How to start a domiciliary care agency in the UK: the complete guide

Thinking about starting a domiciliary care agency? It’s a journey that lets you build a business with real heart, one that genuinely supports people in your local community. 

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But it’s also a big step, and it’s normal to have a lot of questions about how to get started.

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If you're wondering how to start a domiciliary care agency, you're in the right place. 

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This guide is your complete walkthrough on how to start and how to set up a care agency in the UK, covering everything from the initial spark of an idea to the set-up costs and the day-to-day reality of running a successful domiciliary care business.

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What a domiciliary care agency actually is

First things first, what are we talking about? A domiciliary care agency — often called a homecare agency — is a team of trained professionals who provide care and support to people in the comfort of their own homes. 

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This isn't just about medical needs. It’s about supporting people to live full, independent, and dignified lives. This support can range from personal care (like help with washing and dressing), to managing medication, preparing meals, or simply providing companionship.

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The demand for this kind of service is growing fast. We have an ageing population here in the UK, and the simple truth is that most people, given the choice, would much rather stay in their own home than move into a residential facility. Home is where they feel safest and most comfortable. This trend creates a huge opportunity for anyone looking to start a homecare business.

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Skills for Care's 2024/25 data shows 595,000 filled posts and 59,000 vacancies in non-residential care services across England, reflecting a sector under consistent pressure to grow. For anyone considering if or how to start a homecare business, this signals a clear and growing demand for high-quality, person-centred care.

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So let’s get into how to start a domiciliary care business to capture that demand.

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How to start a homecare business in 6 steps

Step 1 - Write the business plan

Every successful business starts with a plan. Think of it as your blueprint — the document that will not only guide your decisions but will also be essential if you need to secure funding. 

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A business plan should detail:

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Market research

Coming up with a plan for your domiciliary care business requires thorough market research.  Get to know your local area inside and out. 

• Who are your competitors? 
• What services do they offer and what do they charge? 

And look for the gaps:

• Is there a waiting list for dementia care specialists? 
• Is there an unmet need for live-in care or post-operative support?

Use local council data and Office for National Statistics (ONS) figures to understand the demographics of your patch.

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Your business proposition

Now that you’ve done the market research, what do you want to offer? Your positioning needs to be clear: what you do, who you do it for, and what makes your domiciliary care business different from what’s already available locally.

There’s a saying in business that ‘you can’t be everything to everyone’. If you try to serve everyone from the outset, you might find it a struggle to sell your agency’s services and/or to maintain quality levels of care if you’re spread too thin.

Setting up a care agency with a clear niche can help you stand out. You could specialise in palliative care, support for adults with learning disabilities, or companionship-led care.

You may want to choose between local authority contracts and winning private clients, too. This will matter when you consider how much it costs to start and run a care agency in the UK.

Local authority work offers stability and a consistent stream of referrals, which can be a huge advantage when you’re just starting out. However, the trade-off is often lower hourly rates and more rigid contractual requirements. 

Private clients, on the other hand, offer the potential for higher profit margins and more flexibility in the care you provide. The challenge here lies in the need for continuous marketing and business development to generate a steady flow of enquiries.

For this reason, many homecare agencies find that a mixed model — called “cross-subsidisation” — helps balance the security of council contracts with the profitability of private care, and offers the best of both worlds.

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Your legal structure

You’ll need to decide on the legal entity for your business. The options available include sole trader, a partnership, or a limited company. A limited company is the most popular, as it separates your personal assets from the business’s liabilities.

That said, each structure has its pros and cons, including your tax and reporting responsibilities, so it’s worth asking an accountant or specialist solicitor how to set up your care agency in the most appropriate way for you.

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Insurance

Insurance is essential. You can’t operate without it. 

You’ll want a comprehensive policy that includes:

• Employers’ liability insurance - This covers compensation costs and legal fees should a carer fall ill or be injured while working for your agency.
• Public liability insurance - This will cover legal fees and compensation should a carer injure a client or cause damage to their property. It also protects you should a member of the public be hurt as a result of your service(s).
• Professional indemnity insurance - This protects your homecare agency against claims of professional negligence or mistakes in care delivery that cause harm to a client or financial loss to the business.

Cover against medical malpractice/treatment (such as medicine administration mistakes), cyber liability, and abuse cover are all worth exploring too.

You may find it impossible to secure local authority contracts and register with the CQC without appropriate insurance.

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Key legislation

The homecare sector is held to high standards (and rightly so!). 

The Health and Social Care Act 2008 provides the statutory framework for CQC regulation. The Equality Act 2010 governs how you treat both clients and employees. Policies and procedures in health and social care are not optional documents: they are evidence of your governance. Getting legal advice early to review your employment contracts, data protection practices, and service user agreements is worth the cost.

A solicitor with experience in the social care sector will be invaluable as you navigate the process of how to set up a care agency in the UK.

