Starting a nursing agency can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful nursing agency.
Importantly, a critical step in starting a nursing agency is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Nursing Agency:
- Choose the Name for Your Nursing Agency
- Develop Your Nursing Agency Business Plan
- Choose the Legal Structure for Your Nursing Agency
- Secure Startup Funding for Your Nursing Agency (If Needed)
- Secure a Location for Your Business
- Register Your Nursing Agency with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Nursing Agency
- Buy or Lease the Right Nursing Agency Equipment
- Develop Your Nursing Agency Marketing Materials
- Purchase and Setup the Software Needed to Run Your Nursing Agency
- Open for Business
1. Choose the Name for Your Nursing Agency
The first step to starting a nursing agency is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your nursing agency:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your nursing agency.
2. Develop Your Nursing Agency Business Plan
One of the most important steps in starting a nurse staffing agency is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your nursing agency.
- Company Overview – this section tells the reader about the history of your nursing agency and what type of nursing agency you operate. For example, are you a staffing agency, home health care agency, hospice agency, or a travel nursing agency?
- Industry Analysis – here you will document key information about the health care industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your nursing agency? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your nursing agency make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Nursing Agency
Next you need to choose a legal structure for your nursing agency and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the nursing agency and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a nursing agency together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a nursing agency include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a nursing agency is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your nursing agency, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Nursing Agency (If Needed)
In developing your nursing agency business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a nursing agency to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a nursing staffing agency that they believe has high potential for growth.
5. Secure a Location for Your Business
There are a few key things to consider when looking for a location for your nursing agency. First, you’ll need an area that is accessible and has a good transportation network. You’ll also want to make sure the area has a strong healthcare sector, as this will be a key market for your nursing agency. Finally, the area must be economically good with healthcare facilities, as this will ensure you have a strong customer base.
6. Register Your Nursing Agency with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire qualified staff, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your nursing agency’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your nursing agency to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
To start a nursing agency, you will need to obtain a business license and a nursing agency permit. You will also need to register with the state nursing board and comply with its regulations. You may need additional permits, depending on your state and local regulations.
10. Get Business Insurance for Your Nursing Agency
The type of insurance you need to operate a nursing agency depends on the services you offer.
Some business insurance policies you should consider for your nursing agency include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Nursing Agency Equipment
To start a nursing agency, you will need some basic equipment. This includes a computer, phone, and fax machine. You will also need medical supplies and a space to store them.
12. Develop Your Nursing Agency Marketing Materials
Marketing materials will be required to attract and retain customers to your nursing agency.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your nursing agency. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional nursing agency website provides potential clients with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your nursing agency.
13. Purchase and Setup the Software Needed to Run Your Nursing Agency
The software needed to run a nursing business is typically a customer relationship management (CRM) system and a medical billing system. Other software that may be useful include an electronic health record system, inventory management system, and a payroll system.
14. Open for Business
You are now ready to open your nursing agency. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Nursing Agency FAQs
No, it is not too hard to start a nursing agency provided you are familiar with the industry and have the required licenses and permits. You also need to make sure that you have a good business plan and marketing strategy.
There are many ways to launch a nursing agency with no experience. One way is to research the industry and learn about the different aspects of running a nursing agency. You can also reach out to others who have started their own health care agencies for advice and support. Additionally, you can seek out training or webinars by health care institutions or local healthcare facilities. Finally, be sure to have a solid business plan in place to help you navigate the early stages of your nursing agency. With careful planning and execution, you can start a successful nursing agency with no experience.
There are many types of nursing agencies, but the most profitable type is the home health nursing agency. Home health staffing agencies provide agency nurses and certified nursing assistants to visit patients in their homes, which allows for more personalized care. They also charge higher rates than other nursing agencies, making them a more lucrative business venture.
A nursing agency startup costs anywhere from $2,000 to $25,000. This includes the costs of setting up a business, licensing and insurance fees, and purchasing medical supplies.
There are a few ongoing expenses for a nursing agency. One of the main expenses is the cost of hiring registered nurses. A nursing agency also needs to pay for office space, equipment, and other supplies. Finally, there are marketing expenses to promote its services.
Nursing agencies make money by charging a fee for their patient care services. This fee can be a set amount, or it can be a percentage of the nurse's salary.
Yes, owning a nursing agency can be profitable because demand for licensed practical nurses is high in both the private and public sector, so there is room for agencies to specialize in either area. Nursing agencies can also charge their clients a markup on the nursing professionals' hourly wage, making them a profitable business.
There are a number of reasons nursing agencies fail. One main reason is because they do not have a solid business plan that outlines their goals and strategies. Nursing agencies also may fail because they do not have the financial resources to sustain their operations. Additionally, poor management and a lack of marketing can also lead to the failure of a nursing agency.