If you’ve ever considered expanding your agency but don’t know where or how to start, you’re not alone. Some owners might be happy where they’re at and have no desire to take on the responsibility of opening a second or third location.
Others might have a strong desire to become a franchisor and establish a larger foothold in their state or region through expansion.
Here at Rosemark, we are frequently asked a variety of questions related to the home care industry and best practices for running a business. From how to start an agency to how to find more caregivers, we hear many stories from our customers about the challenges faced and successes achieved by owners across the country.
When it comes to expanding your agency, we don’t have all the answers. So we asked someone who did. We interviewed Daniel Story, founder of HomeJoy, a franchise based out of Michigan. Dan was kind enough to share his struggles, achievements, and advice for agency owners curious about opening more offices.
To follow are some of the questions we asked Dan and his candid responses.
Question: Tell us your background and how you got into homecare.
Answer: Dan started as a registered nurse (RN) working in home health care for a skilled nursing, Medicare-certified agency. In that industry, it’s common to go through patients very quickly. Dan generally had new patients every 60 days. His patient load was 25 or more, and he saw a great demand for people who needed more care than Medicare would pay for.
After forming relationships with a lot of smaller agencies that did long-term care work, like his current agency does, Dan realized there were things he would change. He started to lay out a wish list which included things like:
- He would want a back-up plan
- He’d want a consistent caregiver
- He’d want a lot of things that were difficult for his clients to be managed better
At that time, Dan felt a lot of pressure to keep clients out of the hospital. He realized he was in a position where he was learning the industry from the inside out, and he wanted to capitalize on that knowledge.
As an RN, your income is capped. While he loved his job, he knew he wanted to earn more than a hospital RN typically earns to better provide for his family.
As an amputee, Dan also felt like he didn’t have the opportunity to do other things he could have done without that disability. So his focus turned to finding a way to increase his income by using the knowledge and skills he had. He didn’t want to go back to college, so his idea was to use his current skill set and run his own home care agency.
Dan’s first attempt to run a home care agency was in Tulsa, Oklahoma. He admits he got into the business without knowing a lot about the laws surrounding home care. At that time in Oklahoma, owners had to be Medicare-certified administrators to be able to run an agency. He was told things by others in the industry that scared him, and he shut down the business.
In the process, he moved to Michigan and got a job with another agency. After three years, the agency closed down their private-duty home care sector. Seeing the need, Dan went to his boss, explained his interest in owning a private-pay home care agency, and basically got his administrator’s permission to run his own agency on the side, catering to the needs of the clients his employer was not able to meet.
He looked at many franchises during that time frame, but when he looked at their policies and procedures, he didn’t like the “dos and don’ts” he found there. He felt like they prevented patient care.
He felt like most franchises hindered him from providing things that people really need help with, such as providing medicine to a hospice patient who’s in a tremendous amount of pain.
Dan started his new adventure of owning his own home care agency in 2005. He admits there is often failure before success.
Question: When did you decide you were going to open your first HomeJoy?
Answer: Dan explained that he actually started out as Care N Assist LLC, but he ran into some difficulties with branding, as there were similarly named agencies in other states. He knew he would run into trouble with a federal trademark if he continued using that name, so in 2018, the name was changed to HomeJoy.
Question: What did the journey look like for you after you officially opened your agency and when did you decide to open a second location?
Answer: Starting with a handful of clients, Dan got to work, not even thinking about opening up a second location. He thought his business was going to be a second job to help pay extra medical bills or replace tires. But a friend reached out to him and asked if he could join Dan on his journey.
Over the next six months, they worked out the details and opened an agency in the neighboring county in 2008. Dan admits it took a forceful, energetic personality to tip the scales for him to see his process was worth duplicating.
Dan reminded us that he wasn’t in the home care industry as a business person. He was an RN who knew patient care very well, but not necessarily all the policies and procedures it took to duplicate a business. Obviously, years later, all of that has changed, but he said it took a friend who needed a job to help him grow his business.
Question: Did you have a roadmap or strategy laid out that you followed regarding expansion?
Answer: Dan said HomeJoy grew organically. They were running roughly 500 hours per week – nothing grandiose or big, but enough to hire a full-time office manager. Dan kept his full-time job as an RN and hired other people to manage the things he didn’t want to do anyway, like billing, scheduling, etc.
According to Dan, being a nurse in a small community helped him establish relationships with doctors. So at the beginning of his journey, he called a few friends who were in the business and let them know what he was doing. He stopped in at a few doctor’s offices to say hi, share a brochure, and then hope they’d call.
He explained that he had a friend who was a social worker at a nursing home. She discharged clients on a regular basis, and she sent Dan one new client per month for about six months. He explained that was honestly what established his agency as a real provider of services. He had to hire a lot of new workers in order to ensure those clients were taken care of.
