Is Starting a Home Care Agency Worth It in 2026? [+ Checklist]

Yes, starting a home care agency is worth it but there are some caveats 

Starting a home care agency can be worth it for an owner who is prepared to manage compliance, recruit dependable caregivers, attract clients and maintain enough working capital to support the business while it grows. However, it is not a simple passive income opportunity.

A home care agency is a regulated service business. Its success depends on consistently delivering safe care, ensuring every scheduled shift is covered, controlling labour costs, generating referrals and maintaining accurate records.

The demand for care at home is real. The U.S. Census Bureau estimated that 61.2 million Americans were aged 65 and older in 2024. Statista projects that this age group will represent 19.2% of the U.S. population in 2026.

However, a growing older population does not guarantee that an individual home care agency will be profitable. Whether starting a home care agency is worth it for you depends on the demand for home care in your area, the services you plan to offer, the money and resources available to start the business, and your ability to manage caregivers and daily operations. Your willingness to meet regulatory requirements and build the agency properly is equally important.

Is Starting a Home Care Agency Worth It for You?

Starting a home care agency may be worth it for you if the business matches your financial goals, available resources, management ability and willingness to handle staffing, compliance and client acquisition.

Before investing, clarify the type of agency you want to build, the clients you plan to serve and the level of responsibility you are prepared to take on.

For example, an agency serving private-pay clients may require a different marketing and payment process from one working mainly with Medicaid or managed-care clients.

A non-medical personal assistance services (PAS) agency will also have different staffing and compliance requirements from a home health agency providing skilled care.

Make sure you can clearly answer these questions:

• What services will the agency provide, who will it serve and how will clients pay?
• Which Texas licence and compliance requirements apply to the agency?
• How will you recruit and retain dependable caregivers?
• How will you attract and retain enough clients?
• How much startup and working capital will you need before the agency reaches break-even?

The clearer your answers are, the easier it will be to determine whether starting a home care agency is the right business for you.

Our home care business plan guide can help you turn those answers into a working plan.

Why Home Care Continues to Be a Strong Business Opportunity

Home care businesses continue to be a strong business opportunity because they meet an ongoing need for dependable support that helps older adults and people with disabilities continue living in their own homes.

Home care businesses also provide practical help with everyday activities such as bathing, dressing, preparing meals and moving around safely. This support allows many people to remain at home rather than move into a care facility.

Four factors support continued demand.

1. The older population is growing

The number of older Americans keeps increasing. The U.S. Census Bureau estimates that the number of people aged 65 and above grew by 3.1% between 2023 and 2024, reaching 61.2 million. By 2030, every member of the baby-boom generation will be at least 65.

As the older population grows, so does the need for services that help people continue living safely and independently at home.

2. Many people need help to remain independent

Not every aging adult requires care in a nursing facility. Some people only need help with personal care, household tasks, transportation or other everyday activities.

A well-run home care agency can provide home-based services by helping older adults and people with disabilities remain in their homes and communities for as long as possible.

3. Families cannot always provide all the care themselves

Family members may provide some support, but work, distance and other responsibilities can make it difficult to provide consistent care. Professional in-home help may be needed when relatives cannot manage every task or live far away.

Home care agencies help fill this gap by recruiting, screening, scheduling and supervising caregivers. This creates an opportunity for agencies that can provide dependable and consistent service.

4. The need for caregivers is expected to remain high

The Bureau of Labor Statistics projects employment of home health and personal care aides to grow by 17% between 2024 and 2034. It also expects approximately 765,800 openings each year during that period.

These figures point to continued demand for paid caregivers. However, many of the openings will result from workers changing occupations or leaving the workforce. New agency owners should therefore view caregiver recruitment and retention as both a business opportunity and an important operational challenge.

Is Home Care a Good Business?

Home care can be a good business because it combines ongoing demand with the possibility of recurring revenue.

A client may receive several hours of care each week over many months. When an agency provides reliable service and consistent caregivers, one client relationship can generate continuing billable hours rather than a single transaction.

For example, consider a Texas home care agency serving 10 private-pay clients. Each client receives 20 hours of care per week, giving the agency 200 billable hours.

Texas’s 2025 median cost for non-medical home care was approximately $30 per hour. So, if your home care agency charges a rate of $30 per hour, they would generate $6,000 in weekly revenue.

However, it’s important to remember that home care is labor-intensive. This means that if you start a home care agency, you must be able to continually manage caregiver wages, software fees, office costs and other operating expenses to get recurring profit.

Is Owning a Home Care Agency Profitable?

Owning a home care agency can be profitable, but note that revenue and profit are not the same.

