many options to be weighed such as location, cost, current and future care requirements, and amenities.
Senior placement agencies can provide all of this, as well as more community-specific information in minutes. It would indeed take any individual days of phone calls and meetings to access all these information from every assisted living facility being considered. It would also subject them to countless sales pitches in which it would still be difficult to obtain the information they require.
A senior placement agency makes the decision process easy for willing individuals or families. They also provide obvious information a family would want and some information which a family might may not necessarily think to inquire.
Information, such as pricing variables, occupancy rates, number of residents, resident to staff ratios, proximity to hospitals, family reviews, and resident complaints. Also, these agencies can save families money by helping them to understand how to negotiate with the assisted living residence and making sure they sign-up for the correct level of care.
Report has it that before deciding on a community, most families tend to take a tour of the residence. Tours are necessary, but vastly time-consuming, difficult, and emotionally challenging. That is another reason why senior placement agencies are very necessary in modern America, they might decrease the number of tours that are needed from 5 to 6 to just 1 or 2. They also provide scheduling assistance in arranging tours.
Starting a Senior Placement Agency Business – A Complete Guide
- Industry Overview
With maximum credit to the baby boomer generation born in the late 1940s and 1950s, the number of American senior citizens is rising massively. As the boomer population reaches age 65, the senior population is projected to reach 83.7 million – almost double the estimated number in 2012 and approximately twenty percent of the total US population.
Report has it that approximately 10,000 people will turn 65 every day for the next 20 years. It means that this increasing elderly population has and will necessitate more senior healthcare.
It is further estimated that the global home health care sector, just one part of the overall industry, would see revenues grow to $300Bn in 2020 from $180Bn in 2014 – a compound annual growth rate of 8%. Note that the paid, regulated number of senior care service providers in the united states in 2012 was 58,500, servicing 8mm people.
According to industry reports, the industry picked up steam in the 1960s and 1970s with government support such as Medicare and the advent of the National Institute on Aging and a growing number of older Americans needing care as the life expectancy continued to improve.
For instance, in 1965, Medicare provided the elderly with federal money for home care, and it has been far and away the largest single source of revenue in home health care services. The rest of industry revenue is derived from private insurance, out of pocket costs, Medicaid and money paid from local governments. Report has it that in 2012, the majority of all senior care providers were for-profit – a change over past decades.
Statistics shows that the industry as a whole employed 1.4mm people in that year. Due to its importance in the industry, the policies of Medicare have been closely linked to the industry’s growth over time. It is believed that some changes in the 1980s stopped the expansion of the industry, as did changes in the 1990s under the Balanced Budget Act.
But each time, the industry rebounded relatively shortly after. Note that the majority of revenue for the industry comes from Medicare, Medicaid and private insurance, all of which set prices in the industry, competition between providers is not on price but reputation, name recognition, quality of care, word of mouth and referrals from medical professionals.
Starting a Senior Placement Agency Business – Market Feasibility Research
- Demographics and Psychographics
When planning to venture into this business, it’s really advisable that you research the senior care industry to determine the types of service options that are available to seniors. Take your time to identify the benefits and disadvantages for each option so that you can explain these to potential clients.
Also note that through your research, determine frequently asked questions families and seniors have when they look for senior housing. Also take the opportunity to find out who your competitors are in your immediate service area and online, as some senior housing consultants provide services via email, chat and by phone.
Find out how each of them attract clients, the types of services they provide and their pricing. Use this information to help create your Business model and differentiate your business from competitors. Report has it that approximately 47 million seniors live in the United States.
This statistics is based on a 2017 census.gov estimate that about 325,600,000 people reside in the US and a 2014 estimate that about 14.5% of Americans are age 65 and older. It is projected that in 2060 nearly 100 million Americans will be 65 or older. This reflects the senior population more than doubling over 40 years.
List of Niche Ideas in the Senior Placement Agency Business
Note that with so many services and options to choose from, it’s important for families and seniors to work together to find a suitable option with good amenities and care options within a stipulated cost. Making a selection takes time and planning, so it’s no wonder families seek senior placement agencies to assist them in their searches.