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Learn more about how to write a domiciliary care business plan.
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Step 2 - Understand your agency’s set-up and running costs

Let’s talk about money. One of the biggest questions people have is: how much does it cost to start a care agency in the UK? 

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While there’s no single magic number, you can create a realistic budget by breaking down the key expenses. 

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New agency owners frequently underestimate both the upfront costs and the working capital required before income becomes reliable. Being thorough here is a vital part of planning how to start a domiciliary care business.

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Here’s a more detailed look at the specific costs you'll need to fund your domiciliary care business:

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CQC fees: As a new agency, you’ll need to register with the CQC and pay an annual regulatory fee. Fees range from £700-2,000+, depending on the size of your domiciliary care agency and how many service users you’ll have. 

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Insurance premiums: This is a major recurring cost. You'll need a specialist policy covering public liability, employers' liability (£5 million is the legal minimum), and professional indemnity. Depending on the level of cover, you should budget anywhere from £1,000 to £3,000 for your first year.

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Recruitment costs: You need to budget for advertising roles and, crucially, for Disclosure and Barring Service (DBS) checks. An Enhanced DBS check, which is required for care workers, currently costs £38 per person.

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Staff wages and ‘on costs’: Your team is your biggest asset — and your biggest cost. The National Living Wage in the UK (for workers aged 21 and over) is currently £11.44 per hour. However, to be competitive and attract quality carers, you should expect to pay more. The average hourly rate for a domiciliary care worker in the UK is around £12.50 - £14.00. On top of the hourly rate, you must also factor in ‘on costs’. This includes Employer's National Insurance contributions (currently 13.8% on earnings above the threshold) and the minimum employer pension contribution (currently 3%). This means you should add approximately 17% on top of the basic wage for each employee.

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Staff training: Providing comprehensive induction and mandatory training (like the Care Certificate and first aid) is essential. Budget at least £300-£500 per employee for their initial training.

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Operational costs: This covers everything from office space (if you need it) to phone systems, IT equipment, and marketing materials to get your agency out there. Many of these costs will vary depending on where in the UK you’re based. 

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Care management software: A good software platform is a critical investment. Prices vary, but you can expect to pay a monthly subscription fee, often based on the number of clients or carers you have. This can range from £50 to several hundred pounds per month.

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Example cost analysis: how to turn a profit

Once you have a handle on your set-up and ongoing costs, you can calculate your pricing and work out your break-even point. Let’s use some rough figures to walk through a more realistic example.

• You decide to charge your clients a competitive rate of £28 per hour.
• You pay your carer a good wage of £13.50 per hour.
• Your on costs (17% for NI and pension) for that carer come to £2.30 per hour.
• You add a contribution for the carer's travel and uniform, let's say £1.20 per hour.
• Your total direct cost for that single hour of care is £17.00 (£13.50 + £2.30 + £1.20).
• This leaves you with a gross profit of £11 per hour (£28 - £17).

From this £11 gross profit, you have to cover all your fixed monthly overheads — your salary, office rent (if any), insurance, software subscriptions, marketing, etc.

If your total monthly overheads are £6,000, you would need to deliver approximately 545 hours of care each month just to break even (£6,000 / £11). Every hour you deliver above that is your pre-tax profit.

If you need external funding, business loans, start-up grants and local Growth Hub programmes could help. 

For a detailed look at the financial structures underpinning a viable homecare business, the 2026 homecare growth blueprint covers cash flow planning, pricing strategy, and the private pay transition in practical terms.

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Step 3 - Register your domiciliary care business with the CQC

You can’t legally provide care services in England without being registered with the Care Quality Commission (CQC). The best advice on how to open a care agency is to start this process as early as possible.

The CQC’s job is to make sure that health and social care services provide people with safe, effective, compassionate, high-quality care. Think of your CQC registration as a badge of quality and trust.

We've written a comprehensive guide to the CQC registration process. But, in summary, it involves:

1. Appointing a registered manager: Every agency needs a registered manager who’s responsible for the day-to-day management of the service. This person must have the right qualifications (like a Level 5 Diploma in Leadership for Health and Social Care) and experience.
2. Submitting your application: This is a detailed set of forms where you explain who you are, what services you'll offer, and how you will meet the fundamental standards of care.
3. The 'fit person' interview: The CQC will interview you and your proposed registered manager to make sure you are suitable people to run a care service.
4. Getting registered: The CQC will review everything and, if they are satisfied, grant your registration. You absolutely cannot start trading until you have this confirmation.

People often confuse CQC registration with CQC inspections. 

Registration is the one-off process to get approved. Inspections are how the CQC monitors you once you are up and running to check you're still meeting the standards. Your first inspection will usually happen within the first 12 months.

You can still operate your domiciliary care businesses while waiting for the CQC inspector to call: How to thrive without a CQC inspection: a practical guide for homecare businesses.

