Companion care businesses help older adults and people with disabilities live safely and happily at home: conversation and companionship, meal preparation, light housekeeping, errands, transportation to appointments, medication reminders and respite for family caregivers. Demand is growing as the population ages, and most clients prefer to stay in their own homes. This guide explains how to start a companion care business, from licensing and startup costs to pricing and finding customers.
Companion care is non-medical. Hands-on personal care (bathing, toileting, transferring) and medical care (nursing, medication administration) usually require different licenses. Many states license non-medical home care agencies, caregivers need careful screening, and federal rules require agencies to pay home care workers minimum wage and overtime.
A companion care business at a glance
Table of Contents
| Topic | What to expect |
|---|---|
| Startup cost | Low to moderate: licensing, insurance, background checks, training, scheduling software, marketing and payroll |
| Key rules | State home care licensing, caregiver screening and training, wage and overtime rules, elder abuse reporting |
| Revenue model | Hourly care billed to clients, long-term care insurers and some public programs |
| How you earn | Hourly companionship, respite, overnight and live-in care |
| Best for | Compassionate, organized people who can recruit and support caregivers |
Who companion care suits
It suits compassionate people who are organized and can lead a team. Owners spend much of their time recruiting, matching caregivers with clients, scheduling, solving problems and talking with families, often in stressful moments. Experience in senior care, nursing, social work or hospitality helps.
What companion care includes
- Companionship: conversation, games, hobbies, walks.
- Household help: meals, light housekeeping, laundry.
- Errands and transportation to appointments and shopping.
- Reminders: medications, appointments and daily routines.
- Respite that gives family caregivers a break.
Define the line clearly: hands-on help with bathing, dressing or transfers is personal care, and giving medications or wound care is medical care. Both often need different licenses and training.
State licensing
Many states license non-medical home care agencies, sometimes with categories for companion care, personal care and skilled home health. Requirements may include policies and procedures, caregiver training hours, background checks, supervision visits, client care plans, insurance and inspections. Some states don’t license companion-only services. Check your state health department or aging agency before taking clients.
Caregiver screening and training
Run background checks that meet your state’s rules, including abuse and neglect registries where available, check references and driving records for caregivers who drive clients, and follow FCRA rules when using a screening company. Train caregivers on dementia care, fall prevention, infection control, emergency response, boundaries, client rights and recognizing and reporting elder abuse, which many states require caregivers to report.
Pay rules for home care workers
Since the Department of Labor’s 2015 home care rule, third-party employers such as home care agencies must pay home care workers at least the federal minimum wage and overtime, and can’t use the companionship exemption that families hiring directly may use. Pay for travel time between clients during the workday, track hours accurately and follow state wage laws, which may be stricter.
Employees or a registry
Most agencies employ caregivers, train them and supervise their work. Some operate as registries that refer independent caregivers to families, who then employ them. Registries face strict rules in some states, and treating caregivers as contractors while controlling their work is a common and costly mistake. Classify workers correctly.
Who pays for care
Most companion care is private pay by clients and families. Long-term care insurance often covers home care once the policyholder qualifies, and you’ll help with documentation. Medicaid home and community-based services (HCBS) waivers pay for in-home support in many states, through approved providers with specific requirements. Some VA programs cover home care for eligible veterans.
Care plans and supervision
Start every client with an assessment of needs, routines, preferences, home safety and family contacts, and write a care plan. Supervise caregivers with regular visits or calls, update plans as needs change and document every shift with notes families can read.
Pricing
Price by the hour, with minimum shift lengths (often three or four hours), higher rates for weekends, holidays and overnights, and daily rates for live-in care where legal. Your rate must cover wages, payroll taxes, overtime, insurance, training and overhead, so calculate carefully with our pricing calculator and cash and payroll planner.
Startup costs for a companion care business
| Item | What to budget for |
|---|---|
| Licensing | State home care license and policies |
| Insurance | General and professional liability, abuse coverage, bonding, workers’ comp |
| Screening and training | Background checks and caregiver training |
| Software | Scheduling, visit verification and billing |
| Payroll | Caregiver wages before clients pay |
| Marketing | Website, brochures, referral outreach |
Use our startup cost calculator for your total.