One thing you will have to do when starting this business is to create a list of services you plan to provide to clients. These services might include creating a budget analysis to weigh the cost of different senior housing options, setting up interviews and tours with facilities, helping families find financing or completing a needs assessment to determine which housing option best suites the seniors’ needs.
- Convalescent homes or convalescent hospitals placement (except psychiatric)
- Home Healthcare for the disabled
- Home Healthcare for the aged
- Rest homes placement
- Retirement homes placement
- Senior care facility staffing
Level of Competition in the Senior Placement Agency Business
Experts believe that the growing aging U.S. population will establish an unprecedented demand for the senior living industry for decades to come and that opens the door for agents and brokers to grow their business. But knowing and understanding the changing landscape in the complex long-term care and senior living market is very crucial. Almost 54 million seniors today make up approximately 20% of the total U.S. population.
As the baby boomer generation — born just after World War II to the mid 1960s (approximately between 1946 – 1965) — continues to age, approximately 10,000 will turn 65 every day for the next 20 years! The number of seniors forecast for the year 2030 is estimated to grow to about 72 million.
Note that seniors in the United States have an average life expectancy of 19 years after turning age 65. Sixty-seven percent of those seniors own their own homes, 89% prefer to stay in them for the remainder of their lives, living independently for as long as possible.
Non-medical in-home senior care is often the step between self-sufficiency and more serious medical or nursing home care. Even with client’s struggles, familiar surroundings contribute to their longevity and quality of life. For this reason, the demand for non-medical in-home senior care is great.
Industry report has it that the growth in the senior living industry aligns closely with the older adult population in the United States in recent years. Note that between 2001 and 2014, the number of senior living communities increased by 39 percent.
Also within the same period, the U.S. population aged 85 and older rose 43 percent. As a result of the similar growth rates, the number of senior living communities as a proportion of the senior population has been relatively steady. Experts predict that the number of senior living establishments will grow to 29,700 facilities, an increase of 21 percent since 2014. The number of seniors 85 years old or older will also increase by 21 percent.
List of Well known Senior Placement Agencies
- Lighthouse placement services
- Senior living authority
- Exceptional Senior Placement Services
- Peppermint Palm senior placement services
Most senior placement agencies make money when someone they introduce to an assisted living residence moves into that residence. At that point, the assisted living residence compensates the placement agency. Typically, the agency receives the equivalent of one month’s rent in compensation. This is how agencies make money, but what happens behind the scenes to track move-ins is also of interest to families.
Note that when an individual first makes contact with a placement agency, either by phone or by interacting with their website, certain information about that person is gathered. Most importantly, their name and contact information, the relationship to the person in need of care, and the city or town in which they are looking for a residence is asked.
Have it in mind that immediately following the interaction with the agency, the agency will provide the information to several assisted living communities in the desired geographic area. Soon thereafter, these assisted living communities will begin calling.
This whole process happens very rapidly because the agency wants to get credit for introducing the individual to the assisted living community. This is so that they will get paid by the community should a loved one eventually move in.
Starting your Senior Placement Agency from Scratch or Buying a Franchise
In this business there are two options for you to consider when planning the route to follow: a franchise or a membership. In addition to the disparity in terms of cost, there are several other differences. Franchises in this industry exist both regionally and nationally.
They are known to provide training and support, but tend to place restrictions on a franchisee’s independence. One bad thing about it is that the corporate office must be consulted on most decisions – ranging from how you market yourself to who you can sell your franchise to – and charges royalty fees.
A membership organization typically provides the same services to its members while allowing them to make more of their own decisions. This is indeed not a decision you make nonchalantly. You have to research and take your time to carefully choose the membership organization or Senior care franchise that fits you best.
For example, when you decide to join a membership organization, talk to the principals at those you are considering. Try to find out if the organization is being led by people who not only have experience in helping small business owners, but have actually worked in the senior care industry and can put themselves in your shoes. We also advice that you talk to their members to see what they say about the training and the support they’ve received.
Possible Challenges of Starting a Senior Placement Business
Possible threats or challenges business owners face in the industry include finding qualified registered nurses and home health aides. Experts believe that as the number of home health care businesses increase, the need and demand for qualified employees will soar. According to industry reports, between 1989 and 2004, the amount of workers tripled but was still not enough to meet demand. That trend is only getting worse with the Baby Boomers.
