Common home care business plan mistakes, and how to avoid them
By Scott McKenzie, founder of Home Care Agency Blueprint · Updated
Most weak plans fail on the same few points: numbers nobody can source, a funding request that does not match the financials, and no plan for the time before revenue arrives. Here are the mistakes worth avoiding, each with the source behind it.
Mistakes to avoid
Copying someone else’s numbers
Sample figures from a template or another agency do not reflect your state, city or choices. Enter your own amounts and note where each came from.
A funding request that does not match the financials
The SBA advises matching your projections to your funding request. If the plan asks for one amount and the numbers show another, a reader will notice.
Source: SBA, Write your business plan
Leaving out the wait for revenue
Costs start before clients pay. The SBA suggests counting at least one year of monthly expenses when you add up what you need, and says five years is ideal. Size your reserve with the cash-flow reserve calculator.
No market evidence
Saying “there is demand” is not evidence. Describe your target clients, service area and competitors from your own research and public data.
Skipping the licensing path
A plan that assumes services your license does not allow, or that ignores the time and cost of getting licensed, will not hold up. Check with your state licensing agency.
Your own planning
Assuming payer rates you have not confirmed
If the plan depends on Medicaid or another program, confirm the program, its rules and its published rates before you build numbers on them.
Your own planning
Ignoring your own credit
For a new business, the SBA notes loan eligibility is typically based on the owner’s personal credit score. Check your reports before you apply.
Source: SBA, Establish business credit
Writing it only for the lender
The SBA describes a plan as a roadmap for running the business. If you never open it again after the loan, it was not finished.
Source: SBA, Write your business plan
Your lender sets the details. Each lender and loan program decides what it asks for and how it decides. The SBA says the lender will give you the full list of eligibility requirements for your loan. Ask each lender for its list before you finalize your plan, and confirm licensing questions with your state agency.
What to do next
Frequently asked questions
What is the most common reason a plan is turned down?
We do not have data on that, so we will not guess. Lenders decide on their own criteria; a complete, sourced plan with matching numbers makes your request easier to understand.
Want to talk through your options?
A free 15-minute clarity call with Home Care Agency Blueprint. It helps people start home care agencies, so expect that perspective. You do not need a finished plan first.
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