Just as with every business owner, those who start a home care agency have high aspirations for their venture. They’ve invested time, creative process, energy, and often money into seeing it succeed. But in this industry, there are many more risks and a great lack of certainty in whether or not your business will get off the ground. How can you boost your chances? Why have others failed? Here we break down all you need to know.
What Do the Stats Say?
While chances of success are very slim, this is true for most small enterprises. Only 59% of new small businesses survive the first three years. This isn’t comforting, but an almost 50/50 shot isn’t bad. It’s even worse in the first five years, however, where only 48% live on. This is resoundingly scary, and explains why many people stay away from even trying.
Desire, positive energy, and enthusiasm are necessary to see your home care agency succeed, but it can’t be relied on entirely. Startup entrepreneurs get into even deeper trouble if they underestimate the work and drive necessary to see their venture to the finish line.
Alright then, so what about…
The Most Frequent Reasons a Home Care Agency Fails?
The first one can be traced to any branch of economy: a lack of funds. Most home care agencies fail to secure the loans or investments needed to truly get off the ground. This means when future struggles arrive, they’re unprepared.
When founders get their math wrong and don’t account for all potential expenses, even a well funded agency will fall apart. They spend more than they earn, or use borrowed funds and fail to return them. Some use agency money for personal use, or mismanage the space they need… All of this brings the demise of the organization.
Faulty Business Plan
This slip-up is often the most lethal, yet it’s the first one agencies are guilty of. Before they apply for their first loan or contact their first investor, they develop a business plan – and do it poorly. If the plan is not reviewed by professionals in the field, doesn’t properly account for future pitfalls, isn’t clear enough to be understood by all members of the agency, and can’t flex to suit the current situation, then it’s a recipe for failure. It’s vital to have a business plan, but more important to have a quality one.
Have you witnessed other failures? Comment below and tell us how you believe it could’ve been handled better!
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