Registered nurses in particular are retiring faster than newly trained nurses can replace them. Also high turnover and worker retention is another potential issue as well – in 2013 turnover was 24.2%, with resident caregivers having the highest turnover at 36.4%.
Another threat you might face in this business will be unforeseen changes in Medicare and the effects of Obamacare – if it is not repealed. Opinions differ on whether the Patient Protection and Affordable Healthcare Act will ultimately help or hurt the senior care industry and seniors themselves. Other challenges include;
- Regulation/Classification of Health Care Agencies
- Advances in Technology
- Political pressure
- Working in Isolation
Starting a Senior Placement Agency Business – Legal Aspect
- Best legal entity for a Senior placement Agency
You will need to choose a business entity that best suits your business visions and the model you plan to run. Note that forming a Corporation, limited liability companies and limited liability partnerships can give you, your investors or partners personal liability protection. They are among the legal entities you should consider as they all have different pros and cons. You can form these business entities via your state’s secretary of state’s office.
It’s advisable that you work with an attorney or accountant to understand what makes the most sense for you. For the sake of this article, the LLC is the best entity for a senior placement business. Some of the benefits of forming your business as an LLC includes;
- Simple setup
- Not so expensive
Catchy Business Name ideas for a Senior Placement Business
- Senior health agency
- Placement Caregivers
- Care Site
- Citywide Seniors
- Comfort givers
- Beta Care
- First class Health
- Royal placement Care
- Home Care Assistance
- Fire Senior Care
- Unique Home placement
- Central Home consultant
- Loving Care Agency
- Tender Care Inc.
- 21st century seniors
- Personal Touch Care
- Professional helpers
The senior care industry is growing, especially as baby boomers become part of the elderly population. This growth creates an enormous demand for agencies that can help families and individuals choose the best service options for their seniors.
But you have to understand that rendering these services also presents risks greater. It’s important for every business to have liability insurance, but anything to do with health care makes it especially important to carry insurance as they are among the riskiest businesses and are often fraught with claims. Insurance you will need may include;
- Workers’ Compensation Insurance
- General and Professional Liability
- Employment Practice Liability
- Business / Owned Auto
- Non-owned and Hired Auto
- Sexual Abuse
- Crime – Third Party Theft
- Employee Dishonesty Bond
- Cyber & Identity Theft
- Medical Billing E&O
- Property Coverage
Intellectual Property Protection
Any business venture requires a form of intellectual property protection to protect its ideas and secrets. Intellectual Property rights, which comprises of patents, trademarks, trade secrets and copyrights–even the right URLs–, play a crucial role in monetizing innovation. When you freely let others connive and steal your ideas, you’ve literally taken away your advantage in the industry.
A lot can be said about intellectual property protection and truthfully it does not feed the world, but it does provide the invisible infrastructure that gives room to innovation and success in any business. Some decades ago, the general healthcare industry was an empirical science based on trial and fail.
But with the advent of technology and today’s innovations being processed with sophisticated science and technology, including new technologies, patent drugs, hospital methods, orthodox medicine and business differences; intellectual property protection is needed in this industry to protect patents and new ideas, registered and unregistered trademarks, copyright, and trade secrets.
Professional Certification Needed to Run a Senior Placement Agency Business
- Certified Professional in Healthcare Quality®
- Home Health Aide Certification
- Home Care Coding Specialist— Diagnosis (HCS-D)
- Certified Home Health Care Agencies
- Home Health Agency Certification
- Senior care certification
Legal Documents Needed to Run a Senior Placement Agency
To start and run this business successfully in the United States you will need to register your business and obtain a Tax ID and NPI number for your senior care business. It’s important to state that the license and operational requirements and standards will vary from state to state. We believe that the best way to make sure you have your bases covered is by contacting your State Department of Health for assistance.
Note that Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance) will cover a patient’s eligible health services such as skilled nursing care, physical therapy, speech-language pathology services, occupational services, and others.
