By Stephen Tweed
At the Home Care CEO Forum, we work with home care companies that want to grow, and with home care leaders who want to get ready for the future.
So, how did you do at growing your business in 2022?
While we don’t have industry wide revenue growth as the Home Care Pulse Benchmarking Report does not show year over year revenue growth, we do have some other data:
- Average weekly billable hours declined in 2022 from 1,238 hours per week in 2021 to 939 hours per week in 2022.
- Customer Turnover Rate declined from 55.5% in 2021 to 50.2% in 2022.
- Median Customer Growth Rate declined from 7.3% in 2021 to 6.1% in 2022
- Caregiver turnover in 2022 spiked to 77.1% from 64.9% in 2022. Caregiver turnover has been flat in the mid 60’s for six years except for a spike to 81.6% in 2018.
All of these data suggest that 2022 was a difficult year for home care company growth.
Source: HCP Benchmarking Study from Home Care Pulse.
https://www.homecarepulse.com/benchmarking/
Mastermind Members Grew Their Businesses in 2022 over 2021
In January of 2023, we did a survey of our mastermind members from all five of our groups to learn about their business growth in 2022 over 2021. We learned that …
- 77% of our responding members grew their business in 2022 over 2021
- The average annual growth was 18.86%
- 3% of our members were flat in revenue from 2021 to 2022
- 20% of our members declined in revenue from 2021 to 2022
- The average revenue decline was 11.09%
- Those companies who experienced a decline in revenue had a major disruption in their local market or in their company.
- Our fastest growing group was our Top 7% Mastermind Group, consisting of ten companies between $6 million and $10 million in annual revenue. The average year-over-year growth for this group was 38.7%.
An analysis of all of our responding members showed they achieved a Gross Margin of 44.15% of total revenue, compared to 34.4% Gross Margin for the Masters Level companies in the HCP benchmarking study. We also found that our members earned a net income from operations before owner’s compensation of 13.79% compared to 11.9% for masters level companies in the HCP Report.
What are the Growth Secrets of these Fast-Growing Mastermind Companies?
To get a better understanding of the factors that affected growth, we looked at the data for each of the fastest growing companies. Here are some things we learned about the leaders of these companies:
- They have a huge vision. They see themselves leading a large home care company
- They have focused on crafting their company culture, and that means creating a great place to work.
- They have figured out how to recruit and retain more caregivers than they lose each month.
- They have put systems in place for key areas of their business using technology when possible, to automate those processes.
- They have set up metrics to track performance in key areas of the business, and they communicate those results with team members regularly.
- They have analyzed their own data to make key strategic decisions, and identify their ideal clients.
- They monitor and manage their stop line revenue, gross margins, operating expenses, and net income.
As you can see, not every company in our network does these things, but those that apply these principles have demonstrated measurable growth and profitability.
Would you like to grow your business at these rates?
If you are the leader of a home care company in the top 10% of the industry, and if you would like to work with a group of your peers to find ways to grow your business, consider becoming a member of a Home Care Mastermind Group at the Home Care CEO Forum.
Need help? Give us a call.
If you would like some assistance in analyzing your own data to identify your ideal client, and develop strategies to grow your business, explore Home Care Industry Research, and Strategic Business Coaching from Stephen Tweed and Leading Home Care.
