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How can I increase profit in my care business?

Advice and guidance on knowing who your clients are, calculating cost per client and using technology to allow you to increase profit below.

Understanding how profitable your clients are is essential to increase profit in your care business, as there is significant fluctuation with both employees and clients as well as increasing costs.

So margins can be small, but what I’ve noticed with many care businesses I’ve worked with, when I’ve asked, they couldn’t tell me which clients were profitable and which weren’t.  They could guess but they couldn’t tell me for sure.  If you want to build profit you have to know how profitable each and every client is.

There are a number of actionable areas in your care business you can look at to increase profit and I’ve highlighted these below:

1. Client segmentation

Business owners will all be familiar with Pareto’s 80/20 rule and it’s no different for care businesses.  In order to find out who they are you can do a simple client segmentation exercise. If you would like me to send you a spreadsheet to go through this process for your business (click here).  You will be amazed at the results, for many businesses I work with this has the single biggest impact that increases profit in their care business.

2. Calculating your cost per client

First of all, you need to look at your cost of sales then divide those into the service you deliver to your clients.  What you want to find out is your break-even cost for your mode client, not your mean client.  Once you’ve done this you can start to look at streamlining services or packaging them into a service proposition.   This means you are consciously aware about whether you are making a profit or not.  Many businesses will deliver services to a few clients that make a loss.  This is okay if there is a specific and legitimate reason for doing it, but it must be done consciously. 

3. Technology

Technology can help massively to ensure you are as efficient as possible and therefore more profitable. Care planning, visit management, training/development and recruitment  are all systems that are a must if you want to increase profit.  Additional technology is starting to be put in place too, e.g. care call, fall detectors and home monitors are out there.  This is bringing new opportunities, particularly for home care businesses now.  

However, choosing the right technology to help your business can be a big business decision, it’s a risk that some are not willing to take.  If you want to know the best systems out there for your business, then I’m happy to go through those with you.

By going through the above three areas it will enable you to increase profit within your care business.  If you would like more information, then get in touch with me here or call me direct on 01492 550401.

How to make care businesses more profitable