But if you have an unorthodox business model, Medicare and Medicaid will be your primary source of revenue. You might also be required to complete the process of Medicare accreditation, also complete a three-day Medicare survey which is an audit of your business’s operations and patient clinical records. Also for you to be eligible for Medicare coverage for senior care services, the patient must meet the following criteria:
- Your patient must be under the care of a physician and receive the treatments as part of a treatment plan prescribed and reviewed by the physician
- The physician must certify that the patient requires at least one of the following services:
- Continued Occupational Therapy
- Speech-Language Therapy
- Physical Therapy
- Intermittent Skilled Nursing Care (more than drawing blood)
- The home care business responsible for their care must be Medicare-certified
- The physician must determine that the patient is “homebound”
- The patient may not require more than part-time or intermittent nursing care
Financing your Senior Placement Agency
Deciding how to raise adequate funds for your new business is one of the key decisions you will have to make and follow through. Most traditional routes are bank loans, small business loans, or angel investors. There may be state level grants geared toward emerging businesses in the health care field as well.
But it’s important you understand that your business will operate at a loss for the first three to six months while your client base grows and you get on a regular billing cycle with Medicare and Medicaid. This means a carefully thought out cash flow management plan is required to make you get through these key first few months.
Choosing a Suitable Location for your Senior Placement Agency Business
There was a time when your success in this business will depend largely on your choice of location, but the advent of technology and social media has changed a lot – especially how we reach our target audience. Indeed you can build your own facility, buy a pre-existing building, or acquire one on lease. But it’s important your location and facility meets all medical codes and requirements that apply in your state or country.
If your buying an already existing facility or acquiring one on lease, you must make sure to have it inspected by a seasoned inspector to make sure that there are no problems that could pose threats to your service options and clients. If you’re constructing your own facility, then you need to choose a location that has one or more hospitals around. The more hospitals you have close to your chosen location, the better.
Starting a Senior Placement Agency – Technical and Manpower Requirements
Unlike a lot of other businesses where your employees sell or facilitate your product, in a senior placement business, your clients and your staff are your product, so you need to take the issue of staff and customer retention seriously. Note that the very best way to retain clients and get referrals for others is to create a unique reputation of providing top-quality professional senior care services in a unique and personable manner.
You have to start by making sure you employ the absolute best of the best to work for your company and serve as the face of the company at the front line level. Also, you’ll have to meet payroll immediately, even though your business may have no income for a few months. Your start-up costs will depend greatly on the following factors:
Obviously, starting out with a small office and few permanent employees costs less than starting out with a larger facility and numerous permanent employees.
A lot of sectors of the industry are more expensive to operate than others. As a rule of thumb, the more highly skilled the job assignment your company handles, the higher your start-up costs will be. There are at least three reasons for this:
- Employee salaries will be higher
- The need for a certain image may require a more expensive location
- Computer demands (both hardware and software) for testing and training will be greater. The most expensive niche in which to start up appears to be the senior care facility staffing.
Office rent, employee pay, advertising costs, tax rates and insurance rates all depend on both your area of the country and the city/town distinction.
From our detailed research, start-up costs can range from $62,000 to $127,000, and you should have a suggested operating capital of between $91,000 to $135,000 in the bank. After having some success with initial placements and earning enough commissions, it is possible to expand staff to increase the placement activities.
Each new staff member can concentrate on expanding the opportunities in a particular niche or working with a certain type of professional. By using this strategy, it is possible to build up a good reputation from efforts that are focused on gaining useful expertise and contacts in this industry.
The Service Process of a Senior Placement Agency Business
Have it in mind that from sprawling retirement communities with hundreds of residents to adult family homes with only a few, the options for senior living are endless. Working alone, most people will be overwhelmed with the choices available and will pick something because it is close or familiar, later discovering that it does not meet their needs. This is why finding the right placement is important for seniors.
As much as we would like to believe that everyone has the best of intentions, unfortunately that is not always the case. As someone looking to achieve success in this business, note that a reputable agency is always tasked with ensuring that they are following the laws set out by the Elder and Vulnerable Adult Placement Referral Agency Act (RCW 18.330), providing the client information about your agency and the communities or care providers you’re referring.
You will read and sign a Disclosure of Services statement that includes agency and client information, details regarding the fee to be received (and refund policy) for the referral, a description of the services provided, and frequency of facility tours by the agency. Included will be contact information for the Office of the Attorney General if a complaint needs to be filed.