A worked example: a growing companion care agency
These are illustrative assumptions for a companion care agency with about 14 part-time caregivers, not predictions.
| Assumption | Monthly | |
|---|---|---|
| Companion care hours | 1,450 hours at $34 | $49,300 |
| Respite and overnight care | $5,200 | |
| Revenue | $54,500 | |
| Caregiver wages | With payroll costs | $(35,400) |
| Office and care coordinator | With payroll costs | $(5,600) |
| Office rent and utilities | $(1,500) | |
| Scheduling software and phones | $(700) | |
| Insurance and licensing | $(1,600) | |
| Background checks and training | $(500) | |
| Marketing | $(1,500) | |
| Profit before owner pay and taxes | $7,700 |
That leaves about $7,700 a month before the owner’s pay and taxes, on about $54,500 of revenue. Caregiver retention and scheduling efficiency decide profit, because labor is most of your cost.
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Electronic visit verification
Medicaid-funded home care must use electronic visit verification (EVV), which records when and where caregivers start and end each visit. Even for private-pay clients, EVV-style apps help with accurate payroll, billing and family trust.
Keeping caregivers
Caregiver turnover is the industry’s biggest problem. Pay as well as you can, offer consistent schedules and clients, recognize good work, provide paid training and career paths and respond quickly when caregivers need support. Matching personalities between caregivers and clients also improves retention on both sides.
Dementia and safety
Many clients live with dementia. Train caregivers in communication, redirection, preventing wandering and managing difficult moments, and adapt homes for safety with families’ agreement. Know when a client needs more care than companion services provide, and help families find the right next step.
Safety, incidents and emergencies
Train caregivers to call 911 first in an emergency, then the family and your office. Record falls, injuries and unusual changes in a client’s condition the same day and tell the family. Protect clients’ money and belongings with clear rules: caregivers shouldn’t handle cash, accept gifts or use credit cards without written permission and records.
Communicating with families
Families often live far away and worry. Share visit notes through an app, schedule regular check-in calls and tell them promptly about changes in mood, eating, memory or safety. Clear communication builds trust and helps families decide when more care is needed.
Marketing
- Hospital and rehab discharge planners and social workers.
- Senior centers, churches and community groups.
- Elder law attorneys, geriatric care managers and financial planners.
- The Eldercare Locator and area agencies on aging.
- Reviews and family testimonials, with permission.
Growing your agency
Growth comes from steady referrals and enough reliable caregivers to say yes. Before marketing hard, build a bench of trained caregivers, add a care coordinator to handle scheduling and family calls, and consider adding personal care services once you have the right license and training. Track hours per client, caregiver turnover and on-time visits every week.
Common mistakes to avoid when starting a companion care business
- Providing personal or medical care without the right license.
- Treating caregivers as contractors while controlling their work.
- Not paying overtime and travel time.
- Weak screening and supervision.
- Pricing that doesn’t cover labor costs.
Your first 90 days as a companion care business owner
- Days 1-30: check state licensing, write policies and set up insurance.
- Days 31-60: recruit, screen and train your first caregivers and set up scheduling and payroll.
- Days 61-90: meet discharge planners and senior organizations and take your first clients.
Frequently asked questions about starting a companion care business
Do I need a license for companion care?
Many states license non-medical home care agencies; some don’t license companion-only services.
Can companion caregivers help with bathing?
Bathing and other hands-on help is personal care, which often needs a different license and training.
Do home care agencies have to pay overtime?
Yes; third-party employers must pay home care workers minimum wage and overtime under federal rules.
Who pays for companion care?
Mostly families, plus long-term care insurance, Medicaid waivers and some VA programs.
What is EVV?
Electronic visit verification, required for Medicaid-funded home care visits.
How much do companion care agencies charge?
Hourly rates vary by area; they must cover wages, taxes, insurance and overhead.
Can caregivers drive clients?
Yes, with good driving records and proper auto insurance coverage.
What background checks are required?
It depends on the state; many require criminal history and abuse registry checks.
Should caregivers accept gifts from clients?
Most agencies forbid it, to protect clients and caregivers from misunderstandings and financial abuse.
What happens when a client needs more care?
Help the family find personal care, home health, adult day care or residential options.
Keep learning
- Senior care industry data
- How to start a non-medical home care agency
- How to start an adult day care center
- Cash and payroll planner
Sources
- U.S. Department of Labor, Home care workers: minimum wage and overtime
- Administration for Community Living
- Medicaid.gov, Home and community-based services
- FTC, Using consumer reports: what employers need to know (background checks)
- Eldercare Locator (Administration for Community Living)
- US Small Business Administration, Apply for licenses and permits
Last reviewed November 4, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.