Question: At what point did it go from something on the side to looking into expanding your agency?
Answer: Dan said he remembers getting a vision for it in 2008, and in 2009 he tried to launch a third office just north of Detroit in Clarkston. It was about an hour and 45 minutes from his home. He said it took him about nine months to realize he was burning himself out driving back and forth, so he closed the office at that time.
He said at that point he basically closed the book on opening more offices. That is until his wife, who was working on her occupational therapy degree, decided they needed to move to Kalamazoo so she could finish her degree at Western Michigan.
So he had a friend running his Davison office. He hired an old college friend who was also an RN to run the Corunna office he had been running himself. And after moving to Kalamazoo, Dan opened another office there in 2010.
At that time, that was as much growth as Dan had considered. Then his son spoke up.
According to Dan, his son, Justin, was finishing his bachelor’s degree in business, and he told Dan he wanted to come work with him when he graduated in a year. Dan’s first thought was, “Oh wow, I need to create a place for you, otherwise, you’ll graduate and make $10 an hour.”
Dan explained that Justin did actually start out making $10 an hour as an intern and working himself into other positions. But it was having his son come on board that helped him actually see more and be able to put together more behind the scenes systemization for duplication.
In 2013, Dan said he had a friendly competitor in Three Rivers ask him to buy her out. He said it took a year, but that’s how he got his fourth office started in 2014.
Dan explained that he had many case managers consistently asking him to provide services in the Calhoun County area. He said the smaller cities were really hard to serve because it was so far from Kalamazoo that it was difficult to recruit and supervise at a high level. So Dan and Justin put together the financials and instead of repeating the mistakes he’d made in Clarkston and burning himself out. In 2016, they decided to go all in.
They rented an office, hired a full-time manager, and started advertising like crazy. He said it took about six months before they were able to cover the manager’s salary, but years later, his Marshall office is his most profitable office because of their situation and location. They have great relationships with the people and hospitals in that area.
At that point, Dan had multiple offices going and he was struggling to run it all by himself. So he tried to form a corporate level of business. He was going to be the CEO, and he was planning to have a CFO and COO. They were traveling to all 5 offices on a regular basis, trying to keep them going in the right direction.
But in the process, Dan admitted that he got in over his head. He bought a building and opened an assisted living facility. He said, “If you’ve ever been through licensing with the state, you understand, it was difficult.”
Dan said he wasn’t just burnt out mentally. He was physically run down and the business was suffering for it.
He ended up selling the Corunna office, and he gave Justin permission to take the corporate part and franchise it. He then receded into the background and took over running three offices himself.
Dan said, “Operationally, I understood how to provide care. Business-wise, I wasn’t as savvy, and it took some time to learn those skills.”
But having his son come in with a background in business really helped. Justin has now finished his master’s degree in finance and business. He got a lot of helpful insights from college friends and professors during that time, which also helped.
Question: I’m sure a lot of people have the desire to expand, but they don’t know how to go about it. What would you say is the number one thing agency owners should keep in mind when they are considering expanding?
Answer: You have to be able to turn the corner in your own mind to be able to embrace the newness of what you would have to do in order to grow versus keeping on doing what you’re already doing.
Dan knew he engaged well with his employees and clients. Writing a care plan and training someone to work that care plan was easy for him. But he does very little of that now.
Today, Dan has a marketer who goes out and writes initial care plans. He has nurses who refine and update those care plans. He has people in human resources who hire and train a lot of his workers.
According to Dan, “My job now, because I allowed this evolution, is to engage and train and take care of my management team. I’m leading leaders at this point to a degree, which is a completely different skill set.”
He went on to explain, “The empathy and the servant leadership that a nurse tends to learn at the lower levels like I learned in my early years of being a nurse, are still skills I use. But teaching others those skills – the ability to engage without the difficulty and the anxiety – is fun for me now to take my leadership team through.
“My favorite part of my job now are the first and third Friday mornings when we do team management meetings. Just getting to engage with them and teach them management skills and leadership skills and to see them actually take action afterwards to improve a relationship with a client or improve the performance of a health care aide, that’s where I take most of my joy now from work.”
Dan says if you’re looking at expanding your agency, you will need to be ale to stop taking joy from connecting with a client or home care aide. You have to be happy engaging the leaders who do all that work. Because, quite honestly, the behind the scenes tasks of writing policy, making leases, and arguing with insurance companies about what they will and will not cover – that’s the stuff you deal with at the upper levels and it’s no fun. Nobody wants to do that. But you can engage and have fun teaching people to manage and to lead a team.
As a franchisor, even though his son is the majority owner of the franchise, behind the scenes, Dan is still the operations guy. He still gets calls regularly for training.
Question: What are some other things you suggest owners look at when exploring the idea of expanding?