Note that you will have to use a standardized intake form for each vulnerable adult, which is covered by healthcare confidentiality laws (HIPAA). These questions may be asked by an agency staff member who will ask about recent medical history, diagnoses, medications, and health concerns.
You will also have to inquire as to why the clients are seeking services and will want to know about the current living situation, as well as if assistance is needed with activities of daily living and if there are any behavioural concerns, dementia, or developmental disabilities.
Also the intake process requires a basic understanding of the current financial situation, preferences on location, and other issues that are important to their specific situation. Have it in mind that placement agencies operate on a private pay basis with the senior or their family. If the client is on Medicaid or Medicare, you cannot collect a referral fee for services covered by Federal or State health care programs.
Within 30 days of making a referral, your agency must inform the client if any of the referred facilities or agencies is in enforcement (violation of RCW or WAC) status.
Your agency will be required to keep records of all services provided to clients for at least six months, to maintain at least $1 million of general and professional liability insurance. You’re also required to perform a criminal background check every two years on partners, operators, and employees who have contact with vulnerable adults.
Starting a Senior Placement Agency Business – The Marketing Plan
- marketing strategies for a senior placement agency
After you must have established a working business plan, scaled through the rigorous process of state and Medicare certification, and have a top quality professional staff in place. The next crucial point in your business will be to create a marketing plan that will ensure a constant flow of costumers.
This is the point where senior placement businesses start to resemble other businesses—success will depend on effective marketing strategies and some good, old-fashioned hustle. Below are some of the most effective strategies for recruiting clients for a new senior placement agency:
- Create a unique website
- Reach out and network
- Set yourself apart
- Join local business groups or organizations
- Attend as many industry seminars and events as possible
Strategies for Winning Competitors in the Senior Placement Business
Have it in mind that with market competition growing rapidly within the senior placement industry, successful marketing campaigns have become a very important part of doing business even for smaller senior placement agencies. Irrespective of the size of your business, the quality of the customer service a senior placement provides in addition to the efforts put into establishing relationships are key components for marketing long-term care services.
- Extensive Market Research
It is strongly recommended that before you invest in developing specialized services to increase your census numbers, find out if a program is viable in the business market. You should note that the goal of market research is to know if there exists a need.
- Excellent Delivery of Services
It’s okay to want to outshine your competitors and to increase census to raise revenue, but know that it’s a bad thing to promise more than you can deliver. In the senior placement industry, what looks good on a marketing brochure isn’t always possible.
- Service Differentiation
Note that successful differentiation in the senior placement business can give your business a leverage and a competitive edge in the business. It’s advisable that you assess the needs of your target market and then identify what makes your business and offerings different from those of your competitors.
- Choosing a Niche Market
Also knowing and identifying a niche market and target people who need those particular services you offer will help you narrow down your marketing message.
Increasing Client Retention in the Senior Placement Business
Just like we stated above, success in this industry depends on how well you handle your staff and clients. This is why savvy business owners put time and effort into marketing. Marketing doesn’t need to be a difficult, daunting task—but you do need to have a focus and a plan.
- Consumer Marketing
This simply means creating marketing efforts that are aimed directly at your potential clients. Just like any marketing tool, the goal of consumer marketing is to let people know you exist and help them understand the services you provide, hopefully converting these prospects into new clients.
Some good examples of consumer marketing are newspaper ads, TV ads, radio ads, billboards, a sign on your car door, your website and SEO (search engine optimization), speaking at senior events or attending health fairs, and having a listing on a consumer outreach website.
- Referral Marketing
Have it in mind that referral marketing make up all marketing efforts aimed directly at current clients, doctor’s offices and other referral sources, as opposed to potential new clients themselves. Note that by reaching out to these referral sources and building a relationship of trust with them, they are happy to recommend your services to those they know who are in need of senior placement services.
Boosting your Senior Placement Agency Brand Awareness and Creating a Corporate identity
In this our modern age and with the increased importance of social networking, social media has created the ideal climate for senior placement businesses to boost its brand awareness online. Note that there are several ways that social media platforms can be used to help find new customers and to firmly cement your brand in the minds of consumers.
- Find your identified target population
- Connecting Directly With Consumers
- Providing High-Quality Content
- Be eager to help
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