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Written by: Natalie Fell
Natalie is a business writer with experience in operations, HR, and training & development within the software, healthcare, and financial services sectors.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on June 7, 2022
Investment range
$9,000 - $19,400
Revenue potential
$65,000 - $234,000 p.a.
Time to build
3-6 months
Profit potential
$49,000 - $82,000 p.a.
Industry trend
Growing
Commitment
Flexible
Consider these crucial factors when launching your hospice business:
How Journey Hospice Balances High-Quality Care with Personal Touch
You May Also Wonder:
Is a hospice business a profitable venture?
Yes, hospice care businesses can be very profitable. You’ll need to spend time marketing your services to stand out from the competition. Consider getting the certification needed to bill Medicare and Medicaid to increase revenue.
What are the top referral sources for hospice?
The top referral sources for hospice care typically include healthcare providers such as physicians, hospitals, nursing homes, and home health agencies. Additionally, word-of-mouth referrals from satisfied patients and their families can be a powerful source of new business for hospice providers.
What is the difference between palliative care and hospice?
Palliative care and hospice are both forms of specialized medical care that focus on improving the quality of life for patients with serious illnesses. However, palliative care can be provided at any stage of an illness and can be provided alongside curative treatments, whereas hospice care is typically provided in the final stages of a terminal illness when curative treatment is no longer effective or desired.
How do I differentiate my hospice business from competitors?
Differentiate your hospice business by focusing on personalized care tailored to the specific needs and preferences of each patient and their family. Enhance your services with special offerings like music therapy or spiritual support. Emphasize quality by hiring well-trained, experienced staff and utilizing technology to streamline communication and coordination among your care team.
Can you start hospice business on the side?
Starting a hospice takes time and a passionate commitment, so it really cannot be a side hustle. You have to be devoted to what you’re doing full-time.
Before starting a hospice business, it’s important to weigh the pros and cons.
Trends within the hospice care industry include:
Challenges within the hospice care industry include:
Startup costs for a home-based hospice business range from $9,000 to $19,000. Your main costs will be related to obtaining proper licensure and certification. Other costs include a website and your marketing and advertising expenses. If you plan on opening an inpatient hospice facility with a full staff, your costs could be anywhere from $100,000 to $300,000.
If you’d like to learn more about what it takes to start a hospice business, the National Hospice and Palliative Care Organization offers plenty of tools and resources. They also offer online courses for around $500, some of which can be completed in around 14 hours.
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Insurance | $300-$1,000 | $650 |
| Certification and accreditation | $5,000-$10,000 | $7,500 |
| Licenses | $500-$1,000 | $750 |
| Computer | $1,000-$3,000 | $2,000 |
| Website | $800-$1,600 | $1,200 |
| Software | $100-$300 | $200 |
| Marketing and advertising | $1,000-$2,000 | $1,500 |
| Misc | $300-$500 | $400 |
| Total | $9,000-$19,400 | $14,200 |
The average daily rate for in-home hospice care is $250. Inpatient care facilities charge a higher rate, averaging around $750 per day. If you decide to run an in-home, non-medical hospice business, aim for a profit margin of around 75%. If you’re running an inpatient facility, your margins will be much higher, probably close to 15%.
In your first year or two, you could provide non-medical, in-home hospice care five days per week at a rate of $250, bringing in $65,000 in annual revenue. This would mean $49,000 in profit, assuming that 75% margin. As your business and client base grows, you could raise your rates to $300. You would also likely hire additional staff, reducing your profit margin to 35%. With two extra aides working five days per week, you’d bring in annual revenue of $234,000. At that 35% margin, you’d make a handsome profit of $82,000.
There are a few barriers to entry when starting a hospice business. Your biggest hurdles will be:
Now that you know what’s involved in starting a hospice business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research hospice care facilities in your area and online to examine their services, price points, and customer testimonials. You’re looking for a market gap to fill. For instance, maybe the local market is missing a business that offers in-home hospice services.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as palliative care or hospice care with a focus on spiritual healing.
This could jumpstart your word-of-mouth marketing and attract clients right away.
Hospice care services vary greatly, depending on a provider’s credentials and experience and what level of care is needed.
For example, medical-based hospice care provided by a registered nurse at an inpatient facility may include administering medications and monitoring vital signs. Non-medical home hospice care services could include everything from companionship to assistance with personal hygiene.
Costs for in-home hospice care typically range from $150 to $350 per day. Daily rates at inpatient hospice care centers with medical care range from $500 to $1,000. If you’re providing non-medical, in-home hospice care services, aim for a profit margin of around 75%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market will be the families of loved ones who are close to the end of life and are looking for care and support services. Consider marketing your services on social media sites like Facebook and Instagram. Network with local nursing homes and assisted living facilities to generate potential leads.
In the early stages, you may want to run an in-home hospice business to keep costs low. As your business grows, you’ll likely need to hire workers for various roles and may wish to rent out an inpatient facility. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to hospice businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your hospice business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a hospice business. You might also try crowdfunding if you have an innovative concept.
Starting a hospice business requires obtaining a number of licenses and permits from local, state, and federal governments. If you wish to receive payment from Medicaid or Medicare, additional licensure is required.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your hospice business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as Axxess, Alora, or HospiceWorks to store patient records, maintain care schedules, and receive payments.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your hospice care service:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your hospice business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your hospice business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a hospice business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in hospice care for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in hospice care. You’ll probably generate new customers or find companies with which you could establish a partnership.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a hospice care business include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Providing hospice care isn’t for everyone, but those who have a passion for helping people through difficult times can make a great living. The families you serve will always remember you and the impact you had while assisting their loved one through the last chapter of life.
Now that you’ve done your homework and have the necessary knowledge to start a profitable venture, it’s time to build your successful hospice business.
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