Using the example above, an agency earning $6,000 per week does not keep the full amount. It must first pay caregiver wages, payroll taxes, insurance, software, marketing and other operating costs.

For example, if the agency’s total weekly expenses are $4,800, it would have $1,200 remaining before taxes and the owner’s compensation. If expenses rise because of overtime, caregiver turnover or poor scheduling, that profit may shrink. If the agency controls its costs and adds more billable hours without increasing overhead at the same rate, its profit may grow.

Profitability therefore depends on the difference between what the agency earns per hour and what it costs to provide that hour of care. Agencies with appropriate pricing, reliable caregivers, consistent clients and careful financial management are generally in a stronger position to become profitable.

How Is Home Care Agency Profit Calculated?

A home care agency’s profit is calculated by subtracting the cost of providing care and running the business from its revenue.

Using our Texas example, assume the agency provides 200 billable hours each week at $30 per hour. That equals approximately 867 billable hours per month and $26,000 in monthly revenue.

If caregivers earn $17 per hour and payroll taxes, workers’ compensation, training, recruiting and other direct care expenses add another $4, the agency’s total direct cost is $21 per hour.

$30 billing rate − $21 direct cost = $9 contribution per billable hour

At approximately 867 monthly billable hours, this produces about $7,800 in monthly contribution before fixed expenses.

For a lean, home-based Texas agency, hypothetical monthly fixed expenses might include:

• Software and phone services: $200
• Insurance: $100 using bizinsure.com
• Marketing: $500
• Administrative expenses: $300

Total fixed expenses: $1,100

At 123 Consulting Solutions, we often recommend that new agency owners start from home where appropriate rather than taking on commercial office rent too early.

After subtracting $1,100 in fixed expenses from the $7,800 contribution, the agency would have a hypothetical $6,700 in monthly operating profit before taxes, debt payments, owner compensation or distributions, and unexpected expenses.

How Much Money Can a Home Care Agency Make?

How much a home care agency makes depends largely on its billable hours: the hours of completed care that the agency can charge a client or payer for.

The basic calculation is:

Weekly billable hours × average amount collected per hour = weekly revenue

For illustration, an agency collecting an average of $30 per hour would generate approximately:

• 100 billable hours per week: $156,000 annually
• 300 billable hours per week: $468,000 annually
• 500 billable hours per week: $780,000 annually
• About 641 billable hours per week: $1 million annually

This also explains why the number of clients alone can be misleading. One client receiving 40 hours of care per week produces the same number of billable hours as eight clients receiving five hours each.

However, revenue is not profit or owner income.

A Careswitch compensation survey of 421 home care agencies reported an average owner salary of approximately $101,400, although owner compensation varied considerably by agency size and how owners paid themselves.

Profit margins also vary. Activated Insights reported that the median home care agency profit margin was 9.7% in 2023.

In our experience working with home care agencies in Texas, however, we have seen operating profit margins range from approximately 9% to 30%. The difference often comes down to pricing, caregiver costs, billable hours and how efficiently the agency manages its overhead.

To put those percentages into perspective, a home care agency generating $1 million in annual revenue would produce approximately:

• $97,000 in operating profit at a 9.7% margin
• $200,000 at a 20% margin
• $300,000 at a 30% margin

These figures are before applicable taxes, owner distributions and other adjustments.

How Do Home Care Agencies Make Money?

Home care agencies make money by arranging care, completing billable services and collecting payment for those services.

The basic process is:

Billable hours completed × amount collected per hour = revenue

For example, if a client receives 25 hours of care each week, the agency can bill for those 25 hours after the shifts are completed and properly documented. The amount collected depends on the client’s payer source.

Private-pay clients

With private pay, the client or family pays the agency directly. The agency sets its rate, invoices the client and pays the caregiver from the money collected.

Private pay can offer faster payment and greater control over pricing. However, the agency must continually attract families, explain the value of its services and manage collections.

So if you have a private pay client, your agency will generally collect its full agreed rate directly from the client or family. Therefore, a client receiving 20 hours of care each week at $30 an hour might generate about $600 in weekly revenue before expenses.

Medicaid and managed-care contracts

For Medicaid clients, the agency generally provides care based on the number of hours authorized for the client and the reimbursement rate established for that service. The agency must document completed visits correctly and submit accurate claims before it can be paid.

The Texas Health and Human Services Commission (HHSC) changed attendant-service reimbursement on September 1, 2025. Rates were increased to support an average attendant wage of $13 per hour, and the previous Attendant Compensation Rate Enhancement program ended.