Answer: When we talk in simpler terms about the idea of expansion, Dan says he looked closely at the footprint or map of the hospital systems in the areas he was exploring for expansion. He explained that if you have an agency in an area that a regional hospital serves but you have demand for services outside of that regional reach of the hospital system, then it’s probably far enough away to start another agency.
“That’s just a really simple thing, but if you’re far enough over, you’ve got demand for services, and there’s another regional health care system you can engage with to get patients, that’s a great way to decide what’s the next place of where to go,” Dan explained.
Dan added that it’s good to have established relationships with those systems; however, you can always build them.
Dan chose not to put his last office in the biggest city in the county. He strategically chose to put an office in Marshall, the county where Oaklawn Hospital is located. He explained that Oaklawn is a unique system that just serves Calhoun County, so he put his office two blocks from the hospital. That provided him with the opportunity to walk over to the hospital to both build relationships and to meet patients.
Question: What other advice do you have for other home care providers?
Answer: Stay in the healthcare system and be valuable enough to them that they’re begging you to provide services in their region. We’re living in an environment today where 11,000 baby boomers are turning 65 every day, and the numbers are going to keep going up between now and 2030 and remain stable until 2050. So this industry is going to be buzzing. Even if you plant yourself in a rural city with no hospital, Dan thinks agency owners will still be successful due to these trends.
According to Dan, if you intend on having multiple locations, where you start matters.
He drives 45 minutes between offices. He likes that distance because he says each office can manage 20 minutes each direction from their location and ensure their workers are engaging, coming to evaluations, being supervised, etc. Location makes all the difference.
He has competitors that serve nine counties from one office, and he questions how well they manage employees that are two counties over, though he acknowledges there are ways to do that. He said he knows it’s possible to have a nurse on the road for 40 hours a week supervising and visiting homes. But with margins what they are, he doesn’t want to pay an RN full-time when he doesn’t necessarily have to in this industry.
Question: How does your role evolving and adding new locations impact your staff? Do you shuffle people around, reorganize current staff, or start from scratch when expanding your agency?
Answer: It’s been different over the years. If you train them, they might leave, If you don’t train them, they might stay. You know how it is. While he’d love to say he’s retained his office staff, there’s been turnover because people have found advancement in life.
One of the managers who was instrumental in helping him purchase the Three Rivers office now lives in Texas and works at the executive level for a provider like his and makes an incredible income. She can do that because she’s learned a lot, is very smart, and she’s doing great things.
Similarly, a manager for his Kalamazoo office left to take a new job because she’d learned and grown from her time in the industry over the past 6 years, and she was ready to make a little more for her family. She’s since gotten her HR certification, and she’s doing great. Those are success stories in Dan’s opinion.
In looking at his business right now, Dan says that every single member of his management team at one time or another worked for him as a home care aide.
Question: Was that intentional?
Answer: “I looked around 6 months ago and was like, wow, how did this happen? But that also comes from the fact that I personally take a lot of joy from helping people grow. In the back of my head, I could hire someone who’s college educated, prepared for a management role, maybe even has more knowledge and experience than me, or I could give someone the opportunity to grow who’s dreamed of it but didn’t know how to get there, and I’ve personally taken that path obviously a lot through the years.”
Dan explains that it might take a little longer to get them up to speed as a manager, where they need to learn skills like conflict management and delegation. Those are skills that take years to develop.
He explained that he could put more money in his pocket because he hired the perfect person immediately, or he can make himself smile and be happy every day because he helped someone come along the journey with him and grow.
He said that more than once, his wife has asked him if he made the right decision. His response is that, as a business owner at this point in his career, he’s not working to make sure he can pay medical bills or buy new tires anymore. He doesn’t fret over those things because his income has changed. His life has changed being an owner, but he sees his employees in the same situation he was in 20 years ago, and he loves having the opportunity to help them grow beyond those situations.
Question: As you grow, it’s not just business all the time. There are still ways to go about things and build relationships and create value, but in a different way. What advice would you give a brand new agency owner who wants to create a growth plan that includes expansion?
Answer: Someone who’s been in the business for six years could probably have a harder time stepping away and growing because it’s really hard to get out of the river once you’re in the middle of it and it’s flowing. It’s really easy to just stay in the push and pull of the day-to-day. Dan’s seen many businesses around him fail to succeed.
Several times, agencies have popped up in his area. He said it’s usually someone who’s been in the industry and wants to make a difference, but a few years after opening, they’re closed. He said franchises have opened up in town as well, where people put a lot of money into joining a franchise, and they had all the support they needed from the franchisor, but they still didn’t make it.
He said the challenge is those owners open a business and find out afterward how difficult it actually is to make it work.