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Step 4 - Recruit and train your team

Your carers are the heart and soul of your business. Starting a home care business that thrives depends almost entirely on the quality of your team. However, recruitment in social care is tough. A recent GOV.UK workforce survey found that 74% of domiciliary care providers find it hard to recruit, and over half struggle with retention.

This means your approach has to be spot on.

• Hire for values: You can teach someone the practical skills, but you can’t teach compassion, kindness, and respect. Use values-based interview questions to find people with the right heart for care.
  
  
• Invest in training: A great induction is non-negotiable. This must include the Care Certificate, as well as practical training in key areas like moving and handling, first aid, safeguarding, and dementia awareness.
  
  
• Look after your team: Good carers stay with employers who treat them well. This means fair pay, fair scheduling, regular supervision, and creating a supportive culture where people feel heard and valued. Think about career progression – could a carer become a team leader or a care coordinator in the future? Employee retention is a real value-add for a domiciliary care business; it can save money on recruitment costs, maintain high quality of care and engagement to keep clients happy, and support a great CQC rating.
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Step 5 - Getting your first clients and contracts

So, you’re registered, and you’ve hired your first carers. Now you need clients. The path you take here will depend on the business model you chose in your plan.

• Local authority contracts: This involves getting on your local council's list of approved providers or tendering for contracts. This route can provide a consistent and reliable stream of referrals, which is a huge plus when you're just starting out. The downside is that the hourly rates are often lower than for private clients.
  
  
• Private-pay clients: If you're wondering how to start a private home care business in the UK, your focus will be on marketing directly to the public. This means having a professional website, using local online advertising (like Google or Facebook), and building a network in your community. Connect with GPs, district nurses, and community groups who can refer people to you. The rates are better, but you'll need a steady marketing effort to keep the enquiries coming in.

Many agencies find that a mix of the two provides a good balance of stability and profitability.

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Learn more about how to get clients and contracts for your domiciliary care business.

And discover more about marketing to private clients in Birdie’s free practical guide: The Winning Private Clients Handbook.

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Step 6 - Running and growing a successful homecare business

How to open a domiciliary care agency is one question; how to run it successfully is another. The key to long-term success is operational excellence. 

An agency's operational infrastructure is what makes care consistent, safe and demonstrably well-led. From day one, this means having proper digital systems in place for care planning, medication management, scheduling and record-keeping.

Paper-based records are not adequate for a regulated homecare service in 2026; trying to manage rotas, care plans, and medication records with paper and spreadsheets is a recipe for stress, mistakes, and inefficiency. 

A digital system helps you to:

• Give your carers all the information they need for each visit via a simple mobile app. Digital care plans let you record individual needs, preferences and risk assessments in a structured, accessible format. 
• Get real-time alerts from visits, so you know instantly if there’s an issue. An eMAR (electronic medication administration record) system ensures medication schedules are managed correctly and that errors are flagged in real time.
• Roster effectively, reducing scheduling conflicts and helping you match carers to clients based on skills, availability and continuity of care. 
• Keep a clear audit trail of all care activity and easily gather the evidence you need to prove you are a safe, effective, and well-led service for your CQC inspections.
• Slash the time you spend on admin, so you can focus on what really matters: growing your business and delivering outstanding care.

When you set up a domiciliary care agency with a digital foundation from day one, you are building a business that is fit for the future.

Birdie is built specifically for homecare agencies and covers care management, rostering and finance in one platform. Features including real-time alerts, clinically-validated assessment tools, eMAR and the Q-Score metric (aligned to CQC's five key questions) help you track quality and demonstrate compliance from the start. 

Choosing the right domiciliary care software early saves significant operational pain later and builds the data habits that support a Good or Outstanding CQC rating.

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Frequently asked questions

How do I start a domiciliary care business?

Start with a detailed business plan. Then you'll need to establish your company, get the right insurance, register with the CQC, recruit and train your team, and then market your services to find your first clients.

How to set up a domiciliary care agency? 

The setup process involves several key legal and regulatory steps. You must choose a legal structure for your business (e.g., limited company), get insured, and complete the full registration process with the Care Quality Commission (CQC) before you can legally operate.

How much does it cost to start a care agency in the UK?

As a new agency, your initial major costs will include CQC registration (around £1,522), insurance, staff recruitment, and operational costs including premises rental (if needed) and software costs — this could come to anywhere between £3,000 and £15,000.

Do I need qualifications to start a homecare business? 

While you don't personally need specific qualifications to own the business, your agency must have a Registered Manager who has the necessary qualifications and experience. This is typically a Level 5 Diploma in Leadership for Health and Social Care or equivalent.

How do I open a domiciliary care agency? 

Once you have your business plan and funding, the critical step to "opening" is achieving registration with the CQC. You cannot lawfully provide care until your registration is confirmed. This should be done in parallel with other setup tasks, like recruitment. From there, you can look to win homecare clients and contracts.

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