Under the current HHSC fee-for-service schedule, Primary Home Care (PHC) agency rates are $17.13 an hour for non-priority care and $17.31 for priority care. Managed-care rates depend on the contract.

The $13 figure is an average wage used in the rate methodology, not a universal required wage for every attendant. Agency reimbursement differs from caregiver pay; use your actual service rate and current wage requirements when budgeting.

Obtaining a Home and Community Support Services Agency (HCSSA) licence does not automatically make an agency a Medicaid provider.

An agency pursuing PHC must also complete Medicaid enrollment, obtain the applicable PHC contract, receive service authorizations and comply with billing and electronic visit verification (EVV) requirements.

The practical difference is that private-pay agencies generally set their own rates, while Medicaid agencies must operate within the reimbursement rates and authorized hours established by the applicable Texas program.

Other payer sources

Agencies may also receive payment through veterans’ programs, long-term-care insurance, workers’ compensation or community contracts. Each source can have different rates, approval processes and payment timelines.

Long-term-care insurance reimburses care up to a policy’s daily or monthly benefit limit. If the agency charges more than the policy covers, the client normally pays the difference.

Payments through U.S. Department of Veterans Affairs (VA) programs may be based on an approved VA fee schedule or a negotiated rate rather than the agency’s normal private-pay price.

The most important point is that scheduled hours do not automatically produce income. The care must be completed, documented correctly, billed and successfully collected.

How Much Does it Cost to Start a Home Care Agency?

The cost of starting a home care agency depends on the state, licence category, office structure, professional support, staffing model and amount of working capital available.

For example, a small, independent Texas home care agency should generally plan for approximately $12,000 to $20,000 to complete the setup process and maintain enough cash to begin operating. A practical midpoint for budgeting purposes is about $15,000.

This estimate assumes a non-medical, Personal Assistance Services agency rather than a Medicare-certified home health agency or franchise.

When Segun Ogungbemi started his home care agency, he did not rely on the business to support him immediately. Before launching, he had saved more than $10,000 to cover expenses such as licensing, marketing and early operations. He also kept his existing job, using that income to help fund the agency while it was still building its client base.

His experience highlights an important point for new owners: startup capital should cover more than the cost of obtaining a licence. You also need enough financial breathing room to market the agency, recruit caregivers and operate while revenue is still developing.

Here is a sample Texas startup budget for an owner forming a limited liability company (LLC):

Scroll sideways to see the full table

Texas currently charges $300 to form an LLC and $2,625 for an initial three-year HCSSA parent-agency licence.

An owner working from home and handling most administrative work personally may start for less. Based on a lean home-based setup, a prospective Texas home care agency owner should plan for around $15,000 to cover setup and an initial reserve. Your agency may need more for higher care hours or slower payer payments.

For a fuller breakdown, see our Texas home care startup cost guide.

Is it Difficult to Start a Home Care Agency?

Starting a home care agency is more complicated than opening an ordinary unregulated service business. That said, many people have been able to successfully open and operate their home care agencies with the right guidance.

In Texas, the difficulty in starting a home care business comes from completing several connected steps in the correct order. The “challenge” has five parts.

1. Choosing the correct service category

“Home care” can describe very different services. Texas applicants must select the HCSSA category that matches what the agency plans to provide.

For example, an agency helping clients with bathing, dressing, meal preparation and other daily activities may apply for Personal Assistance Services. An agency planning to provide skilled nursing or Medicare-certified services would need a different category.

This decision affects the agency’s staffing, administrator qualifications, policies, training, surveys and the services it can legally offer.

2. Completing the licensing process

Applicants must complete the required presurvey training, prepare the supporting documents, submit the application through the Texas Unified Licensure Information Portal (TULIP), pay the licensing fee and receive HHSC approval before operating as a licensed HCSSA.

After receiving an initial licence, the agency must also prepare to admit clients and complete the initial survey process. In Texas, a newly licensed PAS-only agency generally must admit at least one client, begin providing services and request its initial survey no later than six months after the licence’s effective date.

Incomplete policies, incorrect documents or choosing the wrong service category can delay the process.

3. Recruiting caregivers without overstaffing

A licence alone does not allow the agency to serve clients. It needs dependable caregivers who can pass the required checks, complete training, follow care plans and document every completed shift.

However, hiring too many caregivers before obtaining clients can create unnecessary costs. A practical approach is to build a pool of screened candidates who can be assigned as clients are admitted.

4. Finding the first clients

Many owners concentrate on licensing and postpone marketing until the licence is approved.

Before launching, the agency should already know:

• Who it wants to serve
• Which Texas cities or counties it will cover
• How much it will charge
• Which referral sources it will approach
• How enquiries will be followed up
• How much it can spend on marketing

The owner should also set weekly targets for referral visits, calls, consultations and follow-ups.

5. Remaining ready for inspection

Compliance continues after the licence is issued. The agency must maintain complete personnel files, client records, training documents, complaint procedures, incident reports, emergency plans and quality-management records.

Texas HCSSA surveys are generally unannounced. The agency should therefore operate as though its records could be reviewed on any normal business day, and not wait until a survey is expected.

So, the real difficulty in starting a home care agency is the fact that you have to coordinate licensing, staffing, client acquisition and compliance without allowing gaps in one area to disrupt the others.

Our guide on how to start a home care agency in Texas walks through those steps in order.

Do You Need Healthcare Experience to Own a Home Care Agency?

Healthcare experience is not always required to own a non-medical home care agency. However, owning the business is different from qualifying to manage its daily operations.

Every HCSSA must designate one qualified administrator and one qualified alternate administrator. For example, Texas has qualification requirements for administrators and alternate administrators. The owner may fill one of these roles if they meet the requirements. Otherwise, the agency must appoint or hire qualified individuals.

For a Personal Assistance Services-only agency, both administrators must meet at least one of the following requirements:

• A high school diploma or GED and at least one year of experience or training caring for people with functional disabilities
• Two years of full-time study at an accredited college or university in a health-related field
• The higher qualification requirements that apply to licensed home health or hospice agencies

A PAS-only agency does not need a supervising nurse, although it must have appropriate policies for supervising its caregivers.

First-time administrators and alternates each need eight hours of administrator training before appointment and another 16 hours by the end of their first 12 months. This is separate from presurvey training.

Before applying, an owner should confirm whether they qualify, select an alternate administrator and include any administrator salary or training costs in the startup budget. The practical question is not whether the owner has a medical title, but whether the agency has qualified people in every required position.

Independent Home Care Agency or Franchise: Which Is Better?

Neither option is automatically better. The right choice depends on how much support, control and startup capital the owner needs.

Starting an independent agency

An independent owner develops their own brand, chooses their technology and vendors, and creates their own marketing and operating systems. They also avoid franchise fees, royalties and mandatory marketing-fund payments.

However, the owner must build everything from the beginning, including policies, caregiver recruitment processes, pricing, marketing materials, referral systems and staff training. This may require more research, professional support and trial and error.

Buying a home care franchise

A franchise may provide an established brand, operating procedures, training, marketing materials, technology recommendations and continuing support.

However, these benefits come with additional costs and restrictions. The franchisee may pay an initial fee, ongoing royalties, advertising contributions and required technology or vendor charges. Some royalties may be calculated from gross revenue, meaning they may still be payable when the individual agency is not profitable.

Buying a franchise also does not replace Texas licensing. The owner must still obtain the appropriate HCSSA licence and comply with the state requirements for the services provided.

Before buying, prospective franchisees should examine:

• Total investment required during the first year
• Royalty and advertising fees
• Territory protections
• Required software and vendors
• Training and ongoing support
• Average time to acquire clients and break even
• Renewal, transfer and termination conditions

The Federal Trade Commission requires franchisors to provide a Franchise Disclosure Document containing 23 categories of information at least 14 days before the buyer signs an agreement or pays the franchisor. Important sections include startup and ongoing fees, restrictions, training, earnings claims and contact details for current and former franchisees.

A franchise may suit an owner who values a ready-made system and can afford the additional fees. An independent agency may suit someone who prefers greater control and is prepared to build or purchase the necessary systems separately.

How Long Does it Take for a Home Care Agency to Become Profitable?

There is no standard timeline. A home care agency becomes profitable when the contribution from its billable hours consistently exceeds its monthly operating expenses.

For example, assume an agency earns $9 from each billable hour after paying caregiver wages and other direct care costs. If its fixed expenses are $1,100 per month, it would need approximately 122 billable hours per month to cover those fixed expenses:

$1,100 ÷ $9 contribution per billable hour = approximately 122 monthly billable hours

That equals about 28 billable hours per week. If each client receives an average of 20 hours of care weekly, the agency would need approximately two active clients to cover its $1,100 in monthly fixed expenses.

How quickly the agency reaches and moves beyond that level depends on how fast it attracts clients, recruits dependable caregivers and converts enquiries into completed shifts. Pricing, cancellations, overtime, caregiver turnover and payment delays can also affect profitability.

Rather than relying on a promised number of months, owners should create monthly targets for active clients, billable hours, contribution per hour and cash reserves. Profitability is reached when the agency can consistently cover its direct and fixed expenses, not simply when it receives its licence or signs its first client.

The Biggest Mistakes New Home Care Agency Owners Make

Here are some of the biggest mistakes new home care business owners make:

• Treating the licence as the business. Approval does not bring clients or caregivers. Start planning recruitment, marketing and daily operations before you launch.
• Starting without enough working capital. Budget for payroll and other running costs while you build your client base and wait for payments.
• Setting prices without knowing your costs. Include wages, payroll taxes, insurance, training and overhead before deciding what to charge.
• Waiting until a client is ready to recruit. Build a pool of screened caregiver candidates so you can fill shifts without hiring more staff than you need.

For more examples and practical ways to avoid them, see our guide to the biggest mistakes new home care agency owners make in Texas.

Who Should Start a Home Care Agency?

Starting a home care agency may be a good fit for someone who understands that it is a regulated, people-intensive service business rather than a passive investment.

You may be ready if you:

• Have a clear idea of the services you want to provide and the clients you want to serve.
• Can raise enough money for licensing, setup, payroll and operating expenses.
• Are comfortable recruiting, supervising and retaining caregivers.
• Are prepared to market consistently and follow up with prospective clients.
• Can manage records, policies, schedules and financial reports.
• Are willing to respond when staffing or client problems arise.
• Will hire qualified administrators, clinical staff or professional advisers when needed.
• Are prepared to invest in the training, startup guidance and professional support needed to build the agency correctly.

You do not need to know everything before starting, but you should understand your responsibilities and have a realistic plan for filling the gaps.

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Ready to Start Your Texas Home Care Agency?

123 Consulting Solutions can guide you through the Texas home care startup process, including business planning, HCSSA licensing, administrator training, policy development and compliance preparation. Get practical support based on your proposed services, budget and business goals.

Schedule a Home Care Startup Consultation

Who May Not Be Ready Yet?

You may need more preparation if you:

• Expect immediate passive income.
• Have no plan for recruiting caregivers.
• Have no marketing budget.
• Cannot support payroll during the startup period.
• Do not know which services or payer sources you want.
• Are unwilling to maintain records and policies.
• Expect a consultant to operate the entire business permanently.
• Have not researched your local market.
• Are choosing home care only because someone said it is profitable.

Not being ready today does not mean the idea should be abandoned. It means the next step should be research and planning rather than immediately submitting an application.

Home Care Agency Readiness Assessment

Use this checklist to see what you have ready and where you still need to prepare. Give yourself one point for each statement that is true.

• I know whether I want to provide non-medical or clinical services.
• I understand the difference between PAS, home health and hospice.
• I know my target client.
• I know who will pay for the service.
• I have researched my local competition.
• I understand the Texas licensing process.
• I have identified a qualified administrator and alternate.
• I have a written startup budget.
• My budget includes working capital and payroll reserve.
• I have a caregiver recruitment strategy.
• I have a plan for getting my first 10 clients.
• I understand how to calculate contribution per billable hour.
• I know how many hours I need to break even.
• I can commit time to daily management.
• I am prepared to maintain compliance after licensing.

How to interpret your score

12–15 points: Strong initial preparation

You may be ready to move into detailed licensing, budgeting and launch planning.

8–11 points: Promising, but important gaps remain

Identify the missing areas before making major financial commitments.

0–7 points: More research is needed

Begin with a feasibility assessment, business plan and consultation before submitting an application.

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Need Help Turning Your Plan Into a Texas Home Care Agency?

Your readiness score shows where you are prepared and where you may still need support. 123 Consulting Solutions can help you review your business model, startup budget, administrator requirements, HCSSA licensing path and launch plan before you invest further.

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Is Starting a Home Care Agency in Texas Worth It?

Starting a home care agency in Texas can be worth it for an owner who is prepared for both the opportunity and the responsibility involved.

Texas has a large and growing population, including older adults and people with disabilities who may need support to continue living safely at home. However, demand alone does not guarantee that an agency will succeed.

The business is more likely to be worthwhile when the owner chooses the correct HCSSA licence category, appoints qualified administrators, maintains enough startup capital and develops compliant operating systems. The agency must also recruit dependable caregivers, price its services carefully and build reliable sources of client referrals.

Success may also depend on choosing a suitable payer strategy, whether that involves private-pay clients, Medicaid contracts or other programmes.

The opportunity is therefore not simply in obtaining a licence. It lies in building an agency that can consistently attract clients, deliver reliable care and earn enough from its billable hours to cover its costs and support continued growth.