“Kind of like herding cats,” Dan explained. “Nobody ever herds cats. Or like playing Tetris because you might make it a few levels, but nobody wins playing Tetris because it all falls too fast and falls apart sooner or later. That’s kind of the nature of the staffing and coordinating services. It can be taxing and difficult.”
Question: How did you make it then?
Answer: Dan said his experience being a nurse at a hospital before he owned his agency helped. He does this work because, as a nurse, he was able to contribute to the care of the individual and move on to the next one. Then contribute to the care of the next individual and move on to the next one and the next and so forth.
He never got to see the fruit of his labor. He never got to see the end result because his clients were either discharged or they moved to the next floor for critical care or a different medical floor.
He says he benefits from that now because he lives in a space in his head where once again, he’s contributing to someone’s needs. Even though it’s probably temporary, even if it’s the manager of his more prominent and most successful office, he’s still contributing to their life, knowing in the moment that it’s likely temporary.
So the person who’s been working in the home care industry for six years could be dug in so deep in so many relationships, they may have a much harder time than someone who’s coming along fresh with a great plan.
The only difficulty for the person coming in new and fresh with a great plan is that they have to have a lot of capital to make up for the grind that the person who’s already worked for six years has already put in.
Mistakes have a cost. Dan explained that he didn’t really make any mistakes when he opened his Marshall office. He just had to pay in order to hire a full-time manager at the very beginning. Her salary, let alone the office rental, furniture, and phones all added up. So if a new agency owner has the capital and they have some knowhow, they can actually build a team pretty quickly and have a lot of services going in a lot of different directions pretty quickly.
Question: What other takeaways do you have?
Answer: “The seniors that need help are out there. That’s not the hard part. The hard part is developing home care aides, and then using that ‘capital’ so to speak, to meet as many client needs as possible.
“A good marketing plan is wonderful, but you don’t have to have a good marketing plan in this business. You could probably have a shoddy marketing plan and a couple of friends and still be successful in this business.”
Question: Anything else you’d like to add or words of wisdom you’d like to provide?
Answer: “I remember thinking as I added offices that I’d be able to increase my income. I was wrong. Every time I grew, there were expenses. I had to have staff and management and all those kinds of things. I created this CEO/COO/CFO corporate division on top of multiple offices, which quite honestly crippled my business and made it harder for me to pay myself more.
“Of course, having the right people in those seats might have made a difference – if they had more experience, if they understood their role better, if I was a better CEO, lots of excuses. It wasn’t until I reeled it back in and started to provide good services with necessary staff, not lots of overhead, when I actually started seeing income from the business.
“It doesn’t have to be fancy to make money. But you do have to have a few things in order, and growth is expensive. So that would be my only advice: Understand you’re going to have a lot of variations of things, but if you’re paying yourself on profit margin, your pay might not change for a very long time.”
Dan went on to explain that he’s moved beyond that now because his business has changed. He forced his business to change at unique moments along the way to simplify his life. He absolutely loves what he does, and he has no plans to stop.
He wants to help his son grow the franchise piece of the business, but he’s not going to take responsibility for it. He’s quite happy meeting the needs of the people that he has around him and seeing what else happens.
He also provided this additional advice to someone trying to start or grow a business:
“Just know yourself really well. What level will you be happy at? Do you always have to have more? Then you’re never going to be happy, and quite honestly your income will be reflected in the same level, but if there is a point at which you can say ‘This is enough,’ that’s where you’re actually going to start enjoying the fruit of your labor, which is a beautiful thing. Being able to cut out early and go see my grandkids is as valuable to me right now as the dollars and cents.”
Question: We’re talking about a journey here, and if other agency owners can glean some insights from that, it’s beneficial.
Burnout, physical illness, having to scale back, not making the money you thought you would – these are all parts of your journey.
What’s valuable:
- Knowing what you want to get out of it
- What you want to achieve
- When enough is enough for you
- Why you’re in the home care industry
If you think from the standpoint of “I have one agency now, what will I have when I open my third office?” then you’re in for a rough ride.
Answer: Yes, you’ll have three times more headaches! But Dan says he honestly doesn’t stress the troubles these days. His heart doesn’t break when a home care aide isn’t able to meet the needs of a client anymore. It used to tear him up if a home care aide wasn’t able to or if their capacity just wasn’t enough for a particular client. But now he just tries to contribute what he has to offer, and he’s been able to live in this environment that’s worked in a way to where he’s quite comfortable and he’s seeing the rewards, not just for himself, but for his entire team.
“I think other people could also do it, and I think other people doing it would be wonderful for this industry,” he said in closing.
I’d like to thank Dan for his thoughtful and honest feedback. If you’re a new agency just starting out on the home care journey, or if you’re a seasoned veteran of home care and you’re considering expanding your agency, I hope Dan’s story provides valuable insight, elicits proper consideration, and enhances your motivation to continue providing great care to those in